BALAJI INSTITUTE OF

I.T AND MANAGEMENT

KADAPA
PERFORMANCE MANAGEMENT
(21E00305c)

ICET CODE: BIMK

www.bimkadapa.in
1st & 2nd INTERNAL EXAM

Name of the Faculty: M.ANANTH KUMAR

Units covered: 1-5 units

 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE & SYLLABI

Course Code Specialization Elective- III L T P C

21E00305c Performance Management 4 0 0 4
Semester III

Course Objectives:
• To introduce performance management concept and distinguish performance management and Human
resource management
• To discuss the concept of mentoring , process, types and pitfalls
• To explain coaching and counseling for performance improvement and steps involved in counseling
process.
• To discuss the uses of appraisal system and methods of appraisal
• To impart knowledge on Learning Organization, approaches, sources and rewards, and compensation
management.
Course Outcomes (CO): Student will be able to
• Understand performance management concept and distinguish performance management and Human
resource management
• Learn the concept of mentoring , process, types and pitfalls.
• Explain coaching and counseling for performance improvement and steps involved in counseling
process.
• Design and apply different appraisal systems in an organization.
• prepare reward and compensation policy
• determine factors influencing fringe benefits in the reward and compensation policy.
UNIT - I Lecture Hrs: 8
Introduction to Performance management : Concept -Performance management vs. performance
appraisal--Performance management vs. Human resource management- Purposes- Significance .

UNIT - II Lecture Hrs: 12

Mentoring and Monitoring: Concept of mentoring - Benefits of mentoring - Characteristics of mentor-
Mentoring process-Group mentoring -Benefits -Types of Group Mentoring – Pitfalls Monitoring
performance.

UNIT - III Lecture Hrs:12

Coaching and counseling : Coaching for performance improvement -. Concept - Tips for effective coaching
Counseling -Functions of counseling- Steps in counseling process

UNIT - IV Lecture Hrs:12

Annual Stock taking: Stock taking of performance -Uses –Appraisal system design : Process and
approaches - Appraisal methods - MBO and Assessment centre -360 degree appraisal - Balanced score card.
Stock taking of potential- Appraisal for reward - Appraisal for recognition
UNIT - V Lecture Hrs:12
Learning organization : Concept of learning organization- Learning approaches- Learning sources -
Importance of learning-. Characteristics of learning organization- Reward and compensation Management -
Concept and types of compensation- Objectives - Competitive compensation design - Fringe benefits-
Objectives -Factors influencing fringe benefits - Types of fringe benefits
Textbooks:
1. Performance Management, A.S.Kohli, T.Deb,Oxford.
2. Prem Chadha, Performance Management, McMillan.
57
 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE
Reference Books:
 Performance Management, Bagchi, Cengage Learnings.
 Performance Appraisal and Management, Sharma, Davinder, HPH
 Performance Management, Herman,Aguinis, Pearson Education.
 Performance Management and Appraisal Systems, T.V.Rao, Response.
 Performance management, Kandula, PHI.
 360 Degree Feedback and Assessment and Development Centres, T.V.Rao, Excel.
 Performance Management, Dinesh k.Srivatsava, Excel

Online Learning Resources:

NPTEL :: Management - NOC:Performance and Reward Management
https://www.tutorialspoint.com/performance_management

58
PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

UNIT -1

INTRODUCTION TO PERFORMANCE MANAGEMENT

1. Concept:

1.1: Meaning of performance management

The term ‘performance management’ includes two words ‘performance’ and

‘management’. performances mean accomplishment, execution,carrying out, working out of
anything undertaken. performance can be regarded as behavior the way in which organizations,
teams and individuals get work done. On the other hand, management means the process of
dealing with employees.

Performance management is a strategic and integrated approach to delivering

sustained success to the organizations by improving theperformances of individuals,it can
focuson the performance of an employee, department, organization and also on the processes to
improve them.

Performance management is the systematic assessment of the performance of an

employee and using such assessment to better the performance.

1.2: Definition:

“An effective performance management aligns individual performance with organization

mission vision and objectives”.

American compensation association (1996)

“A systematic approach to improving individual and team performance in order to

achieve organization goals”.

Hendry Bradley and Perkins (1997)

“Performance management is a process for establishing shared understanding about what

is to be achieved and an approach to managing and developing people in a way which increases the
probability that it will be achieved in short and longer term.

Armstrong (1994)

“Performance management is about direction and supporting employees to work as

effectively and efficiently as possible in line with the needs of the transition“.

Walters (1995)

1.3: Concept of performance management

The concept of performance management is based on approaches’that aim to overcome

the negatives of performance appraisal by emphasizingthat performance management is
continuous and forward looking process in which managers and workers / individuals work
together in partnership .

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

MANAGEMENT
PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

Hence the two key emelments of performance management are;

i. Continuous process
ii. Link to mission and goals

Performance management is commonly missing contracted with performance appraisal

which is process of evaluating the performance of workforce

As a concept performance management should include the following.

 As a communication system is developed to assist employees.

 Pm is not just requires directions from mangers but also active participation from
employees.
 Employees should know about their job functions and aware of performance level
expected.
 PM invoices continuous feedback about here employee’s performance.
 Giving rewards to the effective performers.

1.4: Performancemanagement cycle

plan

control act

monitor

1. Plan:
Paling is a pre-determined courseof action planning with regard to performance
managementsinvolves developing a lam about how to improve performance and how to
increase productivity with improved performance.
2. Act

Once the plan has been developed this should convert into action or
implementation whatever the things planned they get into action.

3. Monitor

After implementing the plan,the performance should be monitored by this an idea

regarding the poor performance and high level performance get generated.

4. Review

Performance review also called performance appraisal. If is a tool used to

measure and assess employee efficiency and effectiveness. Manger determines
deviations and the take corrective actionsEg training requirement, increase in wage or
salary need of employee promotion etc.

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

MANAGEMENT
PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

1.5: Factors affecting performance

Performance is affected by number of factors which included

Personal
Contextual factors
factors

factors Leadership
factor
System
factors
Team factors

1. PERSONAL FACTORS:

The individual’s skill competence motivation and commitment have impact on

performance

Egg: if an employee is not well motivated, the he /she will not able toperform
well

2. LEADERSHIP FACTORS:
If includes quality of encouragement guidance and support provided by mangers
and team leaders
3. TEAM FACTORS
This includes the quality of support provided by colleagues. A work gets
completed productively and effectively only when it is performedany all team
members in co-operative ways.
4. SYSTEM FACTORS
Here, it means the system of work and facilities provided by the organization. If
there is lack of facilities it has impact on performance.
5. CONTEXTUAL (SITUATIONAL) FACTORS
Internal and external environmental pressures and changes also have impact on
performance.

2. DIFFERENCES BETWEEN PERFORMANCAE MANAGEMENT AND

PERFORMANCE APPRAISAL

 Performancemanagement is commonly missingconstructed with performance appraisal

which is a process of evaluating the performance of workforce.
 Performance management canbe defined asa process whichcontinuously identifies
measures and develops the performance of workforce in the organization and by doing

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

MANAGEMENT
PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

so, each individuals performance and objectives are connected with overall missionand
goals of organization.
 Performance appraisal is a method of evaluating the behavior of employees in the work
sport including both quantitative and qualitative aspects of job performance.
 Performance appraisal is a system of review and evaluation of individuals
orteam’sperformance.
- According to MONDY ETAL.

The differences between performance management and performance appraisal are

explained here as follows,

Basis Performance management Performance appraisal

Meaning It is the assessment of It includes review and
performance for making evaluation of performance
improvements.
Objective Objective of performance It emphasis only individual
management is to integrate objectives
organizational, team and
individual objectives
Ratings usage Here there is less likely to It often uses ratings or
involve ratings rankings to evaluate
performance
Relation with business needs Performance management is Performance appraisal is not
linked to business needs linked to business needs
Frequency Continuous review with one Performanceappraisal is done
or more formalreviews in a once in a year i.e. annually
year
Focus It is future-oriented for It includes retrospective for
achieving growth corrections i.e. focus on past
performance
Type of process Flexible and continues It is monolithic/rigid system,
process, strategic and operational process
integrated
Documentation In performance management Itneeds complex paper work
is a minimized need of
documentation
Ownership PM is owned by managers PA is housed in human
and supervisors resource department.
Reward linkage Does not have direct link to PA is only linked to pay.
reward

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

MANAGEMENT
PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

3. PERFORMANCE MANAGEMENT VERSUS HUMAN RESOURCE MANAGEMENT

 Performance management is the process of assessing progress toward achieving

predetermined goals. This process focus on improving the performance ofindividuals in
an organization by making corrections to the deviations.
 Human resource management is concerned with the management of human resources in
an organization.
 It may be defined as the art of procuring, developing and maintaining competent
workforce to achieve organizational goals effectively.
 Both performance management and human recourse management have ultimate aim of
achieving organizational objectives effectively. But there are differences in these two
which are given in below table,

BASIS PERFORMANCE HUMAN RESOURCE

MANAGEMENT
Meaning It is the process of It is the approach to the
assessingprogress progress management of organization of
towards achieving organizations most valued
predetermined goals. assets-human resource
Concept Performancemanagement is Human resource management is
narrow in nature as it have less wide in nature as it emphasize n
choices wide aspects
Features  For performance  Personnel
development administration
 Rely on multiple  Organizational
sources of information management
Techniques used Techniques of performance It includes
management are,  Flexi-work &flexi time
 Performance appraisal  Training & development
 Management by  Collaborative
objectives management etc.
 360-degree feedback
 Reward programmers
etc.
Policies Performance management is PM is not guided by policies
guided by policies (plans,
strategy)
Focus PM focus on 3 things, HRM focus on,
a. Setting priorities Implementing policies and
b. Collect data procedures i.e. recruiting,
c. Communicate data training, employee-relations.
Discipline Performance management is a HRM is a part of management
normative study discipline (but itself not a field
of study)
Objectives  Establish standards of  Provide organization
performance well trained and
 Encourage two way motivated employees
communication  Help the organization to
reach its goals.

