PERFORMANCE APPRASIAL:-

Performance appraisals, also known as performance reviews and employee appraisals, are processes
designed to evaluate and improve job performance. They form part of career development, particularly
when future training needs are considered during the process.
There are many different types of performance appraisal – the most well-known is the
manager/employee appraisal but peer appraisals, where colleagues are asked to judge each other’s
performance, are also common.
Most organisations will conduct some form of performance appraisal every year but there’s a modern
trend towards more regular appraisals, whether at quarterly or half-year intervals. Some companies
have performance appraisals every month, although these are likely to be less formal and in-depth than
the annual affair.Some of the cited benefits of performance appraisals include improved communication
in the manager/employee relationship and within teams, improved motivation through re-establishment
of trust and managerial approval and performance improvement through re-aligning the employee’s
day-to-day activities with the company’s goals.Critics of performance appraisals say they are prone to
an ‘overinflation’ effect, where managers rate employees as better-performing than they actually are to
avoid conflict. They also say employees often have negative perceptions of performance appraisals as
inherently critical, outdated methods of evaluation. Another criticism is that formal performance
appraisals do not always gel with modern organisational culture.The performance appraisal is the
process of assessing employee performance by way of comparing present performance with already
established standards which have been already communicated to employees, subsequently providing
feedback to employees about their performance level for the purpose of improving their performance as
needed by the organisation.As said above the very purpose of performance uprising is to know
performance of employee, subsequently to decide whether training is needed to particular employee or
to give promotion with additional pay hike. performance appraisal is the tool for determining whether
employee is to be promoted, demoted or sacked ( remove ) in case of very poor performance and no
scope for improvement.
WHAT IS PERFORMANCE:
Employees are performing well when they are productive. Productivity implies both concern for
effectiveness and efficiency, effectiveness refers to goal accomplishment. However it does not speak of
the costs incurred in reaching the goal. That is where efficiency comes in. Efficiency evaluates the ratio
of inputs consumed to outputs achieved. The greater the output for a given input, the greater the
efficiency. It is not desirable to have objective measures of productivity such as hard data on
effectiveness, number of units produced, or percent of crimes solved etc and hard data on efficiency
(average cost per unit or ratio of sales volume to number of calls made etc.).

WHAT IS APPRASIAL:
Appraisals are judgments of the characteristics, traits and performance of others. On the basis of these
judgments we assess the worth or value of others and identify what is good or bad. In industry
performance appraisal is a systematic evaluation of employees by supervisors. Employees also wish to
know their position in the organization. Appraisals are essential for making many administrative
decisions: selection, training,
promotion, transfer, wage and salary administration etc. Besides they aid in personnel research.
Performance Appraisal thus is a systematic and objective way of judging the relative worth of ability of
an employee in performing his task. Performance appraisal helps to identify those who are performing
their assigned tasks well and those who are not and the reasons for such performance.

Mid-year appraisals good for staff motivation

Appraisals may no longer exist as once-a-year phenomena. A growing number of companies are opting
for mid-year - and even quarterly - reviews. The main argument in favour of this trend is that it may not
be wise for a company to wait as long as one year to assess employee performances.Whether it is to
reward employees for something they did two quarters back or bringing them back on the path of
growth, in case they have strayed, companies have realized the earlier they do so, the better.
Organizations like Deutsche Bank and Akzo Nobel India have been following mid-term performance
reviews for a few years now, while the list of other companies following this model appears to be
growing. Nivea India is among those which have recently adopted the practice.According to Makarand
Khatavkar, MD and head, HR (Dt. 2012) at Deutsche Bank, the bank is trying to make its mid-term
reviews more robust. The move is aimed at making managers and employees more accountable. Bank
is currently conducting a communication and education exercise to train and convey to all our
employees about the new performance system.At Deutsche Bank, performance standards are being
made more objective so that they are easy to understand and implement.During annual appraisals,
mostly recent accomplishments and disappointments may get noticed as these are fresh in the memory
while the events which date back a few quarters could go unnoticed. At global paints and coatings
major, Akzo Nobel India, appraisals are a continuous process. "The HR team conducts workshops with
managers before the mid-year and year-end cycle based on the performance and development dialogue
process. The mid-year review is not about ratings but is geared at reviewing and providing guidance to
the employees. The year-end process, on the other hand, focuses more on self assessment and involves
feedback by both primary and secondary reviewer," said Sangeeta Pandey, director, HR (Dt. 2012),
Akzo Nobel India.

ISSHU IN PERFORMANCE APPRASIAL:-

n my experience, there are ten common objections to the annual performance appraisal process; and ten
very powerful rebuttals:

Objection 1: Once-a-year (or even twice) critiquing (at the annual appraisal) encourages people to save
up and squirrel away both praise and criticism for months instead of giving it at the appropriate time.

Rebuttal 1: This is very rare, and the difference in the appraisal is that it is detailed, numeric, generic
and comparative. Day-to-day feedback that is specific and immediate is necessary and the sign of a
good manager.

Objection 2: Managers are cowardly – they know that low marks are demoralising so they avoid giving
them and hence a paper trail of the poor performers suggests they are performing well.

Rebuttal 2: This is certainly true and perhaps the greatest cause of appraisal system failure. But it can
be cured by a mixture of appraiser training and rewards for managers who give honest feedback.
Manager pusillanimousness is a human failing not exclusively an appraisal issue.

Objection 3: Appraisal confounds different functions: feedback, coaching, development, pay decisions,
legal documentation.

Rebuttal 3: It can, but it need not. It is about detailed feedback. It can be used to generate numbers for
pay and promotion decisions but it does not have to. Best to separate pay and appraisal at first so that it
is not seen exclusively as a remuneration exercise.

Objection 4: Appraisal is evaluation by ambush because employees were encouraged to meet a standard
they had not seen, understood or thought relevant to their job.

Rebuttal 4: This is only the case if appraisal systems are not properly piloted or introduced. In fact the
precise opposite is most often the case: people complain about being over-consulted by HR over the
contents of the appraisal form with which they are all too familiar.

Objection 5: Appraisals are either too inflexible to force real differentiation between individuals on
trivial criteria or else so specific that no useful comparative data is generated.

Rebuttal 5: Certainly the size and complexity of the organisation can make comparisons difficult, but
there are two ways around this: first, everyone beyond a certain level (say supervisor) can be evaluated
on competencies that are considered to embody the unique and important features of the whole
organisation; second, allow unique and shared criteria – the former are called “personal goals” or “key
result areas”; the latter compare competencies or management practices.

Objection 6: the appraisal system is not organisation-wide; special groups opt out quite unreasonably
and unfairly.

Rebuttal 6: This does happen, paradoxically most often with the top board who are supposed to model
and endorse it. Lots of specialists also make a bold attempt to be excluded on the grounds of being
unique. But if they are allowed to get away with it, then the performance review system is really not a
system for the company.

Objection 7: Appraising and giving feedback are skills that needs to be taught before any system is put
in place – ie, the system is not supported by training.

Rebuttal 7: This may be true but does not have to be. Time, effort and money are needed in three
phases: system design, implementation and maintenance. Training is part of the latter two where both
energy and money are low.

Objection 8: The rating scale means the numbers and the words do not match.

Rebuttal 8: This is an important issue that can be unsolvable. Most rating scales used in appraisal are
five-point scales with verbal description. It is a recipe for disaster. It turns into a 3 or 2 point scale that
effectively does not differentiate the good and the bad. There are not enough words to adequately
describe performance on a differentiating scale. The scales are wide, even and anchored at both ends
such as Unacceptable Performance 1 2 3 4 5 6 7 8 9 10 Exceptional Performance.

Objection 9: A cost-benefit analysis of designing, implementing and maintain a performance

management system implies that, frankly, it isn’t worth it.

Rebuttal 9: Not all systems require months of super-consultant time and expense but they must not be
amateur. Paradoxically, it is the effort put into running and maintaining a system rather than designing
it that is most important to ensure its success.

Objection 10: Individual appraisal ruins teamwork and team spirit. Traditionally appraisal is done on an
individual basis: it's the individual's style, effort and outcome that are appraised not the team that they
are in, if indeed they are.

Rebuttal 10: That need not be the case. It is perfectly simple to institute team assessment and appraisal
if that is really wanted.
PURPOSE OF PERFORMANCE APPRASIAL:-
Companies use performance appraisals for evaluation and developmental purposes. A properly
executed appraisal acts as a basis for hiring new employees, training and development of current
employees, restructuring of workflow and employee motivation. Performance appraisals offer evidence
for pay increases or for terminations. Well-designed performance appraisals can start dialogue between
supervisors, direct reports and coworkers that may result in positive outcomes for the individuals and
the business.
Types
Businesses can choose from several types of performance appraisals. Traditionally, employee
evaluations take place one-on-one between supervisors and subordinates. Other type involves
management by objectives, or MBO, where employees and managers set objectives at the beginning of
the evaluation period and assess how well the employees meet those objectives at the end of the period.
Others include 360 degree feedback appraisals, performance ranking, paired comparison analysis,
behavioral observation scales, graphic rating scales and several others. Companies must choose which
type fits best with their company culture, budget and daily operations.

Benefits
Performance evaluations can serve as effective tools for improving employee performance and
productivity as well as determining employee developmental needs. Implemented properly, regular
performance reviews can raise individual self-esteem and deepen the relationship between supervisor
and subordinate. People often perform better when they have an idea how their supervisor views their
work, knowledge and skill. They are more likely to initiate honest conversation regarding goals and
job-related issues as well.

Characterisitics
A quality performance appraisal scheme has a set of clearly defined parameters. The documentation,
whether electronic or written, includes ways to assess performance based on job-relevant skills and
knowledge. Evaluations should not include assessment of employees’ personality of work style, but
should include a review of communication techniques and behavior as it relates to interpersonal
interaction.

Time Frame
A formal performance review should take place annually. In addition, managers must communicate
with employees between formal appraisals to keep them motivated and focused on personal and
company objectives. These regular communications serve as praise for good performance and a means
of stopping poor habits and behaviors before they affect the annual review scores.

Issues
No appraisal system, regardless of how sophisticated, is completely objective. Problems arise when
evaluators tend to give overly lenient or overly strict ratings on a consistent basis. Personal prejudices
can skew results, as can poorly defined standards of measurement. Finally, employees must view the
system as fair and just for the results to impact their behaviors and job performance. If employees do
not see the process as a credible one, it loses validity and value overall.

TIME OF APPRASIAL:-
It is appraisal time again and employees can look forward to an average hike of 10-12 per cent, while
top performers can eye as much as 25 per cent, but this once-a-year evaluation norm may change as
firms are shifting to a more regular feedback culture, say experts.
Most companies have a bell curve system of management in place, which compares employees'
performance relative to others and puts them in different rankings - top, average and bottom performers
- with the vast majority being treated as average performers.

HR experts believe however that times are changing and more and more companies are planning a
revamp of their appraisal systems, opting for a more regular feedback based review systems.

"Eliminating bell curve/forced distribution or going 'rating less' is undoubtedly catching a lot of
attention with many organisations willing to test it as a pilot if not fully implement it," Willis Towers
Watson India Director, Rewards, Talent and Communication, Shatrunjay Krishna said.
"Almost every major company wants to revamp their current approach. They want to make it intuitive,
focused on feedback, and more developmental," Nishith Upadhyaya, Head-Advisory and Knowledge
for SHRM India said adding that "the trick to get it right is to improve upon the curve that uniquely
reflects the real driver of people performance in your organisationRegarding appraisals Kunal Sen,
Senior Vice President, TeamLease Services said average salary hike will be about 11 per cent across
sectors with IT leading the way at about 13.5 per cent, while, top talent should be getting 20-25 per
cent hikes, he added.

"The average hike in 2016 will be 10-12 per cent where in top performers will end up getting 15-20 per
cent specially in the industries like e-commerce, startup's wherein the increase is also the part of the
retention policy since this particular sector has lot of poaching and business models are evolving," said
Sunil Goel, MD GlobalHunt an executive search firm.

According to Joseph Devasia, Managing Director Antal International India "most Indian companies
have now started terminating this style of appraisal system or tweaking it to be more flexible,
rewarding and feedback-based". ".

METHODS OF PERFORMANCE APPRASIAL:-

Numerous methods have been devised to measure the quantity and quality of performance appraisals.
Each of the methods is effective for some purposes for some organizations only. None should be
dismissed or accepted as appropriate except as they relate to the particular needs of the organization or
an employee.

Broadly all methods of appraisals can be divided into two different categories.

Past Oriented Methods

Future Oriented Methods

Past Oriented Methods

1. Rating Scales: Rating scales consists of several numerical scales representing job related
performance criterions such as dependability, initiative, output, attendance, attitude etc. Each scales
ranges from excellent to poor. The total numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost, every type of job can be evaluated, large
number of employees covered, no formal training required. Disadvantages – Rater’s biases

2. Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or
No based questions is prepared. Here the rater only does the reporting or checking and HR department
does the actual evaluation. Advantages – economy, ease of administration, limited training required,
standardization. Disadvantages – Raters biases, use of improper weighs by HR, does not allow rater to
give relative ratings

3. Forced Choice Method: The series of statements arranged in the blocks of two or more are given
and the rater indicates which statement is true or false. The rater is forced to make a choice. HR
department does actual assessment. Advantages – Absence of personal biases because of forced choice.
Disadvantages – Statements may be wrongly framed.

4. Forced Distribution Method: here employees are clustered around a high point on a rating scale.
Rater is compelled to distribute the employees on all points on the scale. It is assumed that the
performance is conformed to normal distribution. Advantages – Eliminates Disadvantages –
Assumption of normal distribution, unrealistic, errors of central tendency.

5. Critical Incidents Method: The approach is focused on certain critical behaviors of employee that
makes all the difference in the performance. Supervisors as and when they occur record such incidents.
Advantages – Evaluations are based on actual job behaviors, ratings are supported by descriptions,
feedback is easy, reduces recency biases, chances of subordinate improvement are high. Disadvantages
– Negative incidents can be prioritized, forgetting incidents, overly close supervision; feedback may be
too much and may appear to be punishment.

6. Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviors determine
the points. They are said to be behaviorally anchored. The rater is supposed to say, which behavior
describes the employee performance. Advantages – helps overcome rating errors. Disadvantages –
Suffers from distortions inherent in most rating techniques.

7. Field Review Method: This is an appraisal done by someone outside employees’ own department
usually from corporate or HR department. Advantages – Useful for managerial level promotions, when
comparable information is needed, Disadvantages – Outsider is generally not familiar with employees
work environment, Observation of actual behaviors not possible.

8. Performance Tests & Observations: This is based on the test of knowledge or skills. The tests may
be written or an actual presentation of skills. Tests must be reliable and validated to be useful.
Advantage – Tests may be apt to measure potential more than actual performance. Disadvantages –
Tests may suffer if costs of test development or administration are high.

9. Confidential Records: Mostly used by government departments, however its application in industry
is not ruled out. Here the report is given in the form of Annual Confidentiality Report (ACR) and may
record ratings with respect to following items; attendance, self expression, team work, leadership,
initiative, technical ability, reasoning ability, originality and resourcefulness etc. The system is highly
secretive and confidential. Feedback to the assessee is given only in case of an adverse entry.
Disadvantage is that it is highly subjective and ratings can be manipulated because the evaluations are
linked to HR actions like promotions etc.

10. Essay Method: In this method the rater writes down the employee description in detail within a
number of broad categories like, overall impression of performance, promoteability of employee,
existing capabilities and qualifications of performing jobs, strengths and weaknesses and training needs
of the employee. Advantage – It is extremely useful in filing information gaps about the employees that
often occur in a better-structured checklist. Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers. They may get confused success depends on the
memory power of raters.

11. Cost Accounting Method: Here performance is evaluated from the monetary returns yields to his or
her organization. Cost to keep employee, and benefit the organization derives is ascertained. Hence it is
more dependent upon cost and benefit analysis.

12. Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of
different methods that compare performance with that of other co-workers. The usual techniques used
may be ranking methods and paired comparison method.

Ranking Methods: Superior ranks his worker based on merit, from best to worst. However how best
and why best are not elaborated in this method. It is easy to administer and explanation.

Paired Comparison Methods: In this method each employee is rated with another employee in the
form of pairs. The number of comparisons may be calculated with the help of a formula as under.

N x (N-1) / 2

Future Oriented Methods

1. Management By Objectives: It means management by objectives and the performance is rated

against the achievement of objectives stated by the management. MBO process goes as under.

Establish goals and desired outcomes for each subordinate

Setting performance standards

Comparison of actual goals with goals attained by the employee

Establish new goals and new strategies for goals not achieved in previous year.

Advantage – It is more useful for managerial positions.

Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting short-term
goals rather than important and long-term goals etc.

2. Psychological Appraisals: These appraisals are more directed to assess employees potential for
future performance rather than the past one. It is done in the form of in-depth interviews, psychological
tests, and discussion with supervisors and review of other evaluations. It is more focused on employees
emotional, intellectual, and motivational and other personal characteristics affecting his performance.
This approach is slow and costly and may be useful for bright young members who may have
considerable potential. However quality of these appraisals largely depend upon the skills of
psychologists who perform the evaluation.

3. Assessment Centers: This technique was first developed in USA and UK in 1943. An assessment
center is a central location where managers may come together to have their participation in job related
exercises evaluated by trained observers. It is more focused on observation of behaviors across a series
of select exercises or work samples. Assessees are requested to participate in in-basket exercises, work
groups, computer simulations, role playing and other similar activities which require same attributes for
successful performance in actual job. The characteristics assessed in assessment center can be
assertiveness, persuasive ability, communicating ability, planning and organizational ability, self
confidence, resistance to stress, energy level, decision making, sensitivity to feelings, administrative
ability, creativity and mental alertness etc. Disadvantages – Costs of employees traveling and lodging,
psychologists, ratings strongly influenced by assessee’s inter-personal skills. Solid performers may feel
suffocated in simulated situations. Those who are not selected for this also may get affected.

Advantages – well-conducted assessment center can achieve better forecasts of future performance and
progress than other methods of appraisals. Also reliability, content validity and predictive ability are
said to be high in assessment centers. The tests also make sure that the wrong people are not hired or
promoted. Finally it clearly defines the criteria for selection and promotion.

4. 360-Degree Feedback: It is a technique which is systematic collection of performance data on an

individual group, derived from a number of stakeholders like immediate supervisors, team members,
customers, peers and self. In fact anyone who has useful information on how an employee does a job
may be one of the appraisers. This technique is highly useful in terms of broader perspective, greater
self-development and multi-source feedback is useful. 360-degree appraisals are useful to measure
inter-personal skills, customer satisfaction and team building skills. However on the negative side,
receiving feedback from multiple sources can be intimidating, threatening etc. Multiple raters may be
less adept at providing balanced and objective feedback.

PROBLEMS IN APPRASIALS :-
In conversations with HR leaders and employees, the talent management process that suffers from the
most disdain around the world is the performance appraisal. It’s one of the few processes that even the
owners of the process dread.

If everyone hates it, but it still gets done nearly everywhere, you might assume some asinine
government regulation requires it, but in this case there is no such regulation. The only legal
justification pertains to showing just cause for termination and other disciplinary action.

While that is the justification used, no matter how strong their design, most performance appraisals are
executed so poorly that they may actually harm a legal case. (A major labor law firm found that among
a random sample of performance appraisals conducted in a retail environment, a majority would
damage the employer’s case versus support it.)

Most ignore the shortcomings of performance appraisals and suffer through it, but that’s hard to do
once you realize how incredibly expensive the process is. In 1996, Frederick Nickols estimated the cost
at just under $2,000 per employee. My estimate, which includes a managers preparation time,
employee time, HR processing time, opportunity costs, and advances in technology, still puts the
process cost at over $2,500 per employee per year. If you choose to take on the challenge of revising
your performance appraisal process, the first step is to fully understand the potential problems
associated with it.

Here are the Top 50 problems with performance appraisals (grouped into six categories):
Most Serious Performance Appraisal Problems

1. Don’t assess actual performance — most of the assessment that managers complete focuses on “the
person,” including characterizations of their personal “traits” (i.e. commitment), knowledge (i.e.
technical knowledge) or behaviors (i.e. attendance). While these factors may contribute to performance,
they are not measures of actual output. If you want to assess the person, call it “person appraisal.”
Performance is output quality, volume, dollar value, and responsiveness.

2. Infrequent feedback – if the primary goal of the process is to identify and resolve performance
issues, executing the process annually is silly. A quality assessment/control program anywhere else in
the business would operate in real time. At the very minimum, formal feedback needs to be given
quarterly, like the GE process.

3. Non-data-based assessment — most processes rely 100% on the memory of those completing the
assessment because pre-populating the forms with data to inform decisions would be too difficult
(cynicism). In addition, most assessment criteria are “fuzzy” and subjective.

4. Lack of effectiveness metrics — many accept that the goals of the process are to recognize results,
provide feedback to address weaknesses, determine training needs, and to identify poor performers.
Unfortunately, rarely do process owners ever measure their processes’ contribution to attaining any of
these goals. Instead, the most common measure relating to performance appraisal is the percentage
completed.

5. Lack of accountability – managers are not measured or held accountable for providing accurate
feedback. While they may be chastised for completing them late, there is no penalty for doing a half-
assed job or making mistakes on them, which is incredibly common. One firm attempting to remove a
troublesome employee found that the manager had rated the individual the highest within the
department and awarded them employee of the year.
Process related problems

6. Disconnected from rewards — in too many organizations, getting a merit raise, bonus, or promotion
is completely disconnected from an employee’s performance appraisal scores. When there is a weak
link, employees and managers are not likely to take the process seriously.

7. No integration — the process is not fully integrated with compensation, performance management,
development, or staffing (internal movement). A lack of integration and coordination leads to
duplication and missed opportunity.

8. Individual scores exceed team performance — without controls, quite often the average score of
team members exceeds the actual performance of the team (i.e. the team reached 80 percent of its goals
but the average performance appraisal for its members was 95 percent).

9. Each year stands alone — each performance appraisal by definition covers a finite period of time.
However, if the goal is to assess potential and identify patterns, an employee’s performance must be
assessed over multiple years.

10. No comprehensive team assessment – although individuals on the team are assessed, there is no
simultaneous overall assessment of the team. Often contingent workers on the team are not addressed at
all.

11. A focus on the squeaky wheel — most performance appraisal systems focus on weak performers.
There is significantly less focus on top performers and thus there is no system to capture their best
practices and then to share them with others.
12. Little legal support — performance appraisals may be an executive’s worst enemy in grievances
and legal proceedings. Even though the process may be flawless, poor execution by managers often
results in performance appraisals that do not aid in a disciplinary action. Errors may include “unfettered
discretion,” improper handwritten notes, generalizations about race, gender, or age, and appraisals that
do not match the performance data. At my university, a study demonstrated that while Asians got the
highest performance score, they somehow managed to get the lowest average pay raise. When the HR
director was confronted, he was furious that anyone would calculate and expose the obvious
discrimination.

13. No second review — even though the process may have impacts on salary, job security, and
promotion, in many firms the assessment is done by a single manager. If there is a second review, it
may be cursory, and therefore not ensure accuracy or fairness.

14. Not reliable or valid — most process managers do not regularly demonstrate with metrics that the
process is consistently repeatable (reliable) and that it accurately assesses performance (valid).

15. Cross-comparisons are not required — one of the goals of the process is often to compare the
performance of employees in the same job. Unfortunately, most appraisal processes (with the exception
of forced ranking) do not require managers to do a side-by-side comparison, comparing each member
of the team with one another.

16. Assessments are kept secret — although a salesperson’s performance ranking may be posted on a
wall, performance appraisals are often kept secret. An overemphasis on privacy concerns might allow
managers to play favorites, to discriminate, and to be extremely subjective. Keeping ratings secret
allows managers to avoid open conversations about equity.

17. Process manager is not powerful — often the process is managed by lower-level HR administrators
without a complete understanding of performance and productivity.

18. No process goals — the overall process operates without clear and measurable goals, and as a result
there is little focus.

19. Not global — most processes and forms are “headquarters centric,” failing to address cultural,
language, and legal differences.

20. Forced ranking issues — although forced ranking has some advantages, using it may result in
significant morale and PR issues.

21. No ROI calculation — HR fails to do a periodic business case justifying the value added compared
to the time and the cost of the process.
Instrument (form) problems

22. Doesn’t address diversity — all too often, the same appraisal form is applied to a large but not
homogeneous group of employees (i.e. all hourly, all exempts, all managers etc.). As a result, the
assessment form does not fit the job. Only management-by-objective-type approaches address
individual needs.

23. The process does not flex with the business – rarely does any portion of the appraisal process flex
to address changing business objectives.

24. The factors are all equal — most forms treat all assessment factors as if they are of equal
importance. Instead, they should be weighted based on their relative importance in a particular job (i.e.
a janitor’s customer service rating should be weighted lower than for a salesperson.

25. Inconsistent ratings on the same form — it is not uncommon for managers to put one level (high,
average or low) of ratings in the Likert scale portion of the form, but another level of rating in the
“overall assessment” box. The final narrative portion of the assessment may contain still another
completely different level of assessment.

26. Disconnected from job descriptions – in many cases, the factors on the form are completely
different from the factors on an employee’s job description, bonus criteria, or yearly goals. This can
confuse employees and cause them to lose focus.
Manager/execution problems

27. Managers are not trained — in most organizations, managers are not trained on how to assess and
give honest feedback. If the process includes a career development component, it is even more likely
that managers will not know how to enhance the career path of their employees.

28. Managers are “chickens” — some managers will do almost anything to avoid tough decisions or
confrontation. Some provide no differentiation and spread “peanut butter” (an even distribution) to
avoid it, while others give everyone “above average” ratings. Some managers will provide feedback
that is extremely vague in order not to offend anyone. Rarely if ever is anyone immediately terminated
as a result of the process.
29. Gaming the system — often managers artificially rate individual employees to save money or to
keep employees from becoming visible for promotion. Some selfishly give a score just below that
required for a pay increase, while others give scores just above the point where they would be required
to take disciplinary action.

30. Recency errors — managers, especially those who don’t consult employee files and data, have a
tendency to evaluate based primarily on events that occurred during the last few months (rather than
over the entire year).

31. Corporate culture issues — subjective appraisals can restrict cultural change in organizations. In
some organizations, there are cultural norms and values that influence performance appraisals. For
example, in one organization new hires were automatically given an average rating for their first year,
regardless of their actual performance. One top performing hire I knew abruptly quit after receiving this
cultural gift.

32. Inconsistency across managers — some managers are naturally “easy raters” while others are not.
As a result, employees working under easy managers have a better chance of promotion due to their
higher scores. In firms that rely heavily on the narrative portion of the assessment, having a manager
with poor writing skills may hamper an employee’s career. Without “benchmark” numbers to set as a
standard, inconsistency is guaranteed in large organizations.

33. Managers don’t know the employee — managers of large and global organizations, as well as newly
hired and “transferred in” managers may be forced to do appraisals on employees they barely know.
Recently promoted managers may be forced to assess their former friends and colleagues. Following a
merger, managers are likely to be confused about whether to focus on the whole year or just “post-
merger” work.

34. Secret codes — I did some work with an army unit where by custom literally everyone got a perfect
numerical score. So assessments by higher-ups were made as a result of interpreting “code words” in
the small written narrative portion of the assessment. Unfortunately, if your commander didn’t know
the code words, your army career was limited.

35. Mirror assessments — most people, and managers are no exception, have a tendency to rate people
like themselves more positively. This can result in discrimination issues.

