BU Project- Proof Reading Copy

8/2/2019 BU Project- Proof Reading Copy

1/37

CHAPTER 1: Introduction


2/37

HUMAN RESOURCE MANANGEMENT

MEANING AND DEFINITION

MEANING

Human Resource Management (HRM) is the function within an organization that

focuses on recruitment of, management of, and providing direction for the people

who work in the organization.

It is the organizational function that deals with issues related to people such as

compensation, hiring, performance management, organization development, safety,

wellness, benefits, employee motivation, communication, administration, and

training.The terms "human resource management" and "human resources" (HR)have largely replaced the term "personnel management" as a description of the

processes involved in managing people in organizations.

DEFINITION

Flippo, Human resource management is the planning, organizing, directing, and

controlling of the procurement, development, compensation, integration,

maintenance and reproduction of human resources to the end that individual,

organization and social objectives are accomplished.

Prof.Roy Joshi, Human resource management may be defined as a set of

policies, practices and programmes designed to maximize both personal and

organizational goals, process by which people and organizations are bound

together in such a way that both of them are able to achieve their objectives.

Therefore, Human resource management is that aspect of management which

deals with the planning, organizing, directing, and controlling the personnel

functions of an enterprise. The purpose of these functions is to assist in the

achievement of basic organizational, individual and social goals.


3/37

OBJECTIVES

To ensure effective utilization and maximum development of human resources.

To ensure respect for human beings. To identify and satisfy the needs ofanindividual

To ensure reconciliation of individual goals with those of the organization.

To achieve and maintain high morale among employees.

To provide the organization with well-trained and well-motivated employees.

To increase to the fullest the employee's job satisfaction and self-actualization.

To develop and maintain a quality of work life.

To be ethically and socially responsive to the needs of society.

To develop overall personality of each employee in its multidimensional aspect.

To enhance employee's capabilities to perform the present job.

FUNCTIONS

The functions of Human resource management are the following:

Human resource or manpower planning.

Recruitment, selection and placement of personnel.

Training and development of employees. Taking corrective steps such as transfer from one job to another.

Remuneration of employees

Setting general and specific management policy for organizational relationship.

Collective bargaining, contract negotiation and grievance handling.

Quality Circle, Organization development and Quality of Working Life.

Reviewing and auditing manpower management in the organization

Potential Appraisal. Feedback counseling.

Aiding in the self-development of employees at all levels.

Futuristic Vision

There should be a properly defined recruitment policy in the organization that

should give its focus on professional aspect and merit based selection


4/37

In every decision-making process there should be given proper weightage to the

aspect that employees are involved wherever possible. It will ultimately lead to

sense of team spirit, team-work and inter-team collaboration.

Opportunity and comprehensive framework should be provided for full expression

of employees' talents and manifest potentialities. Networking skills of the organizations should be developed internally and

externally as well as horizontally and vertically.

For performance appraisal of the employees emphasis should be given to 360

degree feedback which is based on the review by superiors, peers, subordinates as

well as self-review.

360 degree feedback will further lead to increased focus on customer services,

creating of highly involved workforce, decreased hierarchies, avoiding

discrimination and biases and identifying performance threshold.

More emphasis should be given to Total Quality Management. TQM will cover allemployees at all levels; it will conform to customer's needs and expectations; it will

ensure effective utilization of resources and will lead towards continuous

improvement in all spheres and activities of the organization.

There should be focus on job rotation so that vision and knowledge of the

employees are broadened as well as potentialities of the employees are increased

for future job prospects.

For proper utilization of manpower in the organization the concept of six sigma of

improving productivity should be intermingled in the HRM strategy.

The capacities of the employees should be assessed through potential appraisalfor performing new roles and responsibilities. It should not be confined to

organizational aspects only but the environmental changes of political, economic

and social considerations should also be taken into account.

The career of the employees should be planned in such a way that individualizing

process and socializing process come together for fusion process and career

planning should constitute the part of human resource planning.

Human Resource Management should be linked with strategic goals and objectives

in order to improve business performance and develop organizational cultures that

foster innovation and flexibility.


5/37

PERFORMANCE APPRAISAL

History:

Dulewicz (1989),"... a basic human tendency to make judgments about those one is

working with, as well as about oneself. Appraisal, it seems, is both inevitable and

universal. In the absence of a carefully structured system of appraisal, people will

tend to judge the work performance of others, including subordinates, naturally,

informally and arbitrarily.

The history of performance appraisal is quite brief. Its roots in the early 20th

century can be traced to Taylor's pioneering Time and Motion studies. But this isnot very helpful, for the same may be said about almost everything in the field of

modern human resources management.

As a distinct and formal management procedure used in the evaluation of work

performance, appraisal really dates from the time of the Second World War - not

more than 60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of

things historical, it might well lay claim to being the world's second oldestprofession!

