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TABLE OF CONTENTS

VIVEKANANDA DEGREE COLLEGE Page 1

PARTICULARS PAGE NUMBER

Introduction

Performance Management System

Review Of Literature

Introduction

Statement of problem

Objectives

Methodology

Profile Of ABB

Performance Management At ABB

Data Analysis & Discussions

Findin s

Su estion & Conclusion

APPENDIX

( Questionnaire and selected bibliography)


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LIST OF TABLE AND GRAPHS

PARTICULARS

PAGE

NO.OF

TABLE FIGURE NO.

Goal-Setting was done within 30 da s of Joining

Responses of employees as to whether their mid year reviewhas been conducted

Responses of employees as to whether their annualerformance review was conducted

Responses of employees as to opportunity to bring out issues

durin the review sessionResponses of employees whether their manager was receptiveduring the review session

Responses of employees as to whether all their issues wereaddressed or lanned to be addressed

Responses as to whether the discussion helped in improvingthe erformance

Responses of employees whether their relationship with theirmana er im roved after the discussion

Responses of employees to the extent of role clarity after thediscussion

Responses of employees whether there was progress on thelast review discussion

Responses of employees whether they worked under twomana ers durin the a raisal eriod

Responses of employees who worked under two managers asto whether it affected their a raisal ratin

Responses of employees whether they perceived fairness in

erformance evaluation

Responses of employees as to the level of satisfaction withrespect to the Performance Evaluation system


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Introduction

1.1 Performance Management System Overview

Performance Management is a fairly imprecise term, and performance management processes

manifest themselves in many different forms. There is no one right way of managing performance:

the approach must depend on the context of the organization-its culture, structure, technology-the

views of stakeholders and the type of people involved.

Performance management is a strategic and integrated approach ton delivering sustained success to

organization by improving the performance of the people who work in them and by developing thecapabilities of teams and individual contributors. Performance management is:

Strategic in the sense that it is concerned with the broader issues facing the business if it is to

function effectively in its environment and with the general direction in which it intends to go to

achieve longer-term goals.

Integratedin four senses:

1. vertical integration- aligning business, team and individual objectives

2. functional integration- linking functional strategies in different parts of the business

3. human resource (HR) integration- linking different aspects of HRM, especially

organizational development and HR development and reward, to achieve a coherent approach to the

management and development of people

4. the integration of individual needs with those of the organization, as far as this is possible.

Concerned with performance improvement in order to achieve organizational, team and individual

effectiveness. Organizations, as stated by Lawson (1995), have to get the right things done

successfully. Performance is not only about what is achieved but also about how it is achieved.

Management is involved in direction, measurement and control. But these are not the exclusive

concern ofmanagers: teams and individuals jointly participate as stakeholders.



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Concerned with development, this is perhaps the most important function of performance

management. Performance improvement is not achievable unless there are effective processes of

continuous development. This addresses the core competencies of the organization and the capabilities

of individual and teams.

According to Fletcher (1993a),the real concept of performance management is associated with

an approach to creating a shared vision of the purpose and aims of the organization, helping each

employee understand and recognize their part in contributing to them, and in so doing, manage

and enhance the performance of both individual and the organization.

1.2 A short history of Performance Management

No one knows precisely when formal methods of reviewing performance were first introduced. The

first formal monitoring systems, however, evolved out of the work of Fredrick Taylor and his

followers before World War I. Merit-rating came to the fore in the USA and the UK in the 1950s and

1960s, when it was sometimes rechristened performance appraisal. Management by Objectives then

came and went in the 1960s and 1970s and, simultaneously, experiments were made with the

critical incident technique and behaviorally anchored rating scales. A revised form of result-oriented

performance appraisal emerged in the 1970s, which still exists today. The term

performance management was first used in the 1970s, but it did not become recognized

process until the latter half of the 1980s.

The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to

Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said

about almost everything in the field of modern human resource management. As a distinct and

formal management procedure used in the evaluation of work performance, appraisal really dates

from the time of the Second World War-not more than 60 years ago. Yet in a broader sense, the

practice of appraisal is a very ancient art.

Performance appraisal systems began as simple methods of income justification. That is, appraisal was



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used to decide whether or not the salary or wage of an individual employee was justified.

The process was firmly linked to material outcomes. If an employee's performance was found to be

less than ideal, a cut in pay would follow. On the other hand, if their performance was better than thesupervisor expected, a pay rise was in order.

Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a

cut in pay, or a rise, should provide the only required impetus for an employee to either improve or

continue to perform well.

Sometimes this basic system succeeded in getting the results that were intended; but more often thannot, it failed.

For example, early motivational researchers were aware that different people with roughly equal

work abilities could be paid the same amount of money and yet have quite different levels of

motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important, yes; but they were

not the only element that had an impact on employee performance. It was found that other issues, such

as morale and self-esteem, could also have a

major influence.

As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in

the United States, the potential usefulness of appraisal as tool for motivation and development was

gradually recognized. The general model of performance appraisal, as it is known today, began from

that time

1.2.1 Modern Appraisal

Performance appraisal may be defined as a structured formal interaction between a subordinate and

supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the



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work performance of the subordinate is examined and discussed, with a view to identifying

weaknesses and strengths as well as opportunities for improvement and skills development.

In many organizations - but not all - appraisal results are used, either directly or indirectly, tohelp determine reward outcomes. That is, the appraisal results are used to identify the better

performing employees who should get the majority of available merit pay increases, bonuses, and

promotions

By the same token, appraisal results are used to identify the poorer performers who may require some

form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need

to be aware of laws in their country that might restrict their capacity to dismiss employees ordecrease pay.)