36. Managers are not rewarded — managers that go out of their way to provide honest feedback and
actually improve the performance of their workers are not rewarded or recognized.
Article Continues Below

37. Managers don’t own it — managers often feel they don’t own the process, so they invest little in it
and proceed to blame HR for everything. Managers would embrace it instead of grumbling if they were
presented with a positive correlation proving that managers who did excellent performance appraisals
were among the highest performers with regards to business result and bonus awards.
Employee/subject problems

38. High anxiety — because the process is so subjective and no benchmark performance numbers are
set in advance, uncertainty can cause many employees high levels of anxiety weeks before the process.
Managers may also be anxious because of the uncertainty related to the an employee’s reaction. I know
one employee who sincerely thought she was going to be fired prior to her assessment but ended up
being the highest rated employee on the team. Employees should have an accurate idea of their
assessment long before any meeting is scheduled.

39. One-way communication — some managers simply give the employee the form to quickly sign and
they don’t even solicit feedback. Many employees are intimidated by managers and the process, and as
a result, they say nothing during or after the appraisal.

40. Self-assessment is not possible — if an ambitious employee wanted to self-assess their performance
midstream (in order to improve), most processes do not provide access to the instrument. Providing
each employee with a virtual assessment scoreboard and performance management process would be
an ideal solution.

41. No alerts — most processes do not allow an employee to be notified midstream should their
performance change to the point where it was suddenly dramatically below standards.

42. No choice of reviewers — although there are a few exceptions (Sun), in most cases, unlike with
360 reviews, employees are not allowed input into who does their assessment.

43. One-way process — in most cases, employees also have no input into the factors that they are
assessed on, how often they are assessed, and what type of feedback they can receive. It is
unfortunately even rare for a process manager to routinely survey their users for suggestions on how to
improve it.

44. No appeal process — employees who disagree with her appraisal are seldom given the opportunity
to challenge the results with a neutral party.

45. Retention issues — the ultimate cost of an “unfair” assessment may be that it actually drives your
top employees away because, for example, there was no differential in recognition and rewards for their
superior performance.

46. Many possible emotional consequences — if performance appraisal is blotched, you can expect a
decrease in employee engagement, trust, employer brand strength, teamwork, and innovation
contribution. Employee referrals from disgruntled employees will probably also drop.
Timing issues

47. A time-consuming process — most of the forms are incredibly long and time-consuming. As a
result, some managers routinely recycle “last year’s” evaluations. If HR is required to sit in on the
sessions, the amount of wasted time increases significantly.

48. It is historical — the process is focused on capturing feedback about last year rather than on
discussing necessary changes to job and skill requirements that must necessitated by the business
strategy.

49. Not coordinated with business cycles – some appraisal dates do not coincide with the end of major
business periods or seasons when all other business results are tabulated and reported.

50. Not simultaneous — if appraisals are done on the employee’s anniversary date, the entire team will
not be assessed at the same time.

Self appresial:-
Employee self-appraisal, within a performance management or annual performance review system
involves asking the employee to self-evaluate his or her job performance.

Typically, prior to meeting with an employee, the manager will ask the employee to complete an
evaluation form on his or her own, to be used as a basis for discussion during the annual performance
review meeting. Then at the meeting, the manager and employee discuss the self-appraisal results, and
negotiate final evaluations based on both the manager's perceptions and those of the employee.

It's rare that self-appraisal or self evaluation results are used without discussion and negotiation and
they should not be.

Actual self evaluations as part of performance management can take the form of evaluating progress
towards pre-defined annual objectives and performance standards, involve the employee in rating him
or her self using the same rating form the manager uses, or even involve self-ranking.

PURPOSE OF SELF APPRASIAL:-

Want to encourage more participation in performance evaluation and career planning from your
employees? The employee self-evaluation is one of the best methods to engage employees in the
process of looking at performance and setting both job and career goals.

The employee self-evaluation ensures that employees prepare thoughtfully for their performance
development planning or appraisal meeting with their manager.
It provides a useful opportunity for the employees to seriously consider their level of performance and
contribution.

This is especially important when you want to encourage your employees to set stretch goals. Self-
reflection on the possibilities can enhance their capability to aim further, higher, and smarter. It is not
the same as the manager expecting more from them. It is far superior for performance when it is the
employee raising the expectations.
An Employee Self-Evaluation Is a Career Promotion Tool

The employee self-evaluation encourages employees to think about and plan for their future with your
organization. They can target their next opportunity, possible promotions, different jobs they'd like to
try, and cross-training they'd like to obtain. The self-evaluation is also an opportunity for employees to
think about their careers either with your company or with another employer.

Does your company use a traditional performance appraisal system? Or, does your company pursue a
forward thinking performance management process?

Whatever method your company uses to encourage employee performance development, consider
making an employee self evaluation an integral component in the process.

Your employees will appreciate the opportunity for input and your managers will receive further insight
into what motivates and excites the employee.
Why Use an Employee Self-Evaluation?

In a self evaluation, an employee responds to a series of questions that help the employee evaluate his
or her performance during the evaluation period. This guides the employee through a thought process
that allows him or her to focus on the many aspects and nuances of performance.

The employee is prompted to think about all of the components of performance, from the job
description to goals accomplished and to include professional development in the mix. This structured
approach to performance management and planning helps the employee take a look at his current and
desired level of contribution.

This self evaluation opens up the conversation between an employee and the manager during the
performance evaluation meeting. The act of self evaluation and the concurrent introspection causes an
employee to review goals, assess progress and thoughtfully consider areas for job and career growth.
Purpose of Performance Evaluation

The primary purpose of a performance evaluation is to encourage communication about job

performance between the manager and his or her reporting staff members.

Additionally, the performance evaluation meeting is an ideal time to discuss:

the quality and quantity of the work that you accomplished during the evaluation timeframe,
your business goals for the quarter or evaluation time period,
your goals for performance enhancement and improvement, and
the next steps for your personal and business development in your job and career.

Recommended Approach to Employee Self-Evaluation

Use these self-evaluation questions to prepare for your performance review and evaluation meeting
with your manager. Doing this self evaluation will ensure that you:

spend time thoughtfully considering and evaluating your job performance since your last
performance evaluation or performance development planning meeting,
think about your work, career, and personal development progress since your last performance
evaluation,

think about the work, career, and personal development goals you’d like to achieve during this
performance evaluation period,
determine areas in which you want to improve your performance—use coworker and manager
feedback over the evaluation time period as input,
determine whether there are components of your job that might fit better elsewhere in the
organization,
decide if you are spending time on tasks that are preventing you from contributing the outputs that
the organization most needs from you,
adjust your job description to better reflect what you are doing,
prepare to solicit your manager's opinions about how you're performing and whether he or she needs
particular outcomes from you that you're not currently producing, and
prepare for your interaction with your manager to help make the performance evaluation meeting a
conversation, not just a passing of judgment by your manager.

Use these recommended self-evaluation questions to thoughtfully prepare for the performance
development conversation.

Following your thoughtful preparation, please send copies of your self-evaluation to your manager and
the Human Resources department prior to your performance development and evaluation meeting.

360 DEGREE APPRASIAL:-

The 360 degrees Performance Appraisal method was first used in the 1940s. Analogous to the multiple
points on a compass, the 360 method provides each employee the opportunity to receive performance
feedback from his or her supervisor, peers, staff members, co-workers and customers.

360-degree feedback or multi-source feedback is an appraisal or performance assessment tool that

incorporates feedback from all who observe and are affected by the performance of a candidate.

FOR WHICH CATEGORY OF EMPLOYEES IS THIS TOOL USED?

Usually, this tool is used for employees at middle and senior level. The complexity of their roles
enables the organisation to generate sufficient data from all stakeholders for a meaningful assessment.

WHICH ORGANISATIONS USE THIS TO ASSESS EMPLOYEE PERFORMANCE?

Most organisations that focus on employee development use the 360-degree tool to assess performance
and potential of staff and enable the employees to map their career path based on the feedback.
Organisations take 360-degree feedback about an employee before taking a major decision about the
professional's career.

The results from 360-degree feedback are often used by the person receiving the feedback to plan
training and development. Results are also used by some organizations in making administrative
decisions, such as pay or promotion. When this is the case, the 360 assessment is for evaluation
purposes, and is sometimes called a "360-degree review."

360 degree feedback is the most comprehensive appraisal where the feedback about the employees’
performance comes from all the sources that come in contact with the employee on his job. this method
is being used in the (MARUTHI SUZUKI Motors and HCL)

WHO ARE THE STAKEHOLDERS IN DOING 360-DEGREE ASSESSMENT?

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 has four integral components:

Self appraisal
Superior’s appraisal
Subordinate’s 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. Superior’s appraisal forms the traditional part of the 360
degree 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, superior’s 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 h
igh employee involvement and also have the strongest impact on behavior and performance. It provides
a "360-degree review" of the employees’ performance and is considered to be one of the most credible
performance appraisal methods.

360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals
(say yearly) it helps to keep a track of the changes others’ perceptions about the employees. A 360
degree appraisal is generally found more suitable for the managers as it helps to assess their leadership
and managing styles. This technique is being effectively used across the globe for performance
appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc.

Advantages of 360 degree appraisal

Offer a more comprehensive view towards the performance of employees.

Improve credibility of performance appraisal.
Such colleague’s feedback will help strengthen self-development.
Increases responsibilities of employees to their customers.
The mix of ideas can give a more accurate assessment.
Opinions gathered from lots of staff are sure to be more persuasive.
 Not only manager should make assessments on its staff performance but other colleagues should do,
too.
People who undervalue themselves are often motivated by feedback from others.
If more staff takes part in the process of performance appraisal, the organizational culture of the
company will become more honest.

Disadvantages of 360 degree appraisal

Taking a lot of time, and being complex in administration

Extension of exchange feedback can cause troubles and tensions to several staff.
History of 3600 feedback

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

One of the earliest recorded uses of surveys to gather information about employees occurred in the
1950s at Esso Research and Engineering Company (Bracken, Dalton, Jako, McCauley, & Pollman,
1997). From there, the idea of 360-degree feedback gained momentum, and by the 1990s most human
resources and organization development professionals understood the concept. The problem was that
collecting and collating the feedback demanded a paper-based effort including either complex manual
calculations or lengthy delays. The first led to despair on the part 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 of the Internet in
conducting web-based surveys (Atkins & Wood, 2002). Today, studies suggest that over one-third of
U.S. companies use some type of multi-source feedback (Bracken, Timmereck, & Church, 2001a).
Others claim that this estimate is closer to 90% of all Fortune 500 firms (Edwards & Ewen, 1996). In
recent years, Internet-based services have become the norm, with a growing menu of useful features
(e.g., multi languages, comparative reporting, and aggregate reporting) (Bracken, Summers, & Fleenor,
1998).
There is requirement for training and important effort in order to achieve efficient working.
It will be very hard to figure out the results.
Feedback can be useless if it is not carefully and smoothly dealt.
Can impose an environment of suspicion if the information is not openly and honestly managed.

Who should conduct 360 degree performance appraisal?

Subordinates.
Peers.
Managers (i.e. superior).
Team members.
Customers.
Suppliers/ vendors.
Anyone who comes into contact with the employee and can provide valuable insights and
information.
How to use 360 feedback to your advantage
Few modern management practices show as much promise and as few results as 360 feedback.
Companies often look to 360s to improve a leader's behaviours, provide insight during leadership
development courses and help build more effective teams.

They believe that 360 feedback will either change their managers' behaviours or at least increase those
managers' motivation to change.

Unfortunately, those expectations are unrealistic and not supported by science. In fact, given what the
academic research on feedback tells us, we should be surprised that today's 360 processes work at all!
Let's start by addressing some erroneous assumptions we have about feedback:

Feedback does not directly lead to change: Many organisations believe handing a manager a 360 report
will cause them to improve their behaviours with no additional action required. Research says, when
feedback is focused on our behaviours, rather than our skills, our willingness to change drops
dramatically.

Gaps between self perceptions and others' perceptions do not motivate change: It's a commonly held
belief that if we see a gap between how we perceive ourselves and how others perceive us we will be
motivated to close that gap.

In reality, research is clear that when we are confronted with that perception gap we diligently try to
excuse it or explain it away. We aren't resisting feedback - we're experiencing "cognitive dissonance."
Our minds work very hard to ensure that our carefully developed, largely positive self-image is
preserved.

More information does not create better results: Typical 360 reports have 50+ pages filled with charts,
graphs, norms, icons and comments. It's nearly impossible for a manager to tell (without hours of help
from a coach or HR leader) which items are most important to focus on and how to improve those
behaviours.

Afeedback experience that leaves us confused or angry creates a huge barrier to taking action.

MAKE IT EASY TO USE

Making 360s work means making it as easy as possible for the manager to take action on the results.
Here are three steps that will help guarantee that managers will follow the advice in the 360: Don't rate
- guide: The typical 360 rates managers as being good or bad at various behaviours. This doesn't help
anyone change. Instead, use a scale that tells a manager to "Do More" or "Do Less" on that particular
behaviour.

Focus only on the top three behaviours: Busy managers don't have time to search through confusing
360 reports to identify their priorities for change. The first page of their 360 report should list the vital
few actions for them to improve.

Tell the manager exactly how to change:A well-designed 360 report should include specific "start,
stop or continue" suggestions from their raters that describe exactly how the manager should change
those vital few behaviours.

Don't include norms or self-ratings: We do not like to be compared to other people, especially when
the comparison isn't favourable. Self-ratings and external norms only increase our resistance to change
if we score below our expectations but don't motivate us further if we score above our expectations.

DRIVE ACCOUNTABILITY
The "old school" of human resource management used to insist that 360s were purely for development
and that they should never be used to evaluate managers or help make organisational decisions. If we
believe that how managers behave is important, then ignoring the best data we have about a manager's
behaviours seems ridiculous. Properly gathered 360 data should be considered as one of many data
points when making decisions about new roles, promotions or development.

When managers know their behaviors have consequences, they'll be much more likely to take action to
change them. Getting 360 feedback doesn't have to be painful or unhelpful. By focusing on the core
science and presenting information in a practical and easy-to-understand way, 360s can help managers
to make important behaviour changes quickly and easily.

