How to Appraise and Pay Teams

8/4/2019 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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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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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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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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How to Appraise and Pay Teams