BANGLADESH INSTITUTE OF MANAGEMENT (BIM)

(Ministry of Industries)
4, Sobhanbag, Mirpur Road, Dhaka

www.bim.org.bd

Post Graduate Diploma in Human Resource Management

(PGDHRM)

(Academic Year-2024)

Term Paper Report

on
“Performance Appraisal System” A study on “IELTS Spirit”

SUPERVISED BY PREPARED BY
Name: LAMIA FARHA Name: FARHIN MAHBUB
Senior Management Counsellor Roll: 24DH185
Bangladesh Institute of Management (BIM) Batch- Evening 3

Date:20thFebruary, 2025
 Letter of Transmittal
20thFebruary, 2024

Ms. Lamia Farha

Senior Management Counsellor
4 Sobhanbag, Mirpur Road,
Dhaka-1207, Bangladesh.

Subject: Request to accept the Report

Dear Madam,

You have assigned me to prepare the report on “Performance Appraisal System”. I have prepared my
report in mentioned timeframe. The report also consists of the overview of few employees of
aprivate companyin Bangladesh. I tried to gather accurate information to make it specific and
coherent. Through the process of preparing the term paper, I have managed to get some practical
experiences.

To serve your purpose, I have tried my best to find out proper implementation of performance
approsalpractice in IELTS Spirit.

I truly hope and believe, this report will fulfill the requirements suggested by you.

Sincerely yours,

Farhin Mahbub
Roll: 24DH185
EVE Batch 3Session: 2024
PGHRM, BIM
 DECLARATION

I do solemnly declare that this term paper submitted; in partial fulfillment of the requirements for
the Post Graduate Diploma in Human Resource Management (PGDHRM) of the session 2024 of the
Bangladesh Institute of Management (BIM), Dhaka in the result of my own research work and written
in my own language. That no part of this term paper consists of materials copied or plagiarized from
published or unpublished work of other writers and that all materials borrowed or reproduced from
other published or unpublished source have either been out under quotation or duly acknowledge
with full reference in appropriate place(s). I understand that the diploma, conferred on me, may be
cancelled/withdrawn if subsequently it is discovered that this term paper is not my original work, it
consists of materials copied/plagiarized or borrowed with proper acknowledge.

Farhin Mahbub
Roll: 24DH185
EVE Batch 03
Session: 2024
PGHRM, BIM
 Acknowledgement

I express my deep sense of gratitude and sincere appreciation to my supervisor Ms. Lamia Farha
Ma’am, Senior Management Counselor of Bangladesh Institute of Management (BIM) for
hervaluable suggestion, guidelines and co-operation. Without her help and guidance it was quit
impossible to come up with this study.

All of my thanks go to the employees, who have gave me their valuable time to explore their world.
For this I thank my Institution for giving me this nice opportunity to see their life world. I am also
grateful to the management who extended their co-operation for collection data and information
associate with the study.

In writing this term paper, I have drawn as many books which mentioned in the bibliography, I
acknowledge my indebtedness to all those authors for their works which has been great use for me.

I would like to thank all of the counselors of Bangladesh Institute of Management (BIM) who had
been very co-operative and support me to do this term paper.

I am also grateful to my parents for their handy support and off course to all of my friends and
colleagues.

