Performance Appraisal Practices in India

The systematic study of performance appraisal practices in India is very limited. According to few studies in India the performance appraisal is mainly undertaken for three objectives such as (i) to determine increments in salary; (ii) to assist organizational planning, placement, or suitability; and (iii) for training and development purposes. Other objectives of appraisal were: informing employee where they stand in organization, follow-up interviews, etc.

Every company uses different criteria to evaluate their employees. There are basically three groups of criteria being used for appraisal purpose: (i) evaluation of qualitative characteristics, such as, intelligence, reliability, honesty, leadership and attitudes, abilities, etc., evaluation of actual performance- qualitatively and quantitatively; and evaluation of development and future potential and development by an employee during the period under consideration. Evaluation criteria vary from company to company. There is vast deviation in periodicity of appraisal of employees. Few companies appraise annually, some appraise half- yearly, and a few quarterly; however, annual appraisal is most common among many.

Few innovative performance appraisal practices are:

  • Managerial personnel are allowed to challenge or appeal appraisal decisions made by evaluator.
  • Employee management skills are important in performance appraisal.
  • Personnel department gives a clear instruction of policy and its implementation.
  • Evaluation to be made only on the basis of performance of employee at work.
  • It has also enhanced role clarity in the Organization.

The performance appraisal practice by Dabur India Limited is as follows: The main purpose of performance appraisal system is to evaluate the performance of employee, promote their employees and to make necessary arrangement for their training needs if required.

Employees are evaluated by how well they accomplish a specific set of objectives that have been determined to be critical in the successful completion of their job. This approach is frequently referred to as Management by objectives.

The latest mantra being followed by organizations across the world being  “get paid according to what you contribute” – the focus of most of the organizations is turning to performance management and specifically to individual performance.

  1. The focus of the performance appraisals practice in todays environment is changing by concentrating more on career development relying on the dialogues and discussions with the superiors.
  2. Performance measuring, rating and review systems have become more thorough, structured and individual employee specific than before.
  3. Appraisal through a 360-degree feedback system takes place
  4. In India, the performance appraisal processes are faced with a lot of problems, the most important is the need of quantifiable indicators of the performance.

The emergence of following trends related to Performance appraisals practices can be seen in the global scenario: 360 degree feedback, Team performance appraisal, Rank and yank strategy.

  1. 360 Degree Feedback: It is also known as ‘multi-rater feedback’, where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job.
  2. Team Performance Appraisal: In this method each employee performance is measured as a team member as well as individually.
  3. Rank and Yank Strategy: It is also known as up or out policy where the performance appraisal model is prepared in which best-to-worst ranking methods are used to identify and separate the poor performers from the good performers. Then certain plans are chalked out for improvement. Some of the organizations following this strategy are Ford, Microsoft and Sun Microsystems.
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