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Study of HR Policy with respect to Performance Evaluation of Multinational Company

International Human Resource Management & Organisational Design (Group-6, EPGDIB_EV6) Course Coordinator- Dr. Srabani Roy Choudhury

Name of Group Members Name Raja Reddy Subbella Rajat Kumar Samal Shivanand Hiremath Subrata Mahapatra Surjyanata Sahoo Sushant Shedge Roll No 54 55 73 77 82 83

Contents
1. Introduction.3 2. Objectives of Performance Evaluation3 3. Performance Evaluation Techniques4 4. Performance Evaluation Process of the MNC7 5. Conclusion.13

Disclaimer: The case study is taken from global renowned MNC but due to the integrity policy of the organisation & non disclosure agreement, the name of the organisation is not revealed. Request not to publish/reproduce the document & purpose of the document is strictly for the term project of IIFT EXPGDIB Course. Introduction:
Performance Appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management's interest in the progress of the employees. Before analyzing the Performance Evaluation Process, a brief of on Performance Evaluation objective, techniques, processes are enumerated briefly.

Objectives of Performance Evaluation

To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control.

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Helps to strengthen the relationship and communication between superior subordinates and management employees.

To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.

To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

Performance Evaluation Technique:

The various methods and techniques used for Performance appraisal can be categorized as the following traditional and modern methods:

Performance Appraisal System

Traditional Methods Eassy type Apprisal System Straight Ranking Method

Modern Methods
Management by Objective 360 degree appraisal system

ESTABLISHING PERFORMANCE STANDARDS

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The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards. COMMUNICATING THE STANDARDS Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees

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performance. DISCUSSING RESULTS The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. DECISION MAKING

The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

Performance Evaluation Process of the MNC

Brief/Highlights of the Process: Employee evaluation process is Year Round process.

It begins in January & end in December.

In January all the goals & objectives of the employees are set.

Some goals & objectives are reviewed quarterly; some are half yearly while some of them are yearly.

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Employees are given opportunities to change /modify their goals as per the organizational requirements & mutual consent of employees & his/her reporting authority.

At the end of the year , the employee does the self assessment & based on his/her achievements against set goals & then discusses with his/her reporting authority for his assessment & appraisal.

It is an open & transparent process. In case of non agreement, employee can approach the ombudsman who handles the case then.

Organisational Structure of the MNC: The organisation has employees mainly classified into Managers & Leaders who come under the yearly Performance Evaluation Cycle. Rest all other jobs are outsources or contracted whose employees do not fall into the scope of yearly performance evaluation process. All managers & leaders are classified into three broad categories & each category has a much defined role & objective. Level-III Shape

Level-II Master & Guide

Shapes outcomes with relevant stakeholders External Focus Encourages entrepreneurial behavior Imagination & Courage Creates an environment of respectful exchange of ideas and debate Inclusiveness

Level -I

Learn & Do Recognizes emerging patterns and makes connections Clear Thinker Offers solutions to eliminate bureaucracy Imagination & Courage Relates to team

Uses scenario planning to drive market leadership External Focus Navigates and mobilizes others through uncertainty Clear Thinker Proactively adapts new technologies and applies them Expertise

Clear behavioral expectations at each leadership level

Features Performance Evaluation Process Features of Performance Evaluation Process of the MNC The process for Performance Evaluation is Simplification, Transparency & Objectivity. The entire evaluation is uses On Line software tools dedicated for this process. Employees are trained & certified thru Webex/Webinars at the various stages of the Evaluation process. This done to ensure that employees understand the complete evaluation process.

There are following two primary broad objectives on which the evaluation process is based on. Growth Value Performance

What is GROWTH VALUE?

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Growth values are classified into following categories.

External Factors:

Connects effectively with a broad group of stakeholders In tune with outside customers and environment, sees around corners Educated on global issues, curious about the world

Clear Thinker:

Embraces ambiguity and uncertainty, is adaptive Connects strategy to purpose and communicates in a way that inspires Decisive, uses knowledge, experience, network, instinct

Imagination & Courage:

Generates innovative ideas and makes it happen Encourages risk taking and learns from success/failure Challenges bureaucracy and non value-add work, drives speed and simplicity.

Inclusiveness
Welcomes opposing thoughts and ideas, listens and is humble Works collaboratively, respects individuals and cultures Drives engagement and commitment

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Domain depth, credibility built from experience and results Continuously develops self and passionate about developing others Leverages technology to win

Growth Values have a behavioral focus ...they are not outcomes. The Growth Values have Behavioral Anchors tied to each level. Not every parameters of Growth Value applies to every employee or role Anchors describe typical behaviors, they are not all-inclusive "Team" does not exclusively mean direct reports; "Customers" can be internal, external, or both.