Performance appraisal systems began as simple methods of income justification.That is, appraisal was used to decide whether or not the salary or wage of anindividual employee was justified.The process was firmly linked to material outcomes. If an employee's performancewas found to be less than ideal, a cut in pay would follow. On the other hand, if theirperformance was better than the supervisor expected, a pay rise was in order.Little consideration, if any, was given to the developmental possibilities of appraisal.If was felt that a cut in pay, or a rise, should provide the only required impetus foran employee to either improve or continue to perform well.

Sometimes this basic system succeeded in getting the results that were intended;but more often than not, it failed.
http://www.performance-appraisal.com/dulewicz.htmhttp://www.performance-appraisal.com/dulewicz.htmhttp://www.performance-appraisal.com/dulewicz.htm


6/37

For example, early motivational researchers were aware that different people withroughly equal work abilities could be paid the same amount of money and yet havequite different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important,

yes; but they were not the only element that had an impact on employeeperformance. It was found that other issues, such as morale and self-esteem, couldalso have a major influence.As a result, the traditional emphasis on reward outcomes was progressivelyrejected. In the 1950s in the United States, the potential usefulness of appraisal astool for motivation and development was gradually recognized. The general modelof performance appraisal, as it is known today, began from that time.

MODERN PERFORMANCE APPRAISAL

Randell Schuler Modern Performance appraisal is a formal, structured system ofmeasuring and evaluating an employees job related behavior and outcomes todiscover how and why the employee is presently performing on the job and how theemployee can perform more effectively in the future so that the employee,organization and society will benefit.

Performance appraisal is a structured formal interaction between a subordinate andsupervisor, that usually takes the form of a periodic interview (annual or semi-annual), inwhich the work performance of the subordinate is examined and discussed, with a view toidentifying weaknesses and strengths as well as opportunities for improvement and skills

development.

In many organizations - but not all - appraisal results are used, either directly orindirectly, to help determine reward outcomes. That is, the appraisal results areused to identify the better performing employees who should get the majority ofavailable merit pay increases, bonuses, and promotions. Appraisal results are used toidentify the poorer performers who may require some form of counseling, or in extremecases, demotion, dismissal or decreases in pay. Whether this is an appropriate use ofperformance appraisal - the assignment and justification of rewards and penalties - is avery uncertain and contentious matter.

Objectives of performance appraisal:


7/37

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. Helps to strengthen the relationship and communication between superior

subordinates and management employees. To diagnose the strengths and weaknesses of the individuals so as to identify

the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization. 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.

USES OF PERFORMANCE APPRAISAL

Raises, Merit Pay, Bonuses Personnel Decisions (e.g., promotion, transfer, dismissal) Identification of Training Needs Research Purposes (e.g., assessing the worth of selection tests)

BENEFITS OF PERFORMANCE APPRAISAL

To an employee

Gaining a better understanding of their role Understanding more clearly how and where they fit in within the wider

picture A better understanding of how performance is assessed and monitored Getting an insight into how their performance is perceived Improving understanding of their strengths and weaknesses and

developmental needs Identifying ways in which they can improve performance Providing an opportunity to discuss and clarify developmental and training

Needs.

Understanding and agreeing their objectives for the next year. An opportunity to discuss career direction and prospects


8/37

To the Company

A structured means of identifying and assessing potential Up-to-date information regarding the expectations and aspirations ofemployees

Information on which to base decisions about promotions and motivation An opportunity to review succession planning Information about training needs which can act as a basis for developingtraining plans

Opportunities to hear and exchange views and opinions away from thenormal pressure of work

An opportunity to identify any potential difficulties or weaknesses An improved understanding of the resources available.

TYPES OF PERFORMANCE APPRAISAL

1.Traditional MethodsTraditional approach is also known as traits approach. It is based on the

evaluation of traits in a person. This system may list ten to fifteen personalattributes such as ability to get along with people, competence, judgement,initiative, leadership etc.Types of Traditional methods of Performance appraisal are:

1. ESSAY APPRAISAL METHOD

This traditional form of appraisal, also known as "Free Form method"involves adescription of the performance of an employee by his superior. The description is

an evaluation of the performance of any individual based on the facts and often

includes examples and evidences to support the information. A major drawback of

the method is the inseparability of the bias of the evaluator.

2. STRAIGHT RANKING METHOD

This is one of the oldest and simplest techniques of performance appraisal. In this

method, the appraiser ranks the employees from the best to the poorest on the

basis of their overall performance. It is quite useful for a comparative evaluation.

3. PAIRED COMPARISONA better technique of comparison than the straight ranking method, this methodcompares each employee with all others in the group, one at a time. After all thecomparisons on the basis of the overall comparisons, the employees are given the


9/37

final rankings.

4. CRITICAL INCIDENTS METHODSIn this method of Performance appraisal, the evaluator rates the employee on thebasis of critical events and how the employee behaved during those incidents. It

includes both negative and positive points. The drawback of this method is that thesupervisor has to note down the critical incidents and the employee behaviour asand when they occur.

5. FIELD REVIEWIn this method, a senior member of the HR department or a training officerdiscusses and interviews the supervisors to evaluate and rate their respectivesubordinates. A major drawback of this method is that it is a very time consumingmethod. But this method helps to reduce the superiors personal bias.

