Appendix – I

A

Major Project Report

On

“A STUDY ON PERFORMANCE APPRAISAL SYSTEM IN PUBLIC SECTOR”

Submitted for partial fulfillment of requirement for the award of degree

Of

Master of Business Administration

CHHATTISGARH SWAMI VIVEKANAND TECHNICAL UNIVERSTYBHILAI (C.G.)

Session 2010-2012

Supervision By Submitted by

Miss Swati Shukla Nazeesh AliLecture (G.D.R.C.E.T) Roll No.: 5423610015MBA department EnrollmentNo.:AG8065

MBA IV Semester

DEPARTMENT OF MANAGEMENT

G.D.RUNGTA COLLEGE OF ENGINEERING &TECHNOLOGY approved by AICTE,New Delhi Kohka Kurud Road, Bhilai 490024 (C.G.)

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Appendix – II

DECLARATION

I am undersigned solemnly declare that the report of the project work entitled “A

STUDY ON PERFORMANCE APPRAISAL SYSTEM IN PUBLIC SECTOR”, is

based my own work carried out during the course of my study under the supervision of Miss

Swati Shukla.

I assert that the statements made and conclusions drawn are an outcome of the project

work. I further declare that to the best of my knowledge and belief that the project report

does not contain any part of any work which has been submitted for the award of any other

degree/diploma/certificate in this University or any other University.

(Signature of the Candidate) Nazeesh Ali

Roll No.:5423610015 Enrollment No.:AG8065

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Appendix – III

CERTIFICATE BY GUIDE

This to certify that the report of the project submitted is the outcome of the project work entitled

“A STUDY ON PERFORMANCE APPRAISAL SYSTEM IN PUBLIC SECTOR” carried

out by Monali Vaidya, Roll No.:5423610015 & Enrollment No.: AG8065 carried by under my

guidance and supervision for the award of Degree in Master of Business Administration of

Chhattisgarh Swami Vivekanand Technical University, Bhilai (C.G), India.

To the best of the my knowledge the report

i) Embodies the work of the candidate him/herself,

ii) Has duly been completed,

iii) Fulfils the requirement of the ordinance relating to the MBA degree of the University

and

iv) Is up to the desired standard for the purpose of which is submitted.

(Signature of the Guide)Miss Swati Shukla

Lecture (G.D.R.C.T)MBA department

The project work as mentioned above is hereby being recommended and forwarded for examination and evaluation.

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Appendix –IV

CERTIFICATE BY THE EXAMINERS

This is to certify that the project entitled

“A STUDY ON PERFORMANCE APPRAISAL SYSTEM IN PUBLIC SECTOR”

Submitted by

Nazeesh Ali Roll No.: 5423610015 Enrollments No.: AG8065

Has been examined by the undersigned as apart of the examination for the award of Master of

Business Administration degree of Chhattisgarh Swami Vivekanand Technical University, Bhilai

(C.G.).

Name & Signature of Name & Signature of Internal Examiner External ExaminerDate: Date:

Forwarded byAcademic Head

Department of Management

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Appendix – V

ACKNOWLEDGEMENT

In order to complete any project successfully, functional environment & proper

guidance of the expert on the subject is inevitable. It is often the result of valuable contribution of a

number of individual in direct and indirect manner that helps in shaping and achieving the objective.

I take the opportunity to extend my sincere thanks to my guide respect Miss Swati Shukla.

Member MBA department.

I believe that this endeavor of support has greatly boosted my morale and will help in

a long way to reach. Further mile stone and greater height.

(Signature of the student)

Nazeesh Ali

Roll No.: 5423610015

MBA IV th Semester

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Title page i

Declaration ii

Certificate by guided iii

Certificate by the examiner iv

Acknowledgement v

TABLE OF CONTENTS

Chapter No. Topic Name Page No.1. Declaration

2. Certificate by examiner

3. Certificate by the guide

4. acknowledgement

Chapter 1 Introduction1.1 introduction of topic1.2 objectives of the study

Chapter 2 Literature review

Chapter 3 Problem identification

Chapter 4 Research methodology

Chapter 5 Data analysis & interpretation

Chapter 6 Result &discussion

Chapter 7 Findings& conclusion

Chapter 8 Annexure

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CHAPTER –IINTRODUCTION

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1.1 INTRODUCTION OF PERFORMANCE APPRAISAL

performance appraisal is a method of evaluating the behavior of employees in a work place, normally including both the quantitative & qualitative aspects of job performance, performance here refers to the degree of accomplishment of the tasks that make up individual’s job. Performance is measured in terms of results. thus, performance appraisal is the process of assessing the performance or progress of an employee, or a group of employees on the given job, as well as his potential for future development .Thus ,performance appraisal comprises all formal procedures used in organizations to evaluate contributions, personality & potential of individual employees . in other words performance appraisal includes the comparison of performance scales of different individuals holding similar areas of work responsibilities & relate to determination of worth of the scale for the achievement of organizational objective.

The Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed into business planning. Formal performance appraisals are generally conducted annually for all staff in the organization. Each staff member is appraised by their line manager. (Directors are appraised by the CEO, who is appraised by the chairman or company owners, depending on the size and structure of the organization). Annual performance appraisals enable management and monitoring of standards, agreeing expectations and objectives, and delegation of responsibilities and tasks. Staff performance appraisals also establish individual training needs and enable organizational training needs analysis and planning. Performance appraisals data feeds into organizational annual pay and grading reviews, and coincides with the business planning for the next trading year. Performance appraisals generally review each individual’s performance against objectives and standards for the trading year, agreed at the previous appraisal meeting. Performance appraisals are also essential for career and succession planning. Performance appraisals are important for staff motivation, attitude and behavior development, communicating organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual’s performance, and a plan for future development. In short, performance and job appraisals are vital for managing the performance of people and organizations.

DEFINITION “Performance appraisal is the systematic, periodic & an impartial rating of an employee’s excellence in matters pertaining to his present job & his potential for a better job.

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APPROACHS OF PERFORMANCE APPRAISAL_____________________________________________________________

TRADITIONAL APPROAH MODERN APPROACH Straight ranking method Assessment centre Paired comparison technique Appraisal by results or(m.b.o) Man to man comparison method Human asset accounting method Grading Behavioral anchored rating Graphic rating scale Forced choice description method Forced description method Check list method Free essay method Critical incidents method Group appraisal method Field review method

TRADITIONAL METHOD

STRAIGHT RANKING METHOD This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation. 

PAIRED COMPARISON A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. 

CRITICAL INCIDENTS METHODSIn this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur.

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FIELD REVIEWIn this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors’ personal bias.

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

 GRAPHIC RATING SCALEIn this method, an employee’s quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.

FORCED DISTRIBUTIONTo eliminate the element of bias from the rater’s ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.

MODERN METHOD

Assessment centre method: This method was used for the first time in 1930 by the

German army and then in 1960’s by the British army. This method tests a candidate in

different social situations using a number of assessor and procedures. The performance of

an employee an also his potential for a new job is evaluated in this method by assessing his

performance on job related simulations. Characteristics that the concerned managers feel

are important for the success of a particular job are included in these simulations.

Techniques like business games role playing and in basket exercises are used in this

method. The employees are evaluated individually as well as collectively on job related

characteristics. Personal interview and projective tests help in assessing the motivation,

career orientation and dependence on others of an employee. To measure the intellectual

capacity written tests are used. The evaluators in this method consist of experienced

manager working at different levels who prepare a summary report for the management as

well as for the employees. This technique usually measures the planning ability

interpersonal skills and organizational skills of an employee.

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Human Resource Accounting Method: Human resources are a valuable asset for any

organization and it can be valued in monetary terms. This method evaluates the

performance of an employee in terms of costs and contributions. HR costs include

expenses incurred on HR planning recruitment selection induction and training. The

difference between this costs and the contribution by an employee reflects the performance

of that employee. This method is still developing hence is not very popular at present.

Behaviorally anchored rating scale (BARS): This method combines the graphic rating

scale and the critical incident method. It determines in advance the critical areas of the

performance and the most effective behavior to achieve the results. Then the actual job

behavior of an employee is evaluated against the predetermined behavior.

Appraisal through management by objectives (MBO): This concept was introduced by

Peter Drucker in 1954 who named it management by objectives and self control. It is an

effective way it is also known as goal setting approach to appraisal .In this process the

supervisor and subordinate members jointly identify the common goals of the organization

and set the areas of the responsibility of each individual in terms of results expected from

that person. These measures are use for operating the unit as well as for appraising the

performance of the employees.