Whether this is an appropriate use of performance appraisal - the assignment and justification

of rewards and penalties - is a very uncertain and contentious matter.

1.2.2 Appraisal MethodsEssay Method

In the essay method approach, the appraiser prepares a written statement about the employee being

appraised. The statement usually concentrates on describing specific strengths and weaknesses in job

performance. It also suggests courses of action to remedy the identified problem areas. The statement

may be written and edited by the appraise alone, or it be composed in collaboration with the appraisee.

Advantages

The essay method is far less structured and confining than the rating scale method. It permits the

appraiser to examine almost any relevant issue or attribute of performance. This contrasts sharply

with methods where the appraisal criteria are rigidly defined.



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Appraisers may place whatever degree of emphasis on issues or attributes that they feel appropriate.

Thus the process is open-ended and very flexible. The appraiser is not locked

into an appraisal system the limits expression or assumes that employee traits can be neatly

dissected and scaled.

Disadvantages

Essay methods are time-consuming and difficult to administer. Appraisers often find the essay

technique more demanding than methods such as rating scales.

The techniques greatest advantage - freedom of expression - is also its greatest handicap. The varying

writing skills of appraisers can upset and distort the whole process. The process is subjective and,

in consequence, it is difficult to compare and contrast the results of individuals or to draw any broad

conclusions about organizational needs.

Results Method

Management By Objectives (MBO)

The use of management objectives was first widely advocated in the 1950s by the noted management

theorist Peter Drucker.



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MBO (management by objectives) methods of performance appraisal are results-oriented. That is, they

seek to measure employee performance by examining the extent to which predetermined work

objectives have been met.

Usually the objectives are established jointly by the supervisor and subordinate. An example of an

objective for a sales manager might be: Increase the gross monthly sales

volume to $250,000 by 30 June.

Once an objective is agreed, the employee is usually expected to self-audit; that is, to identify the skills

needed to achieve the objective. Typically they do not rely on others to locate and specify their

strengths and weaknesses. They are expected to monitor their own development and progress.

Advantages

The MBO approach overcomes some of the problems that arise as a result of assuming that the

employee traits needed for job success can be reliably identified and measured.

Instead of assuming traits, the MBO method concentrates on actual outcomes.

If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable

level of job performance. Employees are judged according to real outcomes, and not on their

potential for success, or on someone's subjective opinion of their abilities.

The guiding principle of the MBO approach is that direct results can be observed, whereas the

traits and attributes of employees (which may or may not contribute to performance) must be

guessed at or inferred.



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The MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied

elements that go to make up employee performance.

MBO advocates claim that the performance of employees cannot be broken up into so many constituent

parts - as one might take apart an engine to study it. But put all the parts together and the performance

may be directly observed and measured



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Disadvantages

MBO methods of performance appraisal can give employees a satisfying sense of

autonomy and achievement. But on the downside, they can lead to unrealistic

expectations about what can and cannot be reasonably accomplished.

Supervisors and subordinates must have very good "reality checking" skills to use MBO

appraisal methods. They will need these skills during the initial stage of objective setting, and

for the purposes of self-auditing and self-monitoring.

Unfortunately, research studies have shown repeatedly that human beings tend to lack the skills

needed to do their own "reality checking". Nor are these skills easily conveyed by training.

Reality itself is an intensely personal experience, prone to all forms of perceptual bias.

One of the strengths of the MBO method is the clarity of purpose that flows from a set of well-

articulated objectives. But this can be a source of weakness also. It has become very apparent

that the modern organization must be flexible to survive. Objectives, by their very nature, tend

to impose certain rigidity.

Of course, the obvious answer is to make the objectives more fluid and yielding. But the

penalty for fluidity is loss of clarity. Variable objectives may cause employee confusion. It is

also possible that fluid objectives may be distorted to disguise or justify failures in

performance.

1.2.3 Basic Purposes of

performanceappraisal



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Effective performance appraisal systems contain two basic systems operating in

conjunction: an evaluation system and afeedback system.

The main aim of the evaluation system is to identify theperformance gap (if any). This gap is

the shortfall that occurs when performance does not meet the standard set by the organization

as acceptable.

The main aim of the feedback system is to inform the employee about the quality of his or her

performance. (However, the information flow is not exclusively one way. The appraisers also

receive feedback from the employee about job problems, etc.)

One of the best ways to appreciate the purposes of performance appraisal is to look at it from

the different viewpoints of the main stakeholders:

The employee and The organization.

Employee Viewpoint

From the employee viewpoint, the purpose of performance appraisal is four-fold:

(1) Tell me what you want me to do

(2) Tell me how well I have done it

(3) Help me improve my performance

(4) Reward me for doing well.

1.2.4 Organizational Viewpoint



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From the organization's viewpoint, one of the most important reasons for having a system of

performance appraisal is to establish and uphold theprinciple of accountability.

For decades it has been known to researchers that one of the chief causes of organizational failure

is "non-alignment of responsibility and accountability." Non- alignment occurs where employees

are given responsibilities and duties, but are not held accountable for the way in which those

responsibilities and duties are performed. What typically happens is that several individuals or

work units appear to have overlapping roles.

The overlap allows - indeed actively encourages - each individual or business unit to "pass thebuck" to the others. Ultimately, in the severely non-aligned system, no one is accountable for

anything. In this event, the principle of accountability breaks down completely. Organizational

failure is the only possible outcome.