POTENTIAL EVALUATION:-
A Management Audit is an evaluation process which estimates the leadership qualities/management
skills of the existing manpower. External consultants examine employee's skills and potential with
different tests. After that an interview is used to present the employees experience, competencies and
leadership-qualities.
The term “Potential” is typically used to suggest that an individual has the qualities (e.g. characteristics,
motivation, skills, abilities, experiences etc.) to effectively perform and contribute in broader or
different roles in the organisation, at some point in the future. Potential is associated with possibilities
for the future rather than with problems in current performance.
The benefits for organization:

After the identification of potential employees organization is able to set the main steps for their
development and retention. It helps to reduce staff turnover and probability of loss of human resources
(e.g. when the best employees leave the job). Moreover, investment in training and development
programs is beneficial because only the right employees will get it.
Other benefits:

Preparation for rotation of the key positions;

The existing internal Talent Bank allows to fill free positions quickly;
Easier transition from one position to another and also adaptation period is shorter;
Reduced likelihood of unsatisfactory staffing.

SHORT NOTES
1)EMERGING ISSHU IN PERFORMANCE APPRASIAL:
The purpose of this essay is to explore critical issues and emerging trends in performance appraisal,
issues that are enduring and several “cutting edge” developments. A convenience sample of 18
personnel managers and supervisors served as a de-facto focus group to test whether issues in the
literature are salient and relevant to practitioners and to provide specific examples that illustrate the
range of opinions regarding the controversial areas. Areas discussed include the challenges posed by
Total Quality Management, implementation problems relative to organizational commitment, rater
training, performance documentation, multiple sources of appraisal information and the importance of
systematic appraisal quality control and assessment, among others. The paper concludes with a number
of suggestions for practice and research.

COMPETENCY MAPPING:

Contemporary Issues

Human Resource Audit

Objectives and benefits of Human Resource Auditing
Human Resource Auditing Process
Human Resource Accounting
Methods of Human Resource Accounting
Human Resource Information Systems
Outsourcing and Crowdsourcing
Employer Brand
Temping or Temporary Staffing
Attrition
Call centers
Exit interviews
Stress Management
Balanced scorecard
Competency mapping
Human Resource Benchmarking
Employee absenteeism

Competency approach to job depends on competency mapping. Competency Mapping is a process to

identify key competencies for an organization and/or a job and incorporating those competencies
throughout the various processes (i.e. job evaluation, training, recruitment) of the organization. A
competency is defined as a behavior (i.e. communication, leadership) rather than a skill or ability.

DEFINITION:

According to Boyatzis(1982) “A capacity that exists in a person that leads to behaviour that meets the
job demands within parameters of organizational environment, and that, in turn brings about desired
results”

The steps involved in competency mapping are presented below:

Conduct a job analysis by asking incumbents to complete a position information questionnaire(PIQ).

This can be provided for incumbents to complete, or used as a basis for conducting one-on-one
interviews using the PIQ as a guide. The primary goal is to gather from incumbents what they feel are
the key behaviors necessary to perform their respective jobs.
Using the results of the job analysis, a competency based job description is developed. It is
developed after carefully analyzing the input from the represented group of incumbents and converting
it to standard competencies.
With a competency based job description, mapping the competencies can be done. The competencies
of the respective job description become factors for assessment on the performance evaluation. Using
competencies will help to perform more objective evaluations based on displayed or not displayed
behaviors.
Taking the competency mapping one step further, one can use the results of one’s evaluation to
identify in what competencies individuals need additional development or training. This will help in
focusing on training needs required to achieve the goals of the position and company and help the
employees develop toward the ultimate success of the organization.

METHODS OF COMPETENCY MAPPING

It is not easy to identify all the competencies required to fulfill the job requirements. However, a
number of methods and approaches have been developed and successfully tried out. These methods
have helped managers to a large extent, to identify and reinforce and/or develop these competencies
both for the growth of the individual and the growth of the organization. In the following section, some
major approaches of competency mapping have been presented.

1) Assessment Centre

“Assessment Centre” is a mechanism to identify the potential for growth. It is a procedure (not
location) that uses a variety of techniques to evaluate employees for manpower purpose and decisions.
It was initiated by American Telephone and Telegraph Company in 1960 for line personnel being con
Step 1:Gathering facts: The methodology usually employed through an open-ended questionnaire,
gathering retrospective data. The events should have happened fairly recently: the longer the time
period between the events and their gathering, the greater the danger that the users may reply with
imagined stereotypical responses. Interviews can also be used, but these must be handled with extreme
care not to bias the user. sidered for promotion to supervisory positions. An essential feature of the
assessment center is the use of situational test to observe specific job behavior. Since it is with
reference to a job, elements related to the job are simulated through a variety of tests. The assessors
observe the behavior and make independent evaluation of what they have observed, which results in
identifying strengths and weaknesses of the attributes being studied.

It is, however, worth remembering that there is a large body of academic research which suggests that
the assessment centre is probably one of the most valid predictors of performance in a job and, if
correctly structured, is probably one of the fairest and most objective means of gathering information
upon which a selection decision can be based. From the candidate’s perspective it is important to be
natural and to be oneself when faced with an assessment centre, remembering always that you can only
be assessed on what you have done and what the assessors can observe. The International Personnel
Management Association (IPMA) has identified the following elements, essential for a process to be
considered as assessment center:

a) A job analysis of relevant behavior to determine attributes skills, etc. for effective job performance
and what should be evaluated by assessment center.

Techniques used must be validated to assess the dimensions of skills and abilities.
Multiple assessment techniques must be used.
Assessment techniques must include job related simulations.
Multiple assessors must be used for each assessed.
Assessors must be thoroughly trained.
 Behavioral observations by assessors must be classified into some meaningful and relevant
categories of attributes, skills and abilities, etc.
Systematic procedures should be used to record observations.
Assessors must prepare a report.
All information thus generated must be integrated either by discussion or application of statistical
techniques.

Data thus generated can become extremely useful in identifying employees with potential for growth.
Following are some of the benefits of the assessment center:

It helps in identifying early the supervisory/ managerial potential and gives sufficient lead time for
training before the person occupies the new position.
It helps in identifying the training and development needs.
Assessors who are generally senior managers in the organization find the training for assessor as a
relevant experience to know their organization a little better.
The assessment center exercise provides an opportunity for the organization to review its HRM
policies.

Assessment Centre is a complex process and requires investment in time. It should safeguard itself
from misunderstandings and deviations in its implementation. For this, the following concerns should
be ensured:

Assessment Centre for diagnosis is often converted as Assessment Centre for prediction of long
range potential.
The assessors’ judgment may reflect the perception of reality and not the reality itself.
One is not sure if the benefits outweigh the cost.

Assessment Centre comprises a number of exercises or simulations which have been designed to
replicate the tasks and demands of the job. These exercises or simulations will have been designed in
such a way that candidates can undertake them both singly and together and they will be observed by
assessors while they are doing the exercises. The main types of exercises are presented below. Most
organizations use a combination of them to assess the strengths, weaknesses and potential of
employees.

a) Group Discussions: In these, candidates are brought together as a committee or project team with
one or a number of items to make a recommendation on. Candidates may be assigned specific roles to
play in the group or it may be structured in such a way that all the candidates have the same basic
information. Group discussion allows them to exchange information and ideas and gives them the
experience of working in a team. In the work place, discussions enable management to draw on the
ideas and expertise of staff, and to acknowledge the staff as valued members of a team.

Some advantages of group discussion are:

Ideas can be generated.

Ideas can be shared.
Ideas can be ‘tried out’.
Ideas can be responded to by others.
When the dynamics are right, groups provide a supportive and nurturing environment for academic
and professional endeavour.
 Group discussion skills have many professional applications.
Working in groups is fun!

A useful strategy for developing an effective group discussion is to identify task and maintenance roles
that members can take up. Following roles, and the dialogue that might accompany them in a group
discussion have been identified.

Positive Task Roles: These roles help in reaching the goals more effectively:

Initiator: Recommends novel ideas about the problem at hand, new ways to approach the problem, or
possible solutions not yet considered.
Information seeker: Emphasises “getting the facts” by calling for background information from
others.

HRD AND PERFORMANCE APPRASIAL:

Information giver: Provides data for forming decisions, including facts that derive from expertise.
Opinion seeker: Asks for more qualitative types of data, such as attitudes, values, and feelings.
Opinion giver: Provides opinions, values, and feelings.
Clarifier: Gives additional information- examples, rephrasing, applications about points being made
by others.
Summariser: Provides a secretarial function.

Positive Maintenance Roles : These become particularly important as the discussion develops and
opposing points of view begin to emerge:

Social Supporter: Rewards others through agreement, warmth , and praise.

Harmonizer: Mediates conflicts among group members.
Tension Reliever: Informally points out the positive and negative aspects of the group’s dynamics
and calls for change, if necessary.
Energiser: Stimulates the group to continue working when the discussion flags.
Compromiser: Shifts her/his own position on an issue in order to reduce conflict in the group.
Gatekeeper: Smoothes communication by setting up procedures and ensuring equal participation
from members.

b) In Tray: This type of exercise is normally undertaken by candidates individually. The materials
comprise a bundle of correspondence and the candidate is placed in the role of somebody, generally,
which assumed a new position or replaced their predecessor at short notice and has been asked to deal
with their accumulated correspondence. Generally the only evidence that the assessors have to work
with is the annotations which the candidates have made on the articles of mail. It is important when
undertaking such an exercise to make sure that the items are not just dealt with, but are clearly marked
on the items any thoughts that candidates have about them or any other actions that they would wish to
undertake.

c) Interview Simulations/Role Plays: In these exercises candidates meet individually with a role player
or resource person. Their brief is either to gather information to form a view and make a decision, or
alternatively, to engage in discussion with the resource person to come to a resolution on an aspect or
issue of dispute. Typically, candidates will be allowed 15 -30 minutes to prepare for such a meeting and
will be given a short, general brief on the objective of the meeting. Although the assessment is made
mainly on the conduct of the meeting itself, consideration are also be given to preparatory notes.

d) Case Studies / Analysis Exercises: In this type of exercise the candidate is presented with the task of
making a decision about a particular business case. They are provided with a large amount of factual
information which is generally ambiguous and, in some cases, contradictory. Candidates generally
work independently on such an exercise and their recommendation or decision is usually to be
communicated in the form of a brief written report and/or a presentation made to the assessors. As with
the other exercises it is important with this kind of exercise to ensure that their thought processes are
clearly articulated and available for the scrutiny of the assessors. Of paramount importance, if the brief
requires a decision to be made, ensure that a decision is made and articulated.

2) Critical Incidents Technique

It is difficult to define critical incident except to say that it can contribute to the growth and decay of a
system. Perhaps one way to understand the concept would be to examine what it does. Despite
numerous variations in procedures for gathering and analyzing critical incidents researchers and
practitioners agree the critical incidents technique can be described as a set of procedures for
systematically identifying behaviours that contribute to success or failure of individuals or
organisations in specific situations. First of all, a list of good and bad on the job behaviour is prepared
for each job. A few judges are asked to rate how good and how bad is good and bad behaviour,
respectively. Based on these ratings a check-list of good and bad behavior is prepared.

The next task is to train supervisors in taking notes on critical incidents or outstanding examples of
success or failure of the subordinates in meeting the job requirements. The incidents are immediately
noted down by the supervisor as he observes them. Very often, the employee concerned is also involved
in discussions with his supervisor before the incidents are recorded, particularly when an unfavourable
incident is being recorded, thus facilitating the employee to come out with his side of the story.

The objective of immediately recording the critical incidents is to improve the supervisor’s ability as an
observer and also to reduce the common tendency to rely on recall and hence attendant distortions in
the incidents. Thus, a balance-sheet for each employee is generated which can be used at the end of the
year to see how well the employee has performed. Besides being objective a definite advantage of this
technique is that it identifies areas where counseling may be useful.

In real world of task performance, users are perhaps in the best position to recognize critical incidents
caused by usability problems and design flaws in the user interface. Critical incident identification is
arguably the single most important kind of information associated with task performance in usability
-oriented context. Following are the criteria for a successful use of critical incident technique:

Data are centred around real critical incidents that occur during a taskperformance.
Tasks are performed by real users.
Users are located in their normal working environment.
Data are captured in normal task situations, not contrived laboratory settings.
Users self report their own critical incidents after they have happened.
No direct interaction takes place between user and evaluator during the description of the incident(s).
Quality data can be captured at low cost to the user.

Critical Incidents Technique is useful for obtaining in-depth data about a particular role or set of tasks.
It is extremely useful to obtain detailed feedback on a design option. It involves the following three
steps:

There are two kinds of approaches to gather information:

1) Unstructured approach: where the individual is asked to write down two good things and two bad
things that happened when one was carrying out an activity.

2) Moderate structured approach: where the individual is asked to respond to following questions
relating to what happened when he/she was carrying out an activity.

What lead up to the situation?

What was done that was especially effective or non- effective?
What was the result( outcome)?

Step 2: Content analysis: Second step consists of identifying the contents or themes represented by the
clusters of incidents and conducting “retranslation” exercises during which the analyst or other
respondents sort the incidents into content dimensions or categories. These steps help to identify
incidents that are judged to represent dimensions of the behaviour being considered. This can be done
using a simple spreadsheet. Every item is entered as a separate incident to start with, and then each of
the incidents is compiled into categories. Category membership is marked as identical , quite similar
and could be similar. This continues until each item is assigned to a category on at least a “quite
similar” basis.Each category is then given a name and the number of the responses in the category are
counted. These are in turn converted into percentages (of total number of responses) and a report is
formulated.

Step 3: Creating feedback: It is important to consider that both positive and negative feedback be
provided. The poor features should be arranged in order of frequency, using the number of responses
per category. Same should be done with the good features. At this point it is necessary to go back to the
software and examine the circumstances that led up to each category of critical incident. Identify what
aspect of the interface was responsible for the incident. Sometimes one finds that there is not one, but
several aspects of an interaction that lead to a critical incident; it is their conjunction together that
makes it critical and it would be an error to focus on one salient aspect.

