How to make vibrant organization based on performance appraisal system

1.0. General

The essential elements of effectiveness in the system is brought through making measurement indicators through out the organization. In the present era of global competition and recessionary global trend the need of time is to bring efficient and effective work culture. It is therefore necessary to make target oriented culture throughout the organization and start measuring output of individual and review it periodically. It is also necessary to link it with performance appraisal system.

1.1 Objectives

a) To effect promotion based on competence and performance.

b) To confirm the services of probationary employee upon they’re completing the probationary period satisfactorily.

c) To assess the training and development needs.

d) To decide upon a pay raise where regular pay scales have not been fixed.

e) To let the employee know where they stands in their performance.

f) To improve communication between employees and employer.

g) Performance Appraisal can be used to determine whether HR programs such, as selection, training and transfer have been effective or not.

1.2. Appraisal Methods:

a) The Essay Appraisal: A performance appraisal method where by an appraiser writes a narrative about the employee.

b) Critical Incident Appraisal: A performance appraisal method that focuses on the key behaviors that makes the difference between doing a job effectively and ineffectively.

c) Check List Appraisal: A performance appraisal method in which a rater checks of those attributes of an employee those apply.

d) Adjective Rating Scale Appraisal: A performance appraisal method that lists a number of traits and a range of performance for each.

e) Force Choice Appraisal: A performance appraisal method in which the rater must choose between two specific statements about an employee’s work behavior

f) .Behaviorally Anchored Rating Scale: A performance appraisal method that generate critical incidence in develops behavioral dimension of performance. The evaluator appraises behaviors rather than their traits.

h) 360 Degree Appraisal: A performance appraisal method in which supervisors, peers, employees, customers and the like evaluate the individual.

1.3. Guidelines for effective appraisal interview

1) Select a good time

2) Minimize interruptions

3) Welcome, set at comfort (ease).

4) Start with some thing positive

5) Ask open ended questions to encourage discussion

6) Listen

7) Manage eye contact and body language

8) Be specific

9) Rate behaviour, not personality

10) Lay out development plan

11) Encourage sub ordinate participation

12) Complete form

13) Set mutually agreeable goals for improvement

14) End in a positive, encouraging note

15) Set time for any follow up meetings

2.0. Evaluating employee

Employee performance reviews should be designed to answer the “how am I doing?” and “how can I do better?” questions for each employee on a continuous basis.

2.1. Individual Incentive:

• Merit Pay an increase in one’s pay usually given on annual basis.

• Piecework Plan: A compensation plan where by employees are typically paid for the number of units they actually produce.

2.2. Group Incentive:

• Plant Wide Incentive: An incentive system that rewards all members of the plant based on how well the entire group performed.

• Scanlon Plan: An organization wide incentive program focusing on co-operation between manager and employee through sharing problems, goals and ideas.

• Improshare: A special type of incentive plan using a specific mathematic formula for determining employee bonus.

2.3. Pay for Performance: Rewarding employees based on their performance.

• Competency Based Compensation Program: Organizational pay system that reward skill, knowledge and behavior.

• Broad Banding: Pay employees at present levels based on level of competencies they process.

2.4. Team Based Compensation: Compensation based on how well the team performed.

Annexure-1 Identify, review and improve development activities for individuals:

Performance criteria: Range indicators:

a. Development objectives are based on a balanced assessment of current competence, potential future competence and career aspirations and are in line with current and anticipated team /organizational requirement: This activities is carried out for individuals both:

 With in the line responsibility of the manager

 Determined by the organisation but for whom the manager does not have line responsibility, e.g. trainees.

b. Individuals are encouraged and assisted to evaluate their own learning and development needs and to contribute to the discussion, planning and review of the development Identification and review may take place during.

 Induction

 Periodic appraisals.

 After promotion and re location

In response to particular requests or suggestions. Development objective

Annexure-2 Difference between job evaluation and performance appraisal

Job Evaluation Performance Appraisal

1. The job is rated, keeping in view such factors as responsibility, qualification, experience, working conditions, etc. required for performance of the job 1. Employee is rated on the basis of his or her performance.

2. A job is rated before the employee is appointed to occupy it. 2. Evaluation takes place after the employee has been hired and placed on a job

3. The purpose is to establish satisfactory wage differentials.

3. The purpose is to effect promotions, offer reward, award punishment, assess training needs, resort to lay-offs, transfers, etc.

4. It is not compulsory. Many organisation carry on without it. Where it is followed, it is mainly for lower level jobs. 4. Compulsory. It is done regularly for all jobs.

5.Job evaluation committee (comprising internal and external expert) is constituted for the purpose of evaluation.

5. Appraisal is done by employers themselves, peers, superiors, group of people, and combinations of these.


He is a owner of Global Manager Group. Leading ISO and management consultancy firm having more than 1800 clients in more than 45 countries.He is Engineer and MBA with an experience of more than 25 years at senior level in global companies.Also he is giving training on 40 latest management topics like 5S Lean manufacturing, Kaizen, Benchmark,

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