Name: Farhin Mahbub

Roll: 24DH185
EVE Batch 03
Session: 2024
PGHRM, BIM
Executive Summary
 Table of content
Chapter 1. Problem Overview ……….………………………………………… 3
1.1. Introduction………………..….................................................................................................. 3
1.2. Background………………………………………………...……………………… 4
1.3. Purpose and Research Question…………………………… 5
1.4. Methodology …………………..…………………….…………………...… 6
1.5 Structure …………………………………………………………………….……… 7
Chapter 2. Theoretical Framework………………………….…………………... 8
2.1. Definition of Performance appraisal.........………………………………………… 8
2.2. Advantages and disadvantages of Performance Appraisal and the link with the 9
Employee Engagement and feedback…..
2.2.1 Benefits from the Performance Appraisal…………………………..…..……………………….…….... 9
2.2.2. Concerns and challenges of the Performance Appraisal…...…………………………………….. 11
2.2.3. Performance Appraisal and Employee Engagement…………………………………..…..………. 13
2.2.4 Feedback…………………………… 14
2.3 Types of Feedback …………………………………..……………………………………………………… 15
2.4 Spirit practice……………………….…..………………………….……………………………………. 20
Chapter 3. Case study overview…….………………………….…………………...………… 22
3.1 IELTS Spirit…………. ……………………………………………………...……………............. 23
3.2 Appraisal system in IELTS Spirit……….……………………………….………………… 23
3.3 Method of research used…………………. ……………………………………………………… 28
Chapter 4. Summary of findings.….………………………….…………………...……… 32
4.1 Answers from the questionnaire…..………………………………...…………….........................………. 32
4.2 Descriptive statistics…………………..……….……………………………….………………… 41
4.3.1 Introduction……….………………………………………… 46
4.3.2 Scales Development……………..……….………………………… 46
Chapter 5. Recommendations and Findings…….……….…………………... 55
 Chapter 1. Problem Overview

1.1 Introduction

As an organization struggle to remain sustainable and competitive, strategic planners and human resources
professionals need to collaborate more intensely in designing strategies that are productive and humane. According
to many researchers, the most successful organizations in the 21st century will be those to adopt a focused and
integrated HR processes and systems. “The art and science of empowering people, organizations and communities to
create maximum productivity, quality, opportunity and fulfillment has never encountered so many challenges and
opportunities”(Marquardt 2004, p.2).

The enormous transformation processes that take place in the social, political and economic areas drive the need for
organizations to become more responsive to the rapid development of the global strategies and the local operational
levels. Human Resource Management focuses on personnel related areas such as job design, resource planning,
performance management system, recruitment, selection, compensations and employee relations. Out of these one
function plays a critical role for the global success of the organization and this is performance evaluation. It is more
significant than other processes because its outcomes indicate the success of the realization of the other areas in the
field of Human Resources (recruitment, selection, placement, adaptation, training of the employees and other
personnel activities). Building block for enhancing performance is creating a performance culture and implementing
the performance management process. Assumptions of corporate management are that this culture makes people
be truly engaged in the business of the organization. (Reid & Hubbell 2005).

A generation ago, appraisal systems tended to emphasize employee traits, deficiencies and abilities. With the
development of the employee/organization relations modern appraisal philosophy emphasizes on the present
performance and future goals. Modern philosophy also stresses on employee participation in mutually set goals with
the supervisor. The underlying philosophy behind mutual setting of goals is that people will work harder for goals or
objectives that they have participated in setting. The assumption is that people want to satisfy some of their needs
through performing work activities that provide them with a supportive environment. They also need to perform
meaningful tasks, share the objectives setting, share the rewards of their efforts and continue personal growth.

Importance of the study:

The study is specifically limited to PA system and its challenges. It is discussing effectiveness of
PA system and awareness about it’s challenges. The analysis reveals that the expanded view of
purposefulness includes more theoretical anchors for the purposes of PA and relates to various
aspects of human resource functions, feedback and goal orientation. The expansion in the PA
fairness criterion suggests certain newly established nomological networks, which were ignored
in the past relationship between distributive fairness and organization-referenced outcomes.
Further, refinements in PA accuracy reveal a more comprehensive categorization of rating
biases. Coherence among measurement criteria has resulted in a ratee reactions-based
integrated framework, which should be useful for both researchers and practitioners.

Objective
Main objective of the study:

 Performance Apprisal System

Specific objectives: The specific objective of the study will be:

● Employee satisfaction towards performance apprisal system.
● Identifying areas for improvement, which can lead to increased job satisfaction,
employee engagement, and retention.

Methodology of the study:

This term paper aims to study opportunities & challenges of performance apprisal system.
Data will be collected through structured questionnaire, organization visit, group discussion,
personal interview. Data will collect from Customer Services Department of IELTS Spirit Uttara
Branch. The reasons to choose this sector are that they have a very strong and unique cultural
practice.We will get a number of survey participants. We will get an access to a huge collection
of data to ensure more authentic statistical analysis.
Phase- I:

In the first phase theoretical study will be carried out to understand the employees perception
towards performance apprisal system, characteristics and its types, factors associated with
employees.

