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Master of Business Administration-MBA Semester 4

MU0016 – Performance Management and Appraisal

Assignment Set- 1

Q.1 Discuss the aims of performance management?Ans:-

One of the important objectives of performance management is identifying the strengths and weaknessesof employees and finding ways to overcome their shortcomings. This is done by evaluating employee

output and the company’s overall ability to meet the goals by having quarterly or annual audits. Often,

after an evaluation, there will be widespread company meetings where managers and employees discussconcerns and solutions to problems.

Another objective is to discover where employees and the company are falling short. This is done bygoing through details such as profits earned, new clients acquired and the contribution of employees to

make these things happen. Employees whose contribution are minimal or not up to the mark arecounselled on how to improve performance.

The evaluation of an employee’s performance is based on their work output and the amount of time

spent by them on the project. Although time spent in an office is not an accurate way of measuring performance, most companies still have the notion that better employees put in longer hours of work. A

better way of measuring employee productivity would be to measure the output of work and the

accuracy of work completed.

Overall evaluation of a company and its ability to set and reach goals is another important objective of

performance management. Increasing revenue is the overall goal of any company. Other goals may be to

acquire more or specific clients, develop new products or hire new talent. It is very easy to determinewhich of these goals have been met, because these are things that can be seen or calculated.

The inability of a company to meet the goals is mainly due to poor leadership, poor planning, poor

implementation or poor employee performance. Economic factors also play a major role, but it is better

for companies to concentrate on factors that are within their control. The best way of improving acompany’s overall output is motivating the employees and improving their performance.

To identify and remedy situations that hinder company performance is another important objective of

performance management. This includes replacing underperforming employees, gaining new clients,

developing new strategies for reaching the goals and discussing strategies that have worked in the past.

In order to meet the objectives of performance management and improve the overall performance of a

company, every employee must work with the team members to develop new techniques and implementchanges.

The aims of performance management can be summarised into the following points.

The aims of performance management are:

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· Maximising performance / drive for results.

· Highly analytical.

· Highly numerate.

· Trustworthy.

· Planning and organising.

.

Q.3 List the characteristics of performance appraisal?

Ans:-

Some companies recognise the need to render employee feedback regarding performance. One of themethods of providing performance feedback is through a performance appraisal. Organisations that

conduct performance appraisals may have written policies in place that refer to time lines, types of performance ratings and clearly defined processes. Some organisations may also require self-appraisals

by employees or, even, engage outside consultants to conduct the appraisals.

The major characteristics of performance appraisal are:

· Appraisals match the job descriptions:

Performance appraisals must match the job descriptions and standards set for performance objectives.

For example, an employee who does data processing should be assessed based on the number of errorsand timeliness of work as these are standards set for that particular job. It may be unfair to measure a

data processing employee on phone skills if that is not part of the job description.

· Appraisals are legally compliant:

Appraisals must be able to stand legal tests of reliability (questions must yield the same results for all

employees if repeated more than once) and validity (does the appraisal measure what it is designed tomeasure). For this reason, some companies have their appraisals developed by third-party consultants

who are specialists in this area.

· Appraisers must be trained:

The supervisor or manager conducting the appraisal must be trained in the use of the evaluation tool andconducting the appraisal. For example, dispute may arise if the employee disagrees with the outcome,

and knowing how to deal with conflict is an important tool. Explaining the ratings of the appraisal and

discussing future plans for improvement with the employee require good communication skills.

· Appraisal systems require follow-up:

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has a powerful effect on attitude and performance. It provides a "360-degree evaluation" of the

employee’s performance and is measured to be one of the most realistic performance appraisal methods.

· Superior appraisal: Superior’s appraisal outlines the traditional thought of performance appraisal,

where the employee’s tasks and actual presentation is rated by the superior. This form of assessment

involves the evaluation of individuals by supervisors on pre-determined parameters in an employee’s performance record, as well as the evaluation of team and work scenario by senior managers.

The superiors (supervisors and senior managers) have the authority to change and modify an employee’s

or a team’s work on the basis of the assessment of the individual and the team.

· Subordinate appraisal: Subordinates’ feedback involves the evaluation of an individual on

parameters like communication and convincing abilities, superior’s ability to assign the work, team

leading qualities and so on.