6. CHECKLIST METHODThe rater is given a checklist of the descriptions of the behaviour of the employeeson job. The checklist contains a list of statements on the basis of which the raterdescribes the on the job performance of the employees.

7. GRAPHIC RATING SCALEIn this method, an employees quality and quantity of work is assessed in a graphicscale indicating different degrees of a particular trait. The factors taken intoconsideration include both the personal characteristics and characteristics relatedto the on the job performance of the employees. For example a trait like Job

Knowledge may be judged on the range of average, above average, outstanding orunsatisfactory.

8. FORCED DISTRIBUTIONTo eliminate the element of bias from the raters ratings, the evaluator is asked todistribute the employees in some fixed categories of ratings like on a normaldistribution curve. The rater chooses the appropriate fit for the categories on hisown discretion.

2. Modern Methods.Modern methods of performance appraisal is based not only on the traits of a

person[employee],even external and internal environment of the organizationaffecting the individual.

Types of modern methods of performance appraisal are.
http://appraisals.naukrihub.com/http://appraisals.naukrihub.com/


10/37

ASSESSMENT CENTRESAn assessment centre typically involves the use of methods like social/informalevents, tests and exercises, assignments being given to a group of employees toassess their competencies to take higher responsibilities in the future. Generally,

employees are given an assignment similar to the job they would be expected toperform if promoted. The trained evaluators observe and evaluate employees asthey perform the assigned jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centres are interpersonalskills, intellectual capability, planning and organizing capabilities, motivation, careerorientation etc. assessment centres are also an effective way to determine thetraining and development needs of the targeted employees.

BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique whichcombines the graphic rating scale and critical incidents method. It consists ofpredetermined critical areas of job performance or sets of behavioral statementsdescribing important job performance qualities as good or bad (for eg. the qualitieslike inter personal relationships, adaptability and reliability, job knowledge etc).These statements are developed from critical incidents.

In this method, an employees actual job behaviour is judged against the desiredbehaviour by recording and comparing the behaviour with BARS. Developing and

practicing BARS requires expert knowledge.

HUMAN RESOURCE ACCOUNTING METHOD

Human resources are valuable assets for every organization. Human resourceaccounting method tries to find the relative worth of these assets in the terms ofmoney. In this method the Performance appraisal of the employees is judged interms of cost and contribution of the employees. The cost of employees include allthe expenses incurred on them like their compensation, recruitment and selectioncosts, induction and training costs etc whereas their contribution includes the totalvalue added (in monetary terms). The difference between the cost and thecontribution will be the performance of the employees. Ideally, the contribution ofthe employees should be greater than the cost incurred on them.

MANAGEMENT BY OBJECTIVES
http://appraisals.naukrihub.com/assessment-centers.htmlhttp://appraisals.naukrihub.com/behaviorally-anchored-rating.htmlhttp://appraisals.naukrihub.com/http://appraisals.naukrihub.com/http://appraisals.naukrihub.com/behaviorally-anchored-rating.htmlhttp://appraisals.naukrihub.com/assessment-centers.html


11/37

The concept of Management by Objectives (MBO) was first given by Peter

Druckerin 1954. It can be defined as a process whereby the employees and the

superiors come together to identify common goals, the employees set their goals to

be achieved, the standards to be taken as the criteria for measurement of their

performance and contribution and deciding the course of action to be followed.

Methods of Performance appraisal at glance

PROCESS

Performance appraisal should be done on the basis of certain standards or criterionfixed in advance. The employees should also have the knowledge of the yardsticks


12/37

to be used for evaluating them. Unless a proper process is used for evaluation, itwill not give good results.

ESTABLISHING PERFORMANCE STANDARDSThe first step in the process of performance appraisal is the setting up of the

standards which will be used to as the base to compare the actual performance

of the employees. This step requires setting the criteria to judge the performance

of the employees as successful or unsuccessful and the degrees of their

contribution to the organizational goals and objectives. The standards set should

be clear, easily understandable and in measurable terms. In case the

performance of the employee cannot be measured, great care should be taken to

describe the standards.

COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the

standards to all the employees of the organization. The employees should be

informed and the standards should be clearly explained to the. This will help

them to understand their roles and to know what exactly is expected from them.

The standards should also be communicated to the appraisers or the evaluators

and if required, the standards can also be modified at this stage itself according

to the relevant feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the performance appraisal process is measuring theactual performance of the employees that is the work done by the employeesduring the specified period of time. It is a continuous process which involvesmonitoring the performance throughout the year. This stage requires the carefulselection of the appropriate techniques of measurement, taking care thatpersonal bias does not affect the outcome of the process and providing

assistance rather than interfering in an employees work.

COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard


13/37

performance. The comparison tells the deviations in the performance of theemployees from the standards set. The result can show the actual performancebeing more than the desired performance or, the actual performance being lessthan the desired performance depicting a negative deviation in theorganizational performance. It includes recalling, evaluating and analysis of

data related to the employees performance.

DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employeeson one-to-one basis. The focus of this discussion is on communication and

listening. The results, the problems and the possible solutions are discussed withthe aim of problem solving and reaching consensus. The feedback should be givenwith a positive attitude as this can have an effect on the employees futureperformance. The purpose of the meeting should be to solve the problems faced


14/37

and motivate the employees to perform better.

DECISION MAKING

The last step of the process is to take decisions which can be taken either to

improve the performance of the employees, take the required corrective actions, orthe related HR decisions like rewards, promotions, demotions, transfers etc.

Pre-requisites for Effective & Successful Performance Appraisal

The essentials of an effective performance system are as follows:

Documentation means 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 the Performance

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.
http://appraisals.naukrihub.com/http://appraisals.naukrihub.com/http://appraisals.naukrihub.com/http://appraisals.naukrihub.com/


15/37

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.

360 Degree Performance Appraisal System

Meaning and Definition

Meaning

360-degree feedback, also known as multi-rater feedback, multisource feedback,

or multisource assessment, is feedback that comes from all around an employee.

"360" refers to the 360 degrees in a circle, with an individual figuratively in the

center of the circle. Feedback is provided by subordinates, peers, and supervisors.

It also includes a self-assessment and, in some cases, feedback from external

sources such as customers and suppliers or other interested stakeholders. It may

be contrasted with "upward feedback," where managers are given feedback by their

direct reports, or a "traditional performance appraisal," where the employees are

most often reviewed only by their managers.

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 or feedback regarding the "on-the-job" performance of the employee.

360 degree Appraisal system for non-managers is useful to help people be more

effective in their current roles, and also to help them understand what areas they

should focus on if they want to move into a management role.
http://en.wikipedia.org/wiki/Degree_%28angle%29http://en.wikipedia.org/wiki/Performance_appraisalhttp://appraisals.naukrihub.com/pa-feedback.htmlhttp://appraisals.naukrihub.com/pa-feedback.htmlhttp://en.wikipedia.org/wiki/Performance_appraisalhttp://en.wikipedia.org/wiki/Degree_%28angle%29


16/37

DEFINITION

Prof Shashi K.Gupta, A systematic collection of performance data on an individualor group, derived from a number of stakeholders-the stake holders being theimmediate supervisors, team members, customers, peers and self.

Ahrmio[The Associationfor Human ResourcesManagement]

360 degree performance appraisal is a system/process which receives

confidential, anonymous feedback about the person from his manager, peers, and

direct reports. Eight to Ten Employees who are associated with the employee fill

feedback form that asks questions to measure the workplace competencies on a

rating scale. The person receiving feedback also fills out a self-rating survey that

includes the same survey questions that others receive in their forms.

The 360 degree appraisal provides a broader perspective about an employeesperformance. In addition, the technique facilitates greater self development of theemployees. This appraisal provides formalized communication links between anemployee and his customers. By design this appraisal is effective in identifying andmeasuring interpersonal skills, customer satisfaction and team building skills.

History

The German Military first began gathering feedback from multiple sources in orderto evaluate performance during World War II (Fleenor & Prince, 1997). Also duringthis time period, others explored the use of multi-rater feedback via the concept ofT-groups.

One of the earliest recorded uses of surveys to gather information about employeesoccurred in the 1950s at Esso Research and Engineering Company (Bracken,Dalton, Jako, McCauley, & Pollman, 1997). From there, the idea of 360-degreefeedback gained momentum, and by the 1990s most Human Resources andOrganization Development professionals understood the concept. The problem wasthat collecting and collating the feedback demanded a paper-based effort including
http://en.wikipedia.org/wiki/T-groupshttp://en.wikipedia.org/wiki/Human_Resourceshttp://en.wikipedia.org/wiki/Human_Resourceshttp://en.wikipedia.org/wiki/T-groups


17/37

either complex manual calculations or lengthy delays. The first led to despair on thepart of practitioners; the second to a gradual erosion of commitment by recipients.

Multi-rater feedback use steadily increased in popularity, due largely to the use ofthe internet in conducting web-based surveys (Atkins & Wood, 2002). Today,

studies suggest that over one-third of U.S. companies use some type ofmultisource feedback (Bracken, Timmereck, & Church, 2001a). Others claim thatthis estimate is closer to 90% of all Fortune 500 firms (Edwards & Ewen, 1996). Inrecent years, internet-based services have become the norm, with a growing menuof useful features (e.g., multi languages, comparative reporting, and aggregatereporting) (Bracken, Summers, & Fleenor, 1998).

FEATURES

Usually based on a questionnaire, possibly web-based

Choosing Appraisers

Done by the individual employee

Done by HR

Process carried out randomly

Feedback is usually anonymous

Appraisal is normally followed up with actions for individual improvement and

development

Not to be used for decision-making, only purpose is for employee growth Utilizes many stakeholders inside, and outside of, the organization

COMPONENTS OF 360 DEGREE PERFORMANCE FEEDBACK


18/37

Self appraisal Superiors appraisal Subordinates appraisal Peer appraisal.

