INTRODUCTION OF THE ORGANIZATION:
A. K. Khan & Company Ltd. (AKK) is one of the oldest and most reputable private sector business conglomerates in Bangladesh. AKK was established in 1945 by late Mr. A. K. Khan. AKK’s area of operations are in textile, jute, telecommunication, ISP/ASP, deep sea fishing and processing, agro-based plantation, manufacturing, marketing, distribution, trading, clearing and forwarding. The company over its 60 years has build strong partnership with world renowned companies and has also pioneered in creating leading joint-venture companies in Telecommunication, Deep Sea Fishing, Sewing Thread, Electrical Equipments and ISP/ASP. AKK’s mission is to create optimum value for all the stakeholders by adhering to the highest ethical standards while ensuring top quality service and products. The core business value of the company is to help create opportunities for employment, growth and prosperity for the nation.
BACKGROUND OF THE COMPANY:
|1945:||A. K. Khan & Co. Ltd. founded by late Founder Chairman Janab A. K. Khan.|
|1945-1958:||A total of 8 new company setups in the field of textile, shipping, jute and electronic motors, match & plywood.|
|1958-62:||Janab A. K. Khan inducted as Federal Minister for Industries, works, Irrigation, power and Natural Resources in Gen. Ayub’s cabinet of Pakistan.|
|1974:||All major industrial units of the group was nationalized by the Govt.|
|1979:||Bengal Fisheries to establish as a pioneer in Deep Sea Fishing sector.|
|1982:||Most of the nationalized units were returned excepting Eastern Insurance and Eastern Mercantile Bank.|
|1989:||Tootal Thread (later renamed Coats Bangladesh) established as the pioneer Sewing thread company.|
|1991:||Janab A. K. Khan, pioneer industrialist of Bangladesh passes away.|
|1991-1995:||Chairman Janab A.M. Zahiruddin Khan sworn in as Planning Minister and later took over as Industrial Minister of The Government of Peoples Republic of Bangladesh.|
|1996:||TM International (BD) Ltd, a joint venture Company with Telecom Malaysia Berhad awarded cellular license.|
|2002:||AKCEYCOM LIMITED Established|
|The group is managed by a Board of Directors comprising at present with the following:|
|Mr. A. K. Shamsuddin Khan||Chairman|
|Mrs. Zebun Nahar Islam||Vice Chairman|
|Mr. Salahuddin Kasem Khan||Managing Director|
|Mr. Sadruddin Khan||Director|
|Mr. A. M. Ziauddin Khan||Director|
|Mrs. Yasmin Khan Kabir||Director|
|Mr. Abul Kasem Khan||Director|
AREAS OF OPERATIONS:
The A. K. Khan Group is one of the oldest and largest private sector organizations in the Republic of Bangladesh, established in 1945. The Group, including JVs, employs over 7000 persons in the following sectors:
|I. Areas of Operation||II. Areas of Interest for JVs|
Deep Sea Fishing
|IT / Software Development|
Power & Transmission
Heavy Electrical Goods
Shipbuilding & Engineering
Our mission is to become one of the most valued companies in the country. In this, we are guided by the values embedded in our company philosophy by our Founder Chairman, Late Janab A. K. Khan, recognized as a pioneer industrialist of the country. His Mission in life was to create an industrial and service sector base to provide gainful employment and contribute to economic development.
This mission we believe is a “Trust” entrusted to the management and the board of company, so that we give value to our customers, our employees, our share holders and above all to our country-in its relentless effort towards economic take off in this century.
- Strategic alliances.
- Strong business partners.
- Accessibility to policy making.
- Experienced management.
BACKGROUND OF THE STUDY
In order to achieve the objective of any organization, the organization needs productive human resources. An organization has to give due importance to undertake measures in order to equip staff with sound knowledge and skill so that they can contribute in achieving the organization, departmental as well as individual objective. A relentless effort is necessary to help in improving employee personal and professional development. It is performance appraisal system through which an attempt may be made to link which staff’s performance and staff development. Through performance appraisal techniques, we can discover the diamonds in our organization and accomplish them to the drizzling brilliance.
It is really a difficult task to design and implement a standard performance appraisal system in an organization. Performance expectations of line managers and subordinates, the procedural compliance, subjectivity, tools and performance standards are to intricate element inherent in the system of which the deigning and implementation of the system becomes difficult. The inherent inconsistency in the process, unclear performance criteria, and unclear role of the line may be some of the significant limitations of the system that every organization has to carefully handle.
A. K. Khan & Company Ltd. (Telecom Division) has competency based performance appraisal system. The organization used most of the tools and techniques of the performance appraisal system that are frequently used in most of its parallel organizational goals, values & systems. The Human Resources Development and management department works with the mission management and line manager to design and implement a systematic performance appraisal system. An effort is being made to give importance to share concern and expectations, establish communication between supervisors and supervise, involve in goal oriented ventures, so that individual’s performance is improved and the organization at large is benefited. The study on A. K. Khan & Company Ltd. (Telecom Division) Performance appraisal system attempts to highlight each.