The 360 degree appraisal: The 360 degree method of performance appraisal is used to

make the appraisal process more transparent, objective and participative. It introduced the

concepts of self appraisal subordinates appraisal, peer appraisal and appraisal by

customers. It is called a 360 degree method because it involves the evaluation of an

employee by persons above him, below him and alongside him. Structured questionnaires

are used to collect information from the seniors, subordinates and peers. The employee to

be evaluated thus acquires a central position and everyone around him participates in the

appraisal process in the 360 degree method. The following four are the main components

of 360 degree appraisal :

Self appraisal: It allows an employee complete freedom in accessing his or her strengths

objectively and identifying the areas of development. The employees get a chance to share

the development areas with their seniors based on their self appraisal and jointly worked

out a plan in tune with the organizational realities like the availability of resources and

time. It also gives a chance to the employee to express his career plans which is in the

interest of the organization as it knows beforehand the aspirations of its employee.

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Appraisal by superiors: An appraisal by superiors involves providing constructive,

feedback about the performance of any employee as well as his development areas during

the review period. It helps in setting goals for the employees that help in achieve the

organizational goals and improve the performance of the employee. The career aspirations

of an employee are also put in proper prospective.

Appraisal by subordinates: This is a unique feature of the 360 degree method of

appraisal. As the subordinates play an important role in the performance of the employee.

The feedback by the subordinates gives firsthand account of how they look at their

superior in terms of working style. The capability of a superior in motivating, delegating

the work, building a team and communicating with them effectively form the basis of

appraisal by the subordinates.

Peer appraisal: It also plays an important role in 360 degree appraisal as the role of peers

is quite important in life of an employee. Selecting the right peers is very important and

peers from the departments that are directly related with the department of the employee

should also be included. It mainly focuses on feedback about the style of functioning of the

employee under review and can also include his ability to work as team leader besides his

co-operation and collaboration.

Potential appraisal: It is different from performance appraisal as it refers to the abilities

of the employees that are not being used at the time of appraisal. It searches for the latent

abilities of the employee in discharging higher responsibilities in future. The potential of

the employees is judged on the basis of his present performance, personality traits, past

experience and age and qualification. It also looks at the unused skills and knowledge of

an employee. It aims at informing the employee their future prospectus and helps the

organization in drawing your suitable successions plan. It also requires updating the

training efforts regularly and advised the employees on things which they can do to

improve their career prospectus.

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1.2 OBJECTIVE

1. To evaluate the performance of employees.

2. Its help to identify the strength & weakness of employees.

3. Its provide feedback to employees regarding their performance.

4. Its help to identify the necessary training & development programmes.

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CHAPTER –II LITERATURE REVIEW

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2.1 LETRATURE REVIEW

The objectives of the Improving Public Sector Performance Project for Honduras are to

strengthen the management of public finances and to establish a more efficient, effective and

transparent public procurement system through: (i) upgrading the public financial management

system; (ii) upgrading the e-procurement platform; (iii) enhancing the internal control systems

over personnel expenditures; and (iv) building capacity of the central administration. There are

five components to the project. The first component is strengthening and consolidating financial

management systems. The objective of this component is to upgrade the technological platform

of the financial management system (SIAFI) and to strengthen its conceptual and functional

framework in order to provide a more efficient processing and effective access to financial

management information. The second component is to strengthening the public procurement

system. The objective of this component is to support the government's initiative to create a

regulatory body with specific goals and objectives, thus strengthening overall governance in the

public procurement system and to improve transparency and compliance. The third component is

improving public sector human resource management. This component has the objective to

improve human resource management (HRM) in the public sector through: (i) enhancing

controls over personnel expenditures, and (ii) improving the attraction and retention of qualified

personnel to gradually. The part of the economy concerned with providing

basic government services. The composition of the public sector varies by country, but in most

countries the public sector includes such services as the police, military, public roads,

public transit, primary education and healthcare for the poor. The public sector might provide

services that non-payer cannot be excluded from (such as street lighting), services

which benefit all of society rather than just the individual who uses the service (such as public

education), and services that encourage equal opportunity. Public sector organizations include all

those financed by public money. For example: all the Departments of central government and its

agents, local authorities and regional assemblies, the NHS, police and the emergency services,

schools and universities, publicly funded arts venues and organizations. The sector includes

many organizations that are extremely large and complex. In most areas of the country, for

example, the NHS and the local council are by far the largest employers.

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The last decade or so has seen a growing interest amongst both academics and practitioners in the alleged emergence of a post-Fordist production paradigm. It is depicted as the fulcrum on which the UK’s move towards a knowledge driven economy should turn and is similarly as one of the ways to address theUK’s perennial productivity lag. Any change to the organization of work has wide ranging micro and macro implications. Unsurprisingly, therefore, the purported transformation has stimulated a plethora of research from a variety of academic disciplines ranging from political economy to ethnographic sociology. This review seeks structure to this somewhat variegated discourse. By invoking a multidisciplinary perspective, it attempts to offer a succinct and critical summary of the key theoretical debates surrounding new forms of work organisation.The paper is structured as follows. First, in order to locate and clarify the precise terrain of the phenomenon under review, the conceptualization of the reconfigured production model is explored. As will become clear, this remains an area of some dissent and indeed controversy. The paper will then review the principal theoretical issues surrounding the emergent paradigm. For analytical purposes, these will be subdivided in to three research streams: (a) the potential for the consolidation of the news production regime within liberal market economies; (b) issues relating to organisational performance and; (c) the implications of changing organizational practices vis-à-vis employees. As will become evident, at present research in this area is hampered by both insufficient data and inadequate conceptual tools. In the final section, therefore, in line with the intellectual thrust of the CLMS Learning as Work project, the synergies and complementary between the high performance and learning at work literatures are briefly explored.While the increased demand for executive coaching in the marketplace has opened up, the increasing number of coaches of every type, training, and perspective has also grown (Brotman et al., 1998; Joo, 2005; Kampa-Kokesh, & Anderson, 2001;Wasylyshyn, 2003). It is surprising that with the increased use of executive coaching and the rising number of coaches, there has not been a professional association formed to develop and monitor the standards, requirements, and competency validation solely for executive coaches (Brotman et al., 1998; ICF, 2006;Wasylyshyn, 2003). This need has brought reactions from executives, coaches, and clients who suggest standardized methods. Executives have recognized the significance of executive coaching in their professional performance, both personally and organizationally (Effron et al., 2005;Joo, 2005; Kampa-Kokesh, & Anderson, 2001; Turner, 2006; Wasylyshyn, 2003).During the beginning years of executive coaching, it was seen as an executive crutch to assist non-performers. Today, executive coaching is looked upon as a necessary tool and in some cases reserved only for senior executives (Joo, 2005; Kampa-Kokesh, & Anderson, 2001; Stevens, 2005; Turner, 2006; Wasylyshyn, 2003). One reason for the about face attitude could be the value executive coaching brings as a “time-out" break, from the unyielding demands of the corporate world, for inner-thought, assessment, positive criticism, and a co-development of strategies (Bacon &Spear, 2003; Brotman et al., 1998; Joo, 2005; Kampa-Kokesh & Anderson, 2001;Kilburg, 1996a; Orenstein, 2002; Stevens, 2005; Turner, 2006; Wasylyshyn, 2003).One of the premier uses of executive coaching is to deliver "just-in-time" strategies for increasing one's personal performance and effectiveness by transforming weaknesses into strengths (Bacon & Spear, 2003; Kampa-Kokesh, & Anderson, 2001;Kilburg, 1996a; Orenstein, 2002; Wasylyshyn, 2003). Due to this increase in personal ROI, corporate America is enamored with executive coaching and the benefits it has brought in recent years (Bacon & Spear, 2003).With many corporate incomes decreasing over the past few years, corporations have reevaluated their training and development practices, to include the use of external sources (Joo, 2005; Kampa-