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

MANAGEMENT
PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

4.PURPOSE OF PERFORMANCE MANAGEMENT

The main purpose of performance management is to align the organization objectives

with the skills, performance goals and competencies of employee. The purpose of performance
management is explained here under,

Addressing an urgent challenge

Identifying poor performance

Employee growth

Alignment of goals

Purpose of performance improved communication

Management
Improved communication

To improve productivity

Removal of barriers

Motivates employees

1. ADDRESSING AN URGENT CHALLENGE

Some organist ions begun to modernize parts of their performance management
todrive behaviors that are critical in today’s work environment include,
 Providing informal feedback
 Setting clear expectations
 Working collaboratively
2. MAKING DECISIONS
Performance management helps inmaking decisions about pay, promotions and
other performance so that in effective performance will be corrected.
3. IDENTIFYING POOR PERFORMANCE
Another purpose of performance management is identifying the lagging and poor
performance in an organization and taking corrective actions to improve the
performance.
4. EMPLOYEE GROWTH
Management helps in achieving the growth of employees by providing growth
opportunities for their personal growth.
5. ALIGNMENT OF GOALS
By aligning the goals of individuals with organizational goals there is a change to
achieve improved results and objectives of organization. (Performance management
serves this.)

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

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PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

6. IMPROVED COMMUNICATION
To improve the open communication between supervisors and employee’s the
performance management is needed by this theyboth will express their needs, opinions
and expectations freely.
7. TO IMPROVE PRODUCTIVITY
An effective performance management helps in improving the productivity of
origination by enabling employees toperform totheir potential.
8. REMOVAL OF BARRIERS
With performance management the barrierswhich inhibit the effective
performance of employees are identified and removed to achieve improved performance.
9. MOTIVATES EMPLOYEES
Performance management motivates employees in anorganist ion to improve
their performance andit provides proper guidance and support to enhance performance.
High level performance (by rewards hikes), lower level (guidance, support etc.).

5. SIGNIFICANCE OF PERFORMANCE MANAGEMENT

The significance of performance management explained here under,

 Performance management helps toachieve sustainable improvementsin

organizationalperformance.
 PM as a lever for change in developing a more performance – oriented culture.
 PM increases the motivation and commitment of employee’s whichleads toimproved
performance in an organization.
 Performance management enable individuals to develop their abilities increase their
jobsatisfaction and achieve their full potential to their own benefit and for whole
organization.
 Performance management enhances the development of team performance in an
organization.
 Performance management develops constructive and open relationships between
individuals and their managers.
 Performance management providesopportunities for individuals toexpress their
aspirations and expectationsabouttheir work.
 Performance management aligns individual performance expectations with
organizational goals.
 Performance management aims to improve the performance and identifies training
needs.
 Toenhance the quality of work-there by to provide the customer what he wants.
 Performance management contributes for the improved productivity in organization by
the effective performance.

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

MANAGEMENT
PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

5.1: PROCESS OF PERFORMANCE MANAGEMENT

Performance management is an ongoing process it doesn’t takes place just once in ayear.
It is a continuous process includingseveralcomponents which is closely related to each other.
The process of performance management is explained as follows,

Process of performance management

prerequisites

Performance
planning

Performance
execution

Performance
asessment

Performance
review

Performance
renewal &
reconstructing

1. PREREQUISITES
There are two important prerequisites that are requires before implementing performance
management is,
a. Knowledge of organizations mission and strategic goals.
b. Knowledge ofjobin question (done through job analysis).

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

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PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

2. PERFORMANCE PLANNING
Employees should have thorough knowledge of performance management at the
beginning of each performance cycle supervisor and employee meet to discuss what
needs to be done and how. This planning includes,
a. Results.
b. Behaviors.
c. Developmental plan.

3. PERFORMANCE EXECUTION
It involves executing or performing the developed plan. This stage has following
factors,
 Commitment togoal achievement.
 Ongoing performance feedback and coaching.
 Communication with supervisor.
 Collecting and sharing performance data.
4. PERFORMANCE ASSESSMENT
It involves evaluating the extent to which the desired behaviors have
beendisplayed whether the desired results have been achieved or not.
5. PERFORMANCE REVIEW
In this stage there is a meeting between employee and the manager to review
their assessments. This is important because it provides a formal setting in which an
employee receives feedback on his or her performance
6. PERFORMANCE RENEWAL AND RECONTRACTING
This phase is identical to planning stage with a difference that is renewaland
reconstructing stage uses the insights and information gained from other phases.

5.2: CRITERIA FOR SUCCESSFUL PERFORMANCE MANAGEMENT

The criteria needed for achieving successful performance management are given here under,

 Performance management processes must fit the culture of organization

 There should be commitment and support from management
 Performance management should add value in terms of both short-term and long-term
growth
 There should be shared ownership between the managers and employees
 The involvement of stakeholders like customer’semployee’s shareholders, creditors etc.,
is needed to have effective performance management.
 Performance management processes should be transparent and operate fairly.
 Theactivities ofperformance management must be in ethical way by respecting
individualneeds ethical processes and soon.
 Alignment of individual’s goals with the goals of organizations then they will work for
mutual consent.
 Performance management should focus on the development of people.

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

MANAGEMENT
PM(HR PAPER) HR-MARKETING ,HR-SYSTEMS SPECIALIZATION

 Continuous evaluation of performance is needed tohave successful performance

management.

5.3: DIS ADVANTAGES/DANGERS OF POORLY IMPLEMENTED PERFORMANCE

MANAGEMENT.

1. INCREASED TURNOVER
If the process is not fair employees may become upset and they leave the
organization which leads toincreased turnover.
2. MIS LEADINGINFORMATION
If a standardized system is not in place the opportunities tofabricate the
information about employee’s performance may be mislead.
3. LOWERED SELF-ESTEEM
Self-esteem of employee may be lowered ifa feedbackis provided in inaccurate
way.
4. WASTED TIMEAND MONEY
Performance management system involves time and money. These resources get
wasted if performance management designed poorly.
5. DAMAGED RELATIONSHIPS
As a consequence of deficient system the relationship among the individuals may
get damaged.

6. EMPLOYEE BURNOUT AND DISSATISFACTION

When the performance assessments notseenas valid and the system isnot fair it
leads toemployee burnout and this satisfaction.
7. INCREASED RISKOF LITIGATION
Expensive lawsuits may be filed by individuals when they feel that they treated
unfairly.
8. VARYING AND UNFAIR STANDARDS AND RATINGS
Both standards and individual ratings should be fair if not it leads to in effective
performance management.
9. UNCLEAR RATING SYSTEM
Because of poor communication employees maynot know how their ratings are
generated andtranslates to rewards.

UNIT.1/INTRODUCTION TO PERFORMANCE BALAJI INSTITUTE OF IT& MANAGEMENT

MANAGEMENT
 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE & SYLLABI

Course Code Specialization Elective- III L T P C

21E00305c Performance Management 4 0 0 4
Semester III

Course Objectives:
• To introduce performance management concept and distinguish performance management and Human
resource management
• To discuss the concept of mentoring , process, types and pitfalls
• To explain coaching and counseling for performance improvement and steps involved in counseling
process.
• To discuss the uses of appraisal system and methods of appraisal
• To impart knowledge on Learning Organization, approaches, sources and rewards, and compensation
management.
Course Outcomes (CO): Student will be able to
• Understand performance management concept and distinguish performance management and Human
resource management
• Learn the concept of mentoring , process, types and pitfalls.
• Explain coaching and counseling for performance improvement and steps involved in counseling
process.
• Design and apply different appraisal systems in an organization.
• prepare reward and compensation policy
• determine factors influencing fringe benefits in the reward and compensation policy.
UNIT - I Lecture Hrs: 8
Introduction to Performance management : Concept -Performance management vs. performance
appraisal--Performance management vs. Human resource management- Purposes- Significance .