Phase- II:

1. With the theoretical understanding some employees will be interviewed with selected
questionnaire to know their level of understanding of PA and its importance. The participants of this
survey will be answering some close ended questions. These arranged questions will automatically
find out the satisfaction level of the participants on their job.
2. After collecting their opinions through the questionnaire, some open ended questions will be asked
for own understanding of the surveyor. This will be followed by some formal and informal
discussions.

b. Phase-III: Data Collection Tools and Techniques:

● Sampling:

For the convenience customer service department will be chosen.

 ● Sample Size:

The sample size for the study will not be large one. The sample size will be 35 with
representation of the management and front line employees concerned.

● Sampling Scheme:

Having fixed up sample extent, sample size and sample units, it will take 04 days to
complete the task of collection information.

● Source of Information:

Both primary and secondary data will be used to reach a convincing result;

a. Primary Data:

Primary data will be collected through Structured Questionnaire, Personal

Interview and group Discussion.

b. Secondary Data:
● Secondary data will be collected from the CEO of the organization by physical
observation and record review.
● Official website of the company.

● Data Processing Method:

Collected data will be coded and verified. Moreover data will be processed by making
consistency checking with the help of computer and relevant knowledge on the subject
as well as the knowledge and application of statistical tools. Some manual techniques
will be applied during the collection of opinion through the questionnaire.
 Chapter 2. Company Profile

In this chapter, the performance appraisal process in a “IELTS Spirit” is described. The company is an existing one,
under a fictional name. Information has been gathered in interview sessions with representatives of the company in
the following categories – managers, employees and HR professionals.

2.1“IELTS Spirit”

IELTS Spirit a privately-owned educational institution. They offer courses on IELTS International English language
Testing System, free hand writing, spoken English and student recruiting services to North American and European
universities. IELTS Spirit was established in 2016. They have now two branches- one is location in Uttara and the
other one is located in Mirpur.

▪ Revenues 2023: 20 Million ▪ Workforce 2023: 50+ man-years ▪ Partnership with IDP IELTS Australia & Apply Board
Canada

2.2 Appraisal system in “IELTS Spirit’

The company is changing its organizational behavior and implementing and promoting a high- performance culture.
According to the management opinion there are two important elements that have to be rightly positioned and
correctly implemented and these are discipline and leadership. When it comes to discipline, it is not about autocratic
and controlling behaviors. It is more about letting people speak and share their opinions and ideas in an open and
trustful environment. The company discipline does not only follow the guidelines, but it is also about reducing
complexity, do things in a simpler and standard way with a focus on must-have priorities eliminating the nice-have
ones. In “IELTS Spirit” leadership skills such as achieving results, maximizing business opportunities, managing
customer relations, coaching etc. are important not only for managers, but they are also part of the competence
profile of people at different levels – not only for those who are on the top levels but also for those who are in
customer facing jobs, marketing roles, financial planning etc. Leadership accountability and team work are also
identified as aspired core skills and behaviors on company-wide level. Their meaning is defined in details in the
context of company operations. These behaviors are also included in the performance appraisal assessment.

Speaking about behaviors they were added three years ago into the standard list of criteria for performance
measuring and rewarding. Now if an employee deserves a high performance ranking result, he/she should
demonstrate not only what has been achieved but also how – what behaviors they have exhibited in their work. This
makes the appraisal assessment more complex and bureaucratic, but also determines a standard for behaviors –
which of them the company can tolerate and which ones should be eliminated as unacceptable.
There is a growing focus on productivity and objectivity. The legal issue is related to diversity in gender, nationality,
biases, etc. How to handle potential diversity bias and eliminate prejudice are issues addressed in the Performance
appraisal communication pack prepared for managers and HR professionals.

