N

N.L. Dalmia Institute of Management

Studies & Research

Mira Road (East)

Project Report On

Study, Analysis of Performance Management System with RecommendationsCompiled By:Miss. Nivedita Dasgupta

PGDBM-HR (2009-2011)ACKNOWLEDGEMENTI take immense pleasure in submitting the project report on Study, Analysis of Performance Management System with Recommendations.With a deep sense of gratitude I would like to thank Mr. Harindran Pillai, Ms. Ashwini Vinekar, Mrs. Chaitrali Shirur and all the other support staff of Shamrao Vithal Co-operative Bank for devoting their valuable time and guiding me to complete my project as and when I approached them.I owe a special thanks to my project guide, Prof. Rajan for providing constant support & guidance throughout the project. I am highly obliged for the recourses he provided to me for the completion of the project.I am also thankful to Prof. P.L. Arya for giving me this opportunity.

I would like to thank each and every person who has contributed towards the successful completion of the project work.Nivedita DasguptaPGDBM-Human Resources TABLE OF CONTENTSSR. NO.PARTICULARSPAGE NO.

1Introduction5

2An Overview of Banking6

3HR in Banking10

4HR challenges in Co-operative Banks11

5Performance Management System13

6Components of a Performance Management System15

7Reasons for measuring performance17

8Methods of measuring performance19

9HR Functions applicable to Performance Management System21

10Impact of HR professional on the Performance Management System23

11Performance Appraisal24

12Appraisal process in an organization30

13Challenges of Performance Appraisal34

14Introduction of The Shamrao Vithal Co-operative Bank Ltd.37

15SVCB Hierarchy38

16The old appraisal system at SVCB39

17The new appraisal system and its objectives40

18Process of formulating the new appraisal system41

19Process flow chart of e-appraisal at SVCB44

20Benefits of e-appraisal module48

21Analysis of the appraisal system50

22Recommendations51

23Bibliography52

EXECUTIVE SUMMARY

Many companies regularly administer performance appraisals to evaluate an employee's current or past performance relative to his or her performance standards. This process involves an employer (1) setting work standards; (2) assessing the employee's actual performance relative to these standards; and (3) providing feedback to the employee with the aim of motivating that person to eliminate performance deficiencies or to continue to perform above par. If the appraisals are conducted fairly and constructively, the technique can be very beneficial in helping an employee grow in skills and become more promotable. Unfortunately, many performance appraisal rating come to a surprise to an employee due to the lack of communication from their supervisors. Appraisees and appraising managers have both been given guidelines in evaluation process and subsequently the review meeting. It emphasizes how this approach will help the appraisees by giving them an opportunity to assess and correct areas that their supervisors feel may have overlooked. Such incidences do happen due to personal likes and dislikes of superiors. The system can help management to take informed decisions on pay-hikes and career enhancement for their employees.Performance Appraisal can assist the company in many ways including goal setting wherein manager works with employee and agree on a set of goals to achieve during a specific time; reinforcing and sustaining performance wherein the supervisor encourages employees to continue on a positive trajectory; improving performance wherein the employer suggests ways in which employee can perform better in the future. This project explains the meaning of Performance Appraisal, different methods used to evaluate the performance of employees, its effective implementation and the benefits of the system.It also aims at understanding the problems associated with performance appraisal and suggests measures to be adopted to overcome these issues. Overall objective of the project is to understand the effectiveness of performance appraisal system.This project report includes The Shamrao Vithal Co-operative Bank Ltd as a case study and covers the benefits and drawbacks of the traditional methods as well as recent advances in the field of performance appraisal. The project also throws light on the concern areas for different people involved in the appraisal process and attempts to find out ways to overcome those problems.The conclusion arising out of this project is that an online appraisal system is far superior than the traditional appraisal process. Even though the switch from traditional to modern appraisal process can be difficult, it will be beneficial for the organization in the long run.INTRODUCTIONThe last decade has seen many positive developments in the Indian banking sector. A few banks have established an outstanding track record of innovation, growth & value creation. Indias banking industry must strengthen itself significantly if it has to support the modern & vibrant economy that India aspires to be. The onus of this lies on the banks management who must ensure that the performance of its employees is always upto the mark.

The focus of all aspects of Human Resource Development is on developing the mostsuperior workforceso that the organization and individual employees can accomplish their work goals in service to customers. With increasing complexities in business of banking, it is getting increasingly difficult to acquire competent employees in the organization. This makes it absolutely essential to retain the current employees.Apart from acquiring professionally qualified personnel, it is quite a task to retain current employees. Growing competition from other banks increases the risk of attrition. Poaching of senior level employees is a common phenomenon in the banking industry. Employees now have greater expectations from the organization they work in. To address the employee concerns as well as to provide the employees with greater opportunities to develop their career potential and align their performance with the organization, organizations are now enhancing their performance management system. For an organization, the focus should not be just to have the best people; but also to retain them and get the best out of them. To ensure that its workforce retained a high level of competence and motivation, organizations focus towards establishing a robust performance management system that facilitates continuous improvement of the knowledge, skills and performance of its employees.

Performance management should be a process that contributes to the organization's overall success and has a positive impact on the employees. It's about letting employees know what is expected of them, and providing feedback throughout the year on how they are doing and how they can improve.

Performance management is a management tool used to measure employee performance and extend rewards to employees who achieve company objectives. Many companies implement a performance management system to set standards and expectations for employees at all levels in the organization. Performance management systems take the subjectivity out of individual employee reviews and performance rewards conducted by managers. Such systems also create a broad sense of equality since any employee can achieve the performance rewards by following the expectations and goals set forth by the company.

The impact of effective performance management is clear i.e. employee performance affects company performance. If clear expectations are expressed to the employees, the company and its employees will enjoy increased motivation. And all that translates directly into clearly measurable goals, improved morale, a happier workplace and higher profits.AN OVERVIEW OF BANKINGThe banking sector has grown from a few institutions primarily involved in deposit acceptance and trade finance into a complex multi player markets where large number of commercial banks, financial institutions and specialized banks are operating with various products and activities.The changes staring in the face of bankers relate to the fundamental way of banking which is undergoing a rapid transformation in the world of today in response to the forces of competition, productivity and efficiency of operations, reduced operating margins, better asset/liability, risk management, anytime and anywhere banking. The major challenge faced by banks is to protect the falling margins due to the impact of competition. The business profile of banks has transformed dramatically to include non-traditional activities like merchant banking, mutual funds, new financial services and products, personal investment counseling, etc. The entry of new banks intensified the competition to attract and retain customers. TheReserve Bank of India(RBI) is thecentral bankingsystem ofIndiaand controls the monetary policy of currency reserves. It is wholly owned by the union government. Its main functions are regulating country-wide financial systems, regulating external trade & payments, securing foreign exchange reserves, issuing currency notes, etc.

Three types of banks function under the control of RBI. They are commercial banks, co-operative banks and development banks.

ACommercial Bankis a type offinancial intermediaryand a type ofbank. Commercial banking is also known asbusiness banking. It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposit. Some poplar commercial banks in India are State Bank of India, ICICI Bank, Standard Chartered Bank, HDFC, etc.

A Development Bank is a developmental finance institution devoted to improving the social and monetary development of its associate nations. Its main emphasis is the welfare of the people. For example the Asian Development Bank's overarching goal is to decrease poverty in Asia and the Pacific. It helps improve the value of people's lives by providing loans and scientific support for a broad variety of development activities. IDBI Bank is another example of this type of bank.