UNIT - II Lecture Hrs: 12

Mentoring and Monitoring: Concept of mentoring - Benefits of mentoring - Characteristics of mentor-
Mentoring process-Group mentoring -Benefits -Types of Group Mentoring – Pitfalls Monitoring
performance.

UNIT - III Lecture Hrs:12

Coaching and counseling : Coaching for performance improvement -. Concept - Tips for effective coaching
Counseling -Functions of counseling- Steps in counseling process

UNIT - IV Lecture Hrs:12

Annual Stock taking: Stock taking of performance -Uses –Appraisal system design : Process and
approaches - Appraisal methods - MBO and Assessment centre -360 degree appraisal - Balanced score card.
Stock taking of potential- Appraisal for reward - Appraisal for recognition
UNIT - V Lecture Hrs:12
Learning organization : Concept of learning organization- Learning approaches- Learning sources -
Importance of learning-. Characteristics of learning organization- Reward and compensation Management -
Concept and types of compensation- Objectives - Competitive compensation design - Fringe benefits-
Objectives -Factors influencing fringe benefits - Types of fringe benefits
Textbooks:
1. Performance Management, A.S.Kohli, T.Deb,Oxford.
2. Prem Chadha, Performance Management, McMillan.
57
 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE
Reference Books:
 Performance Management, Bagchi, Cengage Learnings.
 Performance Appraisal and Management, Sharma, Davinder, HPH
 Performance Management, Herman,Aguinis, Pearson Education.
 Performance Management and Appraisal Systems, T.V.Rao, Response.
 Performance management, Kandula, PHI.
 360 Degree Feedback and Assessment and Development Centres, T.V.Rao, Excel.
 Performance Management, Dinesh k.Srivatsava, Excel

Online Learning Resources:

NPTEL :: Management - NOC:Performance and Reward Management
https://www.tutorialspoint.com/performance_management

58
PM (HR PAPER) HR MARKRTING, HR SYSTEMS SPECIALIZATION

UNIT -2

MENTORING AND MONITORING

1.CONCEPT TO MENTORING:

1.1:MEANING AND DEFINITION OF MENTORING

MEANING: -

Mentoring is a professional relationship in which an experienced person (the mentor) assists

another (The mentee) in developing specific skills and knowledge that will enhance the less
experienced person’s professional and personal growth.

Mentoring is important at workplace because it helps employees to do the right thing

by exposing them to senior employees.

Mentoring differs from coaching because coaching is short term task and mentoring is
long term task. mentoring is widely recognized today as an extremely beneficial career
development tool.

Definition:

“Mentoring is a long term relationship that meets a development need,helps develop

full potential and benefits all partners,mentor, mentee and the organization”.

- Suzanne Faure

“Mentoring is a protected relationship in which learning and experimentation can

occur, potential skills be developed, an in which results can be measured in terms of
competencies gained.’’

-Audrey Collin

1.2: Characteristics of Mentoring:

The process of mentoring has following characteristics

 Mentoring is long term in nature.

 Mentoring involves two parties i.e. mentor and mentored in which mentor is more
qualified person compared to mentee.
 Mentoring is a professional relationship.
 The process of mentoring enhances skills of mentee.
 Mentoring serves as a career development tool.
 Mentoring leads to reduced training costs for an organization.

UNIT-2/MENTORING AND MONITORING BALAJI INST OF IT &MGMT

PM (HR PAPER) HR MARKRTING, HR SYSTEMS SPECIALIZATION

1.2: Types of mentoring:

The types of mentoring explained as follows,

Reverse mentoring
Special project mentoring formal mentoring

Mentoring
Team mentoring types informal mentoring

Peer mentoring

I. Formal mentoring:

Formal mentoring also referred as classic mentoring. This type of mentoring

pairs a senior faculty member with a junior member, usually from the same
department, for a specified period of time.

II. Informal mentoring:

Voluntary mentoring relationships that are not assigned and lack structure
about how mentors work with mentees constitute ‘informal mentoring’.

III. peer mentoring:

Members with equal ranks form either the same or different

departmentsdevelop supportive networks. They meet regularly to discuss issues and
challenges they are facingas well as shareadvice, information and strategies.

Iv.Group or Team mentoring:

In group mentoring, senior faculty members serve as mentors for a group of junior
mentees who meet regularly as a team. For example, a senior member may meet with a group
of junior faculty on a monthly basis.

V.special project mentoring:

Here mentor helps to guide mentees for short term project or task (normally
lasting a few weeks to a few months).

UNIT-2/MENTORING AND MONITORING BALAJI INST OF IT &MGMT

PM (HR PAPER) HR MARKRTING, HR SYSTEMS SPECIALIZATION

VI. Reverse mentoring:

Here, the roles of traditional mentoring are reversed. A young employee takes on
the role of the mentor while the mentee is an older and often more experiencedemployee.
This relationship closes the knowledge gap for both parties.

2.Benefits of mentoring:

The benefits of mentoring process observed in the following areas

a. mentors
b. mentees
c. organization

a. Benefits for mentors:

The benefits of mentoring for mentors given here as follows;
 Mentoring process strengthens mentor’s active listening skills.
 Mentoring encourages knowledge sharing that increases self-worth (self-value) of
mentor.
 A sense of fulfillment and achievement is established to the mentor with mentoring.
 Mentoring process helps to enhance mentor’s relationship building skills.
 The process of mentoring provides an added sense of responsibility and purpose for
one’s career.

b.Benefits for Mentees:

The benefits for mentee given here under;
 Skills or competency levels of mentees developed with mentoring process.
 Mentoring improves mentees confidence in their ability.
 Communication skills of mentee will have to enhanced with process of mentoring.
 With mentoring process, mentee comes to know how to maintain professional
relationship.
 Mentee’s network of contacts enhanced.
c. Benefits for organization:
With mentoring process, an organization will have following benefits;
 The process of mentoring helps an organization to achieve its talent development
goals like succession planning and strong leadership development.
 Mentoring process improves employee retention keeping an employee for a long
period in organization there by reducing turnover rates.
 The training costs get reduced by one to one interaction.
 By mentoring process, it is possible to inform everyone throughout the company that
leadership is willing to in its employees.
 Mentoring improves talent acquisition efforts(acquiring skilled human labor to meet
organizational needs) New hires are aware of this organization’s career development
opportunities .

UNIT-2/MENTORING AND MONITORING BALAJI INST OF IT &MGMT

PM (HR PAPER) HR MARKRTING, HR SYSTEMS SPECIALIZATION

3. characteristics of mentor:
Mentors do not take their responsibility as a mentor lightly. Agood mentoris committed in
helping their mentees find success in their chosen profession. mentor has following
characteristics.

Willingness to share successful

Good communicator’s characteristics supportive
Inspiring of respectful
Responsive mentor provide insight
Patience criticize constructively

i.Willingness to share:
A mentor is willing to teach what he /she knows and accept the mentee where they
currently are in their professional development.For this, a mentor must be willing to share
skills, knowledge and expertise.
ii.Good communicators:
Goodmentor isable tocommunicate complex concepts in a language that mentee
understand and are in constant communication with mentee.
iii. Inspiring:
As a mentor, he or she must be able to inspire mentee to achieve more and success in
their profession by motivating and inspiring the mentees.
iv. Responsive:

Mentors should respond to the needs of mentee and also the needed tools and
information should be provided to help mentees for developing skills and knowledge.
v. Patience:
Another vital characteristic of mentor is patience. Patience is must because whatever
the information the mentors are sharing to mentees, it takes time to understand and adopt by
mentees.
vi. Successful:
Being successful is one of the important characteristic ofmentor. As a mentor, they
should have a successful track record in their field. Then he or she will be a role model to
mentees.
vii.Supportive:
Always mentorsshould be supportive to the mentees by providing support and
guidance to make them successful. This is also one of the important characteristic a mentor
should have.
viii.Respectful:
As a mentor, he is respected by colleague and employees in the organization and the
professional community.
ix. provide insight:
In mentoring process, mentors use their personal experience to help the mentees avoid
mistakes and learn from good decisions.

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x. criticizesconstructively
Criticize means indicating the faults of someone or something in a disapproving way.
when necessary mentors point out areas that need improvement, always focusing on the
mentee’s behaviors.