Some of the advantages of critical incident technique are presented below:

Some of the human errors that are unconsciously committed can be traced and rectified by these
methods. For example, a case study on pilots obtained detailed factual information about pilot error
experiences in reading and interpreting aircraft instruments from people not trained in the critical
incident technique (i.e., eyewitness or the pilot who made the error)

Users with no background in software engineering or human computer interaction, and with the
barest minimum of training in critical incident identification, can identify, report, and rate the severity
level of their own critical incidents. This result is important because successful use of the reported
critical incident method depends on the ability of typical users to recognise and report critical incidents
effectively.

Some of the disadvantages of critical incidents method are presented below:

 It focuses on critical incidents therefore routine incidents will not be reported. It is therefore poor as
a tool for routine task analysis.

Respondents may still reply with stereotypes, not actual events. Using more structure in the form
improves this but not always.

Success of the user reported critical incident method depends on the ability of typical end users to
recognise and report critical incidents effectively, but there is no reason to believe that all users have
this ability naturally.

3) Interview Techniques Competency Mapping

Almost every organisation uses an interview in some shape or form, as part of competency mapping.
Enormous amounts of research have been conducted into interviews and numerous books have been
written on the subject. There are, however, a few general guidelines, the observation of which should
aid the use of an interview for competency mapping.

The interview consists of interaction between interviewer and applicant. If handled properly, it can be a
powerful technique in achieving accurate information and getting access to material otherwise
unavailable. If the interview is not handled carefully, it can be a source of bias, restricting or distorting
the flow of communication.

Since the interview is one of the most commonly used personal contact methods, great care has to be
taken before, during and after the interview. Following steps are suggested:

Before the actual interviews begins, the critical areas in which questions will be asked must be
identified for judging ability and skills. It is advisable to write down these critical areas, define them
with examples, and form a scale to rate responses. If there is more than one interviewer, some practice
and mock interviews will help calibrate variations in individual interviewers’ ratings.

The second step is to scrutinize the information provided to identify skills, incidents and experiences
in the career of the candidate, which may answer questions raised around the critical areas. This
procedure will make interviews less removed from reality and the applicant will be more comfortable
because the discussion will focus on his experiences.

An interview is a face-to-face situation. The applicant is “on guard” and careful to present the best
face possible. At the same time he is tense, nervous and possibly frightened. Therefore, during the
interview, tact and sensitivity can be very useful. The interviewer can get a better response if he creates
a sense of ease and informality and hence uncover clues to the interviewee’s motivation, attitudes,
feelings, temperament, etc., which are otherwise difficult to comprehend.

The fundamental step is establishing “rapport”, putting the interviewee at ease; conveying the
impression that the interview is a conversation between two friends, and not a confrontation of
employer and employee. One way to achieve this is by initially asking questions not directly related to
the job, that is, chatting casually about the weather, journey and so on.

Once the interviewee is put at ease the interviewer starts asking questions, or seeking information
related to the job. Here again it is extremely important to lead up to complex questions gradually.
Asking a difficult, complex question in the beginning can affect subsequent interaction, particularly if
the interviewee is not able to answer the question. Thus it is advisable for the pattern to follow the
simple-to-complex sequence.

Showing surprise or disapproval of speech, clothes, or answers to questions can also inhibit the
candidate. The interviewee is over-sensitive to such reactions. Hence, an effort to try and understand
the interviewee’s point of view and orientation can go a long way in getting to know the applicant.

Leading questions should be avoided because they give the impression that the interviewer is seeking
certain kinds of answers. This may create a conflict in the interviewee, if he has strong views on the
subject. Nor should the interviewer allow the interview to get out of hand. He should be alert and check
the interviewee if he tries to lead the discussion in areas where he feels extremely competent, if it is
likely to stray from relevant areas.

The interviewer should be prepared with precise questions, and not take too much time in framing
them.

Once this phase is over, the interviewers should discuss the interviewee, identify areas of agreement
and disagreement, and make a tentative decision about the candidate. It will be helpful if, in addition to
rating the applicant, interviewers made short notes on their impression of candidates’ behavior
responses; which can then be discussed later. If the interview is to continue for many days, an
evaluation of the day’s work, content of questions and general pattern of response should be made for
possible mid-course correction.

4) Questionnaires

Questionnaires are written lists of questions that users fill out questionnaire and return. You begin by
formulating questions about your product based on the type of information you want to know. The
questionnaire sources below provide more information on designing effective questions. This technique
can be used at any stage of development, depending on the questions that are asked in the
questionnaire. Often, questionnaires are used after products are shipped to assess customer satisfaction
with the product. Such questionnaires often identify usability issues that should have been caught in-
house before the product was released to the market.

a) Common Metric Questionnaire (CMQ): They examine some of the competencies to work
performance and have five sections: Background, Contacts with People, Decision Making, Physical
and Mechanical Activities, and Work Setting. The background section asks 41 general questions about
work requirements such as travel, seasonality, and license requirements. The Contacts with People
section asks 62 questions targeting level of supervision, degree of internal and external contacts, and
meeting requirements. The 80 Decision Making items in the CMQ focus on relevant occupational
knowledge and skill, language and sensory requirements, and managerial and business decision
making. The Physical and Mechanical Activities section contains 53 items about physical activities and
equipment, machinery, and tools. Work Setting contains 47 items that focus on environmental
conditions and other job characteristics. The CMQ is a relatively new instrument.

b) Functional Job Analysis: The most recent version of Functional Job Analysis uses seven scales to
describe what workers do in jobs. These are: Things, Data, People, Worker Instructions, Reasoning,
Maths, and Language.

Each scale has several levels that are anchored with specific behavioral statements and illustrative tasks
and are used to collect job information.

c) Multipurpose Occupational System Analysis Inventory (MOSAIC): In this method each job analysis
inventory collects data from the office of personnel management system through a variety of
descriptors. Two major descriptors in each questionnaire are tasks and competencies. Tasks are rated on
importance and competencies are rated on several scales including importance and requirements for
performing the task. This is mostly used for US government jobs.

d) Occupational Analysis Inventory: It contains 617 “work elements.” designed to yield more specific
job information while still capturing work requirements for virtually all occupations. The major
categories of items are five-fold: Information Received, Mental Activities, Work Behavior, Work Goals,
and Work Context. Respondents rate each job element on one of four rating scales: part-of-job, extent,
applicability, or a special scale designed for the element. Afterwards , the matching is done between
competencies and work requirements.

e) Position Analysis Questionnaire (PAQ): It is a structured job analysis instrument to measure job
characteristics and relate them to human characteristics. It consists of 195 job elements that represent in
a comprehensive manner the domain of human behavior involved in work activities. These items fall
into following five categories:

Information input (where and how the worker gets information),

Mental processes (reasoning and other processes that workers use),
Work output (physical activities and tools used on the job),
Relationships with other persons, and
Job context (the physical and social contexts of work).

f) Work Profiling System (WPS): It is designed to help employers accomplish human resource
functions. The competency approach is designed to yield reports targeted toward various human
resource functions such as individual development planning, employee selection, and job description.
There are three versions of the WPS tied to types of occupations: managerial, service, and technical
occupations. It contains a structured questionaire which measures ability and personality attributes.

5) Psychometric Tests

Many organizations use some form of psychometric assessment as a part of their selection process. For
some people this is a prospect about which there is a natural and understandable wariness of the
unknown.

A psychometric test is a standardized objective measure of a sample of behavior. It is standardized

because the procedure of administering the test, the environment in which the test is taken, and the
method of calculating individual scores are uniformly applied. It is objective because a good test
measures the individual differences in an unbiased scientific method without the interference of human
factors. Most of these tests are time bound and have a correct answer. A person’s score is calculated on
the basis of correct answers. Most tests could be classified in two broad categories:

a) Aptitude Tests: They refer to the potentiality that a person has to profit from training. It predicts how
well a person would be able to perform after training and not what he has done in the past. They are
developed to identify individuals with special inclinations in given abilities. Hence they cover more
concrete, clearly defined or practical abilities like mechanical aptitude, clinical aptitude and artistic
aptitude etc.

b) Achievement Tests: These tests measure the level of proficiency that a person has been able to
achieve. They measure what a person has done. Most of these testsmeasure such things as language
usage, arithmetic computation and reasoning etc

ROLE CLARITY:

Employee retention is a persistent issue for all businesses, and according to the results of the latest
Pulse Survey of the Australian Human Resources Institute the average level of staff turnover was
around 16%.

For many, this rate is considered too high, with more than two-thirds of the respondents believing that
turnover of 10% or less would be ideal. The survey also indicated that almost 60% believed turnover in
their workplace had a negative impact on workplace productivity.

What is interesting, is that more than half of this turnover came from younger workers (35 years of age
or less) and was highest among those occupying entry level, graduate or junior roles. Although you
might reasonably expect younger employees to exhibit higher turnover, the results from the AHRI
survey show that younger employees are leaving their employers at a rate that is at least 2.5 times
greater, compared to all other positions and ages.

These results indicate that there is a lot of unproductive recruiting, especially among entry-level jobs. If
that is the case, what can employers do to reduce turnover? One solution is greater role clarity.

In an article published in 2012 by the Harvard Business Review, author Tammy Erikson argues that
without clear role descriptions employees are more likely to waste their energies negotiating their roles
within their teams rather than focusing on their productive tasks. To paraphrase the article, without role
clarity, employees often get involved in unnecessary politics and turf wars.

More importantly, the research also suggested that collaboration improved when roles were clearly
defined and well understood. The reasoning behind this conclusion was the finding that team
behaviours improved when employees felt that their roles had clear boundaries, and that allowed them
to do a significant portion of their work independently.
Renewed focus on role clarity

In an increasingly dynamic and connected global economy, new businesses are constantly being created
and existing businesses are re-inventing themselves. In response, jobs and job roles have been changing
at a frenetic pace. Employers are expected to meet and embrace these changes, but often without any
consideration of what the new role expectations are for employees.

Many businesses also assume that their employees understand how their roles directly affect the
success of the company. What then, is the likely outcome if those roles are not well defined (or at all)
and the responsibilities and accountabilities are unclear?
The benefits of role descriptions
The advantages of adopting a systematic way to create and sustain role descriptions go well beyond
simply reducing role confusion and improving collaboration.

Specific role descriptions can be very useful when used in the following ways:
Recruiting and attracting talent

Ensures that the position is well defined and understood, first by the business and then by the
potential recruit.
Assists the recruiting process by helping to frame interview questions and conversations with role
candidates.
Explains how the recruit can contribute to the organisation and vice versa.
Demonstrates that the business is structured and well organised.

Handovers, induction & training

Promotes alignment with, and provides context for the company’s culture, values and purpose.
Provides a valuable reference for handovers and assists an incumbent to introduce the new role
recipient to the breadth and depth of all their role tasks.
Introduces development and training required for performing the role tasks.
Creates objectives to assess the performance of new recruits within a probationary period.

Engagement

Provides clear role responsibility and accountability.

Reduces confusion by eliminating unintentional job overlap.
Defines how the role fits within the business and how it intersects with other roles, workflows and
teams.
Explains how the employee can help the business execute their product or service offering.
Improves collaborative behaviours by providing a secure framework for employees to work
independently and creatively.

Performance management

Defines what the expected performance in the role should look like.
Establishes an objective basis for measuring and managing performance.
Provides a useful reference for counselling employee disputes and discipline issues.

Innovation and knowledge management

Provides a contextual framework that will assist employees seeking guidance.

Facilitates the sharing of stories about why a company does the things it does, in the way that they do
them.
Promotes the capture of ideas on how to improve current processes so they are more effective in the
future.

Career development

Supports the idea that the role is part of a career, rather than a simple placeholder for a job.
 Provides a factual basis for managing career progression and succession planning.
Helps establish the networks available to the employee for advice and mentoring.

Creating & sustaining role descriptions

How a business creates, manages and maintains their role descriptions is a significant issue. When they
exist, most role descriptions are stored as static documents, either in hard copy or Word documents.
When the role and role tasks change, and they often do, how then does a business capture these changes
to reflect the new role descriptions without the time and effort spent in locating and updating these
documents?

The answer to this problem lies with technology and being able to link role descriptions to task maps
instead of linking them to individuals. By consciously separating “roles from souls”, a business can use
task maps to show where capabilities are lacking or duplicated for employees, for teams and for the
organisation.

The benefit of using task maps for this purpose is that they also provide a visual representation of your
business processes and workflows. Given that business processes tend to change more often than
employees, it makes logical sense to innovate around workflow rather than attempt to react to every
change that impacts an employee’s role.

ADAPT by Design has created a cloud-based task mapping system that links directly to a role
description. Whenever any task map is updated, all the role descriptions associated with those tasks are
updated dynamically. An employee can have multiple roles, which will show all their tasks on their
personal profile giving them clarity of their position within the company.

THE ROLE OF COACHING AND COUNELING IN IMPROVING PERFORMANCE OF

EMPLOYEES:
Counselling is a very important element of enhancing job performance and work output of an
employee. Many researchers have worked a lot in order to see the impact of on the job and off the job
counselling on the performance of employee. Counselling is a systematic approach in order to analyze
problem area where an employee is not performing well. This means with help of counselling,
managers could be able to solve the problems due to which an employee is not being able to perform
efficiently and effectively (Toit, 2007).

Counselling is a very important technique in order to motivate an employee towards his job.
Communication between the supervisor and employee should have to take place at both sides; so that
the supervisor can easily highlight the actual problem and the possible solution for that problem that
hinders the employee desired performance (Champathes, 2006).

Different coaching methods are accessible for supervisors in order to encourage their employees. The
methods comprise individual assessment meetings, direct observation with feedback, and facilitation
with work group support. Sometime a supervisor also used the mixture of all three methods of
counselling (Starr, 2004).The most necessary step in any effort to increase employee performance is
counselling or coaching. Counselling or coaching is the day-to-day communication between a
supervisor and an employee.