Self appraisal gives 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 the 360 degree performance appraisal where

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 appraisal have high employee involvement and also

have the strongest impact on behavior and performance. It provides a "360-degree
http://appraisals.naukrihub.com/self-appraisal.htmlhttp://appraisals.naukrihub.com/http://appraisals.naukrihub.com/http://appraisals.naukrihub.com/self-appraisal.html


19/37

review" of the employees performance and is considered to be one of the most

credible performance appraisal methods.

Need of 360-degree feedback in organizations

In todays changing and volatile world organizations are continually looking for waysto improve performance, and satisfy the demands of all stakeholders. Achieving thisalmost inevitably involves change, which then becomes the pivotal dynamic forsuccess. For an organization to evolve the people working within it will have toAdapt; and for this to be successful, they first of all need to know what it is aboutthe way they are currently performing that needs to change.This is where 360 degree feedback is playing a growing role in organizations

through its ability to provide structured, in depth information about currentperformance and what will be required of an individual in the future to enabledetailed and relevant development plans to be formulated.

The 3600 Appraisal helps the HR Department to have better understanding of thecompetitive advantage and disadvantages of the current manpower resources andtune them towards performance excellence and productivity.

The rationale behind involving multiple individuals in the appraisal process

360 degree offers an unprecedented opportunity to the employees than the

traditional top- down approach could ever offer, providing as it does, the feed

back from the broad Swathe of people. The purposes of having multiple

individuals in the appraisal process differ. Notwithstanding all the negatives

associated with supervisor feedback, supervisor is well poised to conduct a

very comprehensive performance appraisal of the subject or an individual.Supervisor has a better understanding of the work requirements of the

individual. He can also take a call on matters relating to any changes to be effected

in the job requirements. Supervisor can also re-schedule and re-allocate the


20/37

individuals work as the situation warrants. On the flip side, excessive reliance on

supervisors feedback is not advisable. Besides supervisor should be able to

measure all the critical incident involved in employees job performance so as to

make an dispassionate assessment. Supervisors need to be sensitized as to how

to conduct this 360 degree process. Many a time the performance appraisal systemfall by the way side as the supervisor have no clue what so ever to conduct the

appraisals.

Secondly with traditional hierarchies giving way to flat and lean one, as well as

the increased use of teams in the organizations, peer valuation has come to

stay. Peers can provide a distinctive take on co-workers good performance or

the lack of it for the reason that the behavior of co-workers will have a immediate

bearing on the work environment. Besides employees may be amenable to the

idea of appraising each others performance.

In this day and age, where the self - directed teams are gaining currency in the

organizations, the role of peer appraisal has become the core of formal

appraisal system. This is not to say that the peer appraisal is not without its

share of pitfalls. In a competitive milieu, peer ratings can raise tension levels andcause a bad blood amongst employees. Co-operation and mutual support will

become a catastrophe. Any attempt to tie peer appraisal to pay or promotional

decision can have disastrous consequences for the company.

Thirdly sub-ordinates have a distinct perspective to offer in this appraisal

exercise. A sub ordinate feedback can help the supervisor gain insights intoemployee needs and concerns A sub-ordinate feedback will also go a long way

in assessing the supervisors interpersonal skills. Sub-ordinate feedback


21/37

is not free from negatives. In the event of any sub-ordinate providing feedback

about the superior, the whole exercise should be shrouded in anonymity. Fearing

with-hunt and backlash sub-ordinates may prefer the line of least resistance and

will give a dishonest feedback. If there are less than 5 sub-ordinates in the rating

pool, supervisor can really track the sub-ordinates down and go on the witch hunting. The concept of sub-ordinates actually evaluating the performance is too

frightening a concept for the supervisor. Supervisors may perceive it as an attempt

to severely undermine their authority. The very fact that the sub-ordinates will be

chipping away at their "authoritative silos" is bit tough to chew for the supervisors.

Fourthly Customers will be happy to find their voice resonating in the appraisal

process. The customer feedback can supplement the feedback provided by

other constituents. On the flip side, customer feedback should be taken intoconsideration to evaluate group or organizational performance. The feedback

should not be considered for evaluating individual performance outcomes. They

have a limited understanding of the work processes and a policy frame works

which places immense constraints on the employees. Customers, at best are

well poised to evaluate the quality of products or services.

The relationship of 360Degree Appraisal System with other Human Resource

management is positive in terms of its utility. It is used for training, team building,

career development, succession planning, performance assessment and for

monitoring the effects of change training programmes.

How 360-degree feedback system adds value?