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Kokesh, & Anderson, 2001; Turner, 2006; Wasylyshyn,2003). As a result, executive coaching focuses on ensuring alignment with corporate strategy (Bluckert, 2005b; Brotman et al., 1998; Edwards, 2003; Levinson, 1996; Joo,2005; Orenstein, 2006; Peterson, 1996; Saporito, 1996; Turner, 2006). In this changing corporate setting, executive coaching must be used in a laser-focused manner, rather than a liberally used improvised solution (Orenstein, 2006). Those corporations who have identified the need and usefulness of executive coaching have created an inner coaching environment to facilitate coaching through internal coaches(Turner, 2006).It is in the new corporate coaching culture of companies employing their own coaches(internal) where the chemistry of the coaching relationship takes a back measures in the coaching protocol (Joo, 2005; Kampa-Kokesh & Anderson, 2001; Stevens, 2005; Turner, 2006; Wasylyshyn, 2003). The internal coach, unfortunately, finds him or herself in a dilemma of possibly losing one of his most prized outcomes, which is, assisting clients to become masters of change management (Wasylyshyn, 2003). Another downturn of this "commoditization" of executive coaching is to put a limit on the use of coaching, and to what extent, documenting the benchmarks, stages, and action steps. Doing so, realistically, diminishes the coaching process to a cookie cutter approach including a preset number of sessions and strategies rather than a co-developed strategic plan developed over the course of going relationship. The amount of research regarding the topic “Performance Appraisal” is so vast. The topic is literally not new; it is as old as the formation of the organizations. Before the early 1980’s, majority of theoretical studies emphasized on revamping the rating system within the organization. The actions were a great thing to reduce the chaotic of employee’s performance appraisal (Feldman, 1981). With the passage of the time the methods and rating system among the employees got enhanced and received an immense appreciation and attentions of the managers. Behavioral Observation Scale (BOS) is one of the best techniques utilized by the managers to arte the employees. The dilemma was on the peak in the 1960s and 1970s. In the same period couple of new innovated rating scales were introduced, which was Behaviorally Anchored Rating Scale (BARS) and the Mixed Standard Scale (MSS). The innovations were dominant one which condensed the errors and improved the observation skills from the performance appraisal practice. According to the research of Avery and Murphy (1998), there were hundreds of thousands of researches had been taken place between the periods of 1950 to 1980, which merely focused on the different types of rating scales? Landy and Farr (1980) reviewed and researched the methods of performance appraisal in totally a different manner, in which they understand the rater and process in an organizational context. Other Performance appraisal reports include the rater characteristics in their report like race, gender and likeability. After the year 1980 the biasness among the performance appraisal system occurred outrageously and appraisal had been granted on the favoritism or race and gender basis rather examined the knowledge, skills and style of the work of the employee. The accuracy criteria among the performance appraisal system clutched its grip in the start of the 1980s, where the researches were emphasized on common psychometric biases which include the diversified rating errors like leniency, central tendency and halo, which were termed as rating errors in the appraisal method. It has been observed that the bias free appraisals were inevitably true or more precisely we can say more accurate, but the concept was totally refused by the research of Hulin in 1982.

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According to them the biasfree appraisals were not necessarily accurate (Murphy & Balzer, 1989). Researches which had been done in the year 1980 were found the most dominating one which contributed the appraisal system in a great deal. The researches of the1980 also helped out to clarify some presumed assumptions regarding the performance appraisal, just like the work of Murphy (1982). Research has included the measure of employee attitudes towards the system of performance appraisal and its acceptance (Roberts, 1990). Bernardian and Beatty (1984), suggested in their research that behavioral and attitudinal kinds of measure ultimately prove to be better anticipator as compared with the traditional psychometric variables, which we have declared earlier as well, like leniency, halo and discriminability. A Performance Appraisal system is totally ineffective in practice due to the dearth of approval from the end users (Roberts, 1990).  According to a number of researchers, the enhanced and upgraded performance appraisal procedure and method will enhance the satisfaction level of the employees and definitely will improve the process of goal setting within the organization. 

Performance Appraisal has been considered as the most significant an indispensable tool for an organization, for an organization, for the information it provides is highly useful in making decisions regarding various personnel aspects such as promotion and merit increases. Performance measures also link information gathering and decision making processes which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting, selection, training and compensation. Accurate information plays a vital role in the organization as a whole. They help in finding out the weaknesses in the primary areas .public sector is leading the pack in performance management innovation was confirmed about a year ago, when I signed on as subject-matter expert for the national benchmarking study on best practices in performance appraisal sponsored by the American Productivity and Quality Center, DDI, and Linkage, Inc. My first task was to identify the companies that are doing really innovative stuff in performance management. But many of these companies turned out not to be “companies.” Many of them were government agencies, and two of them — the Air Force Research Laboratory and the Minnesota Department of Transportation — made the final cut as best practice models. Performance management is the handy umbrella term for all of the organizational activities involved in managing people on the job. Performance appraisal, of course, is the one we think of first, and people often use the terms “performance management” and “performance appraisal” interchangeably. But other activities also find room under the performance management umbrella — discipline systems, for example. In addition to creating some novel approaches to assessing and evaluating just how well Charlie and Jane are doing their jobs — performance appraisal, obviously — government agencies at all levels are reacting in entirely new ways when Charlie and Jane drop the ball and create problems on the job. Discipline procedures are another type of performance management system. And what happens when it’s management that drops the ball? Charlie’s upset because he feels he shouldn’t have been assigned to work overtime; Jane’s indignant over what she sees as an undeserved written warning. Grievance procedures too are performance management devices. In each of these areas, government agencies at all levels are developing and installing performance management procedures and systems that can appear revolutionary to anyone who’s locked into old ways of managing people. Historically, performance appraisal has been seen as merely an event—the painful annual exercise where the manager rates the performance of her

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subordinates over the past 12 months. Operating independently all by itself, the performance appraisal system was rarely linked directly to the stated mission of the organization or to any other programs and processes designed to maximize human efforts and intellectual capital. Independence has now been replaced by integration. At the organizations our APQC/DDI/Linkage project team examined, public and private alike, the performance appraisal system is no longer an organizational loose cannon. Items on the performance appraisal are directly tied to the agency’s strategic plan. The system is designed to forge a visible link between organizational and individual goals and to reinforce predetermined core competencies. Moreover, organizational expectations of the performance appraisal system have been upgraded. Where in the past the system may have been used merely to tell old Joe how he was doing and justify his annual step increase, organizations now realize that their performance appraisal system has enormous power to genuinely transform the agency’s culture. One of the major findings of the national benchmarking study was that best-practice organizations are using their performance appraisal process as the primary driver in forcing culture change. What’s the change? It’s the shift from being a best-effort results-driven climate. culture into a truly This drive to focus organization members on results and not tenure has placed a new requirement on performance appraisal’s shoulders: the expectation that performance appraisal must help muscle-build the organization. Government agencies are coming to see that traditional approaches to people development—like promotion from within based almost exclusively on job tenure—are no longer good enough. An agency that uses time in grade as its organizational hardening of the arteries. fundamental criterion for getting ahead is encouraging One of the first organizations to emerge as a genuine model of best practices in the national benchmarking study was the Air Force Research Laboratory in Dayton, Ohio, an organization of 3000 people. Their appraisal system completely designed by their scientists and not by the personnel department, makes the novel assumption that everyone is performing at a competent level. The appraisal system, they argue, needs to focus not on the quality of an individual’s performance but on the degree of the job’s contribution. AFRL deliberately builds jobs big and loads each person with as much responsibility as possible. When a person can’t handle a job, they ratchet the responsibilities down to where he can handle the demands. People migrate to the jobs they can handle. Pay is determined less by the individual’s performance and more by the contribution his or her job makes to the overall mission. Focusing on results clearly indicates whether an employee is doing the job for which he is paid. That’s why AFRL's performance management system evaluates employees' contributions / outputs / results. As a result, AFRL pay raises are based on contributions to the organization’s mission. The system does not appraise performance or behavior, only contribution. All employees have variable pay to motivate their performance toward achieving results that will impact the organization. The new employee has the incentive to contribute at or above the expected level because next year’s pay may be lowered or the employee removed if the contribution does not meet or exceed expectations. More specifically, AFRL's Contribution-based Compensation System (CCS) delineates six key factors: ‰ Technical Problem Solving ‰ Communications/Reporting ‰ Corporate Resources Management ‰ Technology Transition / Transfer (Taking technology out of the laboratory environment and put it to real-world use) ‰ R&D Business Development ‰ Cooperation and Supervision

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Employees certainly recognize the results-driven nature of the system. AFRL’s leaders admit it: Fear of being held accountable for results was apparent in some AFRL employees upon the deployment of the Contribution-based Compensation System. Some employees who didn’t fare well under the new system have left the organization; others have noticeably worked to improve their level of contribution. The majority of employees, however, embraced the system because they recognized the equitable nature of CCS.