Coaching always provides positive feedback about employee contributions. At the same time, usual
coaching brings performance problems to an employee's concentration when they are of no
consequence or big enough, and assists the employee to make them correct.

The purpose of performance coaching is not to make the employee feel badly, or to show how much the
HR expert or supervisor knows. The goal of coaching is to work with the employee to resolve
performance dilemma and get better the work of the employee, the team, and the department.

Nowadays, it's important to get the most production from each employee efficiently and effectively.Â
Organizations must make sure that every worker performs to the best of their ability and delivers
substantial worth to the business. One leading matter that almost every company deals with is the
challenge of dealing with worker performance reviews.Â

Employee performance reviews were once seen as a compulsory part of managing employees, but on
the other hand it also observed that managers and employees feeling fear from going through
evaluations. The time it takes to write, administer, analyze and then package them up for release is
enough to decrease anyone's output by a huge quantity. This attempt toward employee performance
management just isn't as winning as it should have to be. Then the concept of coaching in order to
increase the employee efficiency has been introduced. Coaching is pretty simple, stemming from a
relationship that anyone who has been in a learning/mentoring relationship can understand. A coach
helps an employee to get better, stronger, and more effective at the job. This can happen through
analysis of performance, provision of skills training, exhortation to higher achievement and provision
of rewards and sanctions.

Coaching is about performance. A successful coach tries to see things from both the project or work
objective and from the subordinate's point of view and then merge these perspectives into helpful
suggestions. As a clever person once said, "Helping is for the helper." It isn't a matter of how the
coach/supervisor would do it. It's a material of helping subordinates to be more effective in their own
way. The supervisor's achievement is the inclusive accomplishment of the rest.

Counselling is a more individual attempt. It is harder because there are no clear answers. It requires the
supervisor to really pay consideration to the work and career related concerns of the subordinate. A
person stressed with his project or doubtful her abilities want more than exhortation or training class.
They require to be heard and understand first before they will open themselves to support and new
approaches. Even employees with family or financial problems need to be heard first before they can
be approved along to right company resources (e.g., employee assistance programs).

It is a trusted supervisor with whom workers will talk about career decisions within and without the
company. A qualified, confident supervisor knows that people will sometimes leave a group for good
and personal reasons, hurting immediate productivity. Yet that same supervisor also knows that time
invested in people pays off in the long run in inspiration, output, devotion, dependability and retention.
Counselling is not about donations or being a get smaller. It's about helping people achieve their
possible and mutually reveling in it. Eventually, it's about group performance.

Research shows that association with the supervisor is an important factor in order to retain employees
in an organization. That is the person with whom they interact most frequently and the one who has the
most direct influence on their work information and their future. Being a good supervisor who attracts
and grows strong subordinates is neither magical nor mysterious. It is hard, eyes-open, focused work
from supervisor.
1.2 Problem Statement
A comparative study between the perception of manager and employee about the impact of counselling
on the employee performance.
1.3 Hypothesis

H1: There is no difference between the perception of manager and employee on the impact of
psychosocial counselling on the employee performance.

H2: There is no difference between the perception of manager and employee on the impact of career
development counselling on the employee performance.

H3: There is no difference between the perception of manager and employee on the impact of job
related issues counselling on the employee performance.

H4: There is a positive impact of psychosocial support from the supervisor on the employee
performance.

H5: There is a positive impact of career development guidance provided by supervisor on the employee
performance.

H6: There is a positive impact of sharing job related issues with supervisor on the employee
performance.
1.4 Outline of the Study

This study has examined the impact of counselling and comparing the perception of the manager and
employee about the out come of counselling on the job performance of employee: the perception which
is representation of what is perceived and considered as a basic component in the formation of a
concept. As coaching has played a very fundamental role in improving the employee performance for
the success of organization sine a very long time ago and always perceived positively as a key factor, at
the both ends, by supervisor and employee as well. There is always a positive impact of psychosocial
support, career development guidance and sharing job related issues with the supervisor on the
employee performance.

This research is based on comparative study in order to analyze the differences in the perception of
manager and the perception of employee about the impact of coaching and counselling on the job
performance of employee. For example, in order to improve the performance of an employee if a
counselling session has been conducted, now the perception regarding the outcome of counselling on
the employee performance would be same on the end of employee and manager as well or would be
perceived differently by both of them.
1.5 Definitions
Employee counselling

Employee counselling can be explained as providing assist and support to the workers to face and sail
through the complex period in life. At many points of occasion in life or career people get nearer to
some troubles either in their job or private life, when it starts influencing and upsetting their
performance or, rising the pressure levels of the individual. Counselling is guiding, calming, advising
and sharing and helping to resolve their troubles whenever the require arises. Counselling can be done
on different areas, like as follows:

Psychosocial support: Psychosocial support is the procedure of meeting a person's emotional, social,
mental and religious desires. All of these are necessary fundamentals of positive human development.

Career development support: It is a complex managerial course which involves people, addresses their
ambitions, assigns those roles & responsibilities, matching with their potential, evaluate their
presentation, and create Job positions to accommodate growth ambitions of workers.

Job related issues support: Job related issues support is the process of providing guidance to the
employees if they are facing any kind of issues on their jobs.
Employee performance

Effective and efficient performance of an employee is an important element for the success of an
organization. Employees who do not obtain yearly performance reviews, but still obtain annual pay
raises, do not obtain additional enthusiasm because they be trained that no performance increases are
required in order to get more money. So management of an employee performance every day is the key
to an effective performance management system.
CHAPTER 2:
LITERATURE REVIEW

Dubinsky, Childers, Skinner, & Gencturk (1988) have defined the supervision as the behavior of an
individual when he or she is directing the actions of a group toward a combined goal. Two management
behavior dimensions that have recognized in organizational behavior vis-à-vis subordinate attitudes and
performance are supervisor initiating structure and consideration. Initiating structure is the level to
which a leader/supervisor guides subordinates, clarifies their roles, and plans, coordinates, problem
solves, criticizes, and forces them to give an exceptional performance. Consideration is the extent to
which a leader/supervisor is supportive, friendly, and considerate of subordinates, consults with them,
represents their interests, has open communications with them, and recognizes their contributions.

Supervisors should monitor employee accomplishment of performance outcomes and try to discover
reaction on their own effectiveness. Relationships expand little by little and gradually over time and
need to be "recalibrated" through ongoing communication between the supervisor and the employee.
This ongoing communication often continues even when an employee has shifted to another position
(Kram, 1985 & Moberg, 1994).

Hill (1992) pointed out that new subordinates usually required counsel from their earlier supervisors
rather than existing supervisors in order to resolve their different job related issues. Supervisors should
have to advice employees and get ready them for their future and career related transitions. Supervisors
should look forward to maturation in their relationships with employees. They should have to support
employees to become more independent and at the same time spot their own need to move beyond a
development role.

Staw, Sutton, & Pelled (1994) explain how helpful feeling helps subordinate to obtain favorable
outcomes at work place. It has been observed that feeling and positive emotions on the job have
favorable impact on: (1) independent relationship of employees with, (2) reactions of others to
employees, and (3) reactions of employees to others. These three sets of factors or variables are very
important, in turn, to lead to work achievement, job enrichment and a higher quality social context.

Employee creativity has been considered to be the creation of thoughts, products, or procedures that are
(1) narrative or unique and (2) potentially helpful to the employing organization. These thoughts may
be a sign of either a recombination of accessible resources or an opening of fresh materials to the
organization. That is, creative work can be generated by employees in any job and at any level of the
organization, not just in jobs that are traditionally viewed as necessitating creativity. Finally, we
observed creativity as differing from innovation in that the previous linked to ideas formed at the
individual point, while the second one refers to the implementation of these thoughts at the
organization level. As noted before, that helpful behavior on the part of others in a work-place (such as,
coworkers and supervisors) enhances employees' creativity. It means the more supervisors were
cheering of employees, the more creative ideas they submitted to an organization's suggestion program.
Thus, the more employees' supervisors and coworkers offer support for creativity, the higher
employees' creative performance will be (Amabile, 1996).

As supervisors act as organizational agents in their treatment of subordinates, Perceived Supervisor

Support should contribute to Perceived Organizational Support. The strength of this relationship would
depend on the degree to which employees identify the supervisor with the organization. Supervisors
who appear to be highly valued and well treated by the organization would be highly identified with the
organization's basic character and would therefore strongly influence. Of course, an employee may
attribute a supervisor's high perceived status to the organization's misperception of the supervisor's
character. But, on average, supervisors who appear to be highly regarded by the organization would be
assumed by workers to strongly embody the organization's character (Levinson, 1965).

Some researcher has found that parents of preschoolers reported lower levels of work-family conflict if
they perceived their supervisors were willing to discuss family-related problems and were flexible
when family emergencies arose. In some of the early studies dealing with supervisor supportiveness,
researchers focused on whether a supervisor supported the use of a specific practice. More recently,
researchers have focused on the overall supportiveness of a supervisor rather than his/her support for
the use of a given family-oriented benefit.

Allen (2001) defined a family supportive supervisor as one who is sympathetic to the employee's
desires to seek balance between work and family and who engages in efforts to help the employee
accommodate his or her work and family responsibilities.

Given the theoretical rationale provided by Allen (2001) and his findings, a negative relationship has
been predicted between reporting to a supportive supervisor and work-family conflict. With regard to
the relationship between reporting to a supportive supervisor and family-work conflict, to our
knowledge, no study has examined this relationship. However, to the extent that a supervisor is
perceived as supportive of balancing work and family demands, it seems likely that there should be less
reported family-work conflict.

Supervisors may have an important bearing on the individual outcomes which subordinates get from
their job. In many respects, the supervisor is the most direct and important person in an employee's
work context and is therefore most expected to stand for the organization's culture or climate as well as
having a direct influence on subordinate behavior (Kozlowski & Doherty, 1989).

Considerable importance in research has been placed on individual performance and group
productivity, with some notice also being given to satisfaction with the supervisor. Fewer researches
have been conducted on the impact of supervisors on other emotional reactions which employees might
experience, such as psychological stress and wish to leave the organization. Two assumptions
underlying the present study are (a) that one important realm of influence which supervisors might
control is the degree of uncertainty which personnel have to contend with in their work environment,
and (b) that uncertainty is a predictor of work-related affect, strain and behavioral intentions. An
argument has been made, through their interactions with subordinates; supervisors may lessen or, on
the other hand, exacerbate the amount of uncertainty confronted by workers within an organization.
Supervisors' behavior may be quite significant for alleviating or increasing the uncertainty and
irregularity which subordinates experience about their job tasks, about management, and about the
social and political dynamics of the organization (O'Driscoll & Beehr,1994).

A theoretical illustration of supervision which has exact implications for the task of a supervisor is
path-goal theory. According to this standpoint, the accountability of the supervisor is to simplify the
means by which individuals attain work-related goals. Goal-attainment is viewed as an obligation for
achieving happiness and sustaining high performance levels (House & Mitchell, 1974).

Keller (1989) has suggested evaluation of subordinates' need for clarity as a moderator of the impact of
supervisory behavior. He observed that need for clarity moderated the association between supervisor
initiating construction and subordinate performance.

While this is a significant judgment, little attention has been given to a more fundamental issue the
extent to which supervisory behaviors do or do not provide clarity for subordinates (Tetrick, 1989).

Prior to searching for personal characteristics which may sensible the link between supervisory
measures and subordinates' personal outcomes, it is important to examine the affiliation between a
range of supervisor behaviors and the amount of clarity or, on the other hand, the amount of insecurity
which subordinates experience in the work surroundings. Research on leadership and supervision has
underscored the possible impact of numerous types of supervisory behavior. Particular thought has
been given to initiating structure and the provision of support or consideration for employees as most
important contributors to subordinate sentimental experiences and performance outcomes (Ashour,
1982; Seltzer and Numerof, 1988; & Tjosvold, 1984)

Employee performance is an important building block of an organization and factors which lay the
foundation for high performance must be analyzed by the organizations. Since every organization
cannot progress by one or two individual's effort, it is collective effort of all the members of the
organization. Performance is a major multidimensional construct aimed to achieve results and has a
strong link to strategic goals of an organization (Mwita, 2000).

Managers at all the levels have to input their efforts and make maximum use of their abilities which
sometimes are produced under supervision or without it. However, there are many expectations from
managers working for an organization. These expectations are sometimes fulfilled but in some
situations these managers may be running to their boss for guidance. Therefore, the managers must be
developed so that they can think and work on their own and fulfill their responsibilities innovatively,
while understanding and foreseeing the market and business situations. Consequently question arises
that how an employee can work more efficiently and effectively to increase the productivity and growth
of an organization. An effective leadership program can be of an immense assistance to help identify
and build leadership qualities among individuals within the organization.

The relationship between leadership and performance was indirect as well as direct, which proves the
importance of developing leaders through leadership development programs (Gadot, 2007). Latest
studies provide that organizations heavily invest in Human Resource Development interventions to
update and skill the employees in order to attain job performance, job satisfaction and job involvement.

These skills can be imparted by providing necessary technical/non-technical training and coaching
(Rowold, 2008). Currently leadership is widely recognized, and verified through research. Leadership
development can be imparted through experiential learning, vicarious learning and transformational
learning and it is imparted as leaders can influence the people and motivate them (Popper, 2005).

Leadership development is becoming an increasingly critical and strategic imperative for organizations
in the current business environment (Sheri-Lynne & Parbudyal, 2007). Leadership development is an
important area which is considered and implemented in organizations to increase human capability and
some other benefits like to gain competitive advantage. Some developmental assignments can be
carried out concurrently with regular job responsibilities, whereas others require taking a temporary
leave from one's regular job.

These development assignments can be used to develop managerial skills at current jobs, some may be
used to develop new projects or begin new projects serving as department representative on a cross
functional teams. Training sessions play an important role to improve the performance of
organizational managers regarding communication skills, listening skills, motivate others, support
others, and share information (Klagge, 1997).