The co-operative banks in India started functioning almost 100 years ago. The co-operativebankis an important constituent of the IndianFinancial System, judging by the role assigned to the co-operative, the expectations the co-operative is supposed to fulfill, their number, and the number of offices the co-operative bank operate. Though the co-operative movement originated in the West, the importance of such banks have assumed in India is rarely paralleled anywhere else in the world. The co-operative banks in India play an important role even today in rural financing. The business of co-operative bank in the urban areas also has increased phenomenally in recent years due to the sharp increase in the number of primary co-operative banks.

Co-operative banks in India are registered under the Co-operative Societies Act. The cooperative bank is also regulated by the RBI.

HR IN BANKINGIndian co-operative banking movement has passed through hundred years of its existence. At the same time, human resources management has been a neglected field in co-operative banks over a period of time.

It is understood that co-operative banks approach human resource management (HRM) from the wrong perspective and their financial performance suffers as a result. Instead of focusing on how to execute strategy through the performance of the employees in many co-operative banks, the first priority is cost control and the focus often begins with the HR function. World over, the technology driven channels such as ATM, net banking and mobile banking have reduced walk-in customers at the bank branches. However, in India, it is observed that the customers still find it difficult to use these technology based channels and they are more comfortable in traditional banking over the counter personally to ensure error-free and risk-free banking service. This clearly establishes that employees of co-operative banks play a vital role in managing not only the transaction of a customer but also future long-term relationship.The core function of HRD in the banking industry is to facilitate performance improvement, measured not only in terms of financial indicators of operational efficiency but also in terms of the quality of financial services provided. Factors like skills, attitudes and knowledge of the human capital play a crucial role in determining the competitiveness of the financial sector. The quality of human resources indicates the ability of banks to deliver value to customers. Capital & technology are replicable but not the human capital which needs to be valued as a highly valuable resource for achieving that competitive edge. The primary emphasis needs to be on integrating human resource management strategies with the business strategy. HRM strategies include managing change, creating commitment, achieving flexibility and improving teamwork. The other processes representing the overt aspects of HRM, viz. recruitment, placement, performance management are complementary.HR CHALLENGES IN CO-OPERATIVE BANKSInstead of focusing on how to execute strategy through the performance of the employees in many co-operative banks, the first priority is cost control and the focus often begins with the HR function. A few of the current challenges faced by the banking industry in terms of human resource management may be the following:Human Resource Policies: In practice, there is no specific written document of HR policies in many co-operative banks. It is neither necessary nor desirable to have every rule documented, but it is advisable to take time to formalize the important ones.Recruitment & selection: A time-consuming and hectic job is to hunt the right talent. Higher the professional value of the vacancy, tougher is the search.Identifying the right people followed by negotiation is the element which makes the job tough for the employer.

Data base management problem: Banking jobs being apparently lucrative for many, attract a large number of candidates against advertised vacancies in media. These applications have to be stored with the human resource department for a required period thus creating a data base management problem.Right people:The most difficult agenda of HRM across the banking sector is to retain the right people. Sudden growth of retail banking and other services has put pressure on HR mangers in banks to engage more professionals within shorter span of time thereby attracting manpower in other banks on attractive packages has made the job market very competing.A bank in a normal course invests time and money to hire and train the appropriate work force for its own operations. This ready-made force is often identified and subsequently picked-up on better terms by others.

Compensation:A drawback of co-operative banks is that they are not able to attract professionally qualified candidate because of the poor salary structure. Also, banks often face the dilemma regarding how much to pay to the right employee and how much to the outstanding performer. Training & Development: Designing and implementing effective training and development systems is a particular challenge because all the costs are borne in present, while all the benefits will accrue in future. Performance Appraisal: Co-operative banks have not used any sophisticated methods to evaluate their employees performance. This is the major reason for poor performance of employees in co-operative banks.

Job satisfaction: Everybody in the bank wants to work in the preferential department, preferential location, city of his own choice and boss of his liking. An administrative deviation from any of these results in lowered job satisfaction. Although hiring is normally based on regional requirement matching the area of activity with that of employee's nativity yet other elements like appointment in the department of choice and preference makes the job of HR manager quite challenging. What the HR manger cannot afford is the dissatisfied employee who not only disrupts the smooth working himself but also spreads the negativity to others by his de-motivated attitude.

Mergers and acquisitions: There are many mergers & acquisitions happening between and among co-operative banks that have given rise to many challenges to the HR personnel. HR will be a key player in the managing board of the company and mergers and acquisition will be key capability of a HR.To put in a nut shell, high attrition/poaching of skilled and quality staff, difficulty in hiring highly qualified youngsters aspiring high remuneration are some of the threats the banking industry is facing and hence need to be addressed. However, employee engagement and learning culture still remains the real issue in co-operative sector banks.PERFORMANCE MANAGEMENT SYSTEMBesides effective hr policies, performance management system also can be used as a tool to address the various challenges that exist in the banking industry. Issues like performance appraisal, training and development, giving appropriate compensation to the employee can be resolved by using a performance management system. Such a system can be adapted as per the needs of the organization.An important component of a performance management system involves the job expectations and goals for each position in the company. Each department in the company usually has different expectations for its employees based on the requirements for the positions in the department. Clearly defined expectations and goals give employees the greatest opportunity for advancing in the company. Managers will also discuss the review and feedback process of the performance management system.Performance awards are an important part of the performance management system. Employees are best motivated by the thought of earning rewards for their actions, whether financial rewards or another form of benefit. Companies will usually link an employee's performance review with his financial bonus or pay raise; this ensures that the company gets the best performance out of each employee.

Performance management systems do not benefit a company unless a timely employee review and feedback system is implemented in the program. These review sessions will inform employees how well they are performing in their position and what areas need to be corrected or improved. Most companies have an annual review process, although six-month reviews are often used.Employees who do not meet the standards for performance rewards may need additional training or coaching by their superiors to improve their job skills. Performance reviews will be used as a starting point for the additional training; subsequent performance reviews may be scheduled to see how well the employee improved from the initial review. Performance management systems are ineffective if they only reward employees for good work performance. The system also needs to include training or coaching processes to ensure all company employees are able to improve their performance. Many people mistake performance appraisal forperformance management. Actually, performance management is a much bigger system, and is much more valuable to managers and companies (and employees) than performance appraisal. Performance management begins when a job is defined. Performance management ends when an employee leaves the company. Between these points, the following must occur for a working performance management system: Develop clear job descriptions-Job descriptionsare the first step in selecting the right person for the job, and setting that person up to succeed. This does not include traditional job descriptions that end with "and whatever else you are assigned by the manager." Job descriptions provide a framework so the applicants and new employees understand the expectations for the position so these must be clearly expressed as outcomes. Select appropriate people with an appropriate selection process-People have different skills and interests. Jobs have different requirements. Selectionis the process of matching the skills and interests of a person to the requirements of a job. Finding a good job "fit" is exceptionally important.A selection processthat maximizes input from potential coworkers and the person to whom the position will report should be used.

Negotiate requirements and accomplishment-based performance standards, outcomes and measures-The first reason why people sometimes fail to meet expectations is because employees dont know what theyre supposed to do. Hence it is extremely important to clearly communicate to the employees the expected outcomes & measures.

Provideeffective orientation, education, and training-Before a person can do the best job, he or she must have the information necessary to perform. This includes job-related, position-related, and company-related information; an excellent understanding of product and process use and requirements; and complete knowledge about customer needs and requirements.

Provide on-going coaching and feedback-People need ongoing, consistent feedback that addresses both their strengths and the weaker areas of their performance. Effective feedbackfocuses more intensely on helping people build on their strengths. Feedback is a two-way process that encourages the employee to seek help. Conduct quarterly performance development discussions-If supervisors are giving employees frequent feedback and coaching, performance reviews can change from negative, evaluative, one-sided presentations to positive, planning meetings. Held quarterly, employees always know how they are performing and their next goals and challenges.