What is PERFORMANCE VALUES Under performance values, each employee choose some Goals & Objective which could be tangible /non tangible in nature which he plans to achieve during the evaluation cycle. The goals & objectives are mutually agreed by the appraise & appraiser. Some of the guidelines on selection Goals & Objective To align your work to the strategic imperatives of the business To ensure that individual employee goals support business objectives To measure your performance/progress throughout the year To minimize conflicts in expectations between managers and employees

The Performance Value could focus on following lines (examples) Focused On: Financials/Profitable Growth Systematic Quality Improvements / Customer Centricity Strategic Positioning / Most Competitive Energy Technology Enterprise Leadership, Expertise and Pipeline

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S-M-A-R-T Goal Format

Specific and Measurable. A SMART goal quantifies, and is unambiguous. Commit to focused, specific goals. It is much easier to manage and execute objectives when they are measurable. Motivating. SMART goals are emotionally compelling. They build morale, and inspire stakeholders; both direct and indirect. Goals that contribute to business success and/or personal development are much more likely to be completed. Attainable. A SMART goal is realistic, but makes you stretch. Goals that do not provide sufficient challenge are meaningless. Evaluate reality, and set yourself up for success. Results Oriented. SMART goals prioritize the 20% of activities that contribute 80% of results. Properly conceived goals are relevant to the organizations goals, and help solve business problems.
Time-Bound. Strong SMART goals have target dates to ensure that they dont get lost among daily imperatives. Each goal you establish should be able to be broken down into shorter, track able segments that enable you to check your progress and evaluate the quality of your efforts.

Evaluation Rating System As indicated before, an employee is evaluated based on the Performance Values & Growth Values. Overall rating or assessment of an employee is done based on the overall scoring considering the above two parameters.

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Performance Values

Growth Values

Overall Rating

Rating
1

Rating
1 Exceeds Expectations 2 Consistently Meets Expectations 3 Development Needed

Overall Rating
1 Role Model 2 Excellent 3 Strong Contributor 4 Development Needed 5 - Unsatisfactory

Exceeds Expectations 2 Consistently Meets Expectations 3 Development Needed

Performance Rating Scale

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Development Needed

Consistently Meets Expectations Consistently performing and contributing at a level that keeps pace with changing expectations. Continually meets dynamic goals. Generally delivers more, higher quality, faster, cheaper, greater customer impact. Reacts quickly to new challenges and resolves issues in a timely fashion. Consistently meets commitments. Continually expands personal capabilities and demonstrates willingness to take on greater responsibility.

Exceed Expectations

Not always able to perform and contribute at a level that keeps pace with changing expectations. Falls behind in meeting dynamic goals. Doesnt deliver more, higher quality, faster, cheaper, greater customer impact or requires specific direction to do so. Waits to be redirected when faced with new challenges. Improvement in quality, timeliness or scope needed. Often reacts to rather than anticipates problems/opportunities and requires more than normal direction and follow-up.

Consistently performing and contributing at a level that outpaces changing expectations. Continually exceeds challenging and dynamic goals. Delivers more, higher quality, faster, cost effective, greater customer impact. Anticipates new challenges and develops creative solutions to address them. Thinks beyond immediate job for the good of the component. Continually expands personal capabilities and

1. Role Model - Exceeds expectations on both Performance and Values the very best contributors 2. Excellent -Exceeds expectations on either Performance or Values and fully meets on the other 3. Strong Contributor -Consistently meets expectations on both Performance and Values highly capable and high-achieving people, contributing at the ever rising bar of expectation

Overall Scale Definition

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4. 5.

Development Needed-Contributes above or at expectations on either Performance or Values with a need for improvement on the other. Unsatisfactory -Contributions in both Performance and Values are not meeting expectations Growth
Exceed Expectations Consistently Meets Expectations Exceed Expectations Consistently Meets Expectations Development Needed Development Needed Exceed Expectations Consistently Meets Expectations Development Needed

Performance
Exceed Expectations Exceed Expectations Consistently Meets Expectations Consistently Meets Expectations Exceed Expectations Consistently Meets Expectations Development Needed Development Needed Development Needed

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= = = = = = = = =

Overall Rating
Role Model Excellent Strong Contributor

Development Need

Unsatisfactory

Conclusion: The group studied the standard Performance Appraisal Process & then evaluated the similar process of the multinational organisation. During the study it was found that while the broad framework of Performance Evaluation Process is similar but it changes from the techniques & methodologies followed by organizations to arrive at the desired results. While studying the case, it was also revealed that Organizations are putting up a lot of investment & resources to build up infrastructure to ensure that proper data bank is maintained , employees are trained on the systems & procedures , transparency is ensured & evaluation is carried out more objectively rather than a routine process to meet some organizational requirements. We found the evaluation process is methodical, transparent, effective & most importantly it drives the organizational objective to each & every employees.