4.MENTORING PROCESS:

The process of mentoring includes our important steps which are given as follows;

Building the relationship

Negotiating Agreements
Process of mentoring

Developing the mentee

Ending the relationship

a. Building the relationship:

This is the first and foremost step in the process of mentoring. The mentor- mentee
relationship is the first vital aspect of mentoring that needs to be established. Time and
money must be invested in building a good relationship. The mentor and mentee take their
time ingetting to know each other. With this, the process of mentoring will be easy.
b. Negotiating agreements:
Negotiating is the action of transferring legal ownership of a document. In this step, a
set of agreements get established to be implemented and followed during mentoring
relationship. This includes.
 Defining the roles
 Setting schedules for mentoring sessions
 Identifying limitations
 Identifying mentoring style preferences.
c.Developing the mentee:
This is the longest step of mentoring process. During this stage, both the mentor and
mentee will define mentoring goals, create a list of mentoring activates to achieve their goals
and keep constant communication with each other.
d.Ending the relationship:
It is the final step in the process of mentoring. The mentoring process endswith acelebration
oftheaccomplishments and evaluation of outcomes. The mentoringrelationship must end on a
highly positive note rather thatclosing abruptly (in a rude manner).

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5. GROUP MENTORING:
Meaning: Group mentoring is a methodology for individual development that utilizes
multiple experts (mentors) and multiple learner (mentees) in a group setting. Although
structured as group, learning is individual and each mentee works on his or her own unique
learning needs and development goals.
Group mentoring connects employees and advances learning within your organization
5.1. Features of group mentoring:
The features of group mentoring are given here under.

Efficient
Promotes diversity
Features of group mentoring Contributes to vibrant culture
Matching process
Avoids favoritism

I.Group mentoring is efficient:

Group mentoring affords (provide) an organization the opportunity to extend its
mentoring efforts and reach morepeople in a time –efficient manner.
II. PromotesDiversity:
Group mentoring promotes diversity of thinking practice and understanding. This
diversity of group mentoring interaction is a powerful motivation for employee development.
III. Contributionto vibrant culture:
Here, vibrant means full of energy and life. Group mentoring also contributes to the
vibrancy of mentoring culture. It expands the mentoring capacity of the organizationand
affords the opportunity to move learning to the next level.
IV. Matching process:
Group mentoring is a matching process that takes intoconsiderationcompetency areas
like teamwork responsibility, leadership, decision making and so on as well as personal
characteristicslike flexibility, honesty,communication skills etc., as needed in
mentoringrelationship.
V. Avoidsfavoritism:
Favoritism means giving unfair preferential treatmentto one person at the expense of
another.Group mentoringavoids favoritismthat can resultswhen there are limited mentors and
many potential mentees.

6.BENEFITS OF GROUP MENTORING:

 Group mentoring reduce costs.
 Group mentoring may communicatecorporate culture faster.
 It allows mentors to observe mentees as they share leadership.
 Group mentoring allows faster matching process i.e., both business needs and
personalcharacteristics.
 Group mentoring improves social skills thorough peer interaction.
 Group mentoring improves work performancethrough feedbackfrom more than just
one person.

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 It provides broader peer support opportunities.

 Group mentoring offers more employees the chance to be included in mentoring
program.
 Group mentoring builds team work and sense of community.
 It provides mentees a chance to build a group facilitation and leadership skills.

7. TYPES OF GROUP MENTORING:

Types

Peer group mentoringTeam group mentoring facilitated group mentoring

i.Peer group mentoring:

Peer group mentoringbrings together peers, colleagues with similar learning interests
and needs. The group is self-directed and self-managed. Itmanages the learning process so
that each member’s learning needs are met and everyone derives maximum benefitfrom
each other’s knowledge experience.
Example:
Each participant presents a problem or issues. The other members of the group
respond to problem.As a result, the collective wisdom ofgroup is used to solve problem.
ii.Team group mentoring:
Team mentoring offers a methodology fromfacilitating thelearning of a team. Together
the individuals making up the team,articulate mutual learning goals and work simultaneously
with one or more mentors who guide them.
Example,
In a law firm, two mentors with different legal specialties work with an internal groupof
associates with the goal of helping them better understand what they do and how they do it.
iii.Facilitated group mentoring:
Facilitated group mentoring allows a number people to participate in a learninggroup
and to benefit simultaneously from the experience ofa mentor or mentors.
Example:
Once a month several physicians meet to talk about issues in their area of practice.
For each session, they choose an outside facilitator(a medical academician) based on the topic
they are exploring.

8.PIT FALLS IN MONITORING PERFORMANCE:

8.1Monitoringperformance:
Meaning:
‘Monitoring’means consistently measuring performance and providing ongoing
feedback to employees and work groups towards reaching their goals.

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‘Performance monitoring’ also defined as a process of promoting a climate of

continuous learning and development helping to sustain employee performance at planned
level, enhancingindividual competencies.
Definition:
“Performance monitoring makes a contribution in the evaluation of work methods and
employee performance”.
-According to Haynes
8.2Objectives of monitoring performance:

The objectives of monitoring performance are as follows;

To observe employee’s performance.

Objectives of monitoring To exchange information.
To support manage.
To identify hurdles.

I. To observe mange performance:

Performance monitoring helps to observe theemployee’sperformances againstplanned
quality, time, cost,set standards related to the tasks and goals.
II. To exchange information:
Performance monitoring aims to exchange information mutually regarding
thedevelopmental execution ofperformanceplan.
iii. To support managee:
Monitoring of performance helps to support the managee for plan implementation
adequately and in time. By this, manageeperformance will be effective.
IV.To identify hurdles:
With thehelp ofperformance monitoring, the hurdles in the implementation ofplan
observed,and corrective actions developed to solve such hurdles.

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8.3.Pitfalls in monitoring performance:

Lack of objectivity
Halo effect
Pitfalls in Performance monitoring Recency effect
Distributional tendency
Prejudice
Contrast tendency

i.Lack of objectivity:
Bias is generally defined as an inclination or prejudice for or againstperson
Or group especially in a way considered beingunfair in the context of performance appraisal.
This has impact on overall performance of employees

ii.Halo effect:
This type of problem arises when the person carrying out the appraisal
generalizes (make a general statement) the positive or negative impression to several
individual performance categories, thus overall performance influenced by this exploitation.
iii.Recencyeffect:
It implies the evaluator’s tendency to focus on an employee’s recent activities,
behaviors and performance (good or bad) rather the performance registered over a period of
time.
iv. Distributional tendency:
In this case evaluators face three types of errors;
a) Strictness tendency: all those evaluated are rated below average.
b) Central tendency: when no one is rated really bad or really good.
c) Leniency tendency: all those assessed to have performed above average.
v.Prejudice (Stereotype):
It entails the identification of an employee with a certain group and the assumption
that the characteristicsof that group apply to the employee as well irrespective of its positive
and negative nature.

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vi. contrast tendency:

Here, evaluators resort tocomparisons between employee performance with the view
of assessing each individual’s performance and they fail to objectively evaluate it based on
actual facts and results.
8.4. WORKING MODEL FOR MENTORING:
The working model for mentoring includes the following stages.
Stages 1: Introduction:
The objective of introduction is to build a connection and start the relationship
between mentor and mentee. This is a good time to get to know each other better before
starting mentoring sessions.
Stage 2: Foundation:
This entails an agreement about the mentor and mentee roles and sets the expectations
for mentoring process.
Stage 3: Orientation:
The mentee is oriented to the process in order to lessen the tension
andincreased motivation.
Stage 4: Collaboration:
In this stage, the mentor works together with the mentee and is seen as a caring
partner.
Stage 5: Problem solving:
At this stage,mentor helps the mentee to identify the issue about his skills and
performance.This issue isrectified by corrective actions.
Stage 6: personal framework:
Here the mentoring relationship is strengthened and the mentor is regarded as a
trustworthy partner. The mentor makes an effort to help mentees in developing confidence
and self-esteem.
Stage -7 professional frame work:
At this stage mentee views the mentor as a role model and now the focus is on skills
improvement and performance improvement.
Stage 8 Transitions:
Transition refers to change. This is the last stage encourages the interdependence
ofmentor and mentee. The mentee is taught to work independently but the guidance of
mentor is still there.

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8.5: ESSENTIALS OF SUCCESSFUL MENTORING :( PERVIOUS EXAM)

For achieving successful mentoring program following essentials should be

considered
Develop a relationship trust
Define roles and responsibilities
Establish short and long term goals
essentials of successful mentoring collaboration
Be honest
Active participation
Open communication
Shared values

i.Develop a relationship of trust:

Relationships need to be built before anyeffective mentoring take place. An
environment of trust and mutuality must be established. It is important for the mentor and
mentee to become acquainted know to with each other.

ii.Define role and responsibilities:

To achieve successful mentoring the roles and responsibility of both mentor and
mentee should clearly defined it includes.

 What will be the role of mentor?

 What types of mentoring will be more effective?
 What are the responsibilities of mentor and mentee?

iii.Establish short and long term goals

By establishing short term and long term goals, mentors and mentees will work
together to develop mutually agreed upon goals.These goals become the basis frommentoring
activities.

iv. Collaboration:
Collaborating is another essential for successful mentoring program. Be collaborative
in solvingproblems mentorsneed toallow mentees the opportunity to identify concerns and
potential solutions.

