Download - How to Appraise and Pay Teams
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How To Appraise and Pay Teams
Prepared by:
Aditya Sarda 2010SMT6806
Ankur Gupta 2010SMF6765
Navneet Singh 2010SMF6640
Pranshu Srivastava 2010SMT6822
Roopak Jain 2010SMF6754
Suyash Singh 2010SMF6740
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Performance Appraisal
Performance appraisal is a method by which the job performance of an employee
is evaluated (generally in terms of quality, quantity, cost, and time) typically by the
corresponding manager or supervisor
How to Appraise teams
Identify KRAs Set targetsDetermineparameters
Measureperformance
regularly
Communicateresults
Evaluateperformance
Indentify individualratings
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Rewards are the benefits (monetary and non monetary) given to someone for
service rendered or for accomplishing a particular task
Rewards
Link Rewards to Team Appraisals
Identify
benchmarkinglevel
Mandate team
performance forrewards
Distribute team
awardproportionately
Identify reward foreach successive
target
Link the individualaward to basic payof team member
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Some Methods of Performance Appraisal
Critical incident method
Involves recording of specific events by the appraiser. An incident is considered critical
when it illustrates what the employees have done or have failed to do The manager writes down positive and negative performance behavior of employees
throughout the performance period
The manager maintains logs on each employee, whereby he periodically records critical
incidents of the workers behavior and performance
At the end of the rating period, these recorded critical incidents are used in the
evaluation of the workers performance
Weighted checklist method
The Rating Scale is a form on which the manager simply checks off the employees level
of performance. This is the oldest and most widely used method for performance appraisal
The scales may specify five points, so a factor such as job knowledge might be rated 1
(poorly informed about work duties) to 5 (has complete mastery of all phases of the
job).
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Some Methods of Performance Appraisal
Essay evaluation method
In this method managers/supervisors are asked to describe strengths and weaknesses
of an employees behavior Essay evaluation is a non-quantitative technique
This method is usually used with the graphic rating scale method
360 degree performance appraisal
Employees receive anonymous , confidential feedback from people who work around
them
The feedback is given by subordinates , peers , customers , suppliers etc
It measures the following
The persons behaviors and competencies Skills such as listening planning and goal setting
Focuses on leadership character and leadership
It tells what others think about the particular employee
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Some Methods of Performance Appraisal
Performance ranking method
Employee performance is ranked from best to worst
Manager compares one employee with another employee rather against a standardmeasurement
The scale of rating is as follows Much better (5 points)
Slightly better (4 points)
Equal (3 points)
Slightly worse (2 points) Worse (1 point)
Paired comparison analysis
Paired comparison analysis is a good way of weighing up the relative importance ofoptions
A range of plausible options is listed. Each option is compared against each of the other
options. The results are tallied and the option with the highest score is chosen
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Some Methods of Performance Appraisal
Management by objectives
MBO is a process in which managers set objectives for the employee, periodically
evaluate his performance, and reward according to the result
This method focuses attention on what must be accomplished (goals) rather than how it
is to be accomplished (methods) This method is widely used in the industry. It is being used in companies such as
Accenture , IBM , Wipro , TCS , Reliance energy , Bharti etc
In the coming slides we have explained how this method is used in Accenture along
with graphical rating method
Graphic rating scales
The Rating Scale is a form on which the manager simply checks off the employees level
of performance This is the oldest and most widely method
The scales may specify five points, so a factor such as job knowledge might be rated 1
(poorly informed about work duties) to 5 (has complete mastery of all phases of the job).
