TASKS FOR THE DIRECTED INDEPENDENT WORK

of undergraduates
in academic discipline “Human resources management”
within the master's program 1-26 80 03 Business Administration

Topic VII “Methods of assessment of human resources quality

Task I: Read the articles below and highlight the key points, write them in
your exercise books, form a brief summary, make flowcharts:

I Performance Management as a HR Management Concept

The very mention of appraisals, reviews and ratings is enough to make
seasoned professionals cringe and rejoice alike. For some, these are occasions when
they would come out smiling out of the review whereas for others, there is nothing
memorable about the whole process. So, what is it that is so important about
performance management? For starters, performance management is the process of
reviewing an employee’s performance during the preceding year or cycle and
deciding where he or she stands as far as their peers in the same band are
concerned.
The process of reviewing results, arriving at a rating and then deciding upon the
bonus or salary hike is what performance management is all about. Before we look at
the topic sentence, it is important to understand what goes into the decision making
process and who is involved in the same.
Typically, the process of performance management starts a month or two
before the appraisal cycle ends. The appraisal cycle can be half-yearly or yearly
depending upon the policies of the organization. Further, the appraisal cycle can be
based on the calendar year or the financial year i.e. it can run from April to March of
the following year or January to December of the same year. In the same vein, it can
be half-yearly as well.
There are different rounds to the appraisal process.
1. In the first round, the people who participate in an employee’s appraisal are the
employee and his or her manager. In this round, the manager gives a frank
assessment of the employee’s performance after giving a chance to the
employee to self-assess.
2. The second round consists of the manager and the manager’s manager. This
round is mostly about deciding the band in which the employee falls post the
rating and in comparison with his or her peers. This process of rationalizing the
employee’s performance with others is called “normalization”. In some
 organizations, this takes place in the third round where the HR manager is
involved as well. In any case, the ratings cannot be decided without the HR
manager’s assent to the same. Once these rounds are over, the bonus level or
the salary hike are decided.
What we have described in the above paragraphs is the way the system “ought”
to work. However, as any HR professional or Industry magazines would tell you, the
performance management process as it exists in many organizations leaves a lot to be
desired. In fact, surveys and studies have found that the majority of employee’s who
quit organizations do so because of differences over their ratings. In other words,
attrition is in many cases a direct consequence of the way in which the performance
management process is managed.
The question as to why this happens can be best understood if we understand
the dynamics inherent in the process. For instance, despite exhortations from HR
professionals and experts about letting personal biases and prejudices affect the
process, in many cases, if the manager and the employee do not see eye to eye on
many issues, the appraisal and the ratings are the place where this difference of
opinion comes out into the open. Further, the organizations are themselves to blame in
some cases as the process of “normalization” means a “winner takes all” approach
which leaves the moderate performers bracketed with the poor performers. The point
here is not to belittle the competitive environment that is the reason for this. On the
other contrary, what is needed is a more holistic approach towards performance
management that takes into account the varying needs of employee’s and a broader
appreciation of differing working styles and motivations.

II Performance Management in Successful Companies: Lessons from

Cutting Edge Research
Introduction
Continuing with our series of articles on HRM practices in successful
companies, this article examines the performance management practices of those
companies that have managed to be in the FORTUNE “100 Most Admired Places to
Work in” consistently. To put it in perspective, just twenty odd companies have
remained in this list throughout the last decade.
The research into the HRM practices by the leading business consultancy, BCG
or Boston Consulting Group, has revealed a set of practices that are followed in these
companies with respect to performance management.
The first practice is to link the bonuses and other incentives for the managers to
KPIs or the Key Performance Indicators to ensure that the managers’ goals and the
organizational goals are aligned together. However, these companies do not stop at
this and actualize a well-constructed and balanced performance management system
that motivates and develops employees. The twin aspects of such performance
management systems are that they institute ac culture of meritocracy and provide
incentives to foster and sustain this culture. Further, the performance management
systems in these companies are fair, transparent, and reward the employees to
promote such a culture.
Establish Clear Norms and Articulate Expectations
Employees need to understand what constitutes superior performance and what
is unacceptable from the organizational perspective. This means that organizations
have to not only not overcomplicate the performance management systems but also
have to articulate what is simply below average or poor performance that leads to
action from the organization. Further, the research has shown that these companies
explain the reward systems to the employees in a clear and engaging manner so that
the employees are aware of what performance would be rewarded and what
performance would be punished. If these practices are not followed, they might lead
to lack of employee cohesiveness and risk the flight of valuable talent from the
organization.
Follow Global Standards Consistent throughout the Organization
The other aspect of successful performance management is that most of these
organizations follow global corporate HRM practices and standards. This is done in a
manner where the global policies are articulated clearly and the local units are asked
to follow the same practices to have coherence and consistency throughout the
organizations irrespective of which geographical location the employee is based.
Further, the high performing companies employ state of the art performance
management systems and put in place processes and methods that conform to global
norms and standards throughout the organizations.
Reward Behavior and Promote Openness
The research has also shown that more often than not, these successful
companies reward behavior and not just results, which show the commitment they
have towards actualizing employee fulfillment and at the same, time inculcating high
performance culture throughout the organizations. Of course, though these companies
reward high performance, they are not overly procedural or bureaucratic in their
approach. Apart from this, successful companies emphasize feedback, promote a
culture of openness, and tend to avoid too much formality and a culture where cut
throat competition kills creativity and innovativeness.