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V.Be honest:
Being honest is another essential for both mentor and mentee
Mentor: be honest and truthful in evaluations.
Mentee: let mentor know if mentee don’t understand something.

vi. Active participation

There should be active participation from both mentor and mentee to achieve
successful mentoring.
Mentor: engage in own leering while mentoring, ask questions and experiment.
Mentee: listen the mentors information carefully (active listening).

Vii)Open communication
Open communication also one of the important element for successful mentoring.

Mentor:Help mentee set realistic expectation also the reason for Un availability should
communicated to mentee openly.
Mentee: let mentor know what mentee’s goals are.

viii.shared values
Both mentors and mentees should share interests and values which will establish a
common ground options shared by each other

8.6. ROLES AND RESPONSIBILITIES OF MENTOR AND MENTEE:

A) mentor roles and responsibilities:

1.Identifying roles
 Have a clear understanding of why he /she want to be mentor
 Mentor with a realistic assessment of mentees skills and experiences
2.Communicating expectations

 Have a clear understanding of mentor’s expectations for mentee

 Clearly communicating those expectations.
 Stay flexible in changing expectations.
 Adopt feedback to mentee’s leering style.
 Be realistic about setting timelines.
3.Working together
 Advice, don’t dictate.
 Advice on what mentor know and admit things he/she don’t know.
 Give good examples.
 Offer constructive feedback.
 Evaluate progress.
 Be supportive to mentees, be reliable.

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4. Meeting all the goals:

 After mentoring is completed,follow up on successes.
 Provide an evaluation of the experience.
 Repeat the mentoring process with others.
B) Mentee roles and responsibilities:

1. Identifying roles

 Have an understanding about what mentee want to be mentored.

 Select a mentor based on his /her goals.

2. Communicating expectations
 Have a clear understanding of mentee’s expectations for mentor.
 Clearly communicate those expectations.
 Stay flexible in changing expectations.
 Inform mentor about learningstyle that mentee preferred.
 Be realistic about setting timelines.

3.Working together

 Listen and contribute to the conversation.

 Understand that mentors will not have all the answer.
 Accept constructive feedback.
 Evaluate progress.
 Celebrate success.
 Be reliable.

4.Meeting the goals

 Provided updates to the mentor after mentoring is completed.

 Provide evaluation of the experience.
 Say thank you.

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 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE & SYLLABI

Course Code Specialization Elective- III L T P C

21E00305c Performance Management 4 0 0 4
Semester III

Course Objectives:
• To introduce performance management concept and distinguish performance management and Human
resource management
• To discuss the concept of mentoring , process, types and pitfalls
• To explain coaching and counseling for performance improvement and steps involved in counseling
process.
• To discuss the uses of appraisal system and methods of appraisal
• To impart knowledge on Learning Organization, approaches, sources and rewards, and compensation
management.
Course Outcomes (CO): Student will be able to
• Understand performance management concept and distinguish performance management and Human
resource management
• Learn the concept of mentoring , process, types and pitfalls.
• Explain coaching and counseling for performance improvement and steps involved in counseling
process.
• Design and apply different appraisal systems in an organization.
• prepare reward and compensation policy
• determine factors influencing fringe benefits in the reward and compensation policy.
UNIT - I Lecture Hrs: 8
Introduction to Performance management : Concept -Performance management vs. performance
appraisal--Performance management vs. Human resource management- Purposes- Significance .

UNIT - II Lecture Hrs: 12

Mentoring and Monitoring: Concept of mentoring - Benefits of mentoring - Characteristics of mentor-
Mentoring process-Group mentoring -Benefits -Types of Group Mentoring – Pitfalls Monitoring
performance.

UNIT - III Lecture Hrs:12

Coaching and counseling : Coaching for performance improvement -. Concept - Tips for effective coaching
Counseling -Functions of counseling- Steps in counseling process

UNIT - IV Lecture Hrs:12

Annual Stock taking: Stock taking of performance -Uses –Appraisal system design : Process and
approaches - Appraisal methods - MBO and Assessment centre -360 degree appraisal - Balanced score card.
Stock taking of potential- Appraisal for reward - Appraisal for recognition
UNIT - V Lecture Hrs:12
Learning organization : Concept of learning organization- Learning approaches- Learning sources -
Importance of learning-. Characteristics of learning organization- Reward and compensation Management -
Concept and types of compensation- Objectives - Competitive compensation design - Fringe benefits-
Objectives -Factors influencing fringe benefits - Types of fringe benefits
Textbooks:
1. Performance Management, A.S.Kohli, T.Deb,Oxford.
2. Prem Chadha, Performance Management, McMillan.
57
 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE
Reference Books:
 Performance Management, Bagchi, Cengage Learnings.
 Performance Appraisal and Management, Sharma, Davinder, HPH
 Performance Management, Herman,Aguinis, Pearson Education.
 Performance Management and Appraisal Systems, T.V.Rao, Response.
 Performance management, Kandula, PHI.
 360 Degree Feedback and Assessment and Development Centres, T.V.Rao, Excel.
 Performance Management, Dinesh k.Srivatsava, Excel

Online Learning Resources:

NPTEL :: Management - NOC:Performance and Reward Management
https://www.tutorialspoint.com/performance_management

58
PM(HR PAPER) HR-MARKETING,HR-SYSTEMS SPECIALIZATION

UNIT-3

COACHING AND COUNSELING

1. COACHING FOR PERFORMANCE INPROVEMENT

1.1 MEANING OF PERFORMANCE CAOCHING

 Coaching is a person to person technique designed to develop individual knowledge, skills and
abilities. Coaching is most effective if it takes place informally as part of the normal process of
management or team leadership.
 Performance coaching involves establishing a partnership between managers and their staff for
the purpose of improving performance.
 Performance coaching is developmental processes in which all personnel grow and develop
improve their performance and advance their carriers.
 Performance coaching for executives or employees achieves a fulfilling balance between
professional goals and personal development. In the context of business performance coaching
can bring out the true potential of staff at all levels.
1.2 HOW DOES WORKING WITH A COACH HELP?
 Working with a coach and help individual to.
 Identify roadblocks to achieving individual’s true potential.
 Set practical, achievable goals.
 Develop new skills.
 Identify and maximize strengths.
 Develop tools to overcome weaknesses.
 Develop a greater understanding of his/her wants, needs and desires.
 More effectively inspire and drive a team towards success.
 Address and overcome negative behavior and thought process that create road blocks
(obstacles/hurdles).

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2. CONCEPT
2.1 PURPOSE OF COACHING
The purpose of coaching is explained here as follows,

Improving performance

To prepare for future roles

Purpose of coaching for self-awareness

Embracing change

Solving problems

Securing desired results

1. IMPROVING PERFORMANCE
 The main purpose of coaching in workplace is to improve the performance of employees.
 For improving the performance of individuals, coach adopts following five important steps
 Identification of required performance outputs and communicates them to employees.
 Identifying the activities required to produce a given output.
 Developing and communicating performance standards that must be met or exceeding
performance outputs.
 Compare individual’s current performance with established standards, to know deviations.
 Develop actions plans to correct deviations thereby improving performance of individuals.
2. TO PREPARE FOR FUTURE ROLES
 Coaching has become a tool to develop leaders and their leadership capabilities.
 By thinking through the situations with the assistance of a coach, the leader is able to plan how
to handle anticipated situations and also gain confidence to handle unplanned situations.
 Coaching makes individuals to deal with dynamic, complex situations and thereby they
prepared to deal with future roles effectively.
3. FOR SELF-AWARENESS
 Most common purpose of coaching focus on building self-awareness through identifying blind
spots and strengthening skill gaps.
 With the usage of 360 degrees’ feedback assessment, leaders are able to compare feedback from
others to their own self-perception.
 This self-perception gives a deep understanding of strengths and opportunities so they can
develop an action plan to move forward.
4. EMBRACING CHANGE
 Improvement in performance cannot occur without change.
 By understanding the fundamentals of change and human reactions, it enables coaches to
leverage their knowledge of the individual and the organization to make change happen.
 To change, following steps are included,
a. Lead the change.

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b. Create a shared need.
c. Shaped a vision.
d. Mobilize commitment.
e. Change systems and structures.
f. Monitor progress.
5. SOLVING PROBLEMS
 Performance coaching is an effective means to solve problems creatively.
 Performance coaches’employee’s variety of problem solving techniques to solve problems.
 One of the most effective approach to solve problems include the following steps,

a. Identify the problem.

b. Isolating the root cause of problem.
c. Generating possible solutions.
d. Analyzing solutions.
e. Selecting a solution.
f. Implementing and evaluating a solution.
6. SECURING DESIRED RESULTS
 Performance coaching helps the firm to achieve the results it needs.
 Desired results may include increased sales revenue, greater productivity, better customer
service, improved quality and efficiency etc.
 For achieving these desired results, coaching is helpful for an organization.
2.2 PROCESS OF PERFORMANCE COACHING
The process of performance coaching includes the following five stages,

Analyze

Prepare

Conduct

Document

Follow up

STEP ONE: ANALYZE

 First and foremost, step in performance coaching is to collect and interpret performance data
and segment employees by performance.
 Identify the areas of knowledge skills or capabilities where learning needs to takes places to
qualify people to carry out the task provide for continuous development improve performance,
and enhance skills.