In cases where the non-alignment is not so severe, the organization may continue to function,

albeit inefficiently. Like a poorly made or badly tuned engine, the non-aligned organization

may run, but it will be sluggish, costly and unreliable. One of the principal aims of performance

appraisal is to make people accountable. The objective is to align responsibility and

accountability at every organizational level.

Benefits of Appraisal



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Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working

life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-

one discussion of important work issues that might not otherwise be addressed.

Almost universally, where performance appraisal is conducted properly, both supervisors and

subordinates have reported the experience as beneficial and positive.

Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and

correct existing problems, and to encourage better future performance. Thus the performance of

the whole organization is enhanced.

For many employees, an "official" appraisal interview may be the only time they get to have

exclusive, uninterrupted access to their supervisor. Said one employee of a large organization

after his first formal performance appraisal, "In twenty years of work, that's the first time

anyone has ever bothered to sit down and tell me how I'm doing."

The value of this intense and purposeful interaction between a supervisors and

subordinate should not be underestimated.

Motivation and Satisfaction

Performance appraisal can have a profound effect on levels of employee motivation and

satisfaction - for better as well as for worse.

Performance appraisal provides employees with recognition for their work efforts. The power of

social recognition as an incentive has been long noted. In fact, there is evidence that human

beings will even prefer negative recognition in preference to no recognition at all.

If nothing else, the existence of an appraisal program indicates to an employee that the

organization is genuinely interested in their individual performance and development. This



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alone can have a positive influence on the individual's sense of worth, commitment and

belonging.

The strength and prevalence of this natural human desire for individual recognition should notbe overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced

if more attention were paid to it. Regular performance appraisal, at least, is a good start.

Training and Development

Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur -

for a supervisor and subordinate to recognize and agree upon individual training and

development needs.

During the discussion of an employee's work performance, the presence or absence of work

skills can become very obvious - even to those who habitually reject the idea of training for

them!

Performance appraisal can make the need for training more pressing and relevant by linking

it clearly to performance outcomes and future career aspirations.

From the point of view of the organization as a whole, consolidated appraisal data can form a

picture of the overall demand for training. This data may be analysed by variables such as sex,

department, etc. In this respect, performance appraisal can provide a regular and efficient

training needs audit for the entire organization.

Recruitment and Induction

Appraisal data can be used to monitor the success of the organization's recruitment and induction



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practices. For example, how well are the employees performing who were hired in the past two

years?

Appraisal data can also be used to monitor the effectiveness of changes in recruitmentstrategies. By following the yearly data related to new hires (and given sufficient

numbers on which to base the analysis) it is possible to assess whether the general quality of the

workforce is improving, staying steady, or declining.

Employee Evaluation

Though often understated or even denied evaluation is a legitimate and major objective of

performance appraisal.

But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative

and developmental priorities appear to frequently clash. Yet at its most basic level, performance

appraisal is the process of examining and evaluating the performance of an individual.

Though organizations have a clear right - some would say a duty - to conduct such evaluations

of performance, many still recoil from the idea. To them, the explicit process of judgment can be

dehumanizing and demoralizing and a source of anxiety and distress to employees.

It is been said by some that appraisal cannot serve the needs of evaluation and

development at the same time; it must be one or the other.

But there may be an acceptable middle ground, where the need to evaluate employees

objectively, and the need to encourage and develop them, can be balanced.

1.2.5 Performance Management and Pay



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As the IPD survey demonstrated, performance management is not inevitably associated with pay,

although this is often assumed to be the case. Only 43% of the respondents to the survey with

performance management had performance related pay (PRP). The research, however, showed

that contingent or differential pay is still an important element in many performance-management

schemes. This is because paying for performance or for competence, or both, is regarded by

many organizations as desirable for three reasons:

It motivates people to perform better or to develop their skills and competencies.

It delivers the message that performance and competence are important

It is fair and equitable to reward people differentially according to their

performance, competence or contribution.

The Link to Rewards

Research (Bannister & Balkin, 1990) has reported that appraisees seem to have greater

acceptance of the appraisal process, and feel more satisfied with it, when the process is

directly linked to rewards. Such findings are a serious challenge to those who feel that

appraisal results and reward outcomes must be strictly isolated from each other.

There is also a group who argues that the evaluation of employees for reward purposes, and

frank communication with them about their performance, are part of the basic responsibilities



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of management. The practice of not discussing reward issues while appraising performance is,

say critics, based on inconsistent and muddled ideas of motivation.

In many organizations, this inconsistency is aggravated by the practice of having separate wageand salary reviews, in which merit rises and bonuses are decided arbitrarily, and

often secretly, by supervisors and manager



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Review Of literature & Design

2.1 Introduction

Performance management is a strategic and integrated approach ton delivering sustained

success to organization by improving the performance of the people who work in them and

by developing the capabilities of teams and individual contributors. Performance

management is:

Strategic in the sense that it is concerned with the broader issues facing the business if it

is to function effectively in its environment and with the general direction in which it intends

to go to achieve longer-term goals

2.2 Review of literature

Performance evaluations have been conducted since the times of

Aristotle (Landy, Zedeck, Cleveland, 1983). The earliest formal employee

performance evaluation program is thought to have originated in the

United States military establishment shortly after the birth of the

republic (Lopez, 1968). The measurement of an employees performance

allows for rational administrative decisions at the individual employee

level. It also provides for the raw data for the evaluation of the

effectiveness of such personnel- system components and processes as

recruiting policies, training programs, selection rules, promotional

strategies, and reward allocations (Landy,Zedeck, Cleveland, 1983).

In addition, it provides the foundation for behaviorally based employee counseling.