Design effective compensation and recognition systems that reward people for their contributions-The power of aneffective compensation systemis often overlooked and downplayed in some employee motivation related literature. This is a mistake. It is often not so much about the money as it is about the message any reward or recognition sends to an individual about their value. Provide promotional/career development opportunities for staff-Growth goals, changing and challenging job assignments and responsibilities, and cross-training contribute to the development of a more effective staff member. Such an environment must be created in which people feel comfortable to experiment and make mistakes.

Assist with exit interviews to understand why valued employees leave the organization-When a valued person leaves the company, it is necessary to understand why the person is leaving. This feedback will help the company improve its work environment for people. An improved work environment for people results in the retention of valued staff. So in a performance management system, all components must be present and working to create value for each employee and the organization.COMPONENTS OF A PERFORMANCE MANAGEMENT SYSTEM

Performance Managements five key components

Performance Management System has five main contents namely planning, monitoring, developing, rating, and rewarding: Planning Every process has to start with proper planning so that the activity is carried out in efficient manner and desired results are achieved. A performance management system is important to the organization as well as to the employees. Hence the system must be planned carefully.While planning the flow of the performance measurement, the goals of the organization must be determined. The elements and standards of measuring the performances must be duly communicated to all the employees so as to make him fully aware of all the parameters.

Monitoring Monitoring the way performances are measured is very crucial since this is the crux of the performance management system. In this stage, a performance of the employees is measured and feedback is provided regarding the same. A review of the overall progress is done by the appraiser where he communicates to the employee what are his strengths and in which areas he needs to improve. It also lets the employee know that his efforts are being recognized and monitored.

Developing Once the performances are measured, it is necessary to work on the weaker aspects of the employees performance. Any employee showing poor performance must be provided with training so as to enable him to overcome his weaknesses. At this stage, employees having good performance must further be encouraged to keep improving. Such employees are valuable to the organization and efforts must be taken to retain such employees. Rating The performance of the employees must be summarized and rated. Doing so will enable a quick analysis of the overall performance of the employee. Such ratings can be very useful during promotions pr succession planning. Rewarding In order to motivate employees to perform effectively, it is important to recognize and reward the performances of the employees. This lets the employee know that the efforts contributed by them are valued by the organization and this motivates them to keep performing for the welfare of the organization.Reasons for measuring performance:-Fundamental purpose behind measures is to improve performance. 8 reasons for adapting performance measurements are as follows:1.To Evaluate-To evaluate performance, managers need to determine what the organization is supposed to accomplish; for this a clear, coherent mission, strategy, and objectives need to be formulated. Then based on this information choose how you will measure those activities.

Evaluation process consists of two variables: organizational performance data and a benchmark that creates framework for analyzing that data. As in order for organizations to evaluate performance, it requires standards (benchmark) to compare its actual performance against past performance/ from performance of similar agencies/ industry standard/political expectations.

2.To Control-how can managers ensure their subordinates are doing the right thing.

Today managers do not control their workforce mechanically. However managers still use measures to control, while allowing some space for freedom in the workforce. Organizations create measurement systems that specify particular actions they want to be executed. They want to measure to see whether the employees have in fact taken those actions which lead to the fulfillment of the objectives. There is a need to measure input by individual into organization and process. Officials need to measure behavior of individuals then compare this performance with requirements to check who has and has not complied.Often such requirements are described only as guidelines. Do not be fooled. These guidelines are really requirements and those requirements are designed to control. The measurement of compliance with these requirements is the mechanism of control.

3.To Budget-Budgets are crude tools in improving performance. Poor performance not always may change after applying budgets cuts as a disciplinary action. Sometimes budget increase could be the answer to improving performance. Like purchasing better technology because the current ones are outdated and harm operational processes. So decision highly influenced by circumstance, you need measures to better understand the situation.

4.To Motivate-Giving people significant goals to achieve and then use performance measures- including interim targets- to focus peoples thinking and work, and to provide periodic sense of accomplishment.

Performance targets may also encourage creativity in developing better ways to achieve the goal. Thus measure to motivate improvements may also motivate learning.

Also it is able to provide how workforce is currently performing.

Primary aim behind the measures should be output. Managers cannot motivate people to affect something over which they have little or no influence.

5.To Celebrate-Organizations need to commemorate their accomplishments- such rituals tie their people together, give them a sense of their individual and collective relevance. Moreover, by achieving specific goals, people gain sense of personal accomplishment and self-worth.

Links from measurement to celebration to improvement is indirect, because it has to work through one of the likes- motivation, learning.Celebration helps to improve performance because it brings attention to the agency, and thus promotes its competence- it attracts resources.

Dedicated people who want to work for successful agency.

Potential collaborators.

Learning-sharing between people about their accomplishments and how they achieved.

6.To Promote- Measuring performance enables the organization to know which employees are performing upto the mark & such employees can be promoted accordingly. This serves the purpose of recognition for the employee and also motivates him to perform better.

7.To Learn-Learning is involved with some process, of analysis information provided from evaluating corporate performance (identifying what works and what does not). By analysing that information, corporations are able to learn reasons behind its poor or good performance.

However if there is too many performance measures, managers might not be able to learn anything. Because of rapid increase of performance measures there is more confusion or noise than useful data. Managers lack time or simply find it too difficult to try to identify good signals from mass of numbers.Also there is an issue of black box enigma (data can reveal that organization is performing well or poorly, but they dont necessarily reveal why). Performance measures can describe what is coming out of black box as well as what is going in, but they do not reveal what is happening inside; they do not reveal how are various inputs interacting to produce the output. Benchmarking is a traditional form of performance measurement which facilitates learning by providing assessment of organizational performance and identifying possible solutions for improvements.Identifying core process in organization and measuring their performance is basic to benchmarking. Those actions probably provide answer to issue presented in purpose section of the learning.Measurements that are used for learning act as indicators for managers to consider analysis of performance in measurements related areas by revealing irregularities and deviations from expected data results.

8.To Improve-What exactly should one do differently to improve performance? In order for an organization to measure what it wants to improve it first needs to identify what it will improve and develop processes to accomplish that.Also you need to have a feedback loop to assess compliance with plans to achieve improvements and to determine if those processes created forecasted results (improvements).

Improvement process also related to learning process in identifying places that are need improvements.

After that they need to identify actions they can take that will give them improvements they looking for and how organization will react to those actions ex.

Methods of measuring performance:-Performance measurement is an ongoing activity for all managers and their subordinates. Performance measurement uses the following indicators of performance, as well as assessments of those indicators:-

1. Quantity-The number of units produced, processed or sold is a good objective indicator of performance. Be careful of placing too much emphasis on quantity, lest quality suffer.

2. Quality-The quality of work performed can be measured by several means. The percentage of work output that must be redone or is rejected is one such indicator. In a sales environment, the percentage of inquiries converted to sales is an indicator of salesmanship quality.

3. Timeliness -How fast work is performed is another performance indicator that should be used with caution. In field service, the average customers downtime is a good indicator of timeliness. In manufacturing, it might be the number of units produced per hour.

4. Cost-Effectiveness -The cost of work performed should be used as a measure of performance only if the employee has some degree of control over costs. For example, a customer-service representatives performance is indicated by the percentage of calls that he or she must escalate to more experienced and expensive reps.

5. Absenteeism/Tardiness -An employee is obviously not performing when he or she is not at work. Other employees performance too may be adversely impacted by absences.

6. Creativity-It can be difficult to quantifycreativityas a performance indicator, but in many white-collar jobs, it is vitally important. Supervisors and employees should keep track of creative work examples and attempt to quantify them.