Another aspect to be taken into consideration in the performance appraisal cycle is the culturaldifferences of people
with different backgrounds, beliefs, education, and religion. There is special cultural awareness training offered to
both employees and managers which helps people increase their self-awareness as well as building knowledge and
appreciation of other cultures. HR professionals are delivering these workshops with an emphasis on cultural
empathy and appropriate verbal and non-verbal communication skills that are important to cross-culture success.

At the beginning of the performance period specific objectives are identified. They derive from the overall business
objectives and are cascaded bottom down in the organization. Each employee receives from his line manager his
business objectives and personal targets. They are used as a basis on which the employee specifies his/her own
targets. Using this approach, the organization ensures alignment between company objectives and employees goals.
At the end of the performance period the progress and results are reviewed against these objectives.

The structured and formal performance review or discussion known also as appraisal interview plays an important
role in the process. This is an opportunity to review the past performance against objectives set earlier as well as to
identify any gap. For managers and supervisors this is the time to identify current performance level, discuss
strengths and weaknesses and future opportunities. Appraisal discussion helps employees to understand how they
are doing, receive coaching and feedback, clarify expectations about career development.

Clear and constructive feedback is also part of the process. In the performance appraisal guidelines it is
communicated that giving and receiving feedback is an opportunity to share opinions. Employees expect feedback
on their strengths, achievements but also weaknesses and development areas. Line managers collect feedback from
other managers or colleagues of the employees under their line of subordination. These outputs must be recent,
specific and should contain recommendations for improvement or doing things differently.

HR specialists in the company believe that in order to be productive the Performance Appraisal should be aligning
the interests of the employees and the organization. In order to meet theirpersonal goals the employees would need
to know what the formal opinion about their work and personal qualities is, what their opportunities to progress in
their careers are and they should be aware what they need to improve. The organization should know how to utilize
their skills, how to motivate employees, retain them in the company and develop them further to perform the
company’s objectives even more effectively.
 Chapter 3.Literature Review

There are both quantitative and qualitative method approaches in the thesis. The quantitative approach is more
objective. It is used to evaluate the evidence and to clarify theories. It is much more focused on the collection and
analyzes of statistics. (Hunter & Leahey 2008). On the other side, the qualitative method is interpreting what the
people thing and say. That method is much more subject to interviews and case studies and relies less on numbers.
(Denzin & Lincoln 2005).

DIFFERENCES IN BOTH METHODS

Qualitative method investigates the phenomena, while quantitative method confirms the hypothesis. Qualitative
method is semi-structured; It includes interviews and participant observations, while the quantitative one uses more
structured approaches such as surveys and questionnaires. Qualitative method describes the relationships and
variation, while quantitative method is used to predict the relationships and quantify the variation. Open-ended
questions are used in the qualitative method, while in the quantitative the questions are closed in the questions
formats. The data format in the qualitative method is textual, while in the quantitative one the data assign numerical
values.

DATA COLLECTION

The required information needed for the thesis was collected through the use of questionnaires and interviews.

THE QUESTIONNAIRE METHOD

The questionnaire was send by google form from company employees.The questionnaire consists of different types
of questions. Information about the demographic data of the participants is gathered from the multiple choice
questions (closed), which just required that the right answers be ticked by the respondents. The answers of the
questions are based on five-level scale and the options are: strongly agree, agree, neither agree or disagree,
disagree, strongly disagree. In the research, there are also questions that require only YES/NO as well as
unstructured questions (open ended) which allow the respondents to reply in their own words and give freedom of
opinions.
 Chapter 4. Theoretical framework

In this chapter I provide an overview of concepts for performance appraisal definition, cover
purposes and goals, advantages and disadvantages, types of performance appraisal systems and link
of performance appraisal with employee engagement.

Definition of performance appraisal

According to Carroll and Scheider (1982), performance appraisal is "the process of identifying,
observing, measuring, and developing human performance in organisation." This definition is crucial
since it includes all of the essential elements required for a successful appraisal procedure. By
focussing on performance-related criteria rather than performance-irrelevant ones, identification
criteria let the appraisal process focus on determining what needs to be looked at. Because of the
observation component, supervisors must regularly monitor the traits that have been discovered.
The superior must convert the observations into a rating based on judgement, according to the
measurement component. In addition to being pertinent, they must be similar for all raters in the
company. The term of "development component" indicates that the performance review should
include more than just the assessment of

the past. The supervisor, who makes the appraisal, should focus on the future and on the
improvement of the results. The definition also suggests that effective appraisal can improve the
human performance in the organization, which also means increased employee motivation.
Performance appraisal can and should be linked to performance improvement process and can also
be used to identify training needs and potential, agree future objectives, support a career
development and solve existing problems.