REINFORCING CORE COMPETENCIESOver the past several years, one of the significant developments in the technology of performance management has been the identification of specific “core competencies” by organizations. Competencies define for all members of the organization the behaviors, skills, attributes, performance factors and proficiencies that every organization member is expected to possess and display. They are limited in number and critical to organizational success. The performance appraisal system plays several roles here. First, it is the mechanism that helps the organization highlight and communicate the small number of critically important behaviors and skills against which every single employee will be assessed. In addition, creating a new performance appraisal system may help force the organization to define just what attributes or factors are actually at the organization’s core. Finally, the appraisal system can guarantee that these competencies are fully understood and institutionalized. The senior management of the Minnesota Department of Transportation defined its mission, vision and values several years ago in response to a 1996 employee survey. Seven core competencies and a dozen individual characteristics expected of every Mn/DOT employee were also identified as part of that process. Top management realized that determining the core competencies — as difficult as doing that had been — was in fact the easy job. The hard job would be communicating them to every Mn/DOT employee. Even harder would be making sure that they showed up, day in, day out, in everybody’s job performance. That’s where performance appraisal came in. In early 1998 Mn/DOT’s senior management commissioned a performance appraisal implementation team. They put together a group representing a diagonal slice of the organization: managers and professional employees, supervisors, and technicians from different levels and functions and geographical locations throughout the agency. This twenty-member task force was made responsible for creating a performance appraisal system that directly related Mn/DOT’s mission, vision and values to each employee’s job. In addition, top management demanded that the system reinforce the importance of all employees’ demonstrating the core competencies and individual characteristics they had identified

PUBLIC SECTOR ORGANIZATION — TODAY’S INNOVATIVE LEADERS IN PERFORMANCE MANAGEMENTTo begin, “Positive Contacts” are included as a formal element of the system. Making recognition a formal part of the system reminds managers that reinforcing good performance is just as important as confronting poor performance. It also makes employees aware that the organization expects that they will be recognized when they perform well. Most important, it makes recognition of good performance a policy expectation of the organization, not merely an easily ignored piece of prosaic advice dispensed in a management-training program.

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Now consider the other end of the chart. Another major difference between the conventional and positive models is the new approach’s recognition that the discipline process actually involves only three steps, not four. Termination is not the final step of the discipline system, as the traditional progressive-discipline model would have it. More accurately, termination represents the failure of the discipline system. A commonly used metaphor holds that “Discharge is the capital punishment of organizational life.” That metaphor is nonsense. The proper metaphor for discharge is that it is a no-fault divorce. “You’re a good person,” the organization says to the individual when all the steps of disciplinary action have proved fruitless, “and we’re a good employer. But your goals and needs and our goals and needs can’t be reconciled. You need to find a place to work where you can be happy; we need to find someone to fill this job who can meet our expectations. We now must go our separate ways.”

PUBLIC SECTOR ORGANIZATION — TODAY’S INNOVATIVE LEADERS IN PERFORMANCE MANAGEMENT

THE INITIAL STEPS OF FORMAL DISCIPLINARY ACTION:REMINDERS I AND II When informal coaching sessions and performance improvement discussions are unsuccessful in solving a performance or behavior problem, the first level of formal disciplinary action is a REMINDER I. The supervisor discusses the problem, reminds the employee of his responsibility to meet the organization's standards, and gains the employee’s agreement to return to fully acceptable performance. If the problem continues, the supervisor moves to a REMINDER II. Again the supervisor talks to the employee and gains his or her agreement to solve the problem. After the meeting, the supervisor formally documents the discussion in a written memo to the employee. The term Reminder is chosen deliberately. Unlike a warning or reprimand, we are in fact reminding the employee of two things. First, we’re reminding him of the specific gap between his existing performance and the performance we expect. Second, we are reminding him that it is his responsibility to deliver the goods and do the job that he is being paid to do. Using Reminders I and II eliminates another nagging annoyance generated by the traditional system: the issue of “oral” and “written.” If a supervisor gives a subordinate a “Verbal Reprimand” or an “Oral Warning,” is that action documented? Of course. Is the documentation written down? Of course. So doesn’t that turn an “Oral Warning” into a “Written Warning”? Don’t fight that battle. Call it a Reminder I or a Reminder II to indicate simply the level of the step, and describe the documentation procedures separately.

THE FINAL STEP: DECISION MAKING LEAVEWhen the initial steps of formal disciplinary action are unsuccessful in convincing an individual to solve a performance problem, the need for a dramatic, final-step gesture arises. The positive discipline approach now provides an unexpected, authoritative, and counterintuitive final step: the Decision Making Leave. The employee is suspended for one day. He is told to return the on following day with a final decision: either to solve the immediate problem and make a total performance commitment to fully acceptable performance in every area of the job, or to resign and seek more satisfying employment elsewhere.

PUBLIC SECTOR ORGANIZATION — TODAY’S INNOVATIVE LEADERS IN PERFORMANCE MANAGEMENT

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The employee is paid for the day to demonstrate the organization’s good faith desire to see him change and stay. He is also specifically advised that if another problem requiring disciplinary action arises, he will be terminated. The unconventional aspect of a paid disciplinary suspension is the element of the non-punitive approach that immediately attracts the most attention. But the organizations that have adopted the process report significant benefits: IT DEMONSTRATES GOOD FAITH.Most organizations see themselves as decent and enlightened employers; they want everything that they do in their employee relations practices to reflect and confirm this view. Paying the employee for the day allows them to send the message that when we say we want the individual to use the time seriously to think through whether this is the right job for him, we’re serious.

IT TRANSFORMS ANGER INTO GUILT.Test your experience: most employees who receive an unpaid suspension are irate; many return embittered by the experience. But our intent, even with the old system, is not primarily to punish an individual for his transgressions. It is to send a wake-up call, to get him to take responsibility for his own behavior and performance. But docking his pay makes the agency’s words hollow. Paying the employee, on the other hand, routinely eliminates the anger that commonly results from final step disciplinary transactions.

IT’S APPROPRIATE FOR ANY JOBTraditional approaches to discipline are typically seen as appropriate only for employees in operational, direct-labor, blue-collar jobs. But people problems arise throughout the organization. Public sector organizations often reject tradition al approaches to discipline for professional, exempt, managerial employees but find no satisfactory alternative. A decision making leave is an appropriate transaction for any individual whose performance violates organizational norms.

IT MAKES LIFE EASIER FOR SUPERVISORS.Most supervisors hate having to take disciplinary action. Many supervisors themselves havecome up from the ranks and know their subordinates better as peers than as bosses. Using a decision making leave allows supervisors to handle even the most serious disciplinary problems without feeling the need to apologize. PUBLIC SECTOR ORGANIZATION — TODAY’S INNOVATIVE LEADERS IN PERFORMANCE MANAGEMENTIT GETS RID OF MONEY AS AN ISSUE.While the employee is away, we want him to be thinking about the requirements of his job, his own occupational goals, and whether the two can be reconciled. Forcing the employee to worry about how he will make up for the pay he has lost dilutes the chances that the more important issues will be seriously considered.

IT REDUCES HOSTILITY AND THE RISK OF WORKPLACE VIOLENCE.IT REINFORCES YOUR VALUES.Most public sector organizations take pride in being fair employers and want to be seen as highly desirable places to work — an employer of choice. But traditional, punitive discipline systems violate the spirit of the organization’s values. Using a decision making leave and focusing on

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individual responsibility allows the discipline system to be the most visible evidence of the organization’s bone-deep commitment to assuring that its values are practiced, even in the most difficult situations.