7. Adherence to Policy-This may seem to be the opposite of creativity, but it is merely a boundary on creativity. Deviations from policy indicate an employee whose performance goals are not well aligned with those of the company.

8. Gossip and Other Personal Habits-They may not seem performance-related to the employee, but some personal habits, like gossip, can detract from job performance and interfere with the performance of others. The specific behaviors should be defined, and goals should be set for reducing their frequency.9. Personal Appearance/Grooming-Most people know how to dress for work, but in many organizations, there is at least one employee who needs to be told. Examples of inappropriateappearance and grooming should be spelled out, their effects upon the employees performance and that of others explained, and corrective actions defined. 10. Manager Appraisal -A manager appraises the employees performance and delivers the appraisal to the employee. Manager appraisal is by nature top-down and does not encourage the employees active participation. It is often met with resistance, because the employee has no investment in its development.

11. Self-Appraisal -The employee appraises his or her own performance, in many cases comparing the self-appraisal to management's review. Often, self-appraisals can highlight discrepancies between what the employee and management think are important performance factors and provide mutual feedback for meaningful adjustment of expectations.

12. Peer Appraisal -Employees in similar positions appraise an employees performance. This method is based on the assumption that co-workers are most familiar with an employees performance. Peer appraisal has long been used successfully in manufacturing environments, where objective criteria such as units produced prevail. Recently, peer appraisal has expanded to white-collar professions, where soft criteria such as works well with others can lead to ambiguous appraisals. Peer appraisals are often effective at focusing an employees attention on undesirable behaviors andmotivating change.

13. Team Appraisal -Similar to peer appraisal in that members of a team, who may hold different positions, are asked to appraise each others work and work styles. This approach assumes that the teams objectives and each members expected contribution have been clearly defined.

14. Assessment Center -The employee is appraised by professional assessors who may evaluate simulated or actual work activities. Objectivity is one advantage of assessment centers, which produce reviews that are not clouded by personal relationships with employees.

15. 360-Degree or Full-Circle Appraisal -The employees performance is appraised by everyone with whom he or she interacts, including managers, peers, customers and members of other departments. This is the most comprehensive and expensive way to measure performance and it is generally reserved for key employees.16. MBO (Management by Objectives) -The employees achievement of objective goals set in concert with his or her manager is assessed. The MBO process begins with action statements such as, reduce rejected parts to 5 percent. Ongoing monitoring and review of objectives keeps the employee focused on achieving goals. At the annual review, progress toward objectives is assessed, and new goals are set.There are as many indicators of performance as there are companies and jobs. The various assessment methods can be used in combinations. It is important to choose indicators that align with your companys goals and assessment methods that effectively appraise those indicators.HR FUNCTIONS APPLICABLE TO PERFORMANCE MANAGEMENT SYSTEM

Various hr functions are applicable during the execution of a performance management system in an organization. The functions as well as their usage are listed below:

Performance Appraisal This is one of the major functions in a performance management system. It is very critical to the system since it measures employee performance using various methods. Any further decision can be made only after the performances of the employees are correctly measured. Training After appraisals are completed, weaker performing employees can be sent for training. High performers can also be sent for training so that they can be prepared to take higher responsibilities in the future. Rewards & Benefits High performing employees can be rewarded so that they feel motivated to keep up the performance. This also provides job satisfaction to the employees and helps in employee retention. Career Planning This is one of the best methods to reward better performing employees. Providing promotions to employees signifies to the employees that their efforts are duly recognized by the organization. Aspiring employees can be given desired responsibilities if the appraisal founds them suitable. Formation of HR Policies Based on the feedback received during the appraisal process, various corrective measures can be taken. Existing hr policies can be improved or newer policies can be formed so as to benefit the employees as well as the organization which in turn can boost the overall performance of the organization. Exit Interview - When a valued person leaves the company, it is necessary to understand why the person is leaving. This feedback will help the company improve its work environment for people as well as impact their performance in a positive manner. An improved work environment for people results in the retention of valued staff. Succession Planning By conducting performance management, the potential of many employees is realized. Such employees can be given opportunities when succession planning is carried out.The impact of the Human Resources professional on the performance management system is powerful: HR professional is involved in the process of performance management right from the stage of designing the system. There has to be careful planning of the process after taking into due consideration the welfare of the employees as well as the organization.

There has to be numerous interactions with various Head of Departments, Managers, Supervisors so that the performance management system can be developed without eliminating any key aspects of the job duties.

After the performance management system has been developed, the execution stage is very crucial. Many difficulties may arise at this stage which needs to be effectively handled by the hr professional.

Once the process starts, the hr professional must continuously monitor the overall progress and take necessary actions. All the queries and doubts regarding the execution of the process must be taken care of.

It is the hr professionals role to analyze the results yielded by the performance management system. The results will further enable to take necessary steps in the benefit of the organization.

Apart from measuring the performance of employees, the hr professional can also get valuable feedback regarding the system itself and use the inputs to further develop the performance management system.

Managers and supervisors can be encouraged to take responsibility for managing performance in their work area and cooperating for performance improvement across the organization.

An understanding that even if one individuals work area, shift, or department is successful, this will not result in a well-served customer can be promoted. Because all components of the organization are part of a system that creates value for the customer, all components must be successful.

PERFORMANCE APPRAISALPeople differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Performance appraisals of employees are necessary to understand each employees abilities, competencies & relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance.Performance appraisals are widely used in the society. The history of performance appraisal can be dated back to the 20th century and then to the second world war when the merit rating was used for the first time. An employer evaluating their employees is a very old concept. Performance appraisals are an indispensable part of performance measurement. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards desired goals and aims.Once an annual ritual, performance appraisal has become a continuous process by which an employee understands the companys goals and his or her progress toward contributing to them are measured.The latest mantra being followed by organizations across the world being "get paid according to what you contribute" the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand theirroles and responsibilitiesand give direction to the individuals performance. It helps to align the individual performances with the organizational goals and also review their performance.

Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees. It is a part of career development. It plays the role of the link between the organization and the employees personal career goals.There is no such thing as an "ideal" appraisal format and system. Every organization must design an appraisal instrument and process that supports the organizational goals that it wishes to accomplish.

Pre-requisites for Effective & Successful Performance Appraisal:-

Documentation There must be continuous noting and documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings. Standards/Goals The standards set should be clear, easy to understand, achievable, motivating, time bound and measurable. Practical and simple format The appraisal format should be simple, clear, fair and objective. Long and complicated formats are time consuming, difficult to understand and do not elicit much useful information. Evaluation technique An appropriate evaluation technique should be selected; the appraisal system should be performance based and uniform. The criteria for evaluation should be based on observable and measurable characteristics of the behavior of the employee. Communication Communication is an indispensable part of theperformance appraisal process. The desired behavior or the expected results should be communicated to the employees as well as the evaluators. Communication also plays an important role in the review or feedback meeting. Open communication system motivates the employees to actively participate in the appraisal process. Feedback The purpose of the feedback should be developmental rather than judgmental. To maintain its utility, timely feedback should be provided to the employees and the manner of giving feedback should be such that it should have a motivating effect on the employees future performance. Personal Bias Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. Therefore, the evaluators should be trained to carry out the processes of appraisals without personal bias and effectively.Purpose of Performance Appraisal:-Performance appraisal is closely linked to otherHR processeslike helps to identify the training and development needs, promotions, demotions, changes in the compensation etc. The performance appraisal process in itself is developmental in nature.A feedbackcommunicated in a positive manner goes a long way to motivate the employees and helps to identify individual career developmental plans. Based on the evaluation, employees can develop their career goals, achieve new levels of competencies and chart their career progression.Performance appraisalencourages employees to reinforce their strengths and overcome their weaknesses.Typically, performance appraisal is aimed at-

To review the performance of the employees over a given period of time

To judge the gap between the actual and the desired performance

To help the management in exercising organizational control

To diagnose the training and development needs of the future Provide information to assist in the HR decisions like promotions, transfers etc. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development

To reduce the grievances of the employees

Helps to strengthen the relationship and communication between superior subordinates and management employees.