OBJECTIVE OF THE STUDY
Broad Objective of the Report:
The core objective of the report is to describe the present practice of the performance appraisal system in A. K. Khan & Co. Ltd. (Telecom Division).
Specific Objective of the Report:
- To ensure that all key employees performance in there job.
- Evaluate the overall performance of the organization by getting feedback form employees performance.
- To motivate the employees be evaluate their performance and according to the performance have to provide the reward, punishment, increment, career development and also if necessity then skill development.
- Assess the implementation of AKTD performance appraisal pilot for effectiveness and sustainability;
- Document views of managers and service providers toward the AKTD performance appraisal system;
- Identify performance appraisal systems and processes, or lack of systems and processes, that will facilitate or hinder the scale-up of the performance appraisal system.
SCOPE OF THE STUDY
The scope of this report will be confined to performance appraisal system for retain the talent in the organization. By the study it can be possible to learn how to find out the talent form the existing organization, what sort of reward have to provide, what type of training have to provide for career growth, what type of motivation have to provide for job satisfaction for high productivity. What type of step should the organization take to build up a future leader and what type of objective have to fulfill by them. By the performance appraisal how the organization can achieve the organizational goal. The organization will be benefited from the study. It will be able to identify the weakness and strength of its performance appraisal system and will be able to take necessary steps to make their system more effective. An effective performance appraisal system will contribute to the human resource development process of the concerned organization.
METHODOLOGY OF THE STUDY
According to the topics, data will be collected from both primary and secondary sources.
PRIMARY DATA: Primary data will be collected from;
- Standardize test scores by participant-observer notes.
- Interview of managers, executives and employees by questionnaire.
- Notes or fields notes by interview question.
SECONDARY DATA: Secondary data will be collected from;
- Job Description,
- Performance Appraisal records.
- Books, Published documents
- Reports, statistics
- Internet, Journals
DATA COLLECTION TECHNIQUES AND TOOLS:
Data collection Techniques
Data Collection Tools
In light of data collection tools and techniques discuss above a questionnaire will be prepared for gathering data from employees and another questionnaire will be prepare for collecting data from Manager, HR.
PROCESS AND ANALYZE OF DATA:
For this report mainly qualitative data will be collected and some quantitative data will also be required. For processing the data in computer, Microsoft Word and Excel will be used. Microsoft Word will be required for analytical explanation and Microsoft Excel will be required for graphical and numerical analysis (if we get any analytical information). Then data will be analyzed by the processed data in earlier stage. The analysis will be done in such a way so that every person of every background can understand the analysis.
LIMITATIONS OF THE STUDY
From our previous experience we think some problems will have to face during preparing this report, which can be termed as the limitations of the study. The problems are as follows:
- The questionnaire was received with distrust, suspicion, and negligence. Hence the accuracy of quantitative data was reduced.
- All internal and sensitive information was not found properly form the organization.
- Lack of sufficient time of the personnel, which delayed the analysis of data and thus completion of whole report.
- Lack of sufficient books and journals about performance appraisal system in different libraries.
- Unavailability of enough relevant records and information in organization.
- Some of the respondents were afraid of in providing confidential information and some of them showed less interest on such assignment and few members of the target group willingly avoided the interview.
- An event more in depth study could be made regarding the validity and reliability of the system however the stipulated time period time did not allow such extensive coverage.
DELIMITATIONS OF THE STUDY
- The study examined the use of performance appraisal by AKTD for developmental purposes. A comparison to known performance appraisal methods and techniques has been used to determine the purpose of the performance appraisal instrument.
- The main thrust of the study has been based on a managerial performance appraisal. The major differences between appraisal instruments for engineers, technicians, clerical, and production workers have been only briefly mentioned.
- In reviewing the performance appraisal instrument used for production workers, the researcher noted that no provision for career development had been made.
- A question has been raised concerning the need for developing the production labor force to the same degree as the professional labor force through the use of the developmental aspect of performance appraisal. However, the researcher considered the question to be beyond scope of the study.
- Information regarding the actual effectiveness of the performance appraisal used in the study has not been made available to the researcher by AKTD.
DEFINITION OF TERMS:
Behavioral Anchored Rating Scales – The term used to describe a performance rating that focused on specific behaviors or sets as indicators of effective or ineffective performance, rather than on broadly stated adjectives such as “average, above average, or below average”. Other variations were:
- Behavioral observation scales
- Behavioral expectations scales
- Numerically anchored rating scales
Checklists – The term used to define a set of adjectives or descriptive statements. If the rater believed the employee possessed a trait listed, the rater checked the item; if not, the rater left the item blank. Rating score from the checklist equaled the number of checks.