PUBLIC SECTOR ORGANIZATION — TODAY’S INNOVATIVE LEADERS IN PERFORMANCE MANAGEMENTSince TDMHMR lead the way, dozens of other public sector organizations have adopted a non punitive procedure for dealing with the everyday problems of failure to maintain regular attendance, poor performance, and unacceptable conduct. Their implementations of the system are always met with the same initial concerns and misconceptions: that somehow, by not making the employee suffer financially, we are somehow rewarding misbehavior. That employees will intentionally misbehave in order to get a free day off. That employees will view the system as a joke or management gimmick. Their concerns have been checked, tested and proven unfounded. One of the greatest advantages of the non-punitive approach, organizations report, is that it shifts the responsibility for performance management from the supervisor to the employee. Instead of reprimanding the employee for his misdeeds, the supervisor now insists that the individual make a choice: change and stay with the organization, or leave and find greener pastures elsewhere. The dignities of both parties are preserved, but the demand that everyone adhere to the organizations standards is reinforced. When Mecklenburg County implemented the

DISCIPLINE WITHOUT PUNISHMENT system a few years ago, the first person to reach the point of a decision making leave was a young man who functioned as the department receptionist. “He was everything you didn’t want in an employee — arrogant, insolent and unconcerned with anyone but himself,” his supervisor explained later. He went through the reminder steps and quickly reached the decision-making leave level. He returned the following day, chagrined. He told his supervisor that while on the decision making leave he realized that all his life he’d really wanted to be a barber. He had called all the barber schools in the county, had found one with a class starting in three weeks, and asked if he could resign voluntarily and work the three weeks until his class started. She instantly agreed. “His performance during those three weeks was excellent,” she reported. “And just before he left he wrote a memo to every county employee he had worked with, telling them he was leaving to go to barber school, and asking that in six months, when they needed a haircut, to look him up!” Not every story has that happy ending. But public sector organizations that adopt the positive approach discover that problems get resolved faster, supervisory stress decreases, and challenges to discipline and discharge action are significantly reduced. PUBLIC SECTOR ORGANIZATION — TODAY’S INNOVATIVE LEADERS IN PERFORMANCE MANAGEMENTTHE STATE OF GEORGIA STUDYIn 1996 the State of Georgia decided to implement the DISCIPLINE WITHOUT PUNISHMENT system in every agency throughout the state. Late in 1998 a major study was completed of the results of DISCIPLINE WITHOUT PUNISHMENT in the first five agencies to implement the approach. In addition to other research, 282 supervisors in these five agencies were surveyed about their experiences with the new system. In his November 13, 1998 letter to

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every state agency executive, Dana Russell, Commissioner of the State Merit System of Personnel Administration, wrote: “A little over a year ago five Georgia State agencies streamlined their ability to handle disciplinary action by installing DISCIPLINE WITHOUT PUNISHMENT as their discipline policy. “Last June, surveys were sent to the personnel officers and supervisors of those five agencies to learn how well the program had served them. A glance at the results reveals that the overwhelming majority of managers and supervisors report very positive results. For example, out of 282 supervisors, 63% report that the Performance Improvement Discussion prevented disciplinary action “every time.” That alone represents a significant savings of time and productivity.

PUBLIC SECTOR ORGANIZATION — TODAY’S INNOVATIVE LEADERS IN PERFORMANCE MANAGEMENTPEER REVIEWOne of DISCIPLINE WITHOUT PUNISHMENT’S great benefits is that it makes you look good to a jury. But even better than looking good to a jury is avoiding facing a jury — or an arbitrator, or administrative law judge, or EEOC hearing officer — at all. Peer Review is a formal management system — an Alternative Dispute Resolution system — for resolving the everyday complaints and disputes that arise in all companies. It is a grievance procedure for an organization's non-union work force that can prevent problems from ever getting to court. Most government agencies that have adopted the approach follow a similar procedure. When an employee can't get a problem solved by talking to his or her boss and following the normal chain of command, he or she can elect to use the Peer Review procedure for a final and binding resolution of the complaint. The employee presents his case to a panel made up of both trained employee volunteers — people just like himself — and managers. He explains the problem and tells the panel what he feels should be done to solve it. Panel members (typically three peers and two managers) ask questions, interview witnesses, research precedents and review policy. When the panel feels sufficiently well informed, each member casts a secret ballot to grant or to deny the employee's grievance. Majority rules. A letter explaining the panel's decision is sent to the employee. All panel members sign; no minority opinions are permitted. Everyone gets back to work. The issue is settled. Organizations that have implemented Peer Review report that it creates a problem solving partnership between employees and managers. It builds employee respect for management and the tough decisions managers are often required to make. It demonstrates management's genuine belief in decision-making at the lowest possible level. Peer Review proves management's conviction that employees are trusted partners in the enterprise. But isn’t giving employees the power to overturn management’s decisions just turning theasylum over to the inmates? No, experienced organizations report. With Peer Review, complaints are heard, investigated and resolved by people who know your organization. Outside arbitrators and mediators, judges and juries don't care about your company. Your employees do. And forget “open door” policies — they just don't do the job. Employees are usually skeptical; courts rarely uphold them. Open door systems can't work well when managers are expected to back each other up.

PUBLIC SECTOR ORGANIZATION — TODAY’S INNOVATIVE LEADERS IN PERFORMANCE MANAGEMENT Any organization implementing a peer review complaint procedure maintains a lot of control over the process. It decides what complaints are appropriate for a panel to hear and which fall outside its jurisdiction. Management decides who’s eligible to

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serve as a panelist, how the pool of potential panelists will be trained, and how individuals will be selected when a case comes up for review. When the City of Carrollton, Texas installed its system several years ago, they provided for the city manager in conjunction with personnel to decide who will be panelists. Panelists can volunteer others, volunteer themselves, and supervisors can recommend. They ended up with more volunteers than they were able to train .They decided to train a total of thirty panelists — six Department/Division Managers, six supervisors, and 18 non-management employees. Kathryn Usrey, Carrollton’s director of personnel, acts as the panel's facilitator. She insures that all documentation and witnesses are available to the panel. While she doesn’t have a vote, she does have the authority to advise the panel about the boundaries of their roles. Besides getting employee complaints resolved, Ms. Usrey reports another benefit — it helps keep supervisors from making illogical decisions. It’s easy to get a supervisor to rethink his position by asking, “How do you think this will play out if he takes it to a jury of his peers?” "The hardest part is selling the system to supervisors,” Usrey said. “They fear that you're turning control of the workplace over to the employees." To counteract that, the City held a series of "massive" employee meetings chaired by the City Manager. Peer Review is efficient and inexpensive. Once an employee becomes an adversary, costs balloon. With Peer Review, salary and travel costs are typically the only expenses. The atmosphere of a panel meeting is businesslike with no complicated rules of evidence, no courtroom trappings, no lawyers. Issues get surfaced, explored and resolved. Finally, your employees can be trusted. Peers don't automatically stick together; there's no “us vs. them” on the panel. Your employees are just as concerned about fairness and justice as you are. Three-to-two splits between peers and managers are rare. But the best part of Peer Review is its ability to keep unions at bay and problems out of court. The only benefit union organizers can still deliver is an impartial grievance system. Peer Review removes the organizer's last tool and can keep a company union-free. .

IN PERFORMANCE MANAGEMENT, PUBLIC SECTOR LEADS THE PACKInnovative performance management systems are no longer found exclusively in private sector organizations. The evidence is clear — America’s cities, state and federal agencies, and other public sector organizations are taking a leading role in creating and implementing novel and highly effective approaches to managing people on the job.

INTEGRATING MISSION, VISION AND VALUES INTO PERFORMANCE APPRAISALThe performance appraisal implementation team created one of the most sophisticated performance management systems of any organization in the country. To begin, they took each of the core competencies — Leadership, Learning and Strategic Systems Thinking, Quality Management, Organizational Knowledge, Technical Knowledge and People Management — and developed a unique twist on conventional appraisal techniques. Instead of defining what each of those terms meant, they instead described the behavior one would likely see exhibited by a true master performer.

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For example, for their core competency of “Organizational Knowledge,” instead of defining what was meant by the phrase, they described how you could spot somebody who knows the organization perfectly

LEARNING AND STRATEGIC SYSTEMS THINKING:Accepts responsibility for continued improvement/learning. Appreciates and can explain the mission of each individual work unit and the importance of the tie between them to make the entire operation whole. Acquires new skills and competencies and can explain how they benefit Mn/DOT. Regularly takes all transportation forms (i.e., bicycle, light rail, highways, etc.) into account in planning and problem solving. Seeks information and ideas from multiple sources. Freely and intentionally shares ideas with others. By describing the performance that one might observe in someone who has mastered this area instead of just providing a dictionary-style definition, the implementation team made the lives of Mn/DOT appraisers much easier. Now, when an employee asks her boss what it is that the agency expects of her in the various competency areas, all the boss has to do is hand her a copy of the appraisal form and say, “Here. Read this. And then just do what it says.”

