PERFORMANCE APPRAISAL SYSTEM FOR PIA INTRODUCTION

1) Philosophy The philosophy behind the Appraisal System for PIA is as follows: Performance Management is a daily supervisory responsibility and plays an integral part in achieving optimum output from limited resources. It is a continuous process in which an employee and his Reporting Officer aims to achieve the required output through proper goal setting and monitoring of objectives. If proper goal setting, coaching and feedback are done periodically, the Performance Appraisal would effectively evaluate the employee s performance, which would enhance his overall motivation level and morale. 2) Purpose Keeping the above philosophy in mind the Appraisal Systems would help PIA management to achieve the following: Determine how effectively employees perform their work against the requirement of their position Identify improvement and development needs. Identify their potential for advancement and provides a transparent path for career progression. Provides plan for correcting deficiencies Feedback to employees about their strengths and weaknesses. Input for promotion & salary raise decisions.

3) Deficiencies of Present System Present conventional system is too general and vague. Presently, on a 5 Degree Scale, employee will normally receive 4 on all items, ticked off in a routine like manner. Items in the Form used previously for assessment were too subjective to evaluate. Does not provide an employee with future objectives and goals on which assessment should be focused. Does not provide an Employee with a development plan, which is required for his future progression.

THE BELL - CURVE APPRAISAL METHODOLOGY

There are many formal methods of appraisal, including the Graphic Rating Scale Method, Management by Objectives (MBO), 360 Degree Feedback Method and the Bell Curve Method.

Bell Curve or Normal Probability Distribution Scale is one of the most popular tools for evaluating employees' performance. The bell-curve methodology is as follows: Employees are ranked from best to worst, typically within a department , Job level or seniority cadre. Normal Probability Distribution Scale buckets people, typically in bell-curve fashion, and limits how many fall into each category. It indicates that most employees will wind up in the middle Good , whereas fewer employees will end up in extremes at either end. The PIA Management will use bell curve methodology for the annual appraisal for Management Cadre employees and all employees would be relatively positioned in the bell curve and would be functionally clustered. Clusters The clustering under the bell-curve methodology is done as follows: Employees of each department are placed within the department's bell curve. Simultaneously, ranking lists are prepared for Management Cadre employees in four groups ( Pay Group V to VII, Pay Group VIII, Pay Group IX and Pay Group X. Employees are then functionally clustered and are placed within a company-wide bell curve.

60 50 40 30 20 10 0 OS

50

20 5
V.G

20 5 GOOD
NI IP

BELL CURVE

APPRAISAL FORMS TO BE USED FOR PERFORMANCE ASSESSMENT

Two Appraisal forms shall be used i.e. EMPLOYEE ACTION / REVIEW FORM (EAF 1) & EMPLOYEE APPRAISAL FORM (EAF-2) (Forms attached as Appendix A). FORM EAF -1 FORM EAF- 2 o Reviews Key objectives (planned vs. achieved) The Form is divided into two parts: -

Part A - Employee Self Assessment / Job Review in which employee defines his development needs and specifies areas for development / improvement. Part B onwards - Employees is rated against 17 attributes (Only applicable attributes will be ranked, Not applicable attributes shall be marked as N/A) grouped into 4 broad categories: Results, Methods, Personal Qualities & Knowledge and then evaluated by the Reporting Officer giving the Employee Performance.

The accomplishments in EAF-1 and employee attributes in EAF 2 Part B are rated on a scale of 1 to 5 (1 being the lowest), and mean of the two is calculated to get the final rating of the employee.