Critical Incident Technique – The term used to describe a method of performance appraisal that made lists of statements of very effective and very ineffective behavior for employees. The lists have been combined into categories, which vary with the job. Once the categories had been developed and statements of effective and ineffective behavior had been provided, the evaluator prepared a log for each employee. During the evaluation period, the evaluator recorded examples of critical behaviors in each of the categories, and the log has been use to evaluate the employee at the end of the evaluation period.
Forced Choice Method – This appraisal method has been developed to prevent evaluators from rating employees to high. Using this method, the evaluator has to select from a set of descriptive statements, statements which applied to the employee. The statements have been weighted and summed to at, effectiveness index distribution of categories. One way to do this has been to type the name of each employee on a card and ask the evaluators to sort the cards into piles corresponding to rating.
Graphic Rating Scale – The term used to define the oldest and most widely used performance appraisal method. The evaluators are given a graph and asked to rate the employees on each of the characteristics. The number of characteristics can vary from one to one-hundred. The ratings can De a matrix of boxes for the evaluator to check off or a bar graph where the evaluator checked off a location relative to the evaluators rating.
Narrative or Essay Evaluation – This appraisal method asked the evaluator to describe strengths and weaknesses of an employee’s behavior. Some companies still use this method exclusively, whereas in others, the method has been combined with the graphic rating scale.
Management by Objectives – The management by objectives performance appraisal method has the supervisor and employee get together to set objectives in quantifiable terms. The appraisal method has worked to eliminate communication problems by the establishment of regular meetings, emphasizing results, and by being an ongoing process where new objectives have been established and old objectives had been modified as necessary in light of changed conditions.
Paired Comparison – The term used to describe an appraisal method for ranking employees. First, the names of the employees to be evaluated have been placed on separate sheets in a predetermined order, so that each person has been compared with all other employees to be evaluated. The evaluator then checks the person he or she felt had been the better of the two on the criterion for each comparison. Typically the criterion has been the employees over all ability to do the present job. The number of times a person has been preferred is tallied, and the tally developed is an index of the number of preferences compared to the number being evaluated.
Performance Appraisal – The term performance appraisal has been called by many names, including performance review, performance evaluation, personnel rating, merit rating, employee appraisal or employee evaluation. A performance appraisal has been defined as any personnel decision that affects the status of employee regarding their retention, termination, promotion, transfer, salary increase or decrease, or admission into a training program.
Ranking – The term ranking has been used to describe an alternative method of performance appraisal where the supervisor has been asked to order his or her employees in terms of performance from highest to lowest.
Weighted Checklist – The term used to describe a performance appraisal method where supervisors or personnel specialists familiar with the jobs being evaluated prepared a large list of descriptive statements about effective and ineffective behavior on jobs.
WHAT IS PERFORMANCE APPRAISAL SYSTEM?
Performance appraisal is a methodical, on the job-review of and employee’s abilities and accomplishments. Performance appraisal functions bother a valuable management assessment tool and a superior employee motivate weapon. It enables us to strike a workable balance between our company’s need for qualified and trained personnel and our employees need for feedback and motivation. Performance is the contribution of and individual and appraisal is the process of measuring the contribution. Appraisal is an integral part of a system of managing individuals working in an organization. Performance appraisal is an inevitable tool for the setting of organizational goals. In spite of modern technology and all the system and controls coming into widespread use, people remain the most important factor in all kinds business, government agencies, charitable organizations and all other organizations. It is the process of evaluating performance or contribution of an employee to the organization during a specific period of time by his supervisor with relation to his or her job requirements.
An effective, reliable and valid performance appraisal system recognizes the legitimate desires of employee’s for progress in their profession. Integration of an organizational demands and individual needs through career management is the part of performance appraisal system. Therefore performance appraisal program is inevitable for measuring the contribution of both the employee’s and the managerial personnel.
Performance appraisal program is the basis of determining who is profitable to higher positions and who is to be rewarded for better contribution to the organization he or she belongs to performance feedback lets the employees know hoe well they have performed in comparison with the standards of the organization. Performance Appraisal program is administrative and employee development tool, which is the domain of the management not shared by the employees
Opponents of performance appraisal attack it on a variety of grounds but without appraising performance of the employee’s career development, organizational development, recently a number of organizations have revamped their appraisal system in a bid to reduce possible negative put comes. Appraisal, no doubt is a complex issue and it is clear that to be effective a system must be designed, developed and implemented with great care.