Subordinate appraisal is most advantageous when developmental needs are considered. It can also be

used in the evaluation of record sheets, but measures should be taken to make sure that subordinates areappraising parameters of which they have knowledge. The subordinate’s feedback is effective, mainly in

evaluating the supervisor’s interpersonal skills. However, it may not be as proper or convincing for

measuring task-oriented skills.

· Peer appraisal: Peers usually have an exclusive point of view on a colleague’s job performance andindividuals are generally very friendly to the idea of rating each other. Peer ratings are considered when

the individual’s capability is known or the result of the performance can be computed. There are both

considerable assistance and serious consequences that must be cautiously considered before including

this type of feedback in an all-round appraisal program.

Taken as an effective developmental tool and conducted periodically, a 360 degree application can prove to be highly useful in keeping the track of alterations in others’ perceptions about the employees.

A 360 degree appraisal is generally more appropriate at the managerial level, as it helps in evaluating

their leadership and supervision styles. This method is being successfully used around the globe for

improving performance. Some of the companies that have been successfully following 360 degreeappraisals are TCS, Microsoft and Wipro Technologies.

Q.5 Explain the performance appraisal feedback model?

Ans:-

Performance Appraisal Feedback Models help us to achieve what is known as a meaningful

performance feedback. Meaningful performance feedback, as we know, is best achieved through proper communication between the feedback giver and the feedback receiver. Irrespective of who provides the

feedback to the receiver, there are certain perceptual barriers that these communications have to travel

through. These barriers act as filters and thus affect the actual message that is heard.

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Let us label the four quadrants A, B, C, and D as shown in Figure 5.3.

Figure 5.3: Said/Heard — Meant/Felt Quadrants

Now, let us look at how the matrix can used during a typical performance review.

Let us begin with Figure 5.4 looking into what is “Said.”

Figure 5.4: Quadrant A

In Quadrant A, the feedback giver has said, “You could have contributed much more to the project.”This is where the challenge arises, wherein the statement must now pass through the perception barrier

that has been represented as the vertical axis of the matrix.

Let us now look into what has been heard by the receiver. It is illustrated in Quadrant B in Figure 5.5.

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Figure 5.5: Quadrant B

After passing through the receiver’s perceptual barrier, you can see in Quadrant B that what was heard

was “I have not done my part well.” Now, we must understand that this may or may not have been what

the feedback giver would have actually meant.

In Figure 5.6, Quadrant C, the giver now clarifies to the receiver the intended meaning of his messageshown in the Quadrant A statement.



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Figure 5.6: Quadrant C

In Quadrant C, it is observed that the feedback giver’s meaning was very different when compared to

what was perceived by the receiver.

Now the receiver’s feeling towards this feedback has been illustrated in Quadrant D in Figure 5.7.

Figure 5.7: Quadrant D

Utilising the matrix

We observe that there is a dramatic contrast between what the receiver perceived the performance

feedback message to be in Quadrant B versus what the message actually meant in Quadrant D. The issuewith many performance review sessions is that the communications end at Quadrant B. These

misinterpretations can be very counterproductive and will not support the goals and objectives of

providing feedback. Hence, by using the matrix, the giver of the feedback can understand how thefeedback has been perceived by the receiver and then try to clear the misunderstandings. The matrix can

also be used by the receiver to get clarification on points that were not made clear during the

performance review.

Q.6 How is data used for human resource decision?

Ans:-

You must be wondering how to use the data to make the human resource decision. Well, the main aim

of any human resource system must be to encourage the better use of the available data about theemployees, the labour market conditions and the business scenario to drive effective decision-making.


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This helps in resolving the daily challenges faced by the HR department and positively impacts the

human resource practices and policies followed by the organisation. The traditional ways in which data

is used for successful and effective decision-making depends on the lively involvement of a huge rangeof stakeholders working together. It is also essential to understand the context in which the data is used

to take decisions.

In spite of providing an enclosed training program for using data to make a decision, it is better to

connect all stakeholders in understanding how they use data both individually and collectively as an

organisation. In addition, it is also important to note the factors that are important in the context of usingdata effectively. Working alongside stakeholders improves the process and allows the learning to

develop as much as possible.

Some of the examples to improve the use of data for decision making include:

· Planning how data is used to support a decision.