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STEP TWO: PREPARE

 After analyzing the needs of coaching, before starting coaching, set the coaching session
objective, focusing on one or two behaviors.
 Ensure that people understand and accept the need to learn.
 Discuss with people what needs to be learned and the best way to undertake the learning thereby
preparing them for coaching session.

STEP THREE: CONDUCT

 During the session, ask questions share perspective and insight and determine options to move
forward.
 Coaching is a two-way communication process that requires that the supervisor and the
employee both be fully engaged and motivated.
 Encouragement and advice should be provided to help people in pursuing self-learning
program.
 Specific guidance also required where people need help.

STEP FOUR: DOCUMENT

 Follow the employee progress overtime create a list, library of best practices and learning tips
based on experience and employees input.
 Document in helpful for the future reference.

STEP FIVE: FOLLOW UP

 After documenting the progress of individuals, follow up their performance through reviews
and effective monitoring.
 Follow up is the final and most important step in the process of coaching where the deviations
are rectified by corrective action plans.

3. TIPS FOR EFFECTIVE COACHING

Tips for effective coaching are given here as follows,
(i) COACH MUST BE ABLE TO DEFINE THE BOUNDARIES
 Coaches must understand that they need permissions before they can give any coaching.
 An effective coach must be able to define the boundaries of his or her relationship with the
different managers and executives.
 For a coach to work at his or her best it is vital that the coaching role must be agreed upon.
(ii) COACH MUST BOTH RESOURCE AND KNOWLEDGABLE
To become an effective coach, one must both be resourceful and knowledgeable. When the
coacher is tasked to coach and along the coaching process there are questions that he cannot
provide answers to it is best that tell the truth.

(iii) COACH MUST HAVE CLEAR UNDERSTANDING OF DIFFERENT

COMPETENCIES

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 Coaches work hand in hand with managers so that training programs can be tailored according
to the needs of the different skill areas.
 Coaches can help managers in making behavioral changes that are required in carrier growth
and development. It is thus important that coaches must have a clear understanding of the
different competencies where they will be making an impact on.

(iv) COACH IS ALWAYS AN EDUCATOR

 The coach is always an educator but it does not necessarily mean he or she is an oracle who has
answer to every kind of question.
 It helps to have communication skills so that the creator can easily express what he really means
to say, especially in those.

(v) COACHES MUST REMEMBER THAT THEY ARE IN CONTROL

 The coach does not control the relationships or actions or decisions of the person that he or she
is coaching.
 The coach merely gives recommendations and at the end of the day, the coached person is still
responsible for his or her own actions and decisions.

4. COUNSELLING
4.1 MEANING
 Performance counseling is the process of communicating to an employee the mangers
assessment of the strong aspects of employee’s performance of job and ways in which that
performance may be improved.
 Performance counseling is a significant activity that helps the employees to know themselves
better.
 Performance counseling refers to support provided by a manager to his subordinates in
objectively analyzing their performance. It essentially focuses on the analysis of performance
and identification of training and development needs for bringing about further improvement.
 Performance counseling attempts to help the employee in:
 Understanding himself this strengths and weaknesses.
 Improving his acknowledged and interpersonal support by giving him feedback about his
behavior.
 Establishing goals and formulating action plans for further improvement.
 Generating alternatives for dealing with various problems.
4.2 DEFINITION
Counseling can be defined as any activity in the workplace where one individual uses a set of
skills and techniques to help another individual to take responsibility for and to manage their
own decision making, whether it is work related or personal.

5. FUNCTIONS OF COUNSELING

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The functions of counseling are explained in the following heads,

Advice
Reassurance
Communication
Functions of counseling release of emotional tension
Clarified thinking
Reorientation

1. ADVICE
 Advice giving is not desired for counseling as it is a process of self-growth which advising
would hamper. But many times counselors do have to advice so as to show/guide the counselor
towards a path of actions.
 Counselor after carefully listening to the problems of counselor makes judgments about the
counselor’s problems.
 Advising develops a very good relationship between the counselor and counselee.
2. REASSURANCE
 Counseling has to provide reassurance to the employee that he or she is progressing well and
moving towards achieving the desired goal.
 Reassurance provides courage, confidence and strength and develops a positive feeling that
employee is doing well.
 Reassurance here can be meant as encouragement also. Reassurance is needed when an
employee is assigned a challenging task.
3. COMMUNICATION
 Counseling is mostly about proper communication.
 A proper communication is required to pass the employee problems to the management and also
to air the views of management to the employees.
 Communication skills such as listening providing feedback etc, are required for an effective
counseling session.
 Therefore, counseling facilitates in improving upward and downward communication.
4. RELEASE OF EMOTIONAL TENSION
 Counseling gives a scope of to the employee to release their emotional tension. This release
also termed as emotional catharsis.
 Emotional outbursts help the employee to release one’s anger and frustration to a sympathetic
listener, which in turn helps in subsiding the tension.
 This emotional release may not solve the problem but paves way for solution.
5. CLARIFIED THINKING
 Another important function of counseling is clarified thinking.
 Discussing one’s problem with someone helps the person to see those points and facts which
have been overlooked due to emotional involvement with the problem.
 Clarified thinking helps the person to think in a rational and realistic manner.
 This clarified thinking encourages a person to accept responsibility and be more realistic in
solving problem.

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6. REORIENTATION
 Reorientation is a result of clear thinking which helps an employee to access oneself-one’s
potential and limitation and in accordance to them set new goals and values.
 Reorientation leads a person to have a better self-image and it also helps to treat the patients of
depression.
 A clear self-image leads to be more confident person and also a more effective worker.

6.0 STEPS IN COUNSELING PROCESS

The counseling process is a planned, structured dialogue between a counselor and a client. It is
a cooperative process in which a trained professional helps a person called the client to identify
sources of difficulties or concerns that he or she is experienced. Steps in the process of
counseling are here as follows,

STEP-1 Relationship building.

STEP-2 Problem assessment.

STEP-3 Goal setting.

STEP-4 Counseling intervention.

STPE-5 Evaluation, termination.

STEPS IN COUNSELING PROCESS

1. RELATIONSHIP BUIDLING
 The first step in counseling process involves building a relationship and focuses on engaging
clients to explore issue that directly affect them.
 In this step the relationship between clients and the counselor developed to build relationship,
counselor need to follow steps like,
 Introduce yourself
 Invite client to sit down
 Address the client by name
 Watch for nonverbal behavior as signs of client’s emotional state.
 Invite client to describe his or her reason for coming to talk.
 Indicate that you are interested in the person.
2. PROBLEM ASSESSMENT
 While the counselor and the client are in the process of establishing a relationship, a second step
takes place i.e. problem assessment.
 Problem assessment involves the collection and classification of information about the client’s
life situation and reasons for seeking counseling.
 This step involves assessing the problem of client clearly.
3. GOAL SETTING
 Like any other activity, counseling must have a focus.
 Goals are the results or outcomes that client wants to achieve at the end of counseling.
 Goals play important role in giving proper direction to the counseling process.

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 With goals setting, these goals enables both counselor and counselee to have effective
counseling process of achieve their goals.
4. INTERVENTION
 There are different points of view counseling what a good counselor should do with clients
depending on the theoretical positions that counselor subscribes to do.
FOR EXAMPLE:
 Person – centered approach suggests that the counselor gets involved rather than intervenes by
placing emphasis on relationship.
5. EVALUATION, FOLLOW-UP, TERMINATION
 For the beginning counselor, it is difficult to think of terminating the counseling process, as they
are concerned with beginning the counseling process.
 However, all counseling aims at successful termination.
 Terminating the counseling process will have to be conducted with sensitivity with the client
knowing that it will have to end.
 At the end of counseling process, proper evaluation and follow-up is needed to achieve
successful termination.

7.0 APPROACHES TO EFFECTIVE COUSELING

A non-directive approach is best, which means not telling people what their problem is or what
they should do about it. Instead it is preferable to do the following,

1. LISTEN WITH INTELLIGANCE AND UNDERSTANDING

 People in difficulty cannot fail to benefit it if they are encouraged to discuss their problems with
a sympathetic listener.
 When listening, counselors must try to understand the perspective of other person. They should
attempt to communicate their understanding so that both parties can agree on what the situation
or problem is.