PURPOSE OF PERFORMANCE APPRAISAL SYSTEM:
Performance appraisal is the systematic evaluation of the individual with respect to his performance on the job and potential for development. Despite the multiplicity and complex nature of many training and educational programs, most development occurs on the job. But such development is slowed and less effective if the employees are not systematically appraised and feedback information concerning his of her quality of performance. All employees are appraised on their job performance in some manner the other, It is used to be solely a means of differentiation among employees for wage increase, transfer, promotions and layoffs. It is important for managers to differentiate between current performance and the promo ability of their subordinates, Managers in many organizations fail to make this distinction, and they assume that a person with skills and ability to perform well in one job will automatically perform well in `a different or more responsible positions. This assumption id the basis of the well known if somewhat overstated “Peter Principle” which suggests that individuals be successively promoted until they are placed eventually in a job that they can not perform. Performance appraisal is also important for management development, because if a manager’s strengths and weaknesses are not known, it is difficult to determine whether development efforts are aimed in the right direction. Today performance appraisals are used not only for these purposes but also as a means of motivating both managerial and operation employees of the organization.
WHY SHOULD WE APPRAISE PERFORMANCE?
Appraisals are aid for creating and maintaining a satisfactory level of performance by employees on their present job. There are several reasons to performance appraisal
Firstly, appraisal provides information upon which promotion and salary decisions can be made.
Secondly, it provides and opportunity to review the subordinates work related behavior.
Finally, the appraise should be central to the firms career- planning process because it provides a good opportunity to review the persons career plans in light of his or her exhibited strengths and weakness
Performance appraisal plays a key role in reward system. It is the process of evaluation the performance of employees, sharing information with the employees and searching ways to improve their performance is the central theme of the process.
Appraisal is necessary to:
- Allocate resources in dynamic environment
- Motivate and reward employees
- Give employees feedback
- Maintain fair relationship with in a group
- Coach and develop employees
- Comply with regulation
PURPOSE OF PERFORMANCE APPRAISAL:
Employees are the most valuable assets of the organization. When appraisal is done thoughtfully and skillfully, the plan will accomplish several additional and highly important purposes. It will be as under.
- Promote the employees job satisfaction and moral by letting them know the at their superior is interested in his progress and development,
- Serve as a systematic guide to the superior in planning the employee’s future training.
- Assure considered opinion of employee’s performance rate than sharp judgment.
- Assist in planning personnel moves and placement that will best utilize each employee’s capabilities.
- Assist in locating and recording special talents and capabilities that might otherwise not be noticed and recognized.
- Provide employee and opportunity to talk to superiors about problem and interest.
ESSENTIALS OF A GOOD PERFORMANCE APPRAISAL SYSTEM:
An appraisal system is good if it is acceptable to all and fairly assesses the employee’s performance. With this view, some measures have been found out to shape the performance appraisal system.
a. It must be related
The control of the appraisal system should be related to the job and the employee’s must be rated on the basis of their jobs.
b. Easily understandable and less time consuming.
If the system is too complex or too time consuming there will be misunderstanding and confusion more over the situation of errors may likely be caused.
c. It should fit the organization’s structure and operation
The system should be prepared in a manner that fit fits the organizational structure and its operations. Otherwise it will not be acceptable to the organization.
d. Built-in incentive
There should be direct linkage between appraisal and rewards. The system should be prepared with built-in incentive that a reward should follow satisfactory performance.
e. Similar Criteria for similar Job:
Rating procedure form should be constructed in a manner that ban be applied to all jobs in the organization and similar job should be measured by criteria regardless of all individual job.
The system should be valid. The validity of rating is the degree to which they are truly indicative or intrinsic merit of the employee’s. A good measure of performance should measure important job characteristics and be free from extraneous or contaminating influences it should also encompass the whole job.
The system and the content should be reliable. The reliability of training is the consistency with which the ratings are made, either by different raters or by one rater at different times. Interrupter reliability is the most relevant type of reliability is usually quite good when performance raters one from the same level of the organization. g free from bias
The system should be constructed in the manner that it will appraise the employee’s regardless of their race, sex, nationality, origin, and so on. The rater should observe ration’s performance on the job.
h. Freedom from Rating Error:
There are generally four types of rating errors such as leniency error
1) Leniency Error:
Leniency is very common type of rating bias. Sometimes taters give employee’s more positive performance rating than deserve. When leniency error occurs most employees receive high performance rating.
2) Severity Error:
Severity Error is the reverse of leniency error. Sometimes raters evaluate employee’s more unfavorable than their performance warrants. When severity error occur the distribution o performance rating shifts dramatically towards left that is negative of the true distribution of performance.
3) Central Tendency Error:
Central tendency error results in a rating distribution highly compressed around the middle point. It occurs when a supervisor rates all employees near the midpoint of a performance a scale.
4) Halo Effect
When halo error occurs an employee receives nearly identical performance rating on all performance areas and the correlation among the rating is very high.
Leniency, severity and central tendency error occurs when several employees’ appraised and halo error occurs when single individual is appraised on several aspects of performance.
To overcome these error and thus to appraise the employee’s fairly on the basis of their job performance should be clear cut provision for rating of the raters and the appraisal system.
HOW TO AVOID APPRAISAL PROBLEM:
If we consider the essentials if good performance appraisal them we can get way to avoid appraising problem.
Firstly, the appraisal system should be easily understandable.
Secondly, it must have the support of all levels of the people who administer it.