· Providing chances for decision makers to experience significant decision making moments, so they canenhance their skills using the actual data in real-life situations.

· Advancing communication among users of data.

· Leveraging and identifying opportunities for enhanced data sharing across different levels of theorganisation and with other stakeholders.

It is equally important to know about the two-way process of making informed human resource policy

and management choices based on a suitable study of relevant data and information. This process is

called as Data-driven decision-making (DDDM).

There are ten fundamental and practical pillars, which assist human resource managers, practitioners and

policy analysts in structuring a bridge between human resource data and reports to effective humanresource policy and management decisions.

The ten fundamental and practical pillars are:

1. Making use of the data

One of the foremost misapprehensions about the effective use of human resource data in decision-

making might be summed up as “Build or gather data and they will use it”. This experience shows that it

is not enough to make data available. For example, health sector leaders need a process in place for

analysing reports and information, getting the data to the right decision-maker at the right time, and

ensuring the power and resources to act on the data. However, if this process is faulty or insufficientlyshared, data-driven decision-making can produce unacquainted decisions or swing the focus away from

priority issues.

2. Developing a culture of enquiry

Effective data utilisation requires a mindset as well as an organisational philosophy that actively invests

in a culture of inquiry that helps people question the status. In the field of human resource, this practiceof inquiry should be characterised by work groups, teams, and individuals at different levels of the

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organisation. All of them must regularly probe and scan the atmosphere in a way that will help them

determine and provide answers to a set of human resource policy and management questions. For

example, the subsequent questions can be asked to converse and plan the use of information to supportvarious decisions:

· What human resource data is required to gather?

· How do we actually use data; what decisions do they inform?

· What is the mechanism for facilitating the use of these data (the answer could be – senior management

meetings, annual sector review meetings, department meetings, and so on)?

· How frequently does this process take place?

· What issues, if any, manipulate the quality and security of data use?

3. Context matters

The context is the entire setting or environment in which human resource data are being gathered,

analysed and used to make policy and management decisions. It is vital for human resource managers

and planners to comprehend the various determinants and dimensions of the context, within which, thedata are used to take decisions, since, it is essential for effective policy-making and practice. Some vital

elements of the context include:

· Social, political and other forces at work in the human resource policy environment throughout thecountry.

· Historical and cultural factors.

· Health system factors.

· Resource contexts.

4. Aligning different forces, interests and beliefs

The theory of Policy analysis suggests that data “affects existing beliefs of vital people about major

features of the problem under study and how it might be solved or mitigated” (Eugene Bardach, 2000).

Nevertheless, human resource planners and policy-makers are faced with a distinctive challenge. Theymay have access to diverse types of human resource information from numerous sources, in a variety of

forms and perhaps at different times and frequencies. But, the decisions that need to be made using these

data may involve different people across multiple agencies who do not work together all the time. Theserelationships and connections will need to be recognised and aligned by human resource managers and planners for the decision-making process to be productive. Otherwise, there is a possibility of conflict,

or failure to use the data.

Additionally, it is not enough if only a few people in an organisation examine data and information as

part of their daily functions, as this may not lead to ground decisions. For example, one approach that is

being considered in Uganda is following of a simple framework for analysing and presenting humanresource data and making the data available for discussion during annual joint review meetings. Such a

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streamlined and collaborative approach of sharing data is important when compared to the sensitive

nature of the human resource. In addition, the ways in which such data are used in effective decision-

making are mainly determined by a broad range of contributors. Similarly, whether or not data willgenerate any decisions will also depend on the values, beliefs, skills, and past experiences of these

contributors. Other important factors include economic costs and timing of those decisions.

5. Preparing for data sceptics

Many data users decide the helpfulness of a data by asking some questions like:

o What is latest here? How is this distinct from what we already have or know?: As data collectors, we

may be providing information which people may have known for years but never worked upon. Part of

the solution could be combining these messages with ways of clearing out the mindset that producessuch skepticism or complacency in the first place.

o What do these evidences or reports mean? The complexity of the evidence and reports may draw outthe reaction that more work is required just to understand the evidence. This can lead to a lack of interest

or disinclination to engage.

o What are the professed benefits of change? Many individuals time and again tend to avoid change.