Performance appraisal process is part of the performance management system. The term
“performance management” was first used in the 1970s, but it did not become a recognized process
until the latter half of the 1980. The most appropriate definition in the context of the research is
that, performance management represents a strategic and integrated approach to delivering
organizational success by improving the performance capabilities of both individuals and teams.
(Armstrong and Baron, 1998).Advantages and disadvantages of performance appraisal and the link
with the employee engagement and feedback

Purpose and benefits of the performance appraisal

According to Malcolm and Jackson (2002) there are three main groups of purposes:
Performance reviews –managers discuss with employees the progress in their current positions, their
strengths and areas requiring further development;

Potential reviews – the discussion is about employees’ opportunities for progression, and the type of
work they will be fitted for in the future and how this can be achieved,

Reward reviews – usually separate discussion but linked to the appraisal system. The manager
communicates decisions on rewards such as pay, benefits or promotion and provides feedback.

Let’s have a look at the most critical benefit of the appraisal process. Generally these could be
divided in 3 categories according to their importance for the organization, manager or employee:

BENEFITS FOR THE ORGANIZATION:

Performance Appraisal could be an effective source of management information, given to

employees. Performance reviews are focused on contributions to the organizational goals. Some
forms of these reviews include the question "What organizational goals were contributed to and
how?"

Outcomes of performance appraisal can lead to improvements in work performance and therefore
overall business performance via, for example increased productivity or customer service.

Malcolm and Jackson (2002) outline four different benefits for the organization. These are targeted
training approach based on identified needs, future employee promotion decisions, effective bases
for reward decisions and improved retention of employees. The importance of performance
appraisal for training and promotion needs is also discussed by Mullins (1999).

individual performances with the organizational goals and also review employees’ performances.
Besides, enhancing motivation appraisal is about involvement in the ‘big picture’

responsibility, encouragement, recognition for effective delivery and effort (Malcolm and Jackson,
2002). Performance Appraisal is a motivation for the employee, who performs well in the present to
go on doing so and in the future (Derven 1990).

Concerns and challenges of the performance appraisal

Performance appraisal is a common practice in organisations all around the world. Many managers,
HR specialists, HR consultants, and researchers advise businesses to do away with performance
review systems in spite of this.
Given the gap between theory and practice, this is perhaps the first and most compelling argument.
Human resources professionals do not fully utilise the psychometric instruments available, according
to authors such as Bernardin & Klatt (1985); Hall, Postner& Hardner (1989); and Maroney & Buckley
(1992). They also note that there is a significant gap between theory and practice. Line managers
counter by arguing that if the procedure is not straightforward and easy to use, it will be time-
consuming and inefficient. There is also criticism that arises with the fact that performance appraisal
increases the dependency of the employees on their superiors. Where the process is conducted by
managers who are often not trained to be appraisers, the genuine feedback is obstructed because it
includes subjectivity and bias of the raters, which leads to incorrect and unreliable data regarding the
performance of the employee.

Performance Appraisal process can also be a bitter process which can create emotional pressures,
stress and sometimes can adversely affect the morale and lead to demotivation.

Performance appraisals are often time consuming and use incorrect methods to measure
performances. They are generating false results and the decisions taken can be politically influenced.

Besides, he identifies an additional benefit: performance appraisal can help to identify inefficient
work practices or reveal potential problems, which are restricting the progress of the company.
Derven (1990) and Mullins (1999) suggest that performance appraisal can help the organization to
identify the talented employees and future leaders in the company.

Derven (1990) believes that there is a straight connection between the job of an individual and the
strategic goals of the organization and this can directly increase the profitability of the company. He
gives an example that advantage can be achieved when a company builds its appraisal systems on
measuring customer satisfaction.