Thirdly, choose the right appraisal tool.
Fourthly, training, supervisors to eliminate rating errors such as halo, leniency and central tendency error.
Fifthly, the system should fit the organizational operations as a structure.
Sixthly, the system should have built in incentive that is a reward should follow satisfactory performance.
Seventhly, the system should be periodically evaluated.
The Developmental Performance Appraisal Concept:
There have been two prevalent approaches to performance appraisal. This part will be concerned with the purposes for each performance appraisal approach and the purposes The Corporation has for their use. The use of Performance appraisal as a developmental tool and problems with appraisal will be discussed.
The first approach has been the traditional approach. This approach has also been known as the organizational or overall approach. The traditional approach has been primarily concerned with the overall organization and has been involved with past performance.
The second approach to performance appraisal has been the developmental approach. This approach viewed the employees as individuals and has been forward looking through the use of goal setting.
DEVELOPMENTAL PERFORMANCE APPRAISAL PURPOSES:
The developmental approach to performance appraisal has been related to employees as individuals. This approach has been concerned with the use of performance appraisal as a contributor to employee motivation, development, and human resources planning. The development approach contained all of the traditional overall organizational performance appraisal purposes and the following additional purposes:
- Provided employees the opportunity to formally indicate the direction and level of the employee’s ambition.
- Show organizational interest in employee development, which was cited to help the enterprise retain ambitious, capable employees instead of losing the employees to competitors.
- Provided a structure for communications between employees and management to help clarify expectations of the employee by management and the employee.
- Provide satisfaction and encouragement to the employee who has been trying to perform well.
PERFORMANCE APPRAISAL SYSTEM OF A. K. KHAN & COMPANY LIMITED (TELECOM DIVISION)
Performance appraisal system is defined as a systematic process of performance planning, organizing, monitoring, appraising, and guiding and rewarding individual employee’s performance by using standard tools. This is a formal management process being conducted through participation. The system does not merely represent an annual event rather it represent a systematic process viewed from the standpoint of total perspective. The essence of performance appraisal system is that the employee’s perform the best of their abilities to attain individual and organizational goal.
In many organization, a significant number of supervisor apprise employee’s performance at the end of a performance year virtually doing nothing through there entire calendar year but performance appraisal should be treated as one aspect of total performance management system.
Performance appraisal system aims at creating and maintaining a satisfactory level of performance by the employees on their present job groups.
A. K. Khan & Company Ltd. (Telecom Division) has a performance appraisal system closely akin to the MBO (Management by Objective) performance appraisal mechanism.
The present performance system is done using:
1) Appraisal by achievement against agreed objectives
2) Competence Profile in current job, which includes rating on leadership quality, resource management, business development, communicative etc.
MBO method requires the manager to get specific measurable goals with each employee and then periodically discuss his or her progress toward their goals. The method includes six steps:
1) Set organizational goal.
2) Set departmental goal
3) Discuss departmental goals
4) Define expected result
5) Performance review
6) Provide feedback
The organization views the system as year round processes. There are different component of the performance appraisal system namely performance planning, performance monitoring and performance development and annual appraisal, annual appraisal, each of those are inter related and integrated with each another having several sub-component under each of those components.
The performance appraisal system has been viewed as a cycle. Performance planning is the staring point of the cycle. Throughout the year, individual employees and manager establish communication system, provide feedback, participate in review session as and when required and in the end finalizes annual appraisal. Both agree to identify development needs during appraisal for the next year and thus the process continues.
THE ELEMENTS OF THE APPRAISAL SYSTEM:
1) Performance Standard
2) Continuous monitoring
3) Consistent supervision
4) Routine review and discussion
5) Performance feedback
6) Peer feedback
7) Finalization of Annual Performance Appraisal
THE ANNUAL PERFORMANCE APPRAISAL FORMAT:
In this study, focus has been given on the performance appraisal system of the management executive. The elements of the performance appraisal form are 1) Performance planning 2) Career growth and development 3) Performance competencies 4) Overall Performance Evaluation 5) Review and comment by appraiser, appraiser’s manager and the appraise himself.
There are five types of performance rating, which are discussed and stated below: the rating along with the format used in apprising employee performance is shown in annex-1.
Criteria of Rating Standard
Consistently exceeds requirements of position
Often exceeds requirements of position
Consistently meets requirements of position
Meets minimum requirement of position but needs improvements.
Falls below minimum requirements.
IMPLEMENTATION OF THE PERFORMANCE APPRAISAL SYSTEM:
The first stage in the performance appraisal is performance planning:
In this case, the appraise writes in a white paper 4-6 objective that he targets to accomplish in the upcoming year and submits it to his immediate supervisor who reviews the set of objectives to the HR departments along his signature. The HR department types the objectives in the appraisal form. Throughout the year, individual employee and manager communicate with each other, provide feedback, participate in review session as and when required and in the end finalizes annual appraisal.