360 degree feedback enables an organization to focus on developmental efforts, atthe individual and group level, in the present business environment where the

success of the company depends on continuous revolution, which is possiblethrough organizational development. 360-degree feedback facilitates the

alignment of individual capabilities and behaviors with organizational strategies. Itadds value to the organization indifferent ways:-


22/37

360-degree feedback provides a better understanding of individualsperformance at work

360-degree feedback provides a multifaceted view about the employees fromdifferent sources

360-degree feedback provides a better understanding of employed

developmental needs 360-degree feedback provides increased the understanding about one's role

expectations. 360-degree feedback provides increased the understanding of competence and

competency in various roles 360-degree feedback extends better morale to those who perform and

contribute well to the organization 360-degree feedback reduces training costs by identifying common

development needs. 360-degree feedback increases the team's ability to contribute to the

organizations goals 360-degree feedback helps everyone to work for a common standard and

institutionalize performance management. 360-degree feedback ensure better interpersonal relationship and group

cohesiveness It promotes self-directed learning and provides a road map for employee's

development planning. It promotes better Communication within departments.

360-degree feedback Increases the team's ability to contribute to the

organizations goals develop better bottom line through boosting the capability

of the organization to meet its objectives.

BENEFITS OF360 DEGREE PERFORMANCE FEEDBACK

Feed back that emanates from various source, leaves little room for any

discrimination or bias. In appraisal exercises. any discriminative slant of the

supervisor can be nullified if the multi source feedback shows that the

supervisor input is not in conjunction with that of co-workers and customers andother constituents.

Feedback originating from multi sources can give a glimpse in to individuals

performance improvement needs.


23/37

Enhanced cohesion in the team, better communication and improved

productivity levels are the positive fall out of implementing 360 degree feedback.

Front line employees can hone their customer skills to near perfection owing to

the feedback of the customers. This may enhance the customer service levels.

Subordinates, derive enormous sense of importance and empowerment whenasked to provide feedback about their superiors.

Decisions making percolates down to the lowest and lowest echelons of an

organization, making it truly participative.

360 degree helps the organization to zero in on and leverage the overall

strengths.

Increased focus on internal customer satisfaction

Brings in more objectivity to the appraisal process and complements the

traditional appraisal system

360 feedback is an effective tool for identifying development needs

Uses for 360 Degree Feedback include:

Performance Appraisal

o Recognition of performance.o Providing feedback on individual performance.

o Providing a basis for self-evaluation.

Assessing Employee Development:

o Diagnosing training and career development needs.o Providing a basis for promotion, dismissal, job enrichment, jobenlargement, job transfer, probation, etc.o Monetary and other rewards.

Organizational Climate Study:


24/37

o Organizational environment improvement needso Changes in the Managerial approaches, leadership, etc

Customer Satisfaction Study

o Employees attitudinal changeo Customer satisfaction improvements

In order to reap maximum benefits from the system, the system should have

Senior-Level Support Senior Managers should participate in the 360 degree

feedbackappraisal process and actively pursue their own developmental plans.

Communicating the purpose of the system to all the employees

Proper Planning for the implementation of 360 degree appraisal system

Delivery of Feedback - If feedback is not provided in an appropriate manner, your

program could backfire. We recommend using professional, neutral coaches to

deliver feedback.

Developmental Plan - Every person who receives feedback needs to create some

developmental goals based on the feedback he or she received - and remember -

those goals need to be both measurable and achievable.

Accountability - Developmental goals are meaningless unless people are held

accountable for achieving them. Make sure your employees and their managers

understand how to create S.M.A.R.T. goals - Specific, Measurable, Attainable,

Realistic and Timely.

Follow-Up - Plan to solicit additional feedback six to twelve months after the initial

data are collected.


25/37

PROCESS IN 360 DEGREE PERFORMANCE APPRAISAL

Planning

Piloting

Implementing Feedback

Review

Planning

the planning stage in 360 degree performance appraisal for the organization

involves

Establishing the purpose

Establishing the process

Establishing resources

Piloting

Piloting is critical in 360 degree feedback. It helps remove some of theuncertainties through allowing a group to experience the process. Itprovides useful information for further planning and communication.

Piloting also allows for a review of the 360 degree instrument. Questionnaires,

surveys are important tools for piloting process


26/37

Implementing

When it comes to the implementation stage of the programme, all ofthe lessons learned through the pilot should be considered. Anyalterations and adaptations that will make implementation smoother

should be made. The most critical part of the implementation process isabout what it involves and ensuring that everybody involved in the processis clear about their specific role(s).

FEEDBACK

Feedback is an integral part of any management process, not just 360degree processes. The starting point for any subsequent action is theeffective communication of the results of the exercise to the personreceiving the feedback. How this is done, and by whom, will beinfluenced by the purpose of the exercise. Effective feedback is thespringboard for subsequent development and is integral to the successof the process.

REVIEWReview is the final part of the 360 degree performance feedback.Reviewingsuccess of the programme is a widely overlooked part of the implementationprocess. Too often, organizations assume that by introducing a process it willautomatically by a success. The key question, is whether the 360 degreefeedback has met its original purpose. To know the answer, the review of the

feedback is done at the end before starting the planning of the process again forthe next suitable period for the organization.

S.M.A.R.T METHOD IN SETTING GOALS FOR 360 DEGREE PERFORMANCE

APPRAISALS

Goal setting is one of the most integral aspects for any organization. Goal settingbecomes the foremost part in the planning process for planning a project, meeting,

framing terms, tasks, policies for the company.