BENEFITS FOR THE MANAGER:

The annual meeting gives an opportunity to the manager to formally recognize good performance
and this would lead to more motivation from the workers (Derven 1990). Modern systems for
performance appraisal depersonalize issues. Supervisors focus on behaviors and results, rather than
on personalities. Such systems support ongoing communication, feedback and dialogue about
organizational goals. Also they support communication between an employee and a supervisor.
Performance appraisal provides a clear target of job standards and priorities and ensures more trust
on the relation manager–worker (Derven 1990). Other management benefits of Performance
Appraisal are the identification of high performers and poor performers as well as the identification
of strengths and development areas. (Jackson & Schuller 2002).

BENEFITS FOR THE EMPLOYEE:

Performance appraisal takes into account the past performance of the employees and focuses on the
improvement of the future performance of the employees.

It gives the staff the opportunity to express their ideas and expectations for the strategic goals of the
company (Mullins 1999). Employees can find what is expected from them and what the
consequences of their performance are. Ideally they receive a fair and analytical feedback for their
performance (Derven 1990). Performance appraisal helps to rate the performance of the

employees and evaluate their contribution towards the organizational goals. It helps to align theAn
example to support the points mentioned above would be the case of a call centre employee. The
appraisal of a call center employee is based on the amount of work they do, the number of calls they
receive, the amount of revenue they collect, the average time they spend on each call. But if
analyzed, all these factors depend on other factors like the response of the callers, the availability of
the information asked for, the nature of the calls etc. which are often not considered during
appraisals. When an employee is being aware of all these secondary factors that have not been
considered when they are assessed, the situation can create stress and dissatisfaction.

Walters (1995) outline the main Performance Appraisal challenges in the performance appraisal
process:

Determining the evaluation criteria. Identification of the appraisal criteria is one of the biggest
problems faced by the top management. For the purpose of evaluation, the criteria selected should
be in quantifiable or measurable terms.

Lack of competence. Evaluators should have the required expertise and the knowledge to decide the
criteria accurately. They should have the experience and the training necessary 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 evaluator’s rating for all other traits) etc. may creep in the appraisal
process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the
performance of the employees.

Resistance. The appraisal process may face resistance from the employees because of the fear of
negative ratings. Therefore, the employees should be communicated and clearly explained the
purpose as well the process of appraisal. The standards should be clearly communicated and every
employee should be made aware of what exactly is expected from thempay, promotions, benefits,
etc.
 Chapter 4. Data Analysis

This chapter presents the data collected from the questionnaire. Answers from the questionnaire
were distributed to 25 employees of the selected company, 18 were returned.

Scales development

At the first stage of the data processing, on the basis of the items included in the survey, we have
developed three different measures for evaluating the degree of satisfaction of the employee with
the relationship with the manager, the degree of satisfaction with the Performance Appraisal policies
and the degree of overall satisfaction with the company.

SCALE 1 (Satisfaction with manager relationship)

The first scale includes items of the survey:

My manager recognizes me when I do a good job

My manager plays a significant role in my career development

I am satisfied with the relationship with my manager/supervisor

My manager/supervisor is highly capable as manager

My manager gives me fair feedback

My manager/supervisor has reasonable expectations for my work

My manager/supervisor is well informed about my work

SCALE 2 (Understanding the Performance policies)

The second scale comprises the items:

12. Performance management can help people understand the organization’s strategic priorities

14. I clearly understand the purpose of performance appraisal

Performance appraisal reflects my performance objectively

Performance appraisal makes me better understand what I should be doing

Performance appraisal process helps manager/supervisor to manage people better

Performance appraisal process encourages co-operation & team spirit

Performance appraisal influences positively individual performance

SCALE 3 (Job/Company Satisfaction)

The third scale includes the items:

My job is fulfilling my needs

I feel proud to work for my company

I rank my company higher compared to other employers

I would recommend my company to all my friends

The salary is adequate reflection of my performance

Comments: In this data 61.1% employees agrees with question. 11.1% Strongly agreed and 22%
disagreed.