A leadership development program is aimed to improve the skills of managers at all levels whether
operational, tactical, strategic and personal as well. Performance is a vital feature of an organization;
furthermore, development programs can be helpful in identifying and managing teams, where group
development and specifically personal development and growth of managers also take place. The most
important aspect nowadays is that how a manger can adopt the leadership attributes and effectively use
them to perform his job responsibilities assigned, these attributes can help him work further than the
job responsibilities and add more achievement to the organization. Leadership development process
intends to develop leaders and also includes transfer of organizational culture and values ultimately
resulting into collective sharing among all the members of the organization to achieve the
organizational objectives (Hamilton & Cynthia, 2005).

Leadership requirement in today's organizations in Pakistani perspective is very important to meet the
global business challenges. On the other hand, leadership development is also a major consideration
and challenge across the globe and has a major influence on employee's performance
CHAPTER 3:
RESEARCH METHODS

This study is the comparative study about the Perception of employees and supervisors on the
outcomes of counselling on employee's performance. In the organization if counselling is provided by
supervisor to his subordinates, this study, on the one side focused on the outcome of counselling on the
employee performance and on the other side this study has compared the perception of employee and
supervisor about the results of counselling on the performance of the employee.
3.1 Method of Data Collection

Personal survey technique has been applied and Questionnaire has used as an instrument to collect the
data and data has been collected by taking an appointment with the respondents for having a personal
meeting, in order to filled those questionnaires.
3.2 Sampling Technique

Quota sampling technique has been used.

3.3 Sample Size
Sample size used for this study was, 150 respondents (30 managers/supervisors, 120 employees).
3.4 Instrument of Data Collection

Questionnaires were used as an instrument for data collection. These measures were developed by
Scandura and Ragins (1993). Questionnaire consists of two parts.

i) In first part, response has been received from supervisor and employee about the counselling related
to different issues.

ii) In second part information have been gathered about the impact of counselling on the employee
performance.

The instrument is in the form of closed ended questionnaire. Answers were recorded in the Likert five
point scales.

Strongly agreed = 5 Agree= 4 Neutral= 3 Disagree= 2 strongly disagree= 1 (for first part)

Increase = 3 Remain same= 2 Decrease =1 (for second part)

Dimensions in this questionnaire are as follows:

Psychosocial support
Career Development
Job Related Issues

3.4.1 Validity and Reliability Test

The instrument was pre-tested in order to identify if there are any issues with the instrument and
whether it was easy to understand and comprehend the questions or not. Through pretesting it was
found that all respondents felt comfortable in responding and found the instrument interesting as well.

Reliability analysis allows studying the properties of scales of measurement and the things that build
them up. The Reliability Analysis procedure calculates a number of frequently used procedures of level
reliability and also gives information about the associations between individual items mentioned in the
scale. Intraclass correlation coefficients can be used to compute interrater reliability estimates (Tutorial,
SPSS 17 version).

Cronbach's Alpha is the internal consistency model which is based on the average correlation. Here the
value of Cronbach's Alpha for employees is 0.731 and for managers is 0.961, which indicates that the
data is consistent.
3.5 Research Model Developed

Supervisor perception about the outcome of counsel ling

Psychosocial support
Career development
Job related issues
Impact of counselling on employee performance
 Employee perception about the outcome of counselling
Psychosocial support
Career development
Job related issues
Statistical Technique

Figure 3.1 (Source: Scandura and Ragins, 1993)

3.6 Statistical Technique

In this research Independent sample T-test has been used for H1, H2 and H3 and Regression has been
used for H4, H5 and H6. The reason of using this Independent sample T-test for H1, H2 and H3 is that
as over here perception of managers regarding the impact of counselling on employee performance has
been compared and T-test assesses whether the means of two groups are statistically different from one
another. Researchers usually use the t-test to compare two samples so that they can make an inference
about the populations from which they drew the samples. The reason for using Regression for H4,H5
and H6 is ,in statistics, regression analysis includes any techniques for modeling and analyzing several
variables, when the focus is on the relationship between a dependent variable (Employee Performance)
and one or more independent variables (Psychosocial support, Career development, Job related issues).
More specifically, regression analysis helps to understand how the typical value of the dependent
variable changes when any one of the independent variables is varied, while the other independent
variables are held fixed.
CHAPTER 5:
CONCLUSION, DISCUSSIONS, IMPLICATIONS AND FUTURE RESEARCH
5.1 Conclusion

One of the most vital issues facing organization is preserving employee assurance to business goals and
objectives. Most of all companies are facing a time of great managerial change led by oversees
outsourcing, downsizing, global reform, and retreating career progression paths. Because of these
changes, workers are less probable to rise up the position and more likely to amend jobs or area of
occupation often. With performance being an elementary foundation stone to financial achievement,
employers will need to put into operation constant learning programs and enable workers to obtain new
skills to thrive. There are many situations in the office when counselling can be implemented. At any
time, employees may experience problems related to personal, professional or might be their career
development, which may seriously affect success at the company and in achievements of its financial
and strategic goals. If these difficulties go unsettled for a period of time, they are possible to crash the
employee's talent to perform effectively on the job. Counselling is a strategic resource that workers can
use and managers can rely on when work performance, career transition, personal behavior in the
workplace and/or cultural fit becomes a question. It provides a means for supervisor to encourage their
workers to seek career, personal or current job related support early to avoid small troubles from
receiving out of hand and creating greater barriers to accomplishment. It's also a way to help key
workers to get rid of personal and professional issues and reach higher career aspirations, so that they
maintain to add important value to the business.
5.2 Discussion & Implications

Counselling is a method of responding to another individual so that he/she is supported to explore his
judgment, mind-set and performance to get at a comprehensible self-understanding. Employee
counselling services deal with several types of problems, including tensions among supervisors and
employees, co-worker versus co-worker, sexual harassment, verbal abuse and job disappointment.
These are all work connected issues, but employee counselling is also available for employees dealing
with personal issues, such as alcoholism, separation and sadness. Regardless of the nature of the
employee's troubles, they can get in the way with the excellence of his performance. Companies must
look for to give an ambiance of eagerness at each level of the business. Miserable employee
relationships can send a business into a descending spiral, if problems and conflicts are not brought to
the forefront and resolved. Employee counselling services are available to support and give confidence
anxious staff members to face their challenges. When companies give serious notice to the state of their
employees, employees start feel satisfaction and secure when they know that organization cares about
their problems and challengers. Therefore, employees are free to think and to get better their
performance while helping to complete the organization's purpose and mission.

The most important motive why counselling is considerable in an organization because through it
employees are well motivated to achieve their own and organizational goals more efficiently and
effectively. Supervisors are paying attention to the output and performance of their staff. On the other
hand, if employees are discontented, anxious, or stressed regarding personal, job related or career
development issues, they will not be able to execute well on their jobs. So it is very important for that
organization to give guidance and coach their employees, so they can perform better at the workplace
and can achieve organizational goals more efficiently and effectively.
5.3 Recommendations and Future Research

A number of recommendations that can be considered and done for future research:

Sample selection should be distributed more evenly rather than concentrating on one particular area.
The result will be more representative and convincing.

Other variables should be looked upon in order to get more appropriate results. For example, future
research can be done to check the impact of following different areas of counselling on the employee
performance and productivity:

Marriage and family counselling

Rehabilitation counselling
Mental health counselling
Substance abuse counselling
Educational Counselling
Organization Cultural Counselling

RELATIONSHIP BETWEEN PERFORMANCE AND PAY BE INSTRUMENTAL IN IMPROVING

PERFORMANCE IN AN ORGANIZATION:

Pay for performance: Why do we assume so much and know so little? Pay for performance is an
important element of good management, judging from responses to this month's column. The question
of what kind of pay for what kind of performance, however, becomes much more complex, suggesting
a practice in need of further examination. Taken to an extreme, it leads to a conclusion such as that of
Renat Nadyukov: "Sometimes we forget why we pay people." Sivaram Parameswaran concurs, saying,
"in the compulsion to stay on par with other players, we lose track of real value and performance."

Generally speaking, respondents favored schemes designed to reward long-term as well as short-term
performance, encourage retention, recognize special needs of an organization, be based on the
achievement of both financial and non-financial objectives, and in general create value for
shareholders. However, there is a sense, expressed by John Ippolito, that there is a lack of perception in
boards of directors of "what constitutes 'creating value' in the enterprise … many boards are too ready
to turn over the keys to the incoming CEO—then watch the stock price to see if he or she did a good
job."

Ashok Malhotra favors "reasonable incentives for short-term performance" and "higher incentives for
long-term performance." The rationale, as Mark Evans explains, is that "a CEO must develop and
implement strategies that provide long-term sustainable outcomes to the benefit of shareholders."
However, Gary Johnson cautions that "Because excitement is so critical to success, pay for
performance value can be diminished the longer the time delay for receiving performance pay."

Xu Jian comments that "competitors hire (our employees for their) competence. So beyond paying for
(their) performance, why don't we think more about (paying to retain them) for (their) competence?"
Pallavi Marathe concurs, saying that "Salary and retention are interlinked these days … (the latter) is
also of utmost importance." Jim Chorn asks, "Do you give (mid-range managers) larger incentives in
the hope of retaining them?"

Special needs sometimes dictate pay in relation to expected performance. Veronica Serrano suggests
that this occurs when "extraordinary performance or major business change is required." Whether this
is the case or not, several voiced the need to link pay to both financial and non-financial performance
measures. As Ellis Baxter put it, "… sanity is paying for what you want to have done…." Karla Ortega
commented that "… a well-structured compensation plan communicates corporate objectives to your
employees…."

The perverse effects of pay for performance were also targeted. Sylvia Lee pointed out that "we want
knowledge sharing but reward knowledge hoarding." In commenting on executive pay, CEO Nari
Kannan noted that CEOs seek "less loss on the downside, more gains on the upside. The company's
goals are the (opposite)." Claude Des Rosiers warned that "There are enough challenges to get people
in an organization to work together (without compounding the problem by paying for individual
performance)."

Ira Kay and Steven Van Putten report, based on extensive data, that they have found a correlation
between executive pay and long-term total returns to shareholders. But CEO pay increased
substantially even in low-performing firms in their study. Their book represents a useful effort to shed
light on the issue. But is there another subject as important as this one about which we assume so much
and know so little? How do you explain this? What do you think?

To read more:
Ira T. Kay and Steven Van Putten, Myths and Realities of Executive Pay (Cambridge University Press,
due out summer 2007).
Original Article

Two news items caught my eye recently. The first was the report from the Home Depot annual meeting
contrasting this year's investor-friendlier tone set by the company's new CEO, Frank Blake, with last
year's, led by then-CEO Robert Nardelli. It's hard to tell how much of the investor-friendlier tone was
created by the fact that Blake is earning about 70 percent less in base pay than Nardelli, totally aside
from the fact that the latter also took home a nine-figure package in incentives. Home Depot's stock has
had lackluster performance under both CEOs. But there are those who say that Nardelli's task of
leading a transition from a highly decentralized, founder-led organization to one more reliant on shared
services and central direction was enormous and that he was making good progress. How much is that
worth?

The second item was a report of the decision by Moody's Investors Service to begin taking into account
the spread in pay packages between the top two executives in the organizations whose bonds it rates.
Presumably, the larger the spread, the lower the bond rating, reflecting the higher implied risk
associated with a large spread. As Mark Watson from Moody's put it, "We are rating the company, not
the person. A bus might come by and knock the (top) person over."

There are several assumptions implicit in these two items. First, there are limits within which pay can
elicit performance. Above a certain amount of incentive, does pay provide an incentive for or even
influence performance? The Moody's decision might suggest the assumption that pay reflects value to
an organization, and possibly also potential performance. In other words, one's pay in relation to the
leader reflects one's value (or even likelihood of being promoted) if the leader were to get hit by a bus
today. A third assumption is that good leaders are very hard to find and are worth every penny they are
paid, regardless of structural imperfections in the ways that compensation packages are negotiated and
determined.

There are a number of reasons why pay may not reflect performance. First, many of the larger pay
packages are negotiated by those being hired from outside the organization. Most often, an outside hire
is prompted by poor performance by insiders. So in a sense, the bargaining power of the outsider is
increased, regardless of the performance that may be delivered later. It is one of several reasons for the
careful planning of executive succession. Further, many pay packages are determined on the basis of
what others in comparable jobs, regardless of performance, are being paid. This creates a natural
disconnect between pay and performance. Third, current pay often reflects past performance, not
current or expected performance.

And to what extent does substantial pay for performance elicit short-term decision making that can
even exacerbate management turnover? Does it encourage playing the "roller coaster" earnings game,
in which executives in an organization can make enormous performance-based incentives in the odd
years and none in the even years (ironically, when the large performance-based pay is reported to the
public), thus netting a substantial performance bonus while producing little long-term benefits for
owners? Is it even fair to ask those lower in the organization, who may be less able to afford it, to put
part of their pay package on the line?

If pay is linked to performance, should it be to past, present, or expected performance? Or should pay
be linked more closely to past, present, or expected value to the organization? Or are these differences
academic? Do cross-company comparisons confuse the matter even further? Just how should pay be
linked to performance? What do you think?
To Read More:
The Mark Watson quote is from "The Chatter," The New York Times, May 27, 2007, Section 3, p. 2.

Forrest Christian Associate, The Manasclerk Company

Mark Van Clieaf has been arguing that the problem in comparing pay is knowing what you are
comparing. CEO jobs are not all the same: some are bigger jobs than others so comparing them blindly
makes no sense.
Orgad Barsade Sergeant, IDF
A salary is the incentive that drives a person to do work in general - work that doesn't directly benefit
the worker. In a very basic manner of speaking, if one desires someone else to work for the former's
ends, he should logically give the latter at least as much money as the worker could have produced
working for his own ends.