However, they are also influenced by the obvious benefits of change. As a result, if human resourcemanagers and planners are able to categorise a decisive bunch of active seekers of new ideas, then there

are higher chances of success. These active seekers must be favourable to change and even willing to

take risks.

6. The power of the Individual

Many individuals are key members in taking decisions about how data should or should not be used,

since it is the individuals who choose whether to reject or accept new data findings. Even when

presented with convincing data, people tend to reject or accept new ideas based upon individualinclination. For example, data from the literature suggests that individual decisions are influenced by a

push of personal capacities and qualities that any decision-making process must take into consideration.

At the individual level, these factors include:

o Convolution of what is being presented.

o Beliefs and values as well as current position on certain issues.

o Risk awareness, or the level to which an individual avoids change.o Status or position of the individual within the organisation.

o Knowledge and skill sets.

o Organisational support for change.

o Partnership links.

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7. The power of organisation

There are several organisational factors that influence the decision-making process. These are:

o Organisational culture, values, function, composition, structure, and socioeconomic context.

o The nature of staff (gender, age, racial composition), level of training, and degree of skills.

o The level to which new thoughts or ideas are welcomed or accepted by management figures, and the

kind of support obtainable for improvement of action.

o The influence of interest group activity or public opinion on the organisations with human resource

related decision-making functions.

o The level to which data can generate awareness of authenticity, an atmosphere of trust and mutual partnerships among different members within the same organisation and among the various

organisations that need to work together.

8. Navigating difficult conversations

Constantly, data will create situations that involve complicated discussions within a team or organisation

that can cause chaos or volatility. This generally happens when a new data challenges a particular policy

issue or status quo that has been in place for a long time. If the resulting communications are not

handled with sensitivity and diplomacy, the situation can easily slip into a sinister team disagreement.Generally speaking, many people are uncomfortable with conflict, and they fear the rise of negative

emotions in difficult conversations. Doubts of difficult discussions can frequently lead to avoiding or

rescheduling important discussions because people are worried about argument and damage toworkplace relationships. Part of the strategy for strengthening data-driven decision-making includes an

interactive session that uses an experienced facilitator and a communication-based model and

understanding and responding to difficult conversations. One method is to use a humorous, all-inclusive,no threatening communication style and provide plenty of relatable examples to guide groups of

decision-makers through potentially difficult conversations that data may generate. This ultimately helps

in reaching a mutually beneficial common ground. In most cases, the facilitator does not intend to

correct or entail order on the group conversation, instead might point out the presence of polarisingstandpoint and also support some ways to suspend assumptions and steer the conversation toward

common ground. A second key factor is to present possible conflict producing data using clear and

lenient language, always leaving open the possibility that users might see and hear the data and stillmake a decision to de-emphasise or even ignore the information.

9. Process and relationships

It is observed that people build strategies, plans and data successfully by converting them into policies,

practices and results. As such, the nature of bonding between the possible data users within an

organisation is one of the most critical dynamics determining success or failure. However, this dynamicis often underrated or even overlooked in the process of data-driven decision-making. This is regrettable

because when implemented correctly, the process can:

o Fetch core issues to the forefront.

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o Allow participants to conquer individual, professional and organisational barriers.

o Construct a greater sense of joint ownership.

o Enhance communication and understanding.

o Construct a unified leadership team focused on moving the business of human resource planning andmanagement in the right direction.

10. A Journey, not a destination

Many theorists supporting data-driven decision-making argue that evidence-based decision-making is

not a onetime answer or a standard tool to be applied at random. Rather, it is an in-progress knowledge-driven process that needs continuous compilation, analysis and sharing of data since it is the only way in

which both positive and negative trends can be discovered and acted upon. Data-driven decision-making

is also a collaborative, dynamic process. It is a core function that must be implanted into the culture of organisation. It provides decision-makers with the collective ability to:

o Tackle the most important human resource questions of the day.

o Weigh the available evidence.

o Consider several options.

o Think both tactically and practically about the decisions that they make.

Human resource managers and planners need to lead this journey and act as agents of change. Withouttheir interference, it will be difficult for human resource data to become an essential part of an

organisation’s operations. They can sculpt data use and support it by sharing the successes and benefits.

They can also schedule time for senior management and multi sector teams to review, query, meet, and

discuss on reports required to notify decisions.

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Mu-0016 (1)