The approaches to conducting a performance appraisal is as follows:-Traditional approach:

Traditionally, performance appraisal has been used as just a method for determining and justifying the salaries of the employees. Then it began to be used as a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees.

This approach was a past oriented approach which focused only on the past performance of the employees i.e. during a past specified period of time. This approach did not consider the developmental aspects of the employee performance i.e. his training and development needs of career developmental possibilities. The primary concern of the traditional approach is to judge the performance of the organization as a whole by the past performance of its employees.Therefore, this approach is also called as the overall approach. In 1950s theperformance appraisalwas recognized as a complete system in itself and the Modern Approach to performance appraisal was developed.Modern approach:The modern approach to performance development has made the performance appraisal process more formal and structured. Now, the performance appraisal is taken as a tool to identify better performing employees from others, employees training needs, career development paths, rewards and bonuses and their promotions to the next levels.Appraisals have become a continuous and periodic activity in the organizations. The results of performance appraisals are used to take various other HR decisions like promotions, demotions, transfers, training and development, reward outcomes. The modern approach to performance appraisals includes afeedback processthat helps to strengthen the relationships between superiors and subordinates and improve communication throughout the organization.

The modern approach toperformance appraisalis a future oriented approach and is developmental in nature. This recognizes employees as individuals and focuses on their development.360 degree method of performance appraisal:

360 degree feedback, also known as'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job.360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information orfeedback regarding the"on-the-job"performance of the employee.

360 degree appraisal has four integral components:1. Self appraisal

2. Superiors appraisal

3. Subordinates appraisal

4. Peer appraisal

Self appraisalgives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superiors appraisal forms the traditional part of the360 degree performance appraisalwhere the employees responsibilities and actual performance is rated by the superior.Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superiors ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees abilities to work in a team, co-operation and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree performance appraisalshas high employee involvement and also has the strongest impact on behavior and performance. It provides a "360-degree review" of the employees performance and is considered to be one of the most credible performance appraisal methods.

360 degree performance appraisalis also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc.Arguments against 360 Degree Performance Appraisal:Despite the fact that 360 degree appraisals are being widely used throughout the world for appraising the performance of the employees at all levels, many HR experts and professionals argue against using the technique of 360 degree appraisals. The main arguments are:

360 degree performance rating system is not a validated or corroborated technique for performance appraisal.

With the increase in the number of raters from one to five (commonly), it became difficult to separate, calculate and eliminate personal biasness and differences.

It is often time consuming and difficult to analyze the information gathered. The results can be manipulated by the employees towards their desired ratings with the help of the raters. The 360 degree appraisal mechanism can have an adverse effect on themotivation and the performanceof the employees. 360 degree feedback as a process requires commitment of the top management and the HR, resources(time, financial resources etc), planned implementation and follow up. 360 degree feedback can be adversely affected by the customers perception of the organization and their incomplete knowledge about the process and the clarity of the process. Often, the process suffers because of the lack of knowledge on the part of the participants or the raters.

THE APPRAISAL PROCESS IN AN ORGANIZATION

The appraisal process needs to be planned meticulously. Numerous meetings have to be conducted between the human resource department and the various department heads so that various key issues can be finalised. These issues may include designing the appraisal process and the appraisal forms, the parameters of performance on which employees will be measured, discussions regarding the method of appraisal, taking approvals for conducting the appraisal process, etc. Since performance of employees is measured against parameters, it is very important that these parameters be chosen carefully. For this purpose, job descriptions & key result areas of employees working at all levels needs to be made. The parameters need to be reviewed by the department heads and necessary changes should be made.An appraisal form needs to be developed after parameters have been selected. Performance appraisal form provides the basis for theperformance review, providing the feedback to the employees and the final rating of the employee. It also facilitates various other HR decisions and career development plans and decisions of the employees. Therefore, performance appraisalfrom should be filled with utmost care and objectivity. All the instructions and guidelines on the appraisal form should be read and followed carefully.After the appraisal forms have been designed, the flow of the appraisal forms must be decided. This also includes assigning the supervisors and department heads as appraisers and approvers. The duration of the appraisal process also needs to be fixed at this stage.

Appraisals are often conducted by the managers and the supervisor who sometimes, are themselves not aware of the procedures to be followed. They should be explained the importance and the implications of theperformance appraisalto the organizations, the methods to be followed, the principles and theprocessesof the appraisal.All managers & supervisors who conduct performance appraisals should be given training. The training can be given by conducting special workshops by professional HR consultants or qualified and experienced HR professionals ofhuman resource management. The venue for the purpose can be a suitable seminar hall, training room, conference hall, boardroom, or at some place away from the workplace like some hotel etc.During such orientation and training sessions, the appraiser needs to be alerted about certain occurrences: Halo effect- Halo effect is the tendency of the rater to allow one aspect of a mans character to influence his overall rating of the employee. Central tendency- Central tendency is the tendency of the rater to give average ratings to the employee without actually appraising or condemning them. Recent behaviour - As per the human nature, it is a common tendency to rate the people on the basis of their recent behaviour and forgetting the events and their performance in the starting of the period. Stereotyping- Stereotyping an employee on the basis of the performance of his/her team is another common error.A typical appraisal process may begin with the self appraisal conducted by the employee himself. Self appraisal is an important part of the performance appraisal process where the employee himself gives the feedback or his views and points regarding his performance. Usually this is done with the help of a self appraisal form where the employee rates himself on various parameters, tells about his training needs, if any, talks about his accomplishments, strengths, weaknesses, problems faced, etc.While writing self appraisals, it is important to be honest and objective. All the aspects concerning development and improvement must be duly noted. It is also important that the employee seeks future responsibilities in his self appraisal. The performance appraisal form should then be filled by the immediate supervisor or manager of the employee in order to ensure that the appraiser is fully acquainted with the performance, responsibilities, targets and standards of the employee. A rater or a manager needs: An objective rating method to assess an employees performance, behavior, and skills and knowledge. All the relevant data related to the employees performance, the standards, his job description. To observe and accurately recall the employees behavior throughout the time period of the appraisal. Using meaningful, unambiguous and clear language for the description in the document.The performances of the employees need to be measured after the appraisal forms have been filled. It is perhaps the most difficult part of the performance appraisal process toaccurately and objectivelymeasure the employee performance. Measuring the performance covers the evaluation of the main tasks completed and the accomplishments of the employee in a given time period in comparison with the goals set at the beginning of the period. Measuring also encompasses the quality of the accomplishments, the compliance with the desired standards, the costs involved and the time taken in achieving the results.Accurate and efficient performance measurement not only forms the basis of an accurate performance review but also gives way to judging and measuring employee potential. All the perspectives thus received should be combined in the appropriate manner and to get an overall, complete view of the employees performance. Measuring the performanceof the employees based only on one or some factors can provide with inaccurate results and leave a bad impression on the employees as well as the organization. Therefore, a balanced set of measures (commonly known as balanced scorecard) should be used for measuring the performance of the employee.Performance appraisalprocess is incomplete without the feedback given to the employee about his appraisal and his performance. But the way of giving as well as receiving the feedback differs from person to person and their way of handling and their outlook towards the issue.On the part of the person receiving the feedback, the following points are important to be taken care of:

The employee should have a positive attitude towards thefeedback process He should listen to the suggestions of the appraiser calmly and try to incorporate them in his plans. He should not hesitate to ask for the help of his superiors. Should have a co-operative attitude during the feedback meeting. Dont judge the appraiser as a person. Should take the feedback objectively. Should not judge the appraiser as a person on the basis of the feedback.