One of the most reliable and pragmatic approaches in setting goals would be the

S.M.A.R.T Method. SMART goals can be used in the planning stage of the


27/37

360 degree performance appraisal process. This method gives a practical approach

in planning on the entire process comprising of implementation, feedback, review

for carrying out the appraisal. The acronym SMART has a number of slightly

different variations, which can be used to provide a more comprehensive definition

for goal setting. They are:

Specific

Well defined Clear to anyone that has a basic knowledge of the project Minor terms[Significant, Stretching, Simple]

Measurable

Know if the goal is obtainable and how far away completion is Know when it has been achieved Minor terms[Meaningful, Motivational, Manageable]

Agreed Upon

Agreement with all the stakeholders what the goals should be

Minor terms[Appropriate, Achievable, Agreed, Assignable, Actionable, Action-oriented, Ambitious]

Realistic

Within the availability of resources, knowledge and time Minor terms[Results/Results-focused/Results-oriented, Resourced]

Time Based

Enough time to achieve the goal Not too much time, which can affect project performance Minor terms[Time-oriented, Time framed, Timed, Time-based, Timeboxed,

Timely, Time-Specific, Timetabled, Time limited, Trackable, Tangible]


28/37

360 DEGREE PERFORMANCE APPRAISAL IN INDIA.INC

Though 360 degree is hailed as the greatest leadership development tools bywestern countries, it is yet to make much headway in India. Indian corporate are tadbit slow off the block to embrace 360-degree appraisal system.

The reasons are not far to seek. Indian business houses are markedly reluctant toembrace the system for fear of tinkering with traditional hierarchical structures. 360Performance is an extremely formalized process, where an individual or leaner orsubject receives feedback from multiple individuals (also known as raters). Thefeedback provided by the multiple individuals fall in the remit of competencies,

behavior and performance out comes. The raters, among others include individualboss, direct reports, colleagues, internal and external customers and suppliers. Thesubject will also carry out a self-assessment, which will be included in the appraisal.

360-degree feedback has taken on the "buzz" status in corporate in India. 360

degree feedback is being touted as a major organization change and leadership

developmental tools in recent past. This sudden flurry of interest in 360-degree

approach can be ascribed to the current thinking among the corporate honchos that

this feedback provides a more conducive environment for continuous learning and

the inputs for employees to enhance their performance.

Indian companies following 360 Degree Performance appraisal system

WIPRO

MARUTI-SUZUKI

INFOSYS

ASHOK LEYLAND

HCL INFO SYSTEMS

ASIAN PAINTS


29/37

CHAPTER 2: Research Design


30/37


31/37

appraisal is which bares the effect on the company and the performance of theemployee is absent. 360 degree performance appraisal, a modern method ofperformance considers these vital aspects into consideration in judging theperformance of the individual. The method completely helps the organization in

judging the true performance of its employee.

Research was conducted in a marketing organization called global flavours.Global flavours is in need of an effective 360 degree performance appraisalsystem in place to judge the true performance of its employee which would In turnhelp it achieving its long term and short term goals.

Objectives Of the study

Objective of this research study are:

To help the management of the organization in framing a conducive andeffective 360 degree performance appraisal system for its employees.

Judge an employees true performance in marketing tasks performed byconsidering customer feedback as one of the tools.

Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees in the company.

Strengthen the relationship and communication between superiorsubordinates and management employees.

To diagnose the strengths and weaknesses of the individuals so as to identifythe training and development needs of the future.

To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

To judge the gap between the actual performance and the desired performancethrough use of 360 degree appraisal system.


32/37

Scope of study

The research has been limited to the employees of the organization by collectingdata and knowing their opinion and insights on conducting an effective 360 degreeperformance appraisal system. The data was collected from 3 lines of management

[business development, marketing and sales] only, for research purpose.

Duration of the study

The duration of research conducted in the company was to the extent of 2 weeks.Research was conducted during first 2 weeks of February.

Research Methodology

The methodology adopted was that of survey questionnaires relevant to the 360degree performance appraisal, aspects and components to be considered and onthe basis of these questions conclusions were drawn. Participants were selectedfrom every office of the company. The manager was informed well in advanceabout the selection of the participants. Data was collected through thequestionnaires being handed over to the manager for distribution. The participantswere explained about the objectives of the survey and questions were explained toavoid any ambiguity. Participants were given an option of writing their names in the

questionnaires for some participants wanted confidentiality and no disclosure inidentity for the data provided by them in questionnaires. This helped in getting frankand honest answers.

Research technique

The research technique was a exploratory research. An exploratory research alsocalled quasi-experimental research provides insights into and comprehension of an

issue or situation.Exploratory research is conducted when a problem has been

partially defined. Exploratory research helps determine the best research design,

data collection method and selection of subjects. The results of exploratory

research are useful for provide significant insight into a given situation.In addition,without extensive pre-screening and randomization needing to be undertaken,


33/37

exploratory research do reduce the time and resources needed for experimentation.this research required pre-selection and non randomization of groups, which proved

to be useful in generating results for a particular subject and its trends.