2. AVOID BEING JUDGEMENTAL

 A counseling session aims to help people, not to criticize them (by making unwelcome moral
judgments)
 If an individual engaged in counseling is judgmental, the other party is likely to calm up or go
on the defensive, and the rapport (support) established by active listening get destroyed.

3. DEFINE THE PROBLEM

 Encourage individuals to define the problem for themselves with the aid of sympathetic
listening and careful questions.
 A considerable amount of listening and questioning may be necessary before the point becomes
clear, because clarity of expression and strong emotions seldom go together.

4. STAY ALERT AND FLEXIBLE

 The meeting ought to be planned to decide broadly how it should be tackled, but the counselor
should be prepared to change the direction in the light of new information.
 So counselors should stay alert and flexible.

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5. OBSERVE BEHAVIOUR
 Observing behavior of the client is another important approach to be considered in counseling
process.
 While observing behavior it includes observing how the person talks react and responds.

6. CONCLUDE THE MEETING

 Help people to work out a solution to the problem that they can put into effect, possibly with
some help from manager or another person.
 Meeting should be concluded with questions like,
 Well, what do you think you should do now?
 Where do we go from here?
 How could I help?
 Is there any other help you feel you need?

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 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE & SYLLABI

Course Code Specialization Elective- III L T P C

21E00305c Performance Management 4 0 0 4
Semester III

Course Objectives:
• To introduce performance management concept and distinguish performance management and Human
resource management
• To discuss the concept of mentoring , process, types and pitfalls
• To explain coaching and counseling for performance improvement and steps involved in counseling
process.
• To discuss the uses of appraisal system and methods of appraisal
• To impart knowledge on Learning Organization, approaches, sources and rewards, and compensation
management.
Course Outcomes (CO): Student will be able to
• Understand performance management concept and distinguish performance management and Human
resource management
• Learn the concept of mentoring , process, types and pitfalls.
• Explain coaching and counseling for performance improvement and steps involved in counseling
process.
• Design and apply different appraisal systems in an organization.
• prepare reward and compensation policy
• determine factors influencing fringe benefits in the reward and compensation policy.
UNIT - I Lecture Hrs: 8
Introduction to Performance management : Concept -Performance management vs. performance
appraisal--Performance management vs. Human resource management- Purposes- Significance .

UNIT - II Lecture Hrs: 12

Mentoring and Monitoring: Concept of mentoring - Benefits of mentoring - Characteristics of mentor-
Mentoring process-Group mentoring -Benefits -Types of Group Mentoring – Pitfalls Monitoring
performance.

UNIT - III Lecture Hrs:12

Coaching and counseling : Coaching for performance improvement -. Concept - Tips for effective coaching
Counseling -Functions of counseling- Steps in counseling process

UNIT - IV Lecture Hrs:12

Annual Stock taking: Stock taking of performance -Uses –Appraisal system design : Process and
approaches - Appraisal methods - MBO and Assessment centre -360 degree appraisal - Balanced score card.
Stock taking of potential- Appraisal for reward - Appraisal for recognition
UNIT - V Lecture Hrs:12
Learning organization : Concept of learning organization- Learning approaches- Learning sources -
Importance of learning-. Characteristics of learning organization- Reward and compensation Management -
Concept and types of compensation- Objectives - Competitive compensation design - Fringe benefits-
Objectives -Factors influencing fringe benefits - Types of fringe benefits
Textbooks:
1. Performance Management, A.S.Kohli, T.Deb,Oxford.
2. Prem Chadha, Performance Management, McMillan.
57
 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE
Reference Books:
 Performance Management, Bagchi, Cengage Learnings.
 Performance Appraisal and Management, Sharma, Davinder, HPH
 Performance Management, Herman,Aguinis, Pearson Education.
 Performance Management and Appraisal Systems, T.V.Rao, Response.
 Performance management, Kandula, PHI.
 360 Degree Feedback and Assessment and Development Centres, T.V.Rao, Excel.
 Performance Management, Dinesh k.Srivatsava, Excel

Online Learning Resources:

NPTEL :: Management - NOC:Performance and Reward Management
https://www.tutorialspoint.com/performance_management

58
PM (HR PAPER) HR-MARKETING, HR-SYSTEMS SPECIALIZATION

Unit -4

ANNUAL STOCK TAKING

1. STOCK TAKING OF PERFORMANCE

Annual stock taking of performance is basically a performance audit function,
whichapart from usualemployee evaluations m emphasizes onmeasuring the proper
alignment of performance results with the organizational andemploys growth.
Stock –taking or inventory checking is thephysical verification of the quality
ofperformance in anorganization. Thismay be done toprovide an audit of existing
stock (performance that existing)
For organization, stock –taking ofperformances helps in achieving the goals
by optimizing staff performance, duly identifying, the strength and weaknesses. For
employees, on the other hand it helps in providing guidance to Perform their jobs
andalsohelp in definingtheir career path.
1.1 SKILLS FOR ANNUAL STOCK-TAKING
While stock –taking, the following skills can help a manger makethe process
smoother
 The ability to identify individual strengths and weaknesses.
 The ability to offer genuine reinforcing feedback in right time.
 The ability to offer negative feedback in clear honest get supportive and
developmental terms.
 The ability to provide feedback that the receiver can use effectively for
developmental purpose.
 To ensure effective communication and ability to keep the cultural context in view.
 The ability to listen effectively, appropriately using active as well as passive modes.
 The ability to guide and conduct discussions without manipulating others.
 The ability to documents processes and outcomes of discussions concisely accurately
and meaningfully for all concerned.
2. USES OF STOCK –TAKING OFPERFORMANCE:
Stock –taking of performance can serve several uses for an organization and such uses
are as follows
1) Enabling managers to observe, monitor and guide manage performance as well as
potential, inan effective way.
2) Facilitating multichannel communication on tasks and manage development issues
sensitizing seniors to problemsat lower levels and juniors to the organizations
expectations.
3) Emphasizing and enabling improvement over previous performance ofeach manger
and the manage have roles and expectation that must be fulfilled
4) Appropriately communicating to each manage the organizations perception of his
/her contributionvalue to the organization
5) Ensuring role clarity to improve role performanceand to enhance takes accountability

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6) Accounting for helpingand hindering environmental forces or organizational factors

that affect individual performance and establishing equivalence ofperformanceamong
comparablemanages working across the organization
7) Generating performance dataset can provide a reliable basis todevelop rational
measurable performance standards for each job
8) Generating performance data that could lead to improving the quality of other human
resource decisions
9) Establishing effective control tools to channel human resource effort towards
fulfilling the organization goals by modifying unproductiveproactive and by
reinforcing the productive ones
10) Helping in building trust and understanding between manger and his/her individual
mangers.
3. APPRAISAL SYSTEM DESIGN

Each organization must examine its own unique humanresourcefeatures, task

characteristics, work culture andinternalclimate,andfigure out precisesystem that will be
functional as well as acceptable.

An important principal in the design of any system is that it must besimple and be
acceptable to its users

4. PROCESS AND APPROACHES

4.1 PROCESS OF APPRAISAL SYSTEM DESIGN
The processof appraisal system design includes the following steps

Identifycritical players

Decide on design process

Assessing the current organizational situation

Establish purpose and objectives of performance management system

Designing the appraisal system

Experimenting with implementation

Evaluate the system

1) IDENTIFY CRITICAL PLAYERS:

Identification of critical players are the first and foremost step in appraisal system
process. Critical players include
a) EMPLOYEES AND THEIR MANAGERS: a cordial rule in any type of design
effort is to get the peopletwo will be using the system involved in its design.
The organizations linemangers and the employees who are on the receiving
end of performance management are the players of this design

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b) CUSTOMERS: customers should be involved in the setting of standards of

performance
c) TOP MANAGEMENT: though the groups at the sharp end are important, the design
process also has to bring in the organization’s senior management and the personnel
HR function
d) PERSONNEL /HR MANAGEMENT
 Personnel/HR may be users of information generated by the performance
management system
 Asidefromthis personnel specialistmay have a facilitative role todevelopment
process.

2. DECIDE ON DESIGN PROCESS:

 In large organizations the direct involvement of everyone who will be affected by

performance management is clearly un realistic
 However, a major reason for arguing that a participation involving approach his
special appropriateness with respect to performance management.
 At the designing the system all writers should be considered who are associated
to performance management with a set of values trust openness frees
communication and involvement

3. ASSESSING CURRENT ORGANIZATIONAL SITUATION:

 An organization which routinely carries out monitoring and maintenance of its

performance management system will readily have evidence about how well it is
working
 Organizations commonly do little y way of monitoring and evaluation and
change is likely to come about as a result of some kind of problem
 So, at the time of designing system, current situation of organization should be
assessed.