On the part of the appraiser or the manager / person giving the feedback, the following points are to be taken care of:

The appraiser should make the receiver feel comfortable during the feedback meeting. The appraiser should make it a twoway conversation i.e. let the employee speak. Listen to the employee and note his points, suggestions, problems etc. The appraiser should not adopt a confrontational approach towards the meeting. The goal is not to criticize the employee.

Provide aconstructive feedbackto the employee i.e. in a way which will motivate him to perform better. Have a positive attitude towards the process. Try to understand the reasons of his failure. Be fair and objective. Prepare yourself for what to say and how to say. Make the appraisal feedback meeting useful and productive for the organization and the employee.On completion of the appraisal process, the appraisal reports need to be consolidated. These reports maybe used for many purposes such as determining training needs, giving promotions and monetary rewards to deserving employees, identifying potential employees for the purpose of succession planning, etc. The appraisal can also be kept as a part of theHR recordsof the employee.The individual performance reviews should be kept confidential and should not be accessible to other employees. They should also be stored at a safe place with limited access. Outdated reviews should be destroyed.

Challenges of Performance Appraisal:-An organization comes across various problems and challenges of performance appraisal in order to make a performance appraisal system effective and successful. The main Performance Appraisal Challenges involved in the performance appraisal process are:

Determining the evaluation criteria- Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selection should be in quantifiable or measurable terms. Creating a rating instrument- The purpose of the performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. Lack of competence- Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively. Errors in rating and evaluation- Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating theperformance of the employees. Resistance- The appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well theprocess of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/herArguments against Performance Appraisal:- Performance appraisal is a bitter process for most of the employees which can create emotional pressures and stress for the employees. PA is often looked upon as a tool to control the employees by the superiors who dampen the intrinsic motivation of the employees. Most of the managers and superiors are not trained enough to carry the processes in the appropriate and the structured manner. PA process increases the dependency of the employees on their superiors. PA process encourages accountability, approvals and discourages the spirit of creativity and initiative by employees and also demotivates them. Performance appraisalsare conducted by managers who are often not trained to be appraisers. This obstructs the genuine feedback, as it includes subjectivity and bias of the raters leading to incorrect and unreliable data regarding the performance of the employees. PA can adversely affect the morale of the employees and create dissatisfaction among them, thereby affecting the organizational performance. Performance appraisals andreviewsare often time consuming, with faulty methods to measure performances and generating false results and the decisions taken can be politically influenced.

Study of the Performance Management System in Shamrao Vithal Co-operative Bank Ltd. with Analysis and RecommendationsLogo of svcTHE SHAMRAO VITHAL CO-OPERATIVE BANK LTD.The Shamrao Vithal Co-op Bank Ltd. was founded when co-operation was just beginning to gain ground in the country. Late Rao Bahadur Shripad Subbarao Talmaki was the main architect of the Bank and he named it after Late Shamrao Vithal Kaikini, who was his main guiding force and Guru.

The Bank was originally registered as a Co-operative Credit Society on 27th December 1906. It was set up with the primary objective of helping the less fortunate members of the Chitrapur Saraswat community in its economic enterprises, to encourage savings and to create funds for providing financial aid to deserving members.

Its been an innovative 103 years. As the decades unfolded, varied services were introduced to address an ever-widening spectrum of retail, corporate and institutional clients. The Rs.1000 crore total business mark was crossed in the year 1998; Rs.5000 crore was achieved in 2006; and the turnover has now accelerated beyond Rs. 8900 crore.

Growth has equally been reflected in network expansion too 33 outlets in 1998 boomed to 48 in 2006 and have now grown to 91, and countingInnovation has been in evidence in every aspect of the Banks operations. Administratively, in nurturing human resources and a positive work environment. Operationally, by enhancing security exponentially at various levels. Managerially, through astute goal-definition and an emphasis on transparency. And at corporate level, through network expansion and mergers and acquisitions. Yet, perhaps, the most significant aspect of innovation has been the development and roll-out of Genius internally constructed banking software that has increased operational efficiency across the Banks entire branch network.

The Banks human capital is remarkable in terms of quality. The Human Resource Department of the Bank is well equipped with effective means to select, recruit and retain a high performing workforce, choosing the right fit for the right job and preserving a dynamic culture for employees that foster achievement.

Human Resource management and development practices are major practices in productivity, progress and profits for any institution, and with 1280 employees, the Banks HRD programs respond to the opportunities created by the organizations growth, technological advancements and the productivity challenge faced by it.

SVCB HIERARCHYCHIEF EXECUTIVE OFFICER(CEO)

DEPUTY GENERAL MANAGER

(DGM)

ASSISTANT GENERAL MANAGER

(AGM)

DIVISIONAL MANAGER

(DM)

SENIOR MANAGER

MANAGER

ASSISTANT MANAGER

OFFICER

CLERK

SUB-STAFF

STUDY:The old appraisal system-

The old system of conducting performance appraisal at SVC Bank consisted of hard copy of the appraisal forms. The forms had to be manually filled by the employees.

The old system of performance appraisals had many drawbacks: Employees were appraised on the basis of the duties and responsibilities mentioned in the handbook which had been written in early 90s. These duties and responsibilities had become outdated in todays dynamic environment. Monitoring the status of appraisal completion was done by contacting managers and asking them how far they have progressed with it. This process of tracking was time consuming and could also lead to inaccuracies. Performance record notes were kept in electronic (typically MS Word) format.Such notes had chances of getting easily lost, plus they were difficult to sort through when used during appraisal interviews. The appraisal forms was needed to be gathered by the HR department from all managers, and then added to employee personal files - by hand or electronically - which were both extremely time-consuming, plus some forms would get misplaced in the process. It was also time-consuming to retrieve those forms again if necessary. Performance ratings and feedback from other managers an employee has worked with were gathered on separate, paper-based appraisal forms. This was a logistical nightmare, plus averages have to be calculated by hand or by using a spreadsheet. To view the contents of employee appraisal forms, Managers and HR would have to first find the file/s where they were stored. This would be very time consuming if the files were not kept at not-so-easily-accessible physical location. Employee performance percentages and/or rating averages had to be calculated manually, or ratings were needed to be added into a spreadsheet for calculations.This would lead to potential data input and calculation errors, not to mention the amount of time to do all of this. Maintaining these files was also a tedious process. Staff performance data inputs and comparisons had to be done by using tools such as spreadsheets. The amount of time inputting these data; possible errors with inputting; limited capability to do different reports on a spreadsheet posed many problems.Since the old appraisal system had so many drawbacks, there emerged a need to upgrade to a better way of conducting employee performance appraisals.

The new appraisal system-

The old system of appraising employees was completely revamped into an online procedure. The new appraisal system known as e-appraisal has been designed by the HR department and developed by the in-house IT department of SVC Bank. The appraisal process is now connected to the HRMS, which is the master repository of all employee related data. The appraisal forms have been drafted after due consultation with the zonal heads. This new system will be effective from this year onwards.OBJECTIVES OF E-APPRAISAL The main purpose of introducing the e-appraisal system is to facilitate easy tracking, monitoring and maintenance of records. The task of generating reports about performance of the employees will become much simpler as reports will be made available in the HRMS. This will save a lot of time for the HR department. After the completion of the appraisal process, it will become convenient to identify the performers as well as the non-performers. Individuals with specific talents / potential for growth can be identified and groomed to shoulder higher responsibility. Training and development needs of the employees can be ascertained after appraisals of the employees have been carried out. Appraisals can also measure to some extent the success rate of the training programs provided to the employees. From a broader perspective, e-appraisals will gauge the performance level of the employees in comparison to the banks growth.PROCESS OF FORMULATING THE NEW APPRAISAL SYSTEM - Job Descriptions: JD as they are popularly known have to be designed, as SVCB did not have them in place.

