1 A presentation on PERFORMANCE APPRAISAL SYSTEM by G Sankaranarayanan Senior Vice President Indian Banks’ Association Mumbai

2 Performance Appraisal System Disclaimer : Views expressed in this presentation are the personal views of the presenter only and not the views of the organisation from which he comes.

3 Performance Appraisal System Over the past two days, bankers present in this Conclave have been discussing on how to enhance employee performance.

4 Performance Appraisal System In the context of employee performance one FQA is whether the current performance measurement models are adequate for the Indian Banking System. If not, what changes are required?

5 Performance Appraisal System I would like to limit my presentation to the situations prevailing in public sector banks.

6 Performance Appraisal System Although Indian Banking has come off age in recent times, human resource management continues to remain a neglected one. The role of Human Resource Managers remain limited to fire fighting.

7 Performance Appraisal System Areas like capability assessment, including capability gaps and training needs, placement of right people in the right places, career plan, employee motivation etc. are areas receiving scant or no attention.

8 Performance Appraisal System Most HR Managers go through the performance appraisal in a rather mechanical way and treat them as they treat the plethora of statements that are prepared by banks for submission to various authorities.

9 Performance Appraisal System Presently HR Manager in banks, if there are any, are clearly not in the know-how of what all uses a performance appraisal, if done in a scientific way, can be put to.

10 Performance Appraisal System Presently in most banks, employees are required to submit their performance appraisal only when a promotion process is undertaken.

11 Performance Appraisal System Only a few banks have put in place mechanisms to identify key responsibility areas for the purpose of designing their performance appraisal forms. Target setting is virtually non-existent.

12 Performance Appraisal System The aims and objectives of the organisation, the contribution of individuals/the departments towards these objectives are certain key elements missing in the present day performance appraisal systems.

13 Performance Appraisal System The process takes a bottom-up approach with virtually no interaction between the appraisee and the appraiser. A critical assessment of the appraisee and review of the performance over a reporting period are virtually non- existent.

14 Performance Appraisal System As a result the employee’s development suffers and valuable human resources wasted.

15 Performance Appraisal System Nowadays various tools are available for evaluating employee performance. Some organisations have even taken to 360 degree evaluation techniques.

16 Performance Appraisal System Till such time managing human resources gives way to Human Resource Management in banks, performance management systems including 360 degree evaluation techniques shall remain a distant dream.

17 Performance Appraisal System If only banks are to tweak the performance appraisal systems they have to make it a more meaningful one thereby contributing to the development of the individual and the organisation as a whole, they will be taking a giant step forward.

18 Performance Appraisal System It is in this context that one should look at revamping the performance appraisal systems in public sector banks. As a first step of course, one should be clear as to what purposes it should serve.

19 Performance Appraisal System In general a performance appraisal system should serve as a tool for work- performance judgemental and provide a basis for reward allocation (none at present in public sector banks), promotions, transfers, lay-offs etc.

20 Performance Appraisal System It should help the organisations to identify high potential employees’ developmental, fostering work improvement, identifying training and development opportunities and develop ways to overcome obstacles and barriers.

21 Performance Appraisal System It should serve as a medium for translating organisational goals into individual job objectives, communicating expectations regarding employee performance.

22 Performance Appraisal System It should provide for a two-way communication between the employee and the supervisor and help diagnose strengths and weaknesses thereby enabling a development plan for improving job performance.

23 Performance Appraisal System It should define and analyse the behavioral aspects of performance. It should also serve as a medium for employee introspection.

24 Performance Appraisal System.) A well designed performance appraisal should give employees answers to questions such as –  What am I expected to do  How well am I doing  What are my strengths and weaknesses  How can I do a better job and  How can I contribute more towards the organisational goal.

25 Performance Appraisal System A performance appraisal system often fails because – Managers often resist either passively or actively. have limited contact with subordinates and are poor at giving feedback subordinates are poor at receiving feedback

26 Performance Appraisal System viewed as a wasted paper work especially if nothing comes out of their effort. Managers fear the emotion that can be unleashed. Managers fear not being able to defend the rating.

27 Performance Appraisal System Keys for designing an effective performance appraisal system  Provide for rater and ratee participation in the designing process.  Aim for simplicity, fairness, objectivity, openness, usefulness.  Aim to be inclusive of all behavior and results that should be performed.

28 Performance Appraisal System  While designing, address questions such as –  What is the purpose?  What is the supervisor’s attitude towards performance appraisal?  What are the appropriate job criteria?  Who should conduct the appraisal?  When they should occur; and  How often should they occur?

29 Performance Appraisal System  The performance appraisal forms need to be job related as simple as possible easy to administer valid and reliable enable individuals to influence measures

30 Performance Appraisal System What Performance Appraisal should deliver Evaluate goals Provide feedback to the appraisee Develop valid data for pay and promotion decisions Provide means of putting subordinates on notice about unsatisfactory performance.

31 Performance Appraisal System Enable coaching and developmental goals. Develop contacts through discussions with subordinates. Motivate subordinates through recognition and support. Strengthen supervisor-subordinate relation. Diagnose individual and organisational problems.

32 THANK YOU