The supervisor collects inputs from other staff prior to completing the appraisal formant. The peers may be staffs in different sections or departments who have frequent interaction about the employee’s performance. Peer feedback is given due importance before finalization of annual appraisal however these are these feedback are only asked verbally. No standard format or written document is used.
The employee reads his/her appraisal and writes his or her comments in appropriate sections of the Annual Performance Appraisal Format. The employee is supposed to provide one-week time by supervisor to review his appraisal
The supervisor invites supervise in the appraisal interview once the appraisal is reviewed by him. Performance feedback is a very important feedback aspect of performance appraisal process. Both supervisor and supervise share ideas, provide feedback in a constructive manner to meet objective s and improve performance. The supervisor discusses the strong and weak areas of the subordinates. Both agree on the future developmental needs and discuss about future plans.
Submission to the next level:
Once all parties agree and sign the appraisal, it is forwarded to the next level of authority for review and final approval. Thereafter the appraisals are forwarded to the personnel department for checking, recording and further processing.
MAJOR FINDINGS OF THE PERFORMANCE APPRAISAL SYSTEM OF A. K. KHAN & COMPANY LIMITED
Appraiser and appraise response on different aspects of the performance appraisal system as obtained from the questionnaire are discussed below:
NECESSITY OF THE PERFORMANCE APPRAISAL SYSTEM:
There is a need for performance appraisal system in every organization. The underlying rational of the system comes from the need for evaluating and recognizing employee’s job requirement and providing performance feedback/counseling and allocating rewards/ opportunities for future growth and development.
All respondents of the study unanimously expressed their viewpoints that there is a need for performance appraisal system in the organization. All 100% respondents know that this process exists in the organization and the importance of the system is unquestionable to all respondents. More over most of the appraiser expressed their viewpoints that a systematic performance appraisal helps to serve the purpose of performance appraisal effectively.
Level of Understanding
Interpretation: From the above table it is found that 52% of the sample respondents have responded that they understand the system well and 38% of the respondents viewed that present system is average and only 10% of the respondents have admitted their level of understanding about the existing system is poor.
However, in answering the question on the type of performance system existent in the company, most respondent were confused as to whether the process is annual or a year round process. This reveals that system is completely clearly to all and the percentage obtained in the level of understanding may be misleading.
Tabular presentation of purpose of the performance appraisal system:
Purpose of performance appraisal system:
Identification of Training Need Assessment
Increment of Salary
Identification of potential for career planning
Judging Employees worth
Placement / Promotion Decision
From the above table it is clear that the respondents think performance appraisal system serves several purposes and its importance can be viewed from several perspectives. Among the respondents, (74%) the highest number ranked identification of training needs as the most important purpose of performance. This is followed by performance evaluation. Others reasons of the performance appraisal system such as salary increments, career planning tools and judging tool and judging employee worth have also been focused. The appraisal system as tools for separation or promotion has been viewed by a relatively smaller number of respondents.
Tabular Presentation of basis for Evaluation of Employee Performance
Basis of Performance Evaluation
50 .65 %
Personal relation with the appraiser
This is information from interview with the employees while they were filling up the questionnaire. Majority of the respondents think that job performance (50%) is the basis of evaluation since objectives are set at the initial stages and it is objectives that directs their patterns. It is good to see that they very few respondents think that person relation with the appraiser, regional feeling, and political feeling are not significant factors as basis of evaluation. This indicates there is very little room for biasness; however the existence of such biasness is not welcomed.
Tabular Presentation of Role of HRD & Admin in clarification of the system.
Does HRD play active role in
Clarifying specific details of the system
In clarifying specific details of the performance appraisal system to all staff of the company, the role of Human Resource development and Administration Department is enormous. HRD & Administration Department should circulate memos, guidelines, and formats, disseminate information to all staff and to train line managers about specific details of the system. However, we see that in this case most respondents (80%) think that the HRD & Admin should play more active role. A reason for such response may be that some respondents have received training and has responded strongly whiles the junior/entry and mid level staff may not have received such training and have answered accordingly. This is because there is no mandatory training and has answered accordingly. This is because there no mandatory training course on performance appraisal for all employees.
Tabular Presentation of Performance Rating Scale:
Level of Understanding of the definition of the ratings
Very well defined, Understands very well
Well defined, understanding well
Not well defined, has some understanding problem
Did not hear this
From the above table it is clear that the five performance ratings are well defined and a significant number of respondents have little problem in understanding those rating. However, a few of the respondents have problem in understanding the definition especially the terms such as often “consistently’’ etc.
Tabular Presentation of Performance Factor
Nature of Performance Factor
Criteria are job-related and fully measures performance
Moderately job related, moderately measures performance
Not job related, does not measures job performance.
It is important that the appraisal system should be closely related to job description so that it is able to depict where deficiency lies and there by take corrective measures accordingly.