Key Result Areas: KRA were then defined from the respective JD

Common Appraisal Parameters were drawn out for each cadre, merged and a final draft was preparedLets understand each of the above in detail:

JOB DESCRIPTIONS: The new appraisal process began with the preparation of job descriptions for each cadre at branch / department. Job descriptionsare lists of the general tasks, or functions, and responsibilities of a position. Typically, they also include to whom the position reports, specifications such as the qualifications needed by the person in the job, salary range for the position, etc. Typically, job descriptions are used especially for advertising to fill an open position, determining compensation and as a basis for performance reviews. Here at SVC Bank, they have been used for the purpose of developing performance appraisals.Job descriptions were developed by conducting ajob analysis, which included examining the tasks and sequences of tasks necessary to perform the job. For this purpose, the method of observation was used. The analysis looks at the areas of knowledge and skills needed by the job.Positives Aspects about Employee Job Descriptions: Employee job descriptions provide an opportunity to clearly communicate the organizations goals and they tell the employee where he or she fits inside the big picture. Employee job descriptions set clear expectations for what the organization expects from its people. Employee job descriptions help the organization cover all its legal bases. Employee job descriptions tell the candidate exactly what you want in your selected person. Well-written employee job descriptions help organization employees, who must work with the person hired, understand the boundaries of the person's responsibilities.Negative Potential of Employee Job Descriptions: Employee job descriptions become dated as soon as you write them in a fast-paced, changing, customer-driven work environment. Poorly-written employee job descriptions can serve as evidence of wrong-doing or wrong-telling in a wrongful termination lawsuit.

Hence, preparing correct and accurate job descriptions is absolutely essential because employee job descriptionsare communication tools that are significant in the organization's success. Poorly written employee job descriptions, on the other hand, add to workplace confusion, hurt communication, and make people feel as if they don't know what is expected from them.Job descriptions should be reviewed periodicallyto make sure it accurately reflects what the employee is doing and the organizations expectations of results from the employee.JD was prepared for each cadre mentioned in the hierarchy (i.e. from Clerk to Manager). As the Clerk and Officer work in all departments of the branch on a rotational basis, the JD comprises of work related to all departments of the branch. The Assistant Manager & Branch Head have a consolidate JD. The actual JD are copyright of the Bank, hence cannot be reproduced here.KEY RESULT AREAS:Key Result Area (KRA) refers to general areas of outputs or outcomes for which the departments role is responsible.In simple terms it may be defined as primary responsibility of an individual, the core area for which each person is accountable.Each job can be broken down into about five to seven key result areas, seldom more. These are the results that one must absolutely, positively have to get to fulfill ones responsibilities and make maximum contribution to the organization. Failure to perform in a critical result area of the work can lead to failure at the job. There is essential knowledge and skill that one must have for his/her job. These demands are constantly changing. There are core competencies that a person must have developed that make it possible to do the job in the first place. Preparation of the KRAs gives the employee the exact idea of his job responsibilities. For the new appraisal process, key result areas have been prepared by summarizing the job descriptions. Those duties that will have a direct impact on the organizations goals have been designated as KRAs.KRA for each cadre was established based on the JD. The KRA was then merged with all cadres/grades so that a common pattern could be established for designing the appraisal parameters.

PARAMETERS:With the help of job descriptions & key result areas, relevant parameters have been formed based on which the performance of the employees will be measured. These parameters have been finalised after holding numerous consultations with the branch / department heads.In todays competitive banking industry, having knowledge only about banks products and services is no longer sufficient. Bank staff must also have good communication skills through which they can provide effective customer service and thus attract or retain their customers. To work cordially in the work environment, a person must have certain traits which will enable him to avoid conflicts at workplace.

Based on these factors, four parameters have been selected in the new appraisal system for the purpose of conducting appraisals. The following parameters are applicable to all the cadres:

Individual traits

Work related

Customer service

Communication For Assistant Managers and Branch / Department Heads, additional parameters based on management capabilities have been used.PROFORMA OF THE APPRAISAL FORM:Self appraisal:

State your important achievements during the appraisal period

State your specific qualification / skill upgrades achieved during the appraisal period

Mention aspects of your job which you do best; and those which you do not do so well

What could be done by you and / your supervisor to improve your performance

What are your career goals: short term / long term

The actual performance appraisal form is the copyright of the Bank, hence it cannot be reproduced here.

THE PROCESS FLOW CHART OF ONLINE PERFORMANCE APPRAISALS AT SVCB

PROCESS OF CONDUCTING E-APPRAISALS: Conduct meetings - The e-appraisal system has been designed solely by the HR department and the online software has been developed internally by the IT department. For this purpose, numerous meetings had to be conducted between the HR and IT department. There are many components of the e-appraisal system such as deciding the parameters, appointing appraisers and approvers, finalizing the duration of the appraisal season, taking sanctions from the board etc. which can be decided only after conducting numerous meetings with various departments. Review & change of parameters In the old appraisal system, due to the absence of job descriptions and key result areas, the basis for measuring employee performance was outdated. In the e-appraisal process, job descriptions and key result areas were duly prepared and they were summarized to form the parameters.Since parameters are the very base of measuring performance, they must be formed in the most suitable manner. They must contain all the important aspects of the job to be performed yet, they must be in easy language which would be simple to understand. These parameters need to be finalized after due consultations with the Branch heads and the Department heads. Appraisal routing - This includes determining the work flow of the appraisals. For the smooth flow of the appraisal forms, it is necessary to chalk out a path. This must be designed in such a manner so that there would be no roadblocks during the appraisal process due to which there would be any delay or confusion in the execution of the process.The self appraisal forms would be routed to the appraisers which would then be routed to the reviewer / approver. The completed form would be available on the HRMS software. The workflow for branches and departments have been set up through meetings with branch managers and department heads and incorporated into the system, hence the appraisal will move automatically.

Marking of Branch Heads / Department Heads This is one of the important aspects of the e-appraisal process as it involves deciding who would be the appraisers and who would be approvers. The onus of accurately measuring the performance of the employees lies on the appraisers and approvers. After the Branch Heads and Department Heads are marked, they need to be given orientation regarding the e-appraisal process. Fixing the date range For the smooth and timely transition of the appraisal forms, it is extremely crucial to fix a date range. A period of one week is given to the employees to complete their self-appraisal forms. Next whole week is devoted to the appraisers doing the employee appraisals. The appraisers need to have a meeting with the employee and discuss his appraisal form.The reviewer / approver will also be given a duration of one week to approve the appraisal form and submit it to the HRMS after which no changes can be made.

Run the system After all the planning part is over, it is essential to look after the operational aspects of the e-appraisal process. Since this is the first year where e-appraisal where will be launched, it is important to take care that no technical difficulties may arise. A pilot project was executed in the HR department and at Vakola Branch for the system and it has been accepted by the staff therein. The suggestions / recommendations given by the staff have been incorporated into the module. Orientation of the staff with regards to understanding the appraisal process, tips to appraise effectively and a system orientation have been planned in the month of July 2010.