Sampling technique

Sampling is the process of learning about the population on the basis of sampledrawn from it. A sampling technique is the name or other identification of thespecific process by which the entities of the sample have been selected. In Thisresearch study consecutive sampling [non probability] method is used as asampling technique. Consecutive sampling is very similar to convenience samplingexcept that it seeks to include all accessible subjects as part of the sample. Thisnon-probability sampling includes all subjects that are available that makes the

sample a better representation of the entire population.

Sample Size

A total number of 94 respondents were selected using the consecutive samplingmethod. Respondents were employees who worked in different branches/offices ofthe organization.

Methods for Data Collection

Primary Data-The data collected for the research study was collected for the first time for the

organization. The sources/tools for primary data collection was questionnaires.Questionnaires were given to the employees to the organization to provide the datafor the research.

Secondary Data-Secondary data about the past performance of the organization and the servicefeedback was extracted from a report prepared by one of its clients Solaris

Chemtech in 2007. Information about the industry was extracted from tradejournals and chemical magazines. Majorly the sources of secondary data collectionwas limited to solaris chemtech due to non disclosure of information as part ofpolicies in various organizations client companies
http://www.experiment-resources.com/randomization.htmlhttp://www.experiment-resources.com/statistically-significant-results.htmlhttp://www.experiment-resources.com/sequential-sampling.htmlhttp://www.experiment-resources.com/sequential-sampling.htmlhttp://www.experiment-resources.com/statistically-significant-results.htmlhttp://www.experiment-resources.com/randomization.html


34/37

Plan of Analysis

The questionnaires were given to the employees and filled by them with the help oftheir superiors and instructions given to them. The analysis of the questionnaires

was done in following way:

Collected data were converted into work sheets

Tabulation of non processed data is done in orderly arrangement.

Analysis of the collected data was done with the help of statistical tools likecharts, graphs, bars.

Findings and suggestions were given on the basis of the analysis throughstatistical tools.

Limitations of the study

Some Respondents were hesitant to provide information when asked.

Non probability sampling technique is not true representation of the information.

Comparative study of two or more performance appraisal system with 360degree performance appraisal and showing effectiveness of 360 degreeperformance appraisal system was not possible due to constraint of time andresources.

Possibility of bias in answers from respondents cannot be ruled out.

The sources of secondary data collection was limited to single company due tonon disclosure of information as part of policies in various organizations clientcompanies.

Chapter Scheme

Chapter 1-Introduction

The first chapter in the research study is on Introduction. Chapter 1 comprises of

basic introduction to Human Resource management, its meaning, definition,


35/37

objectives, functions and futuristic vision. The chapter also comprised introduction

of performance appraisal. The idea was to provide basic information about

performance appraisal. Also the topic performance appraisal consisted of its

history, meaning, approaches-modern and traditional approach, Objectives, uses,

benefits-to the employee and the organization, types of performance appraisal,process, perquisites. 360 degree performance appraisal topic is discussed. It

contains of meaning, definition, history, features, components, need for 360 degree

performance appraisal, values, benefits, uses, process,360 degree performance

appraisal practice in India, Method goal setting-S.M.A.R.T is discussed in brief.

Chapter 2: Research design

Second chapter of this project consists of research design. The contents of thischapter are-introduction to research design, title of the project, statement of the

problem, objectives of study, scope of study, duration of the study, research

technique used in the study[exploratory research technique], sampling design,

methods of data collection, plan of analysis, limitations of the study, and chapter

scheme.

Chapter 3: Company Profile

Prior to company profile, the industry profile information is discussed in the second

chapter. The industry profile consists of information about industries in each the

company is into. Industries-Food and beverage industry. Food industry-history,

trends, Indian food industry overview, trends. Beverage industry- contents, trends.

Bakery and confectionery Industry- overview and trends. Emulsifiers Industry-

Introduction, trends in global and Indian markets. Chemical Industry-overview,

products, Trends of Indian chemical Industry, foreign trade-overview

Company profile, part of the chapter consists of overview of the company, history,

products, client base, management and control, principles and philosophy, figures

of global flavours.

Chapter 4: Analysis and Interpretation


36/37

The fourth chapter consists of the analysis and interpretation of the Research study

conducted. Analysis and interpretation consists of tables framed from the

information gathered from primary data[questionnaires] and these tables were used

to prepare the graphs and analyze the and interpret the results. The tables list

consists from table to table and graph list from graph to graph

Chapter 5: Findings and recommendations

The fifth chapter consists of the findings and recommendations of the research

study conducted. The findings of the study were listed out and based on the

findings; 360 degree performance appraisal form is framed. The form has three

parts to it. The appraisal forms were designed for three designations as proposed.Designations were,1. Business development manager 2. Marketing executives 3.

Sales executives. Based on the performance appraisal system designed a list of

recommendations to the company were made in the study. In the final part of the

chapter, conclusions were drawn in points to conclude the research study

conducted.


37/37

BU Project- Proof Reading Copy

Documents

Transcript of BU Project- Proof Reading Copy