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Issues with Appraisal
Rating Bias
When managers include non performance factors like race, gender, hair colour, etc. into
an appraisal the rating becomes unfair and loses its objectivity
Appraisal Hypocrisy
When managers do not follow stated methods and procedures of the organization
Poor Informal FeedbackWhen managers do not provide regular feedback to the employee to improve his/her
performance and shortcomings
Raters Error
When managers want to avoid conflict and wither give undeserved high ratings(researchers call this leniency tendency) or give ratings (central tendency)
Self Appraisal Mismatch
When managers have to rate some employees as average and below performance an
average performance rating conflicts with the supervisors assessment, creating a
serious discrepancy
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Performance appraisal at Godrej & Boyce
Initially it had a functional structure but later moved to divisional one
Problem with functional structure was that, some functional units were gettingrewards based on the achievement of their functional goal even if the company
was not making profit
Under the new system the entire man-power of a business division is considered
a team
G&B measures the performance of its team on Volume of business growth
Net contribution of the division
Net working capital returns
The performance is measured on these parameters using three benchmarks,
level 1, level 2 and level 3.
Level 3 refers to minimum acceptable performance
The actual quantum of team reward varies according the level achieved and the
grade of the members
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Performance appraisal at Accenture
Management by objective(MBO) using Graphic Rating Scales
List of objectives is given to each member of the team at thebeginning of the performance evaluation period
Members give a self input and justify how they have completedtheir objectives
The members immediate supervisor checks the self input andvalidates it. He can rate them as met , partially met , not met or
exceeded expectation All supervisors of a particular Account group meet and discuss
what rating is to be given to which member
Members are given the following ratings following a bell curve i.e.if 5% of employees are CVTPG then 5% have to be CBPG in theparticular account group
CVTPG Contribution at the very top of peer group (5%)
CSAPG Contribution significantly above peer group(25%)
CAPG Contribution above peer group(20%)
CCPG Contribution consistent with peer group(40%)
CBPG Contribution below peer group(10%)
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Favoritism The final rating is in the hands of the supervisor and how he
presents his subordinates to the other supervisors, his decision may be
biased
The Bell Curve If you have people performing at the top of peer group
it does not necessarily mean you have people performing below the
average peer group performance
No comparison of performance across account groups
Ethical Issues with performance appraisal at Accenture
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Performance appraisal at Schneider
5 KPIs are given Employee rated themselves (on a scale of 1 to 5) on each of
those at the end of the year
Their manager rate them and that is reviewed by his
manager Points are given on each KPI and the average is taken
Increments are given according to the ratings
Increments in different business units are independent
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Compensation Policy for Directors and Executive Officers of Nomura
Compensation of Directors and Executive Officers is composed of base salary, cash
bonus and long-term incentive plans. i) Base Salary
-Determined based on factors such as professional background, career history,responsibilities and compensation standards of related business fields.
-A portion of base salary may be paid in equity-based compensation form with acertain non-exercise period to ensure that interests of Directors and ExecutiveOfficers are closely aligned with those of shareholders.
ii) Cash Bonus-Determined by taking into account both quantitative and qualitative factors.Quantitative factors include performance of the whole Group and business divisionresults. Qualitative factors include achievement of individual goals and subjectiveassessment of individual contribution.
iii) Long-term Incentive Plan
-Long-term incentive plans may be awarded to Directors and Executive Officers,depending on their individual responsibilities and performance.-Payments under long-term incentive plans are made when a certain degree ofachievements are accomplished. Payments are made in equity-based compensationform with a certain non-exercise period to ensure that their mid/long-term interestsare closely aligned with those of shareholders.
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Performance appraisal at TCS
Appraisals are based on Balanced Scorecard on the basis oftargets at four levels
Financial
Customer
Internal
Learning and growth
Ratings are done on a scale of 1-5, 5 being the highest
Appraisal done at the end of year and grade changes
accordingly
If a member gets a low rating (less than two) in twoconsecutive appraisals, a warning is given and sometimes
exit option may be considered
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Performance Appraisal at WAPCOS
(Water and Power Consultancy Services)
Appraisal is done on the basis of number of years worked at a particular career
level After the completion of the required period employees give a presentation to their
supervisor telling them about the work dont by them in the tenure
On basis of the presentation and a subsequent discussion by the management
appraisal is done
Issues with Appraisal at WAPCOS
Does not distinguish between a high performer and a low performer until an
employee has completed a fixed number of years in an organization
Managers bias exists No incentive for employees to perform better than his/her peers
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THANK YOU
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