Comments: In this data 61.1% employees agrees with question. 22.2% Strongly agreed, 16.7% are
neutral and 22% disagreed.

Comments: In this data 55.6% employees agrees with question. 22.2% Strongly agreed, and 22.2%
neutrally answered.
Comments: In this data 66.7% employees agrees with question. 16.7% Strongly agreed and 16.7%
neutrally answered.

In this data 55.6% employees agrees with question. 22.2% Strongly agreed and 22.2% disagreed.
In this data 55.6% employees agrees with question. 33.3% Strongly agreed and 11.1% disagreed.

In this data 50% employees agrees with question. 27.8% Strongly agreed, 11.1% are neutral and
11.1% disagreed.
In this data 61.1% employees agrees with question. 33.3% Strongly agreed and 6% are neutral.

In this data 50% employees agrees with question. 33.3% Strongly agreed 11.1% are neutral and 6.5%
disagreed.

In this data 50% employees agrees with question. 33.3% Strongly agreed 11.1% are neutral and 6.5%
disagreed.
In this data 55.6% employees agrees with question. 22.2% Strongly agreed and 16.7% disagreed.

In this data 66.7% employees agrees with question. 27.8% Strongly agreed and 7% disagreed.
 Chapter 5. Findings, Recommendations & Conclusion

In this chapter I summarize my learning experience from the literature and the qualitative survey run
in the observed company. I add some possible pitfalls and general mistakes in the process and how
they can be overcome and some best practices described in the different elements of the
Performance Management cycle.

LINE MANAGER’S ROLE

“The quality of performance appraisal process depends on high level of the line manager leadership
skills, experience and maturity. The fairness of the assessment is currently cross- checked in ranking
sessions. However the leadership skills and abilities of the line managers should be further
monitored and improved for a higher quality of the performance appraisal process.”

and Wrap-up (what would you do) and could be used as a basis for effective communication in the
appraisal meeting.

In the discussion one of the topics on development could be the current gaps and future job
opportunities. Based on this, a learning and development plan could be drafted.

OPEN AND HONEST FEEDBACK

“There should be a mechanism to reflect not only the personal opinion of the line manager, but of
other people (peers, subordinates, higher managers) as well in an objective way of feedback.
Performance should be assessed against clearly specified and agreed tasks and targets and not in
comparison to the perceived performance of other employees.”

This opinion, expressed by one of the participants, demonstrates expectation for improving the
feedback collection process. The employee believes that objectivity in assessment process will
improve through collecting feedback. Although there is a well defined process of feedback collection
in “IELTS Spirit” in some cases line managers probably miss the opportunity to collect input from
others. Employees can suggest relevant references and managers should seek additional feedback
from others in the organization about the performance of their own staff. Collecting information
from different sources increases objectivity and ensures all elements of performance to be covered.
Often in “IELTS Spirit” employees are requested to do a self-evaluation and submit evidence which
could be a good practice. Use of 360 degree feedback can be also very helpful because here the self
evaluation can be compared with the evaluation of the others against the same performance criteria.
Spirit uses 360 as an additional tool for evaluating employees.
Another element – objective and consistent feedback – delivers a constructive and honest feedback.
(Lepsinger& Lucia 1997). It helps employees to understand their strengths and weaknesses and the
areas in which they need to improve their performance. Managers should not only be able to give
feedback but also to suggest corrective behaviors. Because of its sensitivity the feedback should be
given with care, without personal criticism which might hurt.

This one and many other views expressed by respondents confirm the criticality of manager’s role in
the process. Managing expectations and performance of another person is not an easy task because
it requires from line manager to know how to achieve goals through other people. Managers need to
understand the psychology of human behaviors by observing people reactions. They should know
what factors could be motivating for each individual, how to coach and develop as well how to
resolve conflict situation. As people usually have high expectations for their leaders, managers,
especially newly recruited or promoted, should be educated and trained in people management
skills and should carefully prepare themselves for the appraisal cycle.