A BETTER RATING SCHEMEAs clever as their descriptions of mastery performance are, the Mn/DOT team ingeniously solved still another perpetual performance appraisal dilemma when they constructed the rating scale for appraisers to use in evaluating people’s performance in each competency area. Instead of forcing raters to use absolute judgments for their assessment of the individual’s performance,instead they asked how often Sally performed as a master would in each area. In other words, rather than ask appraisers to judge the quality of a subordinate’s performance — was Susie Marginal or Competent or Distinguished; did Joe Fail to Meet Standards, Meet Standards or Exceed Standards — the new Mn/DOT process instead asks the rater to indicate how frequently Susie or Joe performs at a mastery level .The scale values for this part of the Mn/DOT process are Occasionally, Sometimes, Frequently, and Regularly. This approach greatly increases the effectiveness of coaching and lowers the recipient’s defensiveness when bad news has to be delivered. The manager no longer has to confront Mary with his judgment that in the area of quality she is “Unacceptable” or “Below Standard” or a “2.” The manager can now say, “Mary, in the competency area of Quality, occasionally I see you acting the way the form says a master performer would act. What do you need to do so that 12 months from now I can say that I see that kind of performance frequently or regularly?” For those areas that don’t lend themselves to a behavioral frequency rating system, Mn/DOT incorporated two other inventive techniques. First, they recognized that the label for the middle position on the rating scale — the place where most people’s performance usually falls — is typically felt to connote average or mediocre. Nobody wants to be seen as a “—” student; nobody likes that middle rating. Their solution was to abolish language that suggested that performing in a fully acceptable manner was tantamount to mediocrity. Instead the term they came up with for the middle rating was, “Fully Successful: Totally competent performance; Good solid contributor.” Who can complain about being called fully successful, even if two higher categories of “Clearly Superior” and “Truly Distinguished” are available for those who have genuinely earned them? Finally, on the appraisal form itself Mn/DOT specifically indicated the ratings distribution likely to show up in a large organization. Thus the form tells appraisers that typically less than 5% of people fall into the categories of “Truly Distinguished” or “Unsuccessful”; about 15% might be “Somewhat Successful” with

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30% or so demonstrating “Clearly Superior” performance. Finally, the form tells raters and ratees alike to expect about 50% or more to qualify for the middle “Fully Successful” rating.

MAKING THE APPRAISAL PROCESS POSITIVEResearch on performance appraisal, going back to some of the first studies conducted at General Electric and published in 1954, confirm that criticism has little effect on producing lasting behavioral change. Reinforcement of strengths, talents, and positive behaviors however, can generate an increase in their frequency. How do we put a positive spin on performance appraisal, the most scorned and derided of all management processes? The National Security Agency found a simple and unpretentious way to create a positive tone for its new appraisal process that it incorporated into its formal appraisal procedures. At NSA, all raters are told to ask their ratees, a few weeks before the writing of the annual evaluation, to send in a list of all of the contributions and accomplishments the subordinate has made over the past 12-month appraisal period.Only include the positives, supervisors are instructed to tell their subordinates. And keep it informal, too — just send me an email or write it on the back of an envelope and drop it on my desk? So what’s the big deal? First, asking the subordinate to compile a list of successes and send it to the boss before the formal appraisal is written certainly reinforces the organization’s message that it wants the appraisal process to be an affirmative, constructive and positive process. This notion is even more strongly reinforced when the appraiser goes on to explain that he doesn’t want a balanced picture. “If you’ve had any failures over the year,” he’s told to tell his employees, “or a project that didn’t go right, or anything else that doesn’t reflect you at your best, leave it off the list. I only want a list of things that you’re genuinely proud of.” More important, and more subtle, is the other reason for asking for the accomplishments list. Probably nothing is more embarrassing to an appraiser than having an employee finish reading her annual review and moan, “You didn’t even mention the Thompson contract I landed last February!” It’s easy to overlook the triumphs and achievements of others; we rarely disregard our own. By asking appraisers to request an accomplishments list from subordinates, it is helping to assure that the appraiser will not be embarrassed by inadvertently ignoring a success that should be recorded on the annual review. The City of Irving, already a model of innovation for its development of a unique approach to the assessment of competencies, took NSA’s ideas of the accomplishments list one valuable step further. As annual appraisal time approaches, each city employee is asked to fill out a short questionnaire that kicks off the process. The form consists only of four open-ended questions: 1. In appraising your performance, are there any other persons you work with or around with whom your supervisor should speak to get a more complete picture of how you do your work / get results? 2. Of what accomplishments and skills acquired during the last appraisal period are you particularly proud?3. What can be done to make you more effective in your job? 4. What can be done to help you provide better service to your customers?

INCORPORATING TECHNOLOGY INTO PERFORMANCE APPRAISALTechnology can make the performance management process simpler. It is far easier for an appraiser to access an electronic form on her company’s Intranet than to labor with pencil and paper. Sophisticated software can allow senior managers to see both the distribution of performance ratings across the entire organization and view pay inequities instantaneously.

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Course enrollment to meet development needs can be done without forms and phone calls. Most sophisticated organizations today, and all of the best-practice models in the national benchmarking study, are seeking ways of using technology to reduce the administrative burden of performance management, a burden that grows as the performance management system is increasingly linked with compensation, development, and perhaps even an agency’s 360-degree feedback system. Many are also finding innovative ways to use technology for just-in-time (JIT) feedback and training. No organization today is using technology better than the Air Force Research Laboratory — again, an example of a public sector organization leading the pack. AFRL's advantage comes from their highly sophisticated point-and-click software. In addition to allowing supervisors to more efficiently create job descriptions and complete employee assessments, the software helps the organization automate what would otherwise be administratively difficult pay changes while simultaneously ensuring pay equity. Their computer-based, paperless process permits performance management system administrators to ensure equity throughout AFRL by graphing employee positions based on the relationship between pay and performance. Both supervisors and system administrators are provided with instant information. Furthermore, they can manipulate pay variables and instantly see the effect on the overall distribution, thus allowing them to make decisions that are more informed. Their software links ten geographically disbursed sites, walks managers through the complete appraisal process and allows all assessment and pay data to be hierarchically rolled up throughout the organization.

FROM PERFORMANCE APPRAISAL TO PERFORMANCE IMPROVEMENTPerformance appraisal is only one example of the lead public sector organizations are taking in performance management innovation. The purpose of performance appraisal is to identify the quality of an individual’s job performance. What happens when that quality is unacceptable? One of the most innovative performance management procedures public sector organizations are installing is a non-punitive, DISCIPLINE WITHOUT PUNISHMENT approach when informal conversations fail to solve problems of absenteeism, poor performance and shabby attitudes. Organizations as varied as the Charlotte (NC) Housing Authority, Florida’s Pinellas County and North Carolina’s Mecklenburg County, the Congressional Budget Office, the University of Illinois, the City of San Angelo (TX), the Houston Department of Aviation and the entire State of Georgia have rejected traditional adversarial disciplinary responses. In these organizations, reprimands, warnings, demotions, and unpaid disciplinary suspensions are a thing of the past. Instead, they have adopted an approach that requires errant employees to take personal responsibility for their behavior and commit to fully satisfactory performance as a condition of continued employment.

THE TRADITIONAL APPROACH TO DISCIPLINESince the 1930s, public and private organizations alike have settled on a common procedure to handle organizational lapses from grace: “progressive discipline.” This traditional progressive discipline system was developed seventy years ago when unions demanded that companies eliminate summary terminations and develop a progressive system of penalties that would provide a worker with a brand new benefit — protection against losing his job without first being fully aware that his job was at risk. This traditional, progressive-discipline model instructs the supervisor to begin the problem solving process by conducting ill defined “coaching and

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counseling” sessions. When coaching and counseling fail, the supervisor then is told to move into formal disciplinary action, almost always described as a four-step process. An Oral Warning is followed by a Written Warning. If the problem continues, the supervisor then suspends the employee for a period of several days without pay, or writes a final warning notice, or places the employee on probation. If the individual still does not correct his performance, termination follows.

WHAT’S WRONG WITH THIS TRADITIONAL APPROACH? Traditional progressive-discipline is America's criminal justice system brought into the workplace. The basic premise of this traditional discipline system is that crime must be followed by punishment. With its constant quest to “make the punishment fit the crime,” it attempts to provide an awkward mix of retribution and rehabilitation. A growing number of public-sector organizations have found a variety of problems with the traditional approach to discipline that have caused them to examine and revise their practices and approach. 1930s and foisted on unwilling companies and agencies who resisted having a discipline system at all. As a result, our traditional system reflects the adversarial, labor vs. management, us vs. them assumptions that prevailed in those hostile times. In fact, the discipline system that most organizations use today is probably the only remaining vestige of the acrimonious 1930s approach to people-management that still remains in our managerial toolkit.

IT MAKES THE SUPERVISOR THE BAD GUYMost supervisors hate having to take disciplinary action. With its criminal justice mechanism, the system forces the supervisor to become the employee’s adversary. The supervisor feels like he’s the bad guy, the one who’s wearing the black hat.