III Managing Employee Performance

Introduction
Managing employee performance is one of the key drivers for organizational
success in the present context of firms trying to adopt a resource centered view of the
organizational. We have seen elsewhere that integrating HRM practices with those of
organizational goals and strategy increases the competitive advantages for the firm.
Similarly, managing employee performance within the larger framework of
organizational goals is critical for organizations that count people among their key
assets. As we have been mentioning throughout, firms in the service sector that lay a
lot of emphasis on people need to ensure that employee performance is managed in a
holistic manner.
A Two Way Street
When we talk about employee performance, we need to remember that it is a
two way process that tie in the manager and the employee with the HR manager
playing the role of a mediator. For instance, any discussion about employee
performance has to include the manager and the employee or the manager and the
managed. Hence, it is imperative that both parties to this transaction realize their
responsibilities and work together to ensure that the process is smoothened. In the
succeeding sections, we discuss the role of the manager and the employee and how
organizational focus on managing employee performance can play a role as well.
The Role of the Manager
The manager has a duty to ensure that his or her management of the employees
is free of biases and prejudices. It’s been the case across industries and verticals where
the employees feel discriminated against leading to attrition, lower employee morale
and in the extreme cases, lawsuits against the company. Hence, the manager has to
“walk the talk” and not simply pay lip service to the company’s policies on employee
performance. During the course of working together as a team, there are bound to be
instances where friction between the manager and the team and within the team
manifests itself. It is incumbent upon the manager to ensure that this does not morph
into a corrosive effect that threatens the very existence of the team.
The Role of the Employee
The above section looked at the role of the manager. The manager has a duty to
manage the team effectively and so does the employee have corresponding
responsibilities as well. Absenteeism, Shirking Work, A negative attitude and a blasé
approach to work are some things that the employee must avoid. It is helpful to the
employee to know that once he or she is categorized as having an attitude problem,
then it would be difficult for the employee to break the perception and perform
effectively. This does not mean that the employee has to take whatever comes his or
her way. The point here is that the employee must use the channels available for
redressal instead of sulking at work if he or she has grievances about the manager.
Organizational Focus
Though the role of the HR manager and the organization seems to be relatively
small, it is a fact that organizational goals and culture play a very important part in
ensuring that employee performance is managed to the benefit of the organization.
Most of us have read about or heard the benefits of working for MNC’s
(Multinational Companies) in India. The reason why they are highly talked about is
the perception among potential and aspiring employees that these companies treat
their people well. Though the point here is not to belittle Indian companies, the
objective of this section is to highlight the ways in which organizations can shape the
treatment of people in theory and practice.
Conclusion
We have seen the centrality of managing employee performance to the success
of the organization. If organizations want to cut down on attrition and boost sagging
employee morale, the first thing they can do is to ensure that the employee
performance management system is streamlined. Only by a focused approach towards
this key driver of organizational effectiveness can the firms ensure that they do not
lose out on the “war for talent” as well as “retention” of achievers.

