APPRAISAL APPREHENSION

Situation Analysis: Sanjana singh, a management graduate from XLRI has been recently appointed as
the vice president (HRD) at readymade foods. Readymade foods previous HRD Vic e President Mr.
Purohit had served the company for 25 years during which period he tried implementing varied
appraisal structures in the company. He had now found a job in Muscat, but the transition of
responsibilities to her successor had not been smooth. Sanjana Singhs immediate concern was
correcting the companys existing Appraisal structure. To understand its previous appraisal strategies,
which she scrolled through the companys various experiments with it.

Initially in the 1970s the companys first appraisal system rewarded on the basis of the Trait Theory
where the worker would be assessed and rated by his seniors and promoted/rewarded accordingly. But
increasing favoritism led to the trait theorys eventual undoing and was hence introduced in the mid
1980s, the MBO (Management by Objective) system of appraisal. In this system, the employees would
set goals in consultation with their bosses/managers and be evaluated on their achievement of that
goal. An interesting theory, but problems began to show in this system too. Employees would set easy
targets, or attribute their non achievement to external or frivolous factors. In 1997, Purohit
implemented a system called 360 degree appraisal in which a persons performance and behaviour
would be rated by both his seniors and juniors. Prevalent in the company at present, this system has
also not been controversy proof. One of the companys star performers Mr. Surajit Roy claimed he
received a wrong and biased feedback. At the same time, the 360 degree system had also been
successful with some managers correcting the faults in their management styles owing to genuine
feedback.

Sanjana Singhs personal perception favors a hierarchical order of functioning, where a system of
communication and accountability should be followed in all organizations and from a more personal
point of view, wanted to implement something new which differentiates her from her predecessor.

Objective: The objective of Sanjana Singh is to put in place a balanced appraisal system where the room
for biased and prejudiced judgment is minimized, inherent rules of communication and authority are not
bypassed and performance is one of the central basis for reward.

Problem Identification: The major problems in this case are highlighted as:
1. Lack of transparency in the appraisal system. Prejudice and Nepotism prevail.
2. Personal enmity between the managers and subordinates.
3. Sanjana runs the risk of disturbing the companys set system of procedures.

Criteria: The criterion for Sanjana Singh should be:
1. Not to compromise the interests of either the manager or the subordinates.
2. Prevent any friction between the managers and subordinates.
3. Infuse more transparency in the performance judgment.

Alternatives:
Alternative 1: The 360 degree system of appraisal was an entirely new system of appraisal which when
introduced in an organization, had ripple effects. One complaint regarding it was that the managers
were not justly rated by especially their subordinates. Sanjana can mull over making the 360 degree
system transparent by making the disclosure of name and post mandatory in every appraisal statement
so that the manager can ascertain which appraisal is genuine and which not.

Alternative 2: A Second alternative can be to put in place a combination of the 360 degree system and
MBO system. Employees, while to discuss their goals and aspirations with their seniors can sort out their
differences which in the stage of performance appraisal would prevent biased judgments. A
combination of the 360 degree and MBO would basically help in making the work environment more
desirable with little bias and enmity prevalent.

Alternative 3: A third alternative can be to implement the 360 degree system in a modified manner.
Since the problem with trait theory was easy goals, certain concrete or relative benchmarks can be set
for the employees to set their goals at a high pedestal. General Electrics, USA makes its employees keep
pushing the benchmarks of achievement such that a competitive working spirit is maintained.

Evaluation of Alternatives:

Alternative 1: Not feasible, the condition of anonymity is paramount in any appraisal mechanism.
Moreover, name disclosure would increase friction between workers.

Alternative 2: A combination of the 360 degree approach and the MBO approach can be a helpful tool
in lessening the tension currently prevalent in the organization. More interpersonal interaction would
improve organizational relations. Hence, this alternative can be adopted.

Alternative 3: Making the employees set reasonably high benchmarks can be a useful, but challenging
task. Performance can be upgraded for sure, but instant results cannot be expected since (at least some)
employees are conditioned to set trifling goals. This alternative can be adopted, but results will be slow
to come by.
Selection of the best Alternative: From the evaluation above, two alternatives seem feasible. But
alternative 2 seems one that can be readily adopted.

Implementation Plan: Sanjana must invite a meeting of all the departmental heads and she should
discuss the persisting problems in appraisal management. Also should be discussed the important
elements of each appraisal system that need be adopted so that a desirable mix can be obtained and
implemented. And in doing so, she must keep at bay her personal opinions about inherent hierarchy in
organizations.

Submitted by:
Himank Bhanot
34070