IT’S NOT A CORRECTIVE PROCESSOrganizations often discover that their supervisors don’t see their discipline procedure as a corrective devise. To them, it’s the procedure they must follow to generate enough paperwork to justify discharge once they’ve decided that an employee’s termination is in order. They view the steps of the discipline system merely as the hoops put up by the personnel department for them to jump through in order to effect a problem employee’s firing. As a result, they don’t even begin the discipline process until they have given up hope of ever correcting the problem.

THE TRADITIONAL DISCIPLINE SYSTEM OFTEN CLASHES WITH THE ORGANIZATION’S VALUESA large number of public sector organizations today have carefully-drafted, formal statements of their vision and values. They have considered carefully what kind of organization they are and what they aspire to be. But these values are often in direct conflict with organizational practices when the time comes for disciplinary action.

THE TRADITIONAL APPROACH SIMPLY ASKS TOO LITTLEThe traditional progressive-discipline approach is certainly unpleasant. It breeds resentment and hostility. But the traditional system is flawed by more than just its exclusive reliance on punishment: it is insufficiently demanding. Punishment — warnings, reprimands, suspensions without pay — seems like a tough way of assuring compliance with organizational standards. If someone fails to meet expectations, we punish that individual until he complies. But compliance

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is all that the traditional system can produce, and public sector organizations today need more than mere compliance. We can punish people into compliance. But we cannot punish people into commitment. And genuine commitment to the organization is the primary impetus driving innovative public sector organizations to seek a more effective approach.

HOW DOES THE POSITIVE DISCIPLINE APPROACH WORK? Like traditional discipline systems, the DISCIPLINE WITHOUT PUNISHMENT approach starts with informal discussions. Like conventional approaches, it then moves to a series of progressive disciplinary steps when these informal conversations fail to produce results. But the differences between positive discipline and conventional disciplinary practices are dramatic. To begin, “Positive Contacts” are included as a formal element of the system. Making recognition a formal part of the system reminds managers that reinforcing good performance is just as important as confronting poor performance. It also makes employees aware that the organization expects that they will be recognized when they perform well. Most important, it makes recognition of good performance a policy expectation of the organization, not merely an easily ignored piece of prosaic advice dispensed in a management-training program. Now consider the other end of the chart. Another major difference between the conventional and positive models is the new approach’s recognition that the discipline process actually involves only three steps, not four. Termination is not the final step of the discipline system, as the traditional progressive-discipline model would have it. More accurately, termination represents the failure of the discipline system. A commonly used metaphor holds that “Discharge is the capital punishment of organizational life.” That metaphor is nonsense. The proper metaphor for discharge is that it is a no-fault divorce. “You’re a good person,” the organization says to the individual when all the steps of disciplinary action have proved fruitless, “and we’re a good employer. But your goals and needs and our goals and needs can’t be reconciled. You need to find a place to work where you can be happy; we need to find someone to fill this job who can meet our expectations. We now must go our separate ways.

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CHAPTER –IIIPROBLEM IDENTIFICATION

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3.1 PROBLEM IDENTIFICATION

The research comprises of defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data, making deductions and reaching conclusion; and at last carefully testing the conclusions to determine whether they fit formulating hypothesis. The research process is carried out to a series of step, which are required to be taken in chorological order. The major marketing research steps are as follows:

Problem identification. Research design. Fieldwork. Data analysis & interpretation. Report Presentation.

The first and foremost step in this research is to identify the problem chosen for investigation. The step has very significance, once it is said “A Problem well identified is half way to solution”. On the other hand if the problem identified vaguely, a wrong problem is identified, or research is not clarified, then the research result may be completely useless for the management, and the research effort of the investigation will be a futile exercise.

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CHAPTER –IV RESEARCH METHODOLOGY

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4.1 RESEARCH METHODOLOGY

“Research Methodology is a way to systematically solve the research problem.” It is a science of

studying how research is done scientifically. We study the various steps that are generally

adopted by a researcher in studying his research problem along with logic behind them.

This study has used an exploratory design to analyze the effectiveness of training and

development for retaining the employees of BSP.

Research Methodology may be summarized in following steps:-

1. Defining Research Objective.

2. Preparing Research Design.

3. Implementation of Research Design.

“Research Design is arrangement of condition for collection & analysis of data in a manner that

aims to combine relevance to research purpose with economy in procedure.”

Methods of Data collection

Questionnaire:-

A Questionnaire consists of a number of questions printed or typed in a definite order on a form.

Questionnaire is mailed to respondents who are expected to read & understand the questions &

write down the reply in the space meant for purpose in questionnaire itself. Questionnaire

contains simple & straight forward questions for the respondents.

Survey:-

Survey are concerned with describing, recording, analyzing & interpreting conditions that either

existed or exist. Surveys are example of field research.

Sample Unit

Sample is the representative unit of the population .It is neither feasible nor desirable to cover

entire population so; the sample size is taken 50.

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Sources of Data

Primary Data :

“The Primary Data are those which are collected afresh & for the first time & thus happen to be

original in character.”

Secondary Data :

“The Secondary Data are those which have already been collected by someone else & which

have already been passed through statistical process.”

Population :

“Population refers to total of items about which information is desired.” Population is said to be

finite if it consist of fixed number of elements to enumerate it in totality.

Sample Unit :

“The elementary units or group or cluster of such units form the basis of sampling process they

are called as Sample Units.”

RESEARCH METHODOLOGY IN NUTSHELL:-

Universe - Employees

Sample size - 50

Sampling Method - Convenient Sampling

Sampling unit - Employees of public sector

Source of data - Primary, secondary

Data collection tool - Questionnaire

Sample location - Bhilai

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4.2 Hypothesis :-

Null Hypothesis (H0):-

Employees are aware with performance appraisal system in organization.

Alternative Hypothesis (H1):-

Employees are not aware with performance appraisal system in organization.

Q1. In your Opinion Performance Appraisal is?

Evaluation of employees 20Promotion of employees 10Job satisfaction of employees 10Motivation 10

INTERPRETATION—While conducting the research project it is found that 20% of employees said performance appraisal is evaluation of employee,10% employees said promotion of employees, 10% said job satisfaction of employee, where as 10% said motivation of employees.

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20

10

10

10

Sales

Evaluation of employeespromotion of employeesjob satisfaction of employeesMotivation

CHAPTER –VDATA ANALYSIS & INTERPRETATION

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TABULATION, INTERPRETIONAND

PIE PRESENTATION OF DATA

Q1. In your Opinion Performance Appraisal is?

Evaluation of employees 20Promotion of employees 10Job satisfaction of employees 10Motivation 10

INTERPRETATION—While conducting the research project it is found that 20% of employees said performance appraisal is evaluation of employee,10% employees said promotion of employees, 10% said job satisfaction of employee, where as 10% said motivation of employees.

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20

10

10

10

Sales

Evaluation of employeespromotion of employeesjob satisfaction of employeesMotivation

Q2. Do you receive any increment in your salary after performance Appraisal?

Yes 35No 15

INTERPRETATION—

While conducting the research work it is found that 35% employees are receive any increment in

their salary after performance Appraisal & 15% are not receive.

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35

15

Sales

YesNo

Q3. Do you think that performance Appraisal help to provide an atmosphere where all are encouraged to share one another burden.

Yes 30No 20

INTERPRETATION—30% employees are say yes that performance Appraisal help to provide an atmosphere where all are encouraged to share one another burden,& 20% employees say no.

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30

20

Sales

YesNo

Q4. Do you think performance appraisal helps people to set and achieve the meaningful goals?

Yes 35No 15

INTERPRETATION—

While conducting the research work it is found that 25% employees think that performance appraisal helps people to set and achieve the meaningful goals & 10% employees are not set and achieve the meaningful goals.

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35

15

Sales

YesNo

Q5. Do you think performance appraisal give constructive criticism in a friendly and positive manner?

Yes 35No 15

INTERPRETATION—35% employees said yes to the performance appraisal give constructive criticism in a friendly and positive & 15% employees said no.

42

35

15

Sales

yesno

Q6. Do you think that performance of employees improve after process of performance appraisal?

Yes 30No 20

INTERPRETATION—35% said yes to the performance of employees improve after process of performance appraisal & 10% employees said no.

43

30

20

Sales

YesNo

Q7. Do you think performance appraisal improves motivation and job Satisfaction?

Yes 45No 5

INTERPRETATION—While conducting research project it is found that 45% employees improves motivation& job satisfaction where as 5% employees not improves.