IV Performance Appraisal Process

For many employees working in the organized sector, the term appraisal
process conjures images of hope and fear simultaneously. Hope for a better grade and
fear about potential downgrading or a bad rating. The weeks leading up to the
appraisal are filled with hectic activity when the employees get down to evaluating
themselves and prepare to market their achievements during the time for which the
appraisal is being conducted. Before launching into the details of the appraisal process
and the theory and practice of the same, it is pertinent to understand what the term
appraisal process refers to and why it is important for the firm as well as the
employees.
What constitutes the Performance Appraisal process ?
The performance appraisal process, simply put, is the time of the year when the
employees are evaluated on their performance during the last six months or one year
depending upon the timeframe that is set for the same. The performance appraisal
process is conducted between the employee and his or her manager for the first round
and subsequently between the manager and the manager’s manager before going into
the third round which involves the above people excluding the employee but
involving the HR manager as well. The various rounds that comprise the appraisal
cycle correspond to the different stages of the process culminating in the final grading
of the employee.
Appraise and Appraiser
The most important round is the appraisal interview itself (we will discuss more
about this in a separate article) between the employee and his or her manager. The
employee who is being evaluated is called the appraise and the person (usually the
manager) who is doing the evaluation is called the appraiser. The appraiser and
appraise prepare themselves for this round by doing a self evaluation (by the appraise)
and an objective evaluation (by the appraiser). This is the round in which the most
important achievements as well as glaring failures on the part of the appraise are
discussed threadbare and usually the employee’s role in the process is limited to this
round.
What is the outcome of the Appraisal Process ?
As outlined above, the outcome of the appraisal process is the grade that is
decided for the employee as well as the salary hike or the bonus potential that is
awarded to the employee. Typically, organizations divide the year in which the
employee’s performance is evaluated into two cycles, one for deciding the salary hike
and the other for deciding how much bonus he or she gets for the cycle. In this way,
organizations ensure that there is no overlap in grading the employee and a fair and
balanced evaluation is the desired outcome though this does not always happen in
reality.
Shortcomings of the Appraisal Process
The successful completion of the appraisal process hinges on all the
participants approaching the same with an intention to contribute positively instead of
bringing personal biases and prejudices to the table. Management experts usually
prescribe a set of do’s and don’ts to the participants in order to have an harmonious
process. However, as has been pointed out above, the process itself is not without its
shortcomings and the expecting the participants to be rational and objective at all
times is indeed difficult. Further, since most organizations decide the grades in a way
similar to the b-school equivalent of Relative Grading instead of absolute ratings, an
element of competitive rivalry creeps into the process making some employees
unhappy.

V Performance Appraisal Interview

Introduction
We have discussed the performance appraisal process in earlier articles. In this
article, we discuss the performance appraisal interview and its importance in the
performance appraisal cycle. The performance appraisal interview is the first round in
the performance appraisal process and this is the round in which the manager
communicates his evaluation of the employee’s performance during the appraisal
period or the time that the employee’s performance is being evaluated.
What is a Performance Appraisal Interview ?
A performance appraisal interview is the first stage of the performance
appraisal process and involves the employee and his or her manager sitting face to
face to discuss threadbare all aspects of the employee’s performance and thrash out
any differences in perception or evaluation. The performance appraisal interview
provides the employee with a chance to defend himself or herself against poor
evaluation by the manager and also gives the manager a chance to explain what he or
she thinks about the employee’s performance.
 In a nutshell, the performance appraisal interview precedes the normalization
process and is subsequent to the employee filling up the evaluation form and the
manager likewise doing so. The interview is the stage where both sides debate and
argue the employees’ side of the story as well as the manager’s perception.
Objective Evaluation versus Personal Biases
Though management theorists like to propound the benefits of objective
evaluation, it is a fact in contemporary organizations that an element of personal bias
enters the evaluation. This is evident from the studies and surveys done by HR
consultants like Hewitt that point to the employee’s dissatisfaction with the
performance appraisal process as one of the main reasons for leaving the company. To
curb the incidence of biases and heuristics playing a role in the appraisal, HR
managers typically conduct orientations and trainings to both the Managers and the
Employees to sensitize them to these dangers that are sometimes inherent in the
process.
On the other hand, the employees’ should approach the process without
unrealistic expectations and expect the Manager to agree to whatever they write on the
performance evaluation form. Hence, there is a need for both sides in the interview
process to approach the same with an open mind and be as objective as possible.
However, this is easier said than done and hence organizations expend resources on
making the process as transparent and objective as possible.
The Right and Wrong Way to Approach a Performance Appraisal
Interview
The performance appraisal interview must be taken seriously and both the
employee and the manager must set aside time to go through the process. The
manager cannot arbitrarily change the time or the venue and must not approach the
interview in a haphazard manner. Despite all these injunctions, it is often the case that
the manager has to be reminded about the interview and then he or she hurriedly
arranges the meeting. This is definitely the wrong way to approach the interview.
Further, the manager must make the time to go through the employees’ self evaluation
and rate the same objectively.
Though there is no right way to conduct the performance appraisal interview, it
is incumbent upon the manager to avoid the pitfalls described above. A rule of thumb
would be set aside a few days to conduct all the interviews with members of his or her
team and ensure follow-ups to the process. The follow-up is needed when the
employee is not satisfied with the interview discussion and hence requests for
additional time to debate the rating. In some cases, the HR manager may need to step
in to ensure that the process is concluded to the satisfaction of the employee and the
manager.
Conclusion
 Surveys have shown that nearly 70% of the employees who leave organizations
cite the bad rating that they have got as the reason for quitting and often voice their
disappointment at the process in the exit interview. Hence, there is a need for
organizations to smoothen the performance appraisal process and since the
performance appraisal interview is the first step; the beginning must be made well.
Since the career progression of employees depends on the ratings that they get, the
whole process must be taken seriously by all the stakeholders.