In the counseling setting, performance information provides

the vehicle for increasing satisfaction, commitment, and motivation of

the employee. Performance measurement allows the organization to tell

the employee something about their rates of growth, their competencies,

and their potentials.


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There is little disagreement that if well done,

performance measurements and feedback can play a valuable role in

effecting the grand compromise between the needs of the individual and

the needs of the organization (Landy, Zedeck, Cleveland, 1983).

2.3 Statement of the problem

The organization currently follows a review process wherein the manger gives feedback to the

employees working under him and based on it a rating is given. The report tries to find out the

ambiguity in the performance management system, whether the employees are satisfied with

the current system.

2.4 Objectives

In depth understanding of the goal-setting process and the performance management system in

the organization.To measure the effectiveness of the same

To measure the employee satisfaction in these processes

To identify the areas which need to be improved upon

2.5 Methodology

Sampling technique:

The sampling technique adopted is random sampling. It includes all those employees who have


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undergone through their annual performance review.

Sample size:

The sample size consists of 183 employees of ABB INCRC (India Corporate Research

Centre), Bangalore.

Sample Description:

The sample size consists of employees of 7 departments. They are as follows:

800xA

PDI

TDD

Quality

Support (HR, Finance, Purchase, Knowledge management) The number of

employees covered in each department is as follows:

Departments No. of Employees

800xA 87PDI 65

TDD 18

Quality 5

Support 8

Total 183


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The employees covered include Project managers, Group Managers. Technical Engineers etc. All

employees have undergone their Annual performance review.

2.5.1 Types of Data:

Data is the fact of an event. Data is the base for every research work.

The data is mainly classified into two groups.

Primary data:Thrust has been on collection of primary data.

Structured questionnaire has been used and discussed personally

with the respondents to get their responses.

Secondary data: Books, journals, websites etc., have been

consulted for obtaining related information, and also for

crosschecking of primary data.

2.5.2 Data Gathering Procedures:

Surfing the net

Reading & note making for secondary data

Structured Questionnaire.

Personal Intervies

Collection of data:

Employee feedback questionnaire was administered on the employees and feedback was taken through

personal interview method and through e-mail from those employees who were onsite.


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Instrumentationtechniques:

The instrumentation technique used is the graphical method of analysis.


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Profile Of Industry

3.1 Organization Profile

ABB is a leader in power and automation technologies that enable utility and industry customers to

improve performance while lowering environmental impact.

ABB India serves utility and industry customers with the complete range of ABBs offerings. The

company has a vast installed base, extensive local manufacturing at 8 units and a countrywide

marketing and service presence. As a strategic thrust to standard products business, ABB has a

national channel partner network, which ensures geographical reach and penetration of its

products and services.

In order to leverage Indias intrinsic technology strengths and the vast pool of highly qualified

software professionals, ABB has set up a global R&D Centre in Bangalore, which focuses on

Industrial IT development and deployment. It also helps maintain and support a range of software

intensive products and acts as a partner for the ABB R&D centers as well as business areas within the

group.

Vision:

ABBs vision is to be The Value Creator. Working closely with our customers,

understanding their business needs and local market conditions. We ensure our Customer's

success through our innovative products, systems, services and complete solutions; combining

world-class technologies, proven expertise and strong local insight. In turn, our customer's success isechoed as Value for our stakeholders i.e. shareholders, employees and the communities in which we

operate

3.2 ABB India History

General:


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The Company was incorporated on 24th December 1949 as Hindustan Electric Company Limited. In

1965, the Companys name was changed to Hindustan Brown Boveri Limited (HBB). Pursuant to the

Scheme of Amalgamation of Asea Limited with HBB with effect from 1st January 1989, the name was

further changed to Asea Brown Boveri Limited

(ABB) with effect from 13th October 1989.

Flakt India Limited was amalgamated with ABB with effect from 5th October 1995. During 1994-95, a

joint venture Company - ABB Daimler-Benz Transportation AG (Adtranz) was established by ABB

Zurich and Daimler-Benz AG, Germany, in Germany. A subsidiary of Adtranz was incorporated in

India viz. ABB Daimler-Benz Transportation Limited which took over the Transportation Business of

the Company effective 1st January 1996.

ABBs power generation business was globally transferred into the new 50-50 JV with Alstom in

1999. In India the power generation business has been demerged and transferred to ABB Alstom

Power India Ltd. with effect from 1st April 1999. In consideration of the transfer of the power

business, each shareholder of ABB has been allotted one share in ABB Alstom Power India Ltd. for

every share held in the company.

Capital:

The Authorized Share Capital of the Company is Rs.500,000,000 and the paid-up share capital of the

Company as at the end of the financial year ended 31st December 1999 is Rs.414, 183,560, consisting

of 41,418,356 Equity Shares of the face value of Rs.10 each.

Shareholding Pattern:

Asea Brown Boveri Limited, India, is a partly owned subsidiary of ABB Asea Brown Boveri

Limited, Zurich, Switzerland (ABBZH). ABBZH and Flkt AB, Sweden, a 100 percent subsidiary of


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ABBZH, hold 50.99% of Equity Shares in the Company. The balance stake is held by: FIs 22.14%,

FIIs 3.63%, MFs 2.32, Non-resident Individual

0.08%, Nationalised Banks 0.15%, Bodies Corporate 0.93%,Directors and their relatives

0.01%, NSDL (Transit) 1.95% and General Public 17.8%.

Businesses of ABB:

ABB is a global leader in power and automation technologies that enable utility and industry

customers to improve their performance while lowering environmental impact. The ABB Group of

companies operates in around 100 countries and employs about108,000 people.