That would be the situation in a very simple system, with a monopoly of one organization on the
market. If, however, there are two or more employers, then there is the element of competition,
introduced into the system. the employees will have to offer a greater return to the worker if they want
him to work for them instead of for the competition.
Next, we can introduce the element of the nature of the work, where a worker will ask for a larger
compensation for harder work, or for work requiring rarer skills, with a high demand and low supply.

To answer the questions presented here, one could very simply refer to very basic theories of
economics, the fundamentals of which i can only guess at, owning but a high-school degree.

The point, however, of what i'm trying to say here is that pay is determined by a variety of affecting
elements and probably always will be, like the price of a product in a free market. One can't ignore one
of the elements, for fear of causing unbalance in the market, leading to an economic crash of some
kind.
Xu Jian HR Manager, Timken Chengdu Plant
Pay for performance! It's easy to say, but think about these questions: what is the individual
performance criteria? Can we properly measure it? Does this individual performance contribute to the
organizational goal?

And, performance actually is a mixing of personal compentence, motivation and the evironment. A
bad performer maybe perform perfectly in another organization. What is the difference? Maybe a better
culture, maybe a better leader and even maybe a better salary.

We pay our employees by their performance ranking according to our obeservation and
understanding. But how do our competitors hire them from our organization? They do not care about
our judgement; they actualy make their decision to hire and offer upon the competence.

So beyond paying for the performance, why don't we think more about retaining for competence?
How? Pay and not only the pay.
Raed Al-Adl Student, York University, TO
I don't think there is a right answer for any of those questions. Past performance sometimes is more
related to the team and environment than the person himself, therefore repeating past successes may not
turn out to be that easy.

For the second question, how do we measure value related to the org., is it by how happy the
investors are? or by the strategy which sometimes may not push stock prices up?

Pay should be linked to perforamnce, in my opinion, but we need to develop that magic formula in
assessing that performance (percentage of personal contribution and percentage of team related factors)
that will affect the bottomline and future growth of the company.

I don't think cross-company comparison will help much as each company has its internal personality
and therefore the person's contribution would differ from one place to another.

If we develop that lovely formula in assessing the performance, then we should assess the
importance of that contribution and measure it financially, without looking at the outside world.
 I believe Winning Leaders will be successful even if we didn't link their pay to their performance;
however, investors need justification for those big packages.

There is always a risk in hiring externally or promoting internally. Companies will be safe if they
managed to understand the factors behind past performances and see if those factors are available
within their org.
Himanshu Singh Senior Analyst, Pipal Research
At the junior or middle management level it's always easy to link the pay package to the
performance. Normally done through well defined (in some organizations though) KRAs or key result
areas. In the higher management the question is two-fold: 1. What would incentivize the person to
perform better? Pay or something else (share in the company etc.) 2. What is the minimum that should
be paid to the person at such level, regardless of the performance?

Answer to part 1 can be determined while recruiting or promoting the person, based on his record
and the interview. For part 2, one has to look at the pay packages of middle management in this
company, his peers in the industry etc.

Once finalized, this pay package, along with the KRAs, should be made public for the shareholders'
interests, and all subsequent changes be made public, so that the person himself as well as the
shareholders know of it in advance. If both the board and the executive are mature and capable enough
there would be no apprehension regarding this policy.
Andrew K Officer, US Army
Based on my experience in the Army, I can say that linking pay with performance is essential. Army
officers are not paid and promoted based on their performance - but based on the number of years they
have served (at least for the first 10 years of service). While this may appeal to marginal performers, it
is a major turnoff to high-performers and leads to low morale. I'm witnessing this first-hand as all of
my high-performing colleagues are persuing careers in corporate America.

As to the question of how best to link pay with performance: each organization can decide for itself
the best way to implement this policy. If an organization finds that its employees are manipulating the
system by sacrificing long-term performance for short-term performance (and bonuses), then the
problem lies with the leaders of that company. In a case such as this, the leaders of the company should
begin to reward employees who contribute to the long-term health of the company. Regardless of the
method used to implement a performance-based pay system, each organization should ensure that the
method used is transparent, fair, and easily understood.

And as to those who wish to link compensation not with past performance, but with future
performance: I think most people will find that the best indicator of future performance is past
performance - just as the best indicator of future value is past value. So why not just compensate based
on past performance?
M.V. Narayanan Change Facilitator, Fine Jewellery Manufacturing Ltd.
Pay must be linked to expected performance or value to the organization - whichever is higher.
Anonymous
1. Pay linked to past performance is something of a "run of the mill" process. This is quite common
in most organizations, and this once-a-year activity makes it look very ordinary.

2. Pay linked to present performance sounds "little genuine and more like a day-to-day work
tracker."
 3. Pay linked to future performance is "Two Faced":
a. First face being very genuine, the pay is linked to the targets/deadlines that an employee has set
himself and [is based on] how one meets and exceeds them.

b. Second face, as the strategies keep changing in an organization, so do the roles and responsibilities
of the employees, particularly in critical positions. This might not present a clear payment reward for
an employee, but this will surely test the employee's ability under different circumstances, which might
be rewarded over a period of time; and this might not be the right time.

To conclude, pay does motivate individuals to better their past performance. Therefore, organizations
must develop a structured pay-for-performance reward mechanism that is not exactly a cocktail of past,
present and future performance, but is also well aligned with the organization's objectives, employee's
track record, and leadership potential in those employees who will play a prime role towards the
growth of the organization.
Anonymous
Sir,
You bring up excellent points. Am always thinking of new ideas to bring about change and your
article is my inspiration. As a consultant, i've seen a lot of co-workers come and go based on
performance. Still, the hiring company loses a lot by paying professionals who are not up to the mark
and by the firing and new-hire process.

Am thinking on the lines of having a pay package that determines how a person be paid on his/her
current performance at a new place. Keeping incentives aside - maybe a internal point system which
gives the new hirees probably 3 months of pay hikes (totally based on performance)-- which in turn
will generate extra efforts and bring about better performance on both sides.
Maybe a math calculation should be derived from this based on permutations and combinations of
test cases. I'd like to see the results of those!
Jacob Product specialist, Pharmaceutical marketing
Dear Sir,
the perks have to be evaluated with consideration to three values. A cross-company comparison may
not be [static]; the operation area may be the same but the vision of the company may be different. The
structure and the culture matter a lot.
CJ Cullinane
Compensation should always be determined by performance. A combination of accomplishing set
goals, profitability, and company long term strength should be the basic criteria. Stock valuation is a
tricky and probably not a good indicator of true value, look at Enron. The emphasis on short term goals
unless linked to long term profitability is also tricky and can be influenced by short term bonuses and
incentives.

The pressures on a leader are tied more to stock and stock options than longer term organizational
strength. I can see how a CEO would focus on the here and now because they may not be in the job
long. If a company's stock is down other criteria can be used, sales, profitability, cash flow, market
share. If these are down also the CEO should be terminated.

I am amazed that a CEO will take enormous amounts of money while the company is sinking.
Common sense would dictate sharing the pain but yet they still take more and more. Nobody thought of
firing Lee Ioccoca when he took a cut in pay to one dollar at Chrysler! The top people are the leaders,
or should be, and no matter how much they signed on for they must bear the burden of their
performance! They often say that is 'what another company would pay them' but what if everybody in
the organization said that, would the CEO put up with it? They know the risks when they sign on, they
should live with the results.
Simon Stapleton Principal, Commerce-Savvy.com
Performance linked pay is a strong motivation, but only if applied fairly within an organization and
meets the expectations of the individual; a hard balance to strike! Expectancy Theory will motivate
(according to Victor Vroom) when an employee believes that:

* putting in more effort will yield better job performance

* better job performance will lead to organizational rewards, such as an increase in salary or benefits
* these predicted organizational rewards are valued by the employee in question

Many schemes fail these tests, and can have an opposite affect of loafing in some circumstances.

Before establishing a scheme, employers should ensure their HR function is properly trained and is
in touch with its employees.
Anonymous
On the whole question of Exec Pay and performance one should look at DuPont. They generally
grow their own. Last time I looked they pay very low compared to other large corporations and yet
have an instant supply of top Execs in waiting. Their Corporate performance over time has been
exemplary. They don't seem to get into the bidding wars for sometimes questionable talent. They build
a loyalty to their Corporation by constantly promoting high talent and not keeping talent that is
questionable.
Anonymous
Pay-for-performance is currently a point of discussion in health care. To date, the definition of
performance seems to be "use of services". In health care, I believe the performance to be measured
should be the "appropriateness" of the care/tests/medications provided to the patient. This approach
would hopefully encourage professionals and providers to focus on the appropriateness of the care they
give and not the earnings which can be obtained.
John F. Ippolito Managing Director, Axia Partners
I think the element that is often missing in linking CEO performance to compensation is an
understanding on the part of the board of what constitutes "creating value" in the enterprise. Rather
than feeling they know what they need a new CEO to do, I think many boards are too ready to turn over
the keys to the incoming CEO - then watch the stock price to see if he or she did a good job.
Interestingly, this rarely happens in private equity-owned companies.

A better solution would have the board defining strategic and operating objectives against which to
measure a CEO's performance, taking responsibility for knowing that performance on these dimensions
will create shareholder value. These initiatives would be specific, rather than general and incremental
(e.g. increase operating profit by 15%) based on a common, clearly communicated vision of where the
company must go to be successful. A more capable, engaged board is key to making this work.
Dave Siefert
Compensation addresses current, future and past performance. Compensation improvement
adjustments exist to the extent the previous established objectives have been achieved. Secondly, by
virtue of past and present performance future performance could be forecasted -- assuming various
numerous variables do not change. The link between performance to the organization's objectives are
important. Stretch goals and objectives should be established and rewards should be individually as
well as team motivating. Lastly, reward systems such as compensation adjustments should reinforce the
desired behavior and results that you wish - and wish to replicate.
 Phil Clark President, Clark & Associates
Any senior executive or manager...in fact...any person who says they can get more somewhere else,
should be allowed to go somewhere else. You are dealing with ego, not value. A real leader, with the
good of the organization in mind, would never say that. If you have board members parroting those
words...remove them. They will drive you into bankruptcy or to poorer performance.

If you create a performance "system" with formulas and detailed measurements, you have also lost
the battle. If you need that to know the value of someone, you are not paying attention, and you should
be fired.

As to executives who have contracts, not tied to performance...don't even utter the words "pay for
performance". You are the corporate poster child for those who undermine the importance of quality
work and reward.

Using Wall Street as a measurement of performance is like turning over the election of the next
president to American Idol. The schemes and shenanigans used to try and figure out Wall Street are a
second industry. How do you tie someone's livelihood to a group that even the Federal Reserve
Chairman has a difficult time trying to understand?

Really figuring out the worth of someone to an organization takes time, personal involvement, and
good leadership at all levels. If you are trying to do it with spreadsheets you are in serious trouble.
Anonymous
Why do people still continue to "Run n Hide" and shy their eyes, when you use the words, "pay for
performance". These are the people I want to see. Are they not proud of their work, of their
contribution to the organization. Do they not feel that they are a valuable part of the whole? Or are they
just slacking off, every day waiting till it's time to go home? Even though I am young in age, I am of
the old school, of being conscious and accountable of my performance and what I bring to the table,
daily. I find that many people are not, but only "gear-up" when someone is "looking" or there is an
award or bonus involved. Then they are ALL loudly touting their capabilities. But, are they utilizing
them, performing and sharing them with each other? Or are the just giving lip service. No, they again
are stingy and self-centered.

Shame Shame Shame we have lost our Business Pride and Performance ! (It going to the business
"hungry" countries - China and India).

I also agree with Anonymous #9. You hire someone and they don't perform as they say they can.
You've lost time and dollars. How to you get that back? You can't. That is why there has to be a
"mechanism" or key to performance and goal setting, to show accountability.

AND not just for the employee but for the Executives as well. If the company does not do well -
across the board the Exeuctives should take the biggest hit, not the "general" employee. Upper
management always wants the accolades when things are going well but never seems to take the hit
when things are going bad, it's always the "general" employee that gets hit with downsizing,
department reallocation-offshore.
Rowland Freeman Retired
As a VP at a major aerospace company one half of my pay and all bonus was based on my
performance. At the beginning of each year my boss and I negotiated performance targets and they
were real stretches. and at the end of the year my performance was evaluated, and my pay adjusted
accordingly. That system was a very real incentive to not only work hard, but take extra steps to make
sure the subsidiary company i was managing, exceed its performance goals. I was never concerned
about the pay or performance of other company executives, nor did I hear such concerns from others.
As a consultant I have recommended such a system to health care organizations as wa ay to improve
staff performance, and it does.
Anonymous
This discussion seems to be about nothing. And all the wrong questions. Because the questions being
asked come up because there is little or no sense to current conditions of pay, incentives, retirements, et
al.

Just as in unions and hierarchical systems...pay has never been about performance or anything else
other than where one is on the pecking order, and usually relating that to what the organization can or is
willing to afford. And now Exec pay along with star athletes, pay is about a pecking order in past
performance and salaries and an agent who can get more...and who can pay it.

So the real question we should be concerned with is discovering WHY we do what we do, should we
do it, or not, and what alternatives are there. Then we can build a compensation schedule that makes
sense. Only performance could be that, that changes the hierarchy, with the lowest level person (who
may have more knowledge, i.e., two or three masters or PhD degrees, experience and a special
expertise) would be paid more than the person at the helm, who has less, but got that job for other
reasons and criteria.

My sense of the current situation is that consumers make the rules, and the guy at the top is not going
to be able to change that, so why are we paying for stars and celebrities? If they want such astronomical
salaries, let them start their own Amazon.coms, Googles, and Bank of America.

Could they do that? I suspect that some of their...CEOs...business consultants know more about the
business than they do...so why not hire them to lead changes needed instead.

Someone on these responses once suggested the idea of business was to make money. Well, for
whom, and why? Answer those questions and perhaps sanity will return

DISTINGUESS BETWEEN THE PERFORMANCE APPRASIAL AND POTENTIAL EVALUTION