THE APPRAISAL PROCESS

The steps of the appraisal process are as follows:
STEP 1 The Appraisal Forms (EAF 1 & EAF 2) are issued by the HR & A Department and kept with all Admin Managers at Head Office / Domestic Stations and Station Heads at Foreign Stations. The Appraisal is for a period of 12 months from 1st Jan to 31st Dec. STEP 2 Employee in consultation with his Reporting Officer would complete Form EAF-1, Column 1 stating the planned objectives for the Next Review Period. The objectives should be quantifiable and measurable. On these planned objectives the employee would provide his feedback in column 2, stating his "Accomplishments" at the end of the review period. STEP 3 The Reporting Officer would rate the employee on the basis of output in (planned vs. actual) objectives. The Reporting Officer is to make an objective assessment and review the planned objectives. STEP 4 Employee at the end of the review period has to fill up a Self Assessment Form, (EAF-2), PART A in which he has to give a detail review regarding his past review period, what difficulties faced etc and what measures are required for improvement. STEP 5 Reporting Officer completes Part B independently and the Overall Assessment Part C. At this stage involvement of the next Superior Reporting Officer is suggested to make the process transparent and fair. STEP 6 The Superior Reporting Officer completes Part D and records his observations about the Appraisal and his final comments. STEP 7 The employee completes the Employee Comments section and records his views about the appraisal STEP 8 The Review Committee (In cases of disputes / disagreements b/w appraiser and appraisee) revises the appraisal and gives their final scoring keeping in view the Bell Curve methodology. The Form is completed in all respects and Original goes to PR & S Section for record through Admin Managers) and the Copy is kept by the Departmental Admin Manager. STEP 9 Department wise and Group wise clustering is done and bell curve for each cluster is developed. The Procedure is as follows: -

STEP 10

Employees of each department are placed within the department's bell curve based on the following ratings.
Points >= >= >= >= < 4.6 3.6 and < 4.6 2.6 and < 3.6 1.6 and < 2.6 1.6 Rating Outstanding/Exceptional Very Good Good Needs Improvement Inadequate Bell - Curve (%) 5% 20% 50% 20% 5%

The Departments are then functionally clustered, and all employees relatively positioned. These functional clusters are made separately for Groups V to VII, Group VIII & IX and Group X.
Step 11

Company-wide bell curve is reviewed & approved by the ELT.

Step 12

In the event of a substantial difference in the overall appraisal as approved by the department head and already discussed with the employee and the final overall performance approved by the ELT, the employee will be advised appropriately.

Step 13

Human Resource & Administration Department issues increment letters to be delivered to the employees by the respective Departmental / Divisional Heads. Increments and performance rewards are based on the rating of the employees.

BENEFITS OF THE APPRAISAL METHOD

The benefit of the Appraisal Method is as follows: The system creates and sustains a high-performance, high-talent culture. Correlates with the Company's overall goals and objectives. Establishes well-defined consequences (performance-based rewards, timely promotions, etc.).

Awards Top-performing employees substantially than the average performers.

Lets employees know where they stand. Helps the managers identify the most and least talented members of the work group. Helps the managers identify the employee s training / development needs.

GUIDELINES TO COMPLETE APPRAISAL FORMS

Given below are suggestions for completing the appraisal forms, intended to aid the managers who are responsible for appraising performance and potential of their subordinates. In checking the appropriate box out of the five rating categories, the reporting officer will in fact, summarize his judgment of the employee's overall performance. Therefore, before checking a box, please examine the performance in terms of all such factors, which have a significant bearing on the employee's position. RATINGS - The five ratings shown in the Form EAF -2 of boxes 1 to 5 are explained below:
5 OUTSTANDING:

The employees rated in this category excel in all-important aspects of their work, are conspicuous performers in terms of originality, initiative, aggressiveness, versatility and soundness of judgment and require minimum supervision and follow-up reviews. They are usually less than 5% of the total employees. These employees excel in some important aspects of their work and as innovators, instead of accepting the established way, improve on it. They unusually are quick to grasp ideas of others and cut through the core of a problem without being diverted by the irrelevant and the nonessentials. They are more than ordinarily dependable and are often singled out by his supervisor for the more important or difficult assignments. They are usually not more than 20% of the group. The employees rated in this category constitute the majority of personnel and their range of abilities and contributions cover a wide span. These performers are usually qualified and wholly competent employees who produce quality results within allotted schedules. Their performance will naturally reflect both the traits of strength and of weakness, but will have no notable deficiencies in important work aspects. They are usually not more than 50 % of the group. The employees are deficient in one or more basic and important aspects of their work, although they are able to achieve average standards and meet most of their job requirements. The below average employee, when informed of the nature of his deficiencies, should be willing to correct them. They are usually not more than 20 % of the group. The employee rated in this category does not meet the job requirements and is deficient in all basic aspects of his/her work. His/her performance is dissatisfactory overall and is unacceptable. Ordinarily such employees would not be retained indefinitely, but would be terminated after being given reasonable opportunity to attain satisfactory work standard. They are usually not more than 5 % of the group.