Power Products

Power Products are the key components to transmit and distribute electricity. The division incorporates

ABB's manufacturing network for transformers, switchgear, circuit breakers, cables and associated

equipment. It also offers all the services needed to ensure products' performance and extend their

lifespan. The division is subdivided into three business units.

Power Systems

Power Systems offers turnkey systems and services for power transmission and distribution grids, and

for power plants. Substations and substation automation systems are key areas. Additional highlights

include flexible alternating current transmission systems (FACTS), high-voltage direct current

(HVDC) systems and network management systems. In power generation, Power Systems offers the

instrumentation, control and electrification of power plants. The division is subdivided into four

business units.

Automation Products

This ABB business serves customers with energy efficient and reliable products to improve customers'


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productivity, including drives, motors and generators, low voltage products, instrumentation and

analytical, and power electronics. More than one million products are shipped daily to end customers

and channel partners, spanning a wide range of industry and utility operations, plus commercial and

residential buildings

Process Automation

The main focus of this ABB business is to provide customers with integrated solutions for control,

plant optimization, and industry-specific application knowledge. The industries served include oil

and gas, power, chemicals and pharmaceuticals, pulp and paper, metals and minerals, marine and

turbo charging. Key customer benefits include improved asset productivity and energy saving

Robotics

ABB has the world's largest installed base of industrial robots -- also providing robot software,

peripheral equipment and modular manufacturing cells for tasks such as assembly, painting and

finishing, and machine tending. Key markets include automotive, foundry, packaging, material

handling and consumer industries. A strong solution focus leverages thousands of successful

applications for manufacturers worldwide.

In addition to ABB's automation activities directed at the oil and gas industries, ABB Lummus

Global continues to design and supply production facilities, refineries and petrochemical plants.

Performance Management at ABB

The performance appraisal system in ABB follows 3 steps. They are as follows:

1. Goal-Setting

2. Mid-Year Performance Review


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3. Annual Performance Review

As an effective organization, work is planned in advance. This includes setting performance

expectations and goals for individuals in order to channel efforts toward achieving organizational

objectives. Involving employees in the planning process is essential to their understanding of the

goals of the organization, what needs to be done, why it needs to be done, and expectations for

accomplishing goals

In the middle of the year, ideally in July, a performance review is conducted wherein the progress on

the goals set is discussed by the employees with their managers and the necessary plans of action are

discussed thereupon.

In the month of March, an annual performance review is conducted wherein the actual performance

is compared with the standards set and the employees performance is evaluated by giving certain

weightages/ratings. Based on this review a hike in salary is decided.

(Please refer to the diagram below for the review cycle being followed)


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3.2.1 Perform Review Cycle

Goal-Setting Mid year

(March) Review (july)

Annual Performance Review

(March following year)


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Analysis & Discussion

Table 1: Table showing the responses of employees whether the Goal-

Setting was done within30 days of joining

Goal-setting done within 30 days Employees Percentage

Yes 30 94%

No 2 6%

Total 32 100

Interpretation: The above table indicates that 94% of the employees goal-setting was

done within 30 days of joining and 6% of the employees goal-setting was not done

within 30 days of joining. This is applicable only to those employees who have joined in

the year 2011.


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Graph 1: Graph showing the distribution of employees whose goal- setting was

done within 30 days

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% of Employees 94% 6%

Yes No


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Table 2: Table showing the responses of employees as to whether their mid

year reviews been conducted

Mid year

Review

% of Employees No. of Employees

Yes 98 180

No 1 2

NA 1 1

Total 100 183

Analysis: The above table indicates that 98% of the employees mid-year review has been conducted

and 1% of the employees mid year review has not been conducted .it is not applicable to 1 employee.

Interpretation: It is not applicable to one employee who joined in the middle of the year.

Graph 2: Graph showing the distribution of employees whose mid-year review has

beenconducted

0

10

20

30

40

50

60

70

80

90

100

% of Employees 98 1 1

Yes No NA


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Table 3: Table showing the responses of employees as to whether their

annual performance review was conducted

Annual review % of Employees No. of Employees

Yes 99% 181

No 1% 2

Analyisi: From the above table, it is clear that 99% of the employees annual review

was conducted and only 1% of the employees annual review did not happen.

Interpretation: Annual review did not happen to that employee who was onsite.


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Graph 3: Graph showing the distribution of employees whose annual performance

review has been conducted

0%

10%20%

30%

40%

50%

60%

70%

80%

90%

100%


Yes No


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Table 4: Table showing the responses of employees as to opportunity to

bring out issues during the review session

Particulars % of Employees No. of Employees

Strongly agree 13 23

Agree 66 122

Neutral 13 24

Disagree 7 12

Strongly disagree 1 2

Total 100 183

Analysis: The above table shows that 66% of employees agree that they had an

opportunity to bring out their issues during their review session, while there are13% of

the employees who strongly agree and are neutral about the same. 7% of the employees

disagree and 1% of the employees strongly disagree that they got an opportunity to bring

out issues during the feedback session.

Interpretation: The reasons given by employees who said that they did not get an

opportunity to bring out issues during the feedback are as follows:

Time constraint

They felt it was more of a one-sided feedback as the hike in pay was decided prior to the

discussion and the employees opinion was not sought

.

Graph 4: Graph showing the distribution of opinion of employees as to

whether they had an opportunity to bring out iss


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0%

10%

20%

30%

40%

50%

60%

70%

% of Employees 13% 66% 13% 7% 1%

Strongly agree Agree Neutral DisagreeStrongly

disagree


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Table 5: Table showing the responses of employees whether their manager

was receptive during the review session

Analysis: The above table shows that 64% employees agree that their manager was receptive during

the review meeting. 17% employees are neutral about the same, while

14% of employees strongly agree. 4% and 1% of the employees disagree and strongly disagree

respectively.