A supervisor’s attitudes and skills in the appraisal process are crucial – care, empathy, listening,
coaching and influencing, asking the right questions, paraphrasing, summarizing, etc. (Armstrong &
Baron 1998). These are skills that can and should be trained. In order that supervisors could
concentrate on improving their skills my recommendation is that supervisors be appraised for the
quality of the evaluation process. In cases where the employee is very confident and willing to
challenge manager’s opinion and the boss does not have sufficient competence level, the discussion
could go easily off track with little or no benefit to the employee.

APPRAISAL DISCUSSION

Preparation for the appraisal meeting should start early. The place and time of the meeting and the
atmosphere are important factors for the success of conversation. The purpose of the meeting and
the agenda should be set first. The line manager should begin the discussion with job requirements,
strengths and accomplishments observed in the past period. Managers must be well prepared to
listen and discuss, he/she needs to have relevant evidence and be able to provide facts for their
judgments so that their comments be accepted as credible by the employee. The meeting should be
a discussion not a line manager’s one-way communication. Best practice recommended by Walters
(1995) shows that the employee should talk 70-80% of the time about how they feel, what
achievements they have made, what was not achieved and

why, what career objectives they have and how they see their future in the organization. In order to
successfully make the employee talk the manager should be skillful in listening, understanding and
questioning. At the end of the session further actions and timelines should be agreed. Best practice
is at the end of the discussion both parties to reach an agreement based on trust and commitment
to fulfilling their own part of the agreement.

PERFORMANCE RANKING

Measuring performance is a very difficult activity – the performance should be measured against
defined success criteria, following the same format for everyone. Before the appraisal, the supervisor
should gather information on the employee’s work performance by seeking input from other people.
Information references include feedback from other supervisors, managers and peers. The supervisor
must weigh these up and make his/her own assessment of the employee. The evaluation of
performance should be based on facts, recognizing and acknowledging what has been achieved.
Some respondents of the survey challenged the pre- determined ranking which results in average
1.03. This method of budget control is seen by some of the employees of “HSL” as unfair. However, if
there is no controlling measure there is a high risk that Line Managers would give higher
performance ratings than their staff deserve. Another implication would be higher remuneration cost
incurred.

PERFORMANCE REVIEW FREQUENCY

There is a wide spread opinion that an annual meeting to evaluate progress does not have the same
benefits as an ongoing dialogue and formal and informal feedback. Some companies are moving
towards conducting performance reviews twice a year, small numbers of companies do it on more
frequent basis.

Best practice requires the evaluation of performance to take place on a regular basis. Mostly
suggested are quarterly performance updates. Reviewing performance on continuous basis will allow
a bad performance or existing issues to be identified and corrective measures to be designed at an
earlier stage. Also tasks and targets should be checked out several times a year

(Murphy & Cleveland 1995). They are set at the beginning of the year; however they are likely to
change throughout the performance period and should be kept updated.

PROPER PERFORMANCE RECORDING

Note taking must be a consistent practice. Documentation is important to support performance

decisions, and notes should be written with intent to be shared. (Reeves 2002)The performance log
is the record that is kept by a manager and employee and serves a number of purposes. The
performance log can remind of a coaching need or can be a reminder for providing recognition.
Performance log is used when promotion or development opportunity for the employee is
considered. Performance records should follow the same principles – be objective, based on
observations, comment job-related behaviors only, include achievements and deficiency areas and if
applicable disciplinary actions should be logged. Online administration in electronic systems used
nowadays makes it simple to remind managers and employees automatically when reviews are due,
late or incomplete, and HR professionals no longer have to track down the missing reports.

ENSURE ONGOING PROCESS, FULL PARTICIPATION AND SUCCESS

The performance management process must add value, otherwise problems with resistance and
non-participation will pop up on the surface. Participation and support from upper level
management is also important. Senior management should participate in the same process. The
effectiveness of the process increases if there is a culture that supports honest

communication, where employees can openly consider how to make improvements in order to move
forward. (Murphy & Cleveland 1995)

Another way of improving efficiency is to make a regular review of the process through surveys and
questionnaires or get opinions through focus group discussions. However, their benefits are doubtful
and would hardly compensate the time loss.