4 VERY GOOD

3 GOOD

2
NEEDS IMPROVEMENT

1 INADEQUATE

The Admin Manager completes all the personal details. The personal details are confirmed by the employee, so that if necessary, PIA record can be updated or corrected, as the case may be.

SPECIFIC QUESTIONS TO BE ADDRESSED BY THE REPORTING OFFICER FOR PART B QUALITIES OF AN EMPLOYEE

A) What He Accomplishes? What assigned tasks and responsibilities have been carried out by the employee over the review period? B) What has the employee done particularly well? By answering this question with specific examples, you will be supporting your assessment of his overall performance in Part C (Form EAF-2). Please mention the employee's good points and the jobs he has handled creditably. Also, list his strengths, as evidenced by examples of usually good performance. The areas in which an employee excels are important indications of the direction in which his development may be planned. C) In what areas has the employee's performance fallen below the acceptable standards? Your answer to this question is also intended to support your overall rating of the employee's performance. Please substantiate to the extent possible by specific instances, the weaknesses in employee's performance. List the areas in which the employee's performance can and should be improved.

Record of Appraisal interview and Development Plan For Employee

The objectives of the appraisal interview should be: To give recognition to accomplishments and to enhance his level of motivation. To establish awareness of important deficiencies and to discuss improvement plans. Please record the employees review in Part C (EAF 2), employee's reaction to the points discussed regarding the appraisal, your comments to his reaction, employee's views and suggestions for improving his performance. Caution: Employee should not be informed of his ranking until it is reviewed and approved by Departmental heads / Concerned SVPs. A) Indicate areas of knowledge or experience requiring improvement and development? The purpose of development planning is to devise specific plans and programs for an employee's development and for his performance improvement, based on the individual's need to effectively fill his ultimate position. It is, therefore, important to spell out here what specifically is needed to improve and develop the employee. B) What training do you recommend? The employees can be nominated to participate in the training programs organized by certain institutions of repute or organized by the Company. Please specify the type of training you propose for the employee. C) Actions proposed for improvement in present job performance? Please indicate here what immediate steps you would like to take to reduce the employee's deficiencies and improve his performance.

D) Actions proposed for development? Please specify here what actions should be initiated now for employee development. E) Do you think the employee merits greater responsibility? To judge an employees capacity for advancement beyond his present position, you will have to take into consideration, each aspect of his performance, experience and other qualifications, which may have a bearing on his ability to progress. Given below are some of the considerations, which are generally significant in appraising capacity for advancement: Demonstrated ability & Experience. Self-development and motivation. Knowledge & Intelligence. Management skills & Relationships including leadership qualities. Personal matters like age, health etc.

PROCEDURE TO BE FOLLOWED FOR PERFORMANCE APPRAISAL

The following procedure will be applicable for preparation, finalization and distribution of EAF-1 & 2: 1. Only one copy of each performance appraisal form (EAF-1 & 2) should be prepared duly signed. The date, on which the appraisal is prepared, must be indicated. (More copies shall be Xerox made after completion, and distributed accordingly). 2. The appraisal should be reviewed and initialed by the next higher supervisor and the General Manager. 3. Only one filled copy of the EAF-1 should be sent to the HR & A Department. A Xerox copy is to be retained by the person preparing the appraisal form. Concerned Departmental Head shall Review and approve the appraisals. 4. Appraisal interview should be held with the employee appraised, after the departmental heads approval. 5. After the committee's review, a Xerox copy of the Form EAF-1, (amended where recommended by the Review Committee), will be sent by the secretary of the Committee to the Departmental Head / General Managers for holding interviews with the employee concerned. 6. The reporting officer, who discusses the appraisal, will obtain the signature of the employee and record the interview and finalize (EAF 2). 7. A copy of EAF-1 & 2 will be returned to the Personnel Department / Admin Manager to be kept in the Personal File of the employee and one copy will be retained by the Departmental Head / General Manager. 8. EAF-1 & 2 appraisal forms should be finalized within two weeks of the initial presentation to the Appraisal Review Committee.