Interpretation: Employees who have disagreed that their manager was receptive during the

feedback session felt that their manager had a fixed mindset and was not open for an open discussion.



Agree 64 118

Neutral 17 31

Disagree 4 7


Total 100 183


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Graph 5: Graph showing the responses of employees whether their manager was

receptive during the review session

0%

10%

20%

30%

40%

50%

60%

70%

% of Employees 14% 64% 17% 4% 1%


disagree


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Graph 6: Graph showing the responses of employees as to whether all their issues

were addressed or planned to be addressed

Table 6: Table showing the responses of employees as to whether all

their issues were addressed or planned to be addressed


Strongly agree 4 7

Agree 57 104

Neutral 28 51

Disagree 9 16


Total 100 183

Analysis: From the above table it is clear that 57% of the employees agree that all theirissues were addressed or are planned to be addressed, whereas, 28% and 4% of the

employees are neutral and agree about the same. 9 % of the employees disagree to it and

3% of the employees strongly disagree.

Interpretation: Most of the employees feel that it will take time to address certain

issues. Those employees who strongly disagreed that their issues were not addressed

fell that there is no proper mechanism to address these issues.


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Table 7: Table showing the responses as to whether the discussion helped in

improving the performance



Agree 52 95

Neutral 25 46

Disagree 11 21


Total 100 183

Analysis: The above table indicates that 52% of the employees agree that the discussion

helped in improving their performance, whereas, 25% of the employees are neutral about the

same. 10% of the employees strongly agree to it, 11% and 1% of the employees disagree andstrongly disagree to it.

Interpretation: The reasons given by employees to disagree that discussions helped in

improving their performance are as follows:

They felt the discussion was too formal and it was for a very short duration.

Though weaknesses are revealed, steps to overcome the same are not told by

the managers.

The discussion is restricted to the template. There are also problems outside the

work area which may affect the performance of an employee which are neglected.

Graph 7: Graph showing the responses as to whether the discussion helped in


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improving the performance

0%

10%

20%

30%

40%

50%

60%

% of Employees 10% 52% 25% 11% 1%


disagree


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Table 8: Table showing the responses of employees whether their

relationship with their manager improved after the discussion


Strongly agree 8 15

Agree 39 71

Neutral 47 87

Disagree 5 9


Total 100 183

Interpretation: The above table shows that 47% of employees are neutral about their

relationship with the manager improved after the discussion. 39% of the employees agree to the

same whereas 8% of the employees strongly agree to it 5% and 1% of the employees

disagree and strongly disagree to the same.

Inference: Most of the employees were of the opinion that their relationship with their

manager has always been the same

Graph 8: Graph showing the responses of employees whether their


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relationship with their manager improved after the discussion

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

% of Employees 8% 39% 47% 5% 1%


disagree


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Table 9: Table showing the responses of employees to the extent of role clarity

after the discussion


Very High 8 14

High 5 91

Neutral 28 51

Low 13 24

Very low 1 2

Nil (was not discussed) 1 1

Total 100 183

Analysis: The above table that 50% of the employees rate high on the extent of role clarity,

followed by 28% of the employees who are neutral about the same.

13% of the employees rate low on the extent of role clarity and 1% of the employee rates as very low.

1% of the employee says nil as it was not discussed at all during the review meeting.

Interpretation: Employees who rated very low and low to the extent of role clarity were of the

following opinion: Technical competency and experience not in par with the role.

No clarity of role on the part of he manager.

Some employees have started on with a new project and they are not clear on the same.

Graph 9: Graph showing the responses of employees to the extent of role clarity


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after the discussion

Table 10: Table showing the responses of employees whether there was

progress on the last review discussion

0%

5%

10%15%

20%

25%

30%

35%

40%

45%

50%

Very High High Neutral Low Very low Nil (wasnot

discussed)% of Employees 8% 50% 28% 13% 1% 1%


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Yes 65 119

No 21 39

NA 14 25

Total 100 183

Analysis: The above table indicates that 65% of the employees agree that there was progress

on the last review discussion. 21% of the employees disagree that there was some progress on

the last review discussion. It is not applicable (NA) to 14% of employees who have gone

through their first review discussion (Employees who have joined in the year 2011).

Interpretatione: The employees who feel their issues have not been addressed are of the

opinion that it is beyond the control of the manager and are subject to the limitations of the

organization. It will take some time to address these issues. Most of the issues are related to

role clarity and change of role.


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Graph 10: Graph showing the responses of employees whether there

was progress on the last review discussion

0%

10%

20%

30%

40%

50%

60%

70%

% of Employees 65% 21% 14%

Yes No NA


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Graph 11: Graph showing the responses of employees whether they worked under

two managers during the appraisal period

Table 11: Table showing the responses of employees whether

the worked under two managers during the ppraisal period

Particulars % of Employees No of

employees

Yes 28 51

No 72 132

Total 100 183

Analysis: From the above table it is clear that 72% employees did not work under

two managers during their appraisal period and 28% of the employees workedunder two managers during their appraisal period.

Interpretation: Depending on the projects some employees are supposed to work

under two managers. The two managers give their combined rating for the

appraisal.