44

45

5

Sales

YesNo

Q8. Is the top level management partial in Performance Appraisal?

Yes 10No 40

INTERPRETATION—

While conducting the research project it was found that 10% employees said yes the top level management partial in Performance Appraisal where as 40% said no

45

10

40

Sales

YesNo

Q9. Do you think performance appraisal helps to change behavior of Employees?

Yes 39No 11

INTERPRETATION—

While conducting the research project it was found that 39% of employees said change behavior of Employees through performance appraisal whereas 11% of employees said no.

46

39

11

Sales

YesNo

Q10. In your opinion Performance Appraisal system of your organization is related to which of the following?

Retention of employees 10Recruitment system 10Organizational culture 12Motivation 18

INTERPRETATION—

While conducting the research project it was found that 10% of employees said Performance Appraisal system of organization is related to retention of employee, 10% of said Recruitment system, 12 % of employee said Organizational culture whereas said motivation.

47

10

10

12

18

Sales

Retention of employeeRecruitment systemOrganisational cultureMotivation

CHAPTER –VIRESULT & DISCUSSION

48

6.1 HYPOTHESIS

Null Hypothesis (H0):-

Employees are aware with performance Appraisal system in organization.

Alternative Hypothesis (H1):-

Employees are not aware with performance Appraisal system in organization

Q1. In your Opinion Performance Appraisal is?

Evaluation of employees 20Promotion of employees 10Job satisfaction of employees 10Motivation 10

INTERPRETATION—While conducting the research project it is found that 20% of employees said performance appraisal is evaluation of employee,10% employees said promotion of employees, 10% said job satisfaction of employee, where as 10% said motivation of employees.

49

20

10

10

10

Sales

Evaluation of employeespromotion of employeesjob satisfaction of employeesMotivation

6.2 HYPOTHESIS TESTING

My major research report involves the z test. The z test is used for testing hypothesis of mean and the statistic z.

Z testSAMPLE SIZE (n) = 50SAMPLE = 50/4 = 12.5 or 13POPULATION SIZE = 200 ( assumed)POPULATION MEAN = 10 (assumed)

Sample dx dx2

20 -30 900 10 -40 1600 10 -40 1600 10 -40 1600 50 5700

Null hypothesis = H0 : µ= 50Alternative hypothesis = H0 : µ≠ 50

σ =√∑ dx 2/n

=√5700/4

= 37.74Standard deviation of sample mean = σ /√n = 37.74 /√50

= 37.7/7.70 = 5.338Z test = Samplemean−populationmean / standardeviationof samplemean = 13 -10 / 5.338 = 3/5.338 =0.562

The table value of z at 99% level of significant =1.645Thus, null hypothesis is accepted

DECISION-

50

Employees are aware with performance Appraisal system in organization.

CHAPTER –VII FINDING & CONCLUSION

51

7.1 FINDINGS

1. Most of the employees said performance appraisal is the evaluation of the employees.

2. It has been found that performance Appraisal help to provide an atmosphere where all are

encouraged to share one another burden.

3. Most of the employees set & achieve the meaningful goals through the performance

appraisal.

4. Most of the employees think that improve their performance after the process of

performance appraisal.

5. Most of the employees think that performance appraisal improve their motivation & job

satisfaction.

6. Most of the employees think that performance appraisal help to change the behavior of

Employees.

7. Most of the employees receive any increment in their salary after performance Appraisal.

52

7.2 LIMITATIONS

A. Mental status of the respondent: - The respondents do not provide information whole

heartedly as they are convinced for our project but when we asked to fill the

questionnaire some sort of hesitations comes in mind to not to disclose their secrets,

As these secrets are disclosed to others or they are used to completely remove from their

business.

B. Mismatch of time: - Respondents did not want to give a time for filling the questionnaire.

C. Difficulty to approach: - There is proper hierarchy to approach

53

7.3 SUGGESTION

1. Training Appraisers: Training appraisers are essential for achieving better results with

performance appraisal. The training should be designed to improve appraiser’s capabilities to:

observe, conduct constructive feedback, listen, support, counsel, set objectives and ask

appropriate questions. Some benefits that can be achieved by using appraiser training are as:

• Improve understanding of the system, the forms and terminology to be applied.

• Increase accuracy and reduce common judgment errors.

• Enhance appraiser’s self confidence about his rating skills and improve the skill level through

practice and feedback.

2. Developing a positive culture: Changing culture requires leaders to understand the learning

process dynamics and how the learning and unlearning of assumptions and beliefs can be

manipulated to modify behavior. Cultural aspects could be one of the areas of training.

An organization’s leadership has the responsibility to develop a positive culture to facilitate the

acceptance of performance appraisal among managers and their employees.

3. Providing performance feedback: Employees naturally like to know how they are performing

relative to what is expected from them. Performance feedback lets employees know how well

they have performed in comparison with the performance standards. Having day-to-day

employee-manager interaction, through which the appraise is provided with constructive

feedback.

4. Avoiding unequal performance standards: Effective performance appraisal requires equal

54

standards against which employees are assessed. In the absence of equal standards, employees

are assessed with subjectivity, which may destroy the process of appraisal and leave it as a body

without soul.

Therefore, the problem of unequal standards can be minimized by ensuring that the appraisal

criteria are job-oriented, communicating performance expectations to the employees before the

appraisal review.

5. Avoiding multi-purpose programme: One performance appraisal programme should not be

designed to serve a myriad of purposes, administrative and developmental, as it can be vague and

is difficult & results into failure. The solution is to separate assessment from development in

appraising employees.

55

7.4 CONCLUSION

With rewards being directly linked to achievement of objectives goals setting & performance

appraisal assumes utmost importance the performance appraisal system has been professionally

designed & it is monitored by HRD. The implementation is the responsibility of each & every

employee along with their supervisor, there should be adequate training to the evaluator that will go

a long way in answering the quality of performance appraisal. In conclusion performance appraisal

is a very important tool used to influence employees. A formal performance review is important as it

gives an opportunity to get an overall view of job performance & staff development. It encourages

systematic and regular joint stocking & planning for the future good performance reviews therefore

do not just summarize the past they help determine future performance.

56

CHAPTER –VIIIANNEXUR

57

8.1 QUESTIONAIRE

Respected Sir/ Madam, I am student of “GD RUNGTA COLLEGE ENGINEERING & TECHNOLOGY” bhilai is conducting the survey on the topic “ A STUDY ON PERFORMANCE APPRAISAL SYSTEM IN PUBLIC”. I need you help in conducting the study. Kindly provide me your valuable opinion to fill this questionnaire your information will be kept confidential and will be exclusively used for academic purpose.

Q1. In your Opinion Performance Appraisal is?

a. Evaluation of Employees ( )

b. Promotion of Employees ( )

c. Job Satisfaction of Employees ( )

d. Motivation ( )

Q2. Which method of performance appraisal is implemented in the organization?

a. Merit ( )

b. Grading ( )

c. Other ( )

Q3. Do you receive any increment in your salary after performance Appraisal?

a. Yes ( )

b. No ( )

Q4. Do you think that performance Appraisal help to provide an atmosphere where all are

encouraged to share one another burden.

a. Yes ( )

b. No ( )

Q5. Do you think performance appraisal helps people set and achieve meaningful goals?

a. Yes ( )

b. No ( )

Q6. Do you think performance appraisal give constructive criticism in a friendly and positive

manner?

a. Yes ( )

b. No ( )

58

Q7. Do you think that performance of employees improve after process of performance

appraisal?

a. Yes ( )

b. No ( )

Q8. Do you think performance appraisal improves motivation and job Satisfaction?

a. Yes ( )

b. No ( )

Q9. Is the top level management partial in Performance Appraisal

a. Yes ( )

b. No ( )

Q10. Do you think performance appraisal helps to change behavior of Employees?

a. Yes ( )

b. No ( )

Q11. In your opinion Performance Appraisal system of your organization is related to which of

the following?

a. Retention of Employees ( )

b. Recruitment System ( )

c. Organizational Culture ( )

d. Motivation ( )

59

BIBLIOGRAPHY

Book:

Kothari C.R., Research Methodology, New Age International publishers New Delhi, 2nd Revised Edition, year of publication 2004, Chapter no.9 page no 197-202, Chapter no.11, page no.261-264. Chhabra T.N., Human Resource Management, Dhanpat Rai & Co(p.g.no.712-714).Dr.S.S.Khanka, Human Resource Management, S.Chand ( p.g. no.385-389)

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