Handle problems that may occur in the process Inspite of planning everything to the last detail, some unforeseen problems may crop up. Some of the problems may be inability of a staff to access his appraisal form, delays in submission of the forms, etc. In such instances, the HR department has to fix the problems immediately so that the appraisal process stays on schedule. Consolidation of reports At the end of the appraisal season, reports regarding the overall performance of the employees need to be generated. These reports are available in HRMS, they need to be generated by the HR department. These reports maybe used for recognizing well performing employees, for the purpose of promotions, for determining training needs, etc.Thus the e-appraisal system is a much better method of conducting employee performance appraisals.Following is an example of the flow of appraisals at branch level for the cadre of sub-staff and clerk:

BENEFITS OF E-APPRAISAL MODULE: Since the e-appraisals have been linked to HRMS which is the master repository of all employee related data, it has become convenient for the HR department to maintain the records of the employees. Appraisal Forms are automatically stored in the database on completion, per employee and department. Retrieval is easy and instant. Also in respect of any number of previous years' appraisals, they will be easily accessible. The new module has been designed in a user-friendly manner. Also, navigation through the module has been made simple. This will be convenient to employees who will be apprehensive of using online system for their self appraisal. Easier navigation will also be time saving. The parameters in the appraisal form are descriptive choices and not as rating scale. This will make rating simpler and quicker. Since there are only four answer options, it will be easier to rate the performance of the employee. The answer options are simple which are easy to understand. Under the new e-appraisal module, it is necessary to have a review meeting between the appraiser (reporting authority) and appraisee (staff to be appraised). This meeting is very crucial because there is a two-way communication which facilitates better understanding of the organizations as well as personal goals. This dialogue between the appraiser and appraisee is integral without which the appraisal cannot be submitted. In the review meeting that is part of the e-appraisal, the dialogue with employees brings out their opinions/expectations from the Bank and vice versa. This opens up the channels of communication which will be beneficial for the organization in the long run. There is no separate id or password to access the e-appraisal module. All users can access their appraisal forms through their own Windows login. Hence there is no new user id-password to memorize. This is one of the user friendly features of the module which will encourage the employees to adapt themselves to the module. In the e-appraisal module, every cadre of employees has to fill in self appraisal. For Sub-Staff who would be uncomfortable in filling their self appraisal, the Branch Manager / Department Head can nominate an Officer to assist him to fill in his self appraisal. Since the e-appraisal will be introduced for the first time, employees may have many difficulties in using the online appraisal system. For this purpose, a help menu and tips for usage are uploaded into the module. This will enable easy navigation for the users. The HR department can track each appraisal and monitor its progress since all the appraisal reports will be available on the HRMS. Any delays in the process can be tracked and necessary action can be taken. Confidentiality is an important factor in the appraisal process which cannot be neglected. Confidentiality issues are also taken care of in the module. It often happens that the process of appraisal gets delayed as employees tend to get busy in their work. The new module has the feature of sending auto-email reminders in respect of appraisals approaching and those past their due date. Thus, the HR department wont have to send reminder emails manually. The e-appraisal module calculates performance percentages and rating averages automatically, instantly, and error-free. This saves lot of time for the HR department who had to do the calculation manually. Based on the consolidated appraisal reports generated from the system, Training Needs Analysis (TNA) for all employees can be evaluated. Training programs can be designed accordingly. Non performer issues can be dealt with adequate training, counseling.ANALYSIS: The transition of the appraisal system from manual to online is an evolving process. The job descriptions have yet to be formally accepted by the management and staff. Even though the development of the e-appraisal system is progressive for the Bank, whether it will be adapted by the employees or not is yet to be seen. Since the e-appraisal will be introduced for the first time in the Bank, employees maybe apprehensive about it. To add to it, there is a cultural shift involved. The technology savvyness of the employees is not known. Therefore it cant be judged at present whether the new appraisal system will be successful or not. Based on the staff response to the new system, the e-appraisal module is likely to get developed further to be more efficient. It will be essential to conduct orientation sessions about the online appraisal system for all the employees. This can be a two-way communication where the staff can put forth their queries. Having online appraisal process will be highly convenient for the HR department of the Bank. It will be time saving and more organized as compared to the earlier process. The biggest challenge for the HR department will be to ensure that all the stages of the appraisal process get completed within the stipulated period. The Bank has to move towards a performance oriented organization i.e. towards linking pay with performance. That will be the true test of the new appraisal system.RECOMMENDATIONS:

The Bank management needs to take ownership of this appraisal system as a policy decision and a top-down approach is necessary to initiate the change to a performance driven organization. The HR departments needs to be strengthened with HR professionals equipped with the skills of employee engagement & development to drive the change and seek the results. Orientation & training of the new system has to be organization-wide and not limited to a few employees who will be the appraisers/approvers. Leadership qualities of the employees must be encouraged and rewarded so that the organization has a superior talent pool. The appraisal system is an evolving system and hence the continuity in the system and process need to be maintained, hence the entire process needs to be documented well by the people handling it.BIBLIOGRAPHY

Performance Appraisals T.V. Rao Human Resource Management Gary Dessler www.abouthr.com www.citehr.com www.svcbank.comReserve Bank of India

Development Banks

Co-operative Banks

Commercial banks

Commercial Banks

Foreign

Indian

Nationalized Banks

Private Sector Banks

Regional Rural Banks

State Bank Group

Development Banks

Industrial Finance Corporation of India

IFCI

Small Industries Development Bank of India

SIDBI

ICICI

Industrial Credit and Investment Corporation of India

Industrial Development Bank of India

IDBI

National Bank for Agriculture and Rural Development

NABARD

Export and Import Bank

EXIM

Co-operative Banks

Central Cooperative Banks

State Cooperative Banks

Primary Cooperative Banks

Urban Cooperative Banks

Salary earners societies satisfying the definition of primary cooperative bank in the B.R. Act 1949

REWARDING

Recognize & reward good performance

RATING

Summarizing performance

Assign the rating of record

DEVELOPING

Address poor performance

Improve good performance

PLANNING

Set goals & measures

Establish & communicate elements and standards

MONITORING

Measure performance

Provide feedback

Conduct progress review

TRAINING

TRAINING

REWARDS & BENEFITS

PERFORMANCE APPRAISAL

EXIT INTERVIEW

CAREER PLANNING

SUCCESSION PLANNING

FORMATION OF HR POLICIES

PERFORMANCE MANAGEMENT SYSTEM

CONDUCT MEETINGS

DECIDE THE PARAMETERS

DESIGN THE APPRAISAL FORM

DECIDE THE FLOW OF APPRAISALS

FIXING THE DATE RANGE

PROVIDE ORIENTATION & TRAINING ABOUT THE PROCESS

CONDUCT SELF- APPRAISALS

APPRAISAL BY THE MANAGER / SUPERVISOR

MEASUREMENT OF APPRAISALS

FEEDBACK TO EMPLOYEES

CONSOLIDATION OF REPORTS

SVCB Officers Association

SVCB Employees Union

CONSOLIDATION OF REPORTS

HANDLE PROBLEMS THAT MAY OCCUR IN THE PROCESS

RUN THE SYSTEM

FIXING THE DATE RANGE

MARKING OF BRANCH HEADS / DEPARMENT HEADS

APPRAISAL ROUTING

REVIEW & CHANGES IN PARAMETERS

CONDUCT MEETINGS

AT BRANCH

Sub-Staff & Clerk

Assistant Branch Manager Assigned by BM

ADMINISTRATOR

The Reviewer will get both appraiser report of the appraisee. He marks the appraisee on the Global Factors on a scale of 1(min) to 5(max).

For Branch level, for SS & Clerk, Reviewer will be the Approver also.

Branch Manager

REVIEWER &

APPROVER

ABM will submit his appraisal report into the system. Before submitting the report that he has discussed the appraisal with the Appraisee and if the Appraisee disagrees with the Appraiser, the points of disagreement need to be me