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0%

10%

20%

30%

40%

50%

60%

70%

80%


Yes No


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Graph 12: Graph showing the responses of employees who worked under

two managers as to whether it affected their appraisal rating

Table 12: Table showing the responses of employees who worked

under two managers as to whether it affected their

appraisal rating


It did not affect 61 31

Positively affected 8 4

Negatively Affected 25 13

No comments 6 3

Total 100 183

Analysis: From among the 51 employees (i.e., 28% of employees), who worked

under two managers, 61% of them feel that it did not affect their appraisal rating

in any ways, whereas, 25% of the employees feel it has negatively affected their

rating, 8% of the employees feel it positively affected and 6% employees did not

wish to comment on the same.

Interpretation: 25% of the employees who felt working under two managers

affected their appraisal rating negatively were of the opinion that one among the

two managers gave a low rating in spite of one of the manager giving a higher

rating. There was no proper communication among the two managers.


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0%

10%

20%

30%

40%

50%

60%

70%

% of Employees 61% 8% 25% 6%

It did not affect Positively affectedNegatively

AffectedNo comments


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Table 13: Table showing the responses of employees

whether they perceived fairness in

performance evaluationParticulars % of Employees No. of Employees

Yes 75 138

No 25 45

Total 100 183

Analysis: The above table indicates that 75% of the employees perceived

fairness in the performance evaluation system and 25% of the employees did

not perceive fairness in performance evaluation.

Interpretation: The reasons given by employees as to why they do not

perceive fairness in the performance evaluation are as follows:Managers

feedback can be biased. Customer/ Service orientation missing in the

feedback process. No fixed criteria for evaluating.No transparency. Purely

based on opinion rather than facts.Work done out of the projects such as

conducting interviews etc are not taken while evaluating


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Graph13: Graph showing the responses of employees whether they perceived

fairness in performance evaluation

0%

10%

20%

30%

40%

50%

60%

70%

80%


Yes No


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Table14: Table showing the responses of employees as to the level of satifaction with Performance

Evaluation system


Highly satisfied 3 6

Satisfied 42 77

Neutral 36 65

Dissatisfied 14 26

Highly dissatisfied 5 9


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Total 100 183

Analysis: From the above table it is clear that 42% of the employees are satisfied with the

Performance appraisal system, 36% of the employees are neutral about it. 14% of the employees are

dissatisfied with the system, 3% and 5% of the employees are highly satisfied and highly

dissatisfied respectively.

Interpretation: The employees who are dissatisfied with the system are of the opinion that there

are no fixed standards across the organization to evaluate an employee. It varies depending on the

project. There is no transparency in the evaluation process

Graph 14: Graph showing the responses of employees as to the level of

satisfactionwith respect to the Performance Evaluation system

FINDINGS:0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

% of Employees 3% 42% 36% 14% 5%

Highly

satisfiedSatisfied Neutral Dissat isfied

Highly

dissatisfied


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5.1 FINDINGS

1. The goal-setting process was done for 94% of employees and it was not done for6%

of employees.

2. The mid review was conducted for 98% of the employees and it was not

conducted for one employee as the person was on a long leave.

3. The annual performance review was conducted for 99% of employees and it did

not happen for one employee who was onsite.

4. Nearly 66% of the employees agree that they had an opportunity to bring out their

issues during the feedback process and 7% of the employees disagree for the same as they

feel there was no enough time to discuss during the review session.

5. The employees who felt that their manager was not receptive during the feedback


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session were of the opinion that their manager had a fixed mindset during the review

session and were not open for discussions

6. The employees felt that there is no proper mechanism to address the issues and

some were of the opinion that it will tae time to address certain issues which were beyond

the control of the manager.

7. The employees feel though the areas of improvement are revealed in the review

process, no steps to overcome the weaknesses and improve the performance are

suggested by the manager.

8. The discussions are too formal and the employees problems outside the work

area are not taken into account which may Most of the employees feel that theirrelationship with their manager has always been the same.

9. 50% of the employees are high on their role clarity and the rest feel that it was

never discussed during the review process and they needed a role change

10. Employees whose appraisal rating affected negatively because they worked under

two managers feel that there was no proper communication between the two managers.

11. 25% of the employees who perceived that the performance appraisal system as

unfair believed that the there was no fixed criteria across the organization and it lacked

transparency. This also reflected on the satisfaction level of employees on the Performance

Appraisal system in the organization.

12.The entire review process was based on opinion of the manager rather than facts.


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5.2 Recommendations

1. A full-fledged satisfaction survey must be conducted once in 6 months for the staff

cadre, the name of the person must be kept anonymous, only the department must be

revealed. This will unearth lot of expectations of employees

2. Rotation must be made a part and parcel of the system. Job rotation should also be

done at lower levels in the organization depending on a persons interest and

capabilities.

3. Providing more challenging jobs than using money or material rewards as a motivate

or could help the company. This is the basic nutrient of career management.

4. As seen from our research findings, 'Affiliation' seems to be very unimportant to

many employees. The company can take steps to develop closeness between

employees and between the employees and the company. This can be achieved

through 'Employee Engagement Program

5. Opportunities must be given to employees who opt for higher studies. They can get a

hike in salary, job rotation, more span of control or even promotion. This will helpthe company in the long run as more and more of their employees will come under

the educated workforce.

6. ABB currently follows a feedback procedure which is a one-way feedback

process wherein the manager gives his feedback to the employees about their

performance. During the post-review feedback survey, it was revealed that most of

the employees feel that the managers opinion can be biased and it is not supported

by facts but purely based on the opinion of the manager. This has a great

repercussion on the motivation level of the employees which in turn will affect the

performance of the employees.

7. Keeping in view the above factors, 360-degree feedback process can be

implemented. Since ABB is a flat organization (non-hierarchical), the most suitable

form of feedback system would be the 360-degree feedback.