Most respondents think that the performance factors are job related and measures their performance level well. However, for certain positions performance factors are only moderately job related and it is in these areas where the appraisal should be tailor made.
Tabular Presentation of the contents and format of the Annual Performance appraisal
Simplicity and understandability about the format
The format is simple and easily understandable
The format is complex
The response to this question is quite interesting. Section two is simple and easily understandable to almost all respondents however when it comes to section one i.e. setting objectives most respondents finds it difficult to set objectives accurately. In some cases especially the executives who have been in service for a long time said they have been writing the same objectives for years.
Future work plan is a good planning tool but it still need to be clarified among the junior officers since some say the objectives turns out to be repetition of their job description.
Tabular Presentation of Requirement of Appraiser’s Training Need:
Received Performance management training
Managers, who are responsible for finalization of Annual performance appraisal of their subordinates must have adequate understanding about the system and hence should be trained by the HRD department. Majority of the respondents say that they have received no such mandatory training. A few have only said they have gone for such short training. An answer to the question to appraiser whether they have received any criticism for their rating has not given 100% successful response i.e. some raters have received criticism. This response reflects the need for training on performance appraisal rating.
A) Good sides of the present performance appraisal system:
- One of the strong features of the system is performance planning that is conducted at the initial stage of the year through dialogue between supervisors and supervises. Under performance planning, staff has to prepare work plan that is considered to be a good basis to evaluate staff in a quantitative and qualitative manner.
2) Appraiser’s training by Human Resources and development & Administration on various aspects of the system is appreciable.
3) Sharing of the annual performance appraisal contents with the subordinates is a good side
4) The system ensures supervisor’s responsibility and accountability.
5) A system of follow-up and time line is a positive initiative
6) Well-defined performance rating.
7) The system enables t link training and staff development need of the staff, which is encouraging and motivating for the staff.
8) The tools and system used are more opening, participatory, and analytical.
9) Human Resource Development and Administration maintains all records and monitors the use of the system.
B) Problematic aspects of performance appraisal system:
1) The future work plan concepts are not clear at mid level and junior level employees. In most cases they find that there are repetitions of objectives or repetitions of their job description of routine work.
2) An important problem of MBO approach to performance appraisal system is that after a certain period of item, until the company itself changes its business philosophy, business type of adds new items to its product line, very few changes can be made to them objectives to be set. There will be repetition of objectives.
3) An employee is given zero score for bellow performance on any aspects of the different sections of the annual performance appraisal format however this should not be so because, performer also do certain level of duties, on the their hand a score zero means nothing is accomplished.
4) The performance appraisal system is a year-round system, it is nice to hear but it is difficult to implement systematically because of time constraint.
5) The definition between “Consistently Exceeds requirement” and often Exceeds requirement” is difficult to distinguish; they may vary in degree but not in kind.
6) Lack of training of the appraiser may render the system ineffective.
7) While setting objectives both the supervisor and supervise should be well conversant of the job as well as the capability of supervise.
C) Specific Suggestions to improve the system:
1.) Future work plan should be limited to senior level staff, which are in policy making and decision making level.
2.) Job description and competencies should be given more weight age especially for the junior and mid level managers.
3.) Format should be made simple and easily understandable.
4.) It must be confused whether performance management system should be viewed as a tool of salary increment or a tool for staff development.
5.) Supervisor’s accountability should be ensured and they should be trained about their role and about the system.
6.) The system should have built-in provision to prepare future work plan that are achievable and quantitative manner and supervisory assistance in preparing future work plan is a must.
7.) Practice of self-evaluation system in an honest and generous way to reduce conflict between supervisor and supervisor can be adopted.
8.) The evaluation system should be changed as when needed.
9.) A system of listing down the tasks completed throughout the year in due time as well as the reasons why an objective could not be reached in due time should be practiced by both supervisor and supervise otherwise in the end it be difficult to evaluate employee’s performance and there will be a chance that supervisor will relay on one or two events rather than evaluating the employee’s performance in the entire year
EXECUTIVE SUMMARY OF THE FINDINGS FROM PRIMARY SOURCE OF DATA:
The analysis of the primary and secondary data depicts that there are several strong and weak areas of A. K. Khan & Company Ltd. (Telecom Division) performance appraisal system. The respondents both appraiser and appraise put their comments on the strong and weak areas. For convenience, similar comments are clustered and accordingly presented. The strong areas of the performance appraisal are summarized in the following table:
Performance appraisal is practices formally. Designed forms are used to appraise employees. Set policies for appraisal exist.
1) Performance appraisal is practiced formally. Designed forms are used to appraise employees. Set policies for appraisal exist.
2) Objectives are set at the initial stage of the performance year through dialogue between appraisers and appraise.
3) Open discussion, sharing of information between appraiser and appraiser and appraise before finalization of annual performance appraisal.
4) Training needs are linked, action plans are determined for future development.
5) System, policies and procedures are will established and communicated to employees.