.


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5.2.1 Stakeholders in a 360-degree feedback

Superior

Peers Team

Members

Feedbackon

the

employees

from:

Self Customers

Staff

5.2.2 The Feedback Loop


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I.Observation

II.Briefing

VIII. Changedbehaviour

VIIAction plan

III.Questionnaie

completion

IV. Report

Processing

VIReflection

V.

Feedback


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The feedback loop shows the stages in the 360-degree feedback process. Looking at the loop, a 360-

degree feedback process formalizes a natural process of observation (Stage I). People observe each

other all the time, often unconsciously and unsystematically. They gain impressions about the

behavior. These perceptions are formed continuously in anyrelationship

The formalization comes from selecting and briefing respondents (Stage 2) to think about the

participants behavior in a conscious and structured way, usually by completing a Questionnaire

(Stage 3).

The data is collected and then processed into a formal report (Stage 4) containing respondents

perceptions expressed in numerical, graphical or written form, which is then presented to the participant

as feedback (Stage 5).

The minimum time required for these first five stages is two months. Reflection can involve a

number of actions on the part of the participant: trying to understand and accept the data by means of

self-analysis, discussion with a facilitator, coaching by others including the superior, sharing

feedback with others and getting clarification on points which were unclear.

Only when this has been done can the participant convert his or her thoughts into meaningful

and practical action plan (Stage 7) which will result in behavior change (Stage 8). More time is

needed for the behavior change to occur and be noticed (forward to Stage I again).

The whole process, from initial idea to the observation of a permanent improvement in performance,can take up to a year, and if any one stage is neglected then the results can

be disappointing.


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5.3 Conclusion

Managing employee performance is an integral part of the work that all managers and rating officials

perform throughout the year. It is as important as managing financial resources and program

outcomes because employee performance or the lack thereof, has a profound effect on both the

financial and overall objectives of any organization.

Research studies show that employees are likely to feel more satisfied with their appraisal

result if they have the chance to talk freely and discuss their performance. It is also more likely that

such employees will be better able to meet future performance goals.

Employees are also more likely to feel that the appraisal process is fair if they are given a chance to

talk about their performance. This is especially true when they are permitted to challenge and appeal

against their evaluation.

It is very important that employees recognize that negative appraisal feedback is provided with a

constructive intention, i.e., to help them overcome present difficulties and to improve their future

performance. Employees will be less anxious about criticism, and more likely to find it useful, when

they believe that the appraiser's intentions are helpful and constructive.

In contrast, "destructive criticism" - which is vague, ill-informed, unfair or harshly presented -

will lead to problems such as anger, resentment, tension and workplace conflict, as well as

increased resistance to improvement, denial of problems, and poorer performance.

Goal-setting is an important element in employee motivation. Goals can stimulate employeeeffort, focus attention, increase persistence, and encourage employees to find new and better ways to

work.


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The useful of goals as a stimulus to human motivation is one of the best supported theories in

management. It is also quite clear that goals which are specific, difficult and accepted by employees

will lead to higher levels of performance than easy, vague goals (such as do your best) or no goals at

all.

It is important that the appraiser (usually the employee's manager) be well-informed and credible.

Appraisers should feel comfortable with the techniques of appraisal, and should be knowledgeable

about the employee's job and performance.

When these conditions exist, employees are more likely to view the appraisal process as accurate and

fair. They also express more acceptance of the managers feedback and a greater willingness to

change.

APPENDIX Questionnaire

Sir/ Madam,


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Please answer all the questions. There is no right or wrong answers. I assure you that the

information collected will be used research purposes only.

Questionn a ire No.

Goal-Setting and Performance Review at INCRC

1. Joining date at ABB:

2. Was the goal-setting done within 30 days of joining?

Yes No

3. Which month did the goal-setting take place last?

4. Was a mid-year performance review conducted?

Yes No

If yes, which month did the review take place?

5. Was an Annual performance review conducted?

Yes No

If yes, when did the review happen?

Performance Feedback

6. I had the opportunity to bring out issues to bring out all my issues during the last feedback

Strongly Disagree


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Disagree

Neutral

Agree

Strongly Agree

Comments

7. My manager was receptive during the feedback session

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Comments

8. All issues were addressed or planned to be addressed

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Comments

9. The discussion really helped in improving my performance

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree


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Comments

10. My relationship with my manager improved after the discussion

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Comments

11. The extent of role clarity at the end of the review was

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Comments

12. There was progress on the last review discussion

Yes No

Comments

13. During the last appraisal period, I worked under two managers

Yes No

If yes, did it affect the appraisal rating?


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14. Do you perceive fairness in performance evaluation?

Yes No

15. How would you rate your level of satisfaction for the Performance Appraisal

System?

Highly Satisfied

Satisfied

NeutralDissatisfied

Highly Dissatisfied

16. Suggestions that will make the Performance Management System more creative, satisfactory and

mutually beneficial:

Please fill in your personal details:

a) Age:

20-30

31-40

41-50

Above 50


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b) Sex

Male

Female

c) Department

d) Role

THANK YOU

B IB L IOGRAPHY

Books:

Performance Management System------Michael Armstrong

Human Resource Management---------- J R Gordon, Boston: Allyn &

Bacon

Publications 2002

JOURNALS:

Business Line


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Websites:

360-Degree Feedback-----------------------Peter Wardwww.citehr.com

www.hrvi llage.com

www.abb.com
http://www.hrvillage.com/http://www.hrvillage.com/

Abb-final Project 20.05

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