6) Peer feedback system existent though not formally or officially documented.
7) On going feedback system backed up by continuous review system is a positive aspect.
8) All good performance receives salary increments or other forms of rewards that is motivating for the staffs.
9) Format is specific and standard.
10) A career-planning tool that encourages staff to perform the best of their abilities and strengthen organizational discipline.
THE WEAK AREAS OF THE PERFORMANCE APPRAISAL SYSTEM ARE AS FOLLOWS:
1) Peer comments are valued but since they are not documented so there is possibility of misinterpretation. Moreover, dissimilar peer comments are difficult to assimilate.
2) Appraisal is biased occasionally.
3) Follow-up and monitoring should be strengthened.
4) Misconceptions among the staff that the system is an annual event.
5) The format is in English.
6) No training for the supervisors. In most cases they appraise employees based on experience and practice.
7) Performance appraisal forms are not very much scientific, it does not cover all the criteria to measure the performance of he employee.
THE RESPONDENTS PUT THEIR SUGGESTIONS IN THE QUESTIONNAIRE WHICH ARE SUMMARIZED AS FOLLOW:
1) Make the system understandable to all categories of staff through training.
2) Mandatory training for the appraiser on how to rate the annual performance appraisal form.
3) Develop strong follow-up and monitoring system associated with coaching and counseling.
4) Implementation of self-evaluation system to avoid conflicts between appraisers and appraise.
5) Introduction of Bengali annual performance appraisal form which is convenient to understand to the employees.
6) Enhance supervisor’s accountability to clarify and implement performance management system.
7) HRD and Admin should play more active role in this regard especially in providing training to the appraisers.
8) Allocate weight age to job responsibilities for the junior and midlevel staff.
9) Introduce formal peer evaluation system.
Appraisal is an integral and inevitable process of the management. The appraisal process is quite properly viewed as an integral part of the development of the people in the organization. Such development led to improved job performance and the acquiring of new skills and knowledge by the individual. This qualifies him/her for broader responsibility, more rewarding assignment, and promotion. A development plan should be tailored made for each employees or it no possible for each departments and each level.
In accordance with the responses received in questionnaire and from senior management level staff so far, an all efforts has been make to analyze data, comply and summarize suggestions made by the respondents as well as my own comments, the analysis concludes that A. K. Khan & Company Ltd. (Telecom Division) has a standard tools and system with regards to employee performance appraisal system. However, based on respondent’s suggestions, opinion from senior management staff, analysis of primary data and my own observation, the following recommendations can be made to make the system more effective.
1) An all-out effort should be made to enhance the level of understanding about the system at all levels particularly mid and lower level staff. This is a huge task no doubt but the Human Resources development and Management can ensure this by delegating to mangers training followed by effective follow-up and monitoring system.
2) Analyze job duties and responsibility. Discuss with employee to reach agreement upon these requirement.
3) Establish standards of job performance. Supervisors discuss these with the employees so that there is common understanding agreement.
4) Personal trait (i.e. cooperation, quality of work, overall attitude, neatness, dependability, initiative, and drive) may evolve out of a systematic job analysis, but they are subjectively determined and have only face validity for job performance.
5) Development plan should emphasize strengths upon which the person can build rather then trying to over come weakness of character and temperament.
6) Make performance factor job related for all positions.
7) Review further whether future work plans are workable and feasible for junior level staff in the mission.
8) Establish an effective follow-p and review system to assess staff compliance with the system. Grant proper recognition for his or her accomplishment or setting of new goals.
9) The system should be made more acceptable, valid and reliable. The tools used must be able to measure employee’s performance. The system should be more scientific. Further study may be undertaken to evaluate acceptability, reliability, and validity of the system.
10) Have the employee and the employee’s manager identify the employee’s development objective and then put together a plan that outlined specific goals and deadlines on how the employee could broaden the employee’s skills and increase his responsibility in the employees chosen direction.
A. K. Khan & Company Ltd. (Telecom Division) has standard performance appraisal system in the Head Office and Regional Office. Sharing of appraisal contents with the staff, communication of mutual expectations between supervisor and supervise, linking of training development needs with the annual appraisal, performance planning through discussion at the initial stages, performance review, ongoing feedback etc are the most significant and noteworthy characteristics of the performance appraisal system. On the other hand, a moderate to poor level of understanding among the mid and junior level staffs, lack of training of the appraisers, inclusion of future work plans for junior level officers, inadequate monitoring systems are some of the significant drawbacks of the system. There are rooms for further attention on these elements of the system. The present study was undertaken in a very brief period of time and hence it was difficult to evaluate the reliability and validity of the system accurately. However, in its limited scope, the study has derived significant finding on various aspects of the performance appraisal system. Once the identified shortfall of the systems are properly addressed by way of making the system more transparent, the purpose of performance appraisal system will be achieved and thus employees, the organization and at large the society will be benefited from the system.