4.0 ESTABLISH PURPOSES AND OBJECTIVES OF PERFORMANCE

MANAGEMENT SYSTEM
 Performance management systems are commonly multipurpose and those
purposes predominantly to serve organizational ends.
 All these purposes andobjectives of performance management system should
be established
5. DESIGNING THE PERFORMANCE APPRAISAL SYSTEM
 At the time of designing performance appraisal system it is necessary to decide
what the purpose of the performancemanagementsystem is to be is perhaps the
most important part of the whole development process as hisdesignof system will
follow inlarge part from decision taken about purpose.

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 This step inthe overalldevelopment processinvolvesanswering whole series of

questionabout the nature scope context and mode of operation of performance
management.
6. EXPERIMENTING WITH IMPLEMENTATION
 In this step thedesigned appraisal system is implement theimplementation of
appraisal system may well be organizational change on a large scale.
 The more wide ranging the scope of the system the greater is the scale of the
task even if the system in relatively circumscribed as an employee focused inter
mention implementation will be a big task
7. EVALUATE THE SYSTEM
As the final step of appraisal system design the system is evaluated and
corrective actions are taken on the basis of feedback
4.2 APPROACHES TO APPRAISAL SYSTEM DESIGN

Performance appraisal is not a single event, but rather a process that is ongoing.
Creamer and janosik outline several approaches to appraisal system design including

i. Behavior based approaches.

ii. Results focused approaches.
1) BEHAVIOR BASED APPROACHES
Behavior based approaches tend to use specific performance factors to
evaluate employees. Some such behavioral approaches are
2) RATING SCALE:
 These rating scales use words or phrases to describe the degree to which certain
behaviors or characteristic are displayed
 Categories for behaviorally enclosed scales can be created from job descriptions.
 If there are no appropriate behaviors or characteristics within the job description
mangers should work with employees to determine what behaviors and characterize
wouldbe mostuseful in setting appraisal.

ii) WEIGHTED CHECK LIST:

 Weightedchecklist provides a listof performance related statements that are weighted.

 Employees are judged on a scale indicating the degree to which thestatement
accurately describes performance.

III) FORCED CHOICE METHOD:

 In this method a list of performance related statement is evaluated on how well they
differentiate among employee and how important they are to organizational
performance.
 Differentiation and desirability statements are placed on a grid in clusters that differ
on differentiation but are closely related in desirability.
 Differentiation and desirability are multiplied to yield a total score card

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b) RESULT FOCUSED APPROACHES:

result forced approaches have both advantages and disadvantages on the positiveside,
they produce short and long term results in the context of original performance on the
negative side thy can be overly result oriented and they may be inflexible

There are two approaches based on results

i. MANAGEMENT BY OBJECTIVES
 Management by objective emphasizes participation by al organization members
the following are elements in MBO.
 Formation of trusting and open communication thought out the organization.
 Mutual problem solving.
 Creation of win win relationship.
 Minimal use of forces and political fear games
 Development of positive proactive and challenging organizational climate.

II. ACCOUNTABILITIES AND MEASURES APPROACH


This approach involves the manager and employee agreeing on accountability and
performance factors performance is there forecast for each factor to enable
quantifiable measures for each factor.
 An accountabilities and measure form can be created with performance factor
categories.
5.0 APPRAISAL METHODS:

5.1. APPRAISAL OF PERFORMANCE MEANING:

A performance appraisal also referred to as a performance review performance

evaluation career development discussion or employee appraisal. Performance appraisal is a
method by which the job performance of an employee is documented andevaluated
performance appraisals are a part ofcareer development and consist of regular review of
employee performance within organizations.

A performance appraisal is a systematic general and periodic process that assessed

anindividual employee ‘s job performance andproductivity in relation to certain reestablished
criteria and organizations objective sootheraspects of individual employees are considered as
well as such as organizationalcitizenshipbehavioraccomplishmentsstrengthsand weakness etc.

Performance appraisal can help facilitate management employee communication

however performance appraisal may result in legal issues if not executed appropriately .

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5.2APPRAISAL METHODS OF PERFORMANCE

There are several methods used toappraise or evaluate the performance of employees
in an organization the criteria for performance appraisal methods are based on various aspects
like productively quality of work duration of service and training

Productivity is measured mostly in the case of manufacturing or delivered by the

employee. Duration of services and training is where the companies assume the longest
serving employee to be deserved one for an appraisal

Appraisal methods of performance are of two types as shown in figure

Appraisal methods

Traditional modern methods

Ranking method management by objectives

Paired comparison behaviorally anchored rating scales

Grading method assessment centers

Check list method 360-degree appraisal

Critical incidents method human resource accounting

Confidential report

Graphic rating scale method

TRADITIONAL METHODS

i. RANKING METHOD
 Rankingmethod is the oldest and simplest formal systematic methodof
performance appraisal
 In ranking method an employee is compared with all others for the purpose of
placing order of worththe employees are ranked from the highest to the lowest or
from the best to the worst.

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II. PAIRED COMPRESSION METHOD

 In parriedcompression method, each employee iscompared with other employees on

one on one basisthen after they will provided with aninch of slips each containing
parties’ names, one should keep tick mark against the employee whom he feels the
better of the two.

III. GRADING METHOD.

 In grading method certain categories ofwith are established in advance and carefully
defined
 There can be there categories established for employees

a) Outstanding
b) Satisfactory and
c) Unsatisfactory
 The employee is then allocated to the grade that best describes his or her performance

IV.CHECK LIST METHOD

 The basic purpose of utilizing check list method is the ease the evaluation burden
upon the rather
 Inthis method, a series of statements i.e. questions with their answers in yes or no are
prepared by the Human Resource department in the check list after then it is scented
to the rater to tick appropriate answer relevant to the appraise.

V. CRITICAL INCIDENTS METHOD:

 The critical incidents method requires the rater to recordstatements that describe
extremely good or bad behavior related to job performance.
 Such statement is calledcritical incidents andare usually recorded by the supervisor
during the evolution period for each subordinate recorded incidents include a brief
explanation of what happened.

VI. CONFIDENTIAL REPORT

 Confidential report is the traditional way of appraising employees mainly in

thegovernment departments.
 Evolution is made by the immediate boss or superstore for giving effect to
promoting and transfer and such evaluation report kept confidentially.
 Usually a structured format is devised to collectinformation on employee strength
attitude, Weakness intelligence character attendance discipline etc.

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VII. GRAPHIC RATING SCALE METHOD

 The graphic rating scale is one of the most popular and simplest traditional techniques
for appraising performance.
 This method is also known as linear rating scale method.
 In this method the printed appraisal form is used to appraisal each employee’s
performance in an organization.

Graphic scale rating

Employee name
Department
Job title

Work& time in Poor Fairly poor Good Fairly good excellent

hours/performance
level
Attendance
Behavior towards
sub-ordinates
Sincerity
dependability

2. MODERN METHODS

I) MANAGEMENT BY OBJECTIVES (MBO)

The concept of management by objectives can be described as a process whereby the

superior and sub ordinate managers of an organizationjointly identity its common goals
define each individual’s major areas of responsibility in terms of results expected of him, and
use these measures as guides for operating the unit and assisting the contribution of each its
members.

ii) BEHAVIORALLY ANCHORED REATING SCALES (BARS)

 Behaviorally anchored rating scales are designed to bring the benefits of both
qualitative and quantitative data to the employee appraisal process.
 BARS compare an individual’s performance against specific examples of behavior
that are anchored to numerical ratings.
Ratings example: BARS

Indicate the appropriate level of performance on each factor

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QUANTITY OF WORK

Volume low & erratic satisfactory & steady volume volume above
expectation

QUALITY OF WORK

Results always accurate results accurate & results in accurate&

Model work through not through.

JUDGEMENT

Systematic analytically practical judgment solves doesn’t always show

Good with complex problems, difficultly with good judgment problem

Problems assessing relative value analyze not always

Of factors. adequate.

iii) ASSESSMENT CENTERS

 An assessment center is central location where the managers may come together to
participate in job related exercises evaluated by trained observers.
 The principles idea is to evaluate managers over a period of time, by observing and
later evaluating their behavior.

iv) 360-DEGREE APPRAISAL

 In 360-degree appraisal system an employee is appraised by his superior

subordinate’s peers and customers with whom he interacts in the course of his job
performance.
 All the above appraisals provide information or feedback on an employee by
completing survey questionnaires designed for this purpose.

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Employee

Managers peers direct reports customers

v)HUMAN RESOURCE ACCOUNTING

 Human resource accounting method attaches money values to the value of a firm’s
internal human reserves and its external customers good will i.e. money invested on
human resources of organization.
 Under this method performance is judged in terms of costs and contributions of
employee’s difference between the cost and contribution will reflect the performance
of employee.

1 2

Cost contribution provided by = performance of employee

Invested - employee

(If I < ii – good performance)

(If I > ii – performance is ineffective and need improvement)

6.0 MBO AND ASSESSMENT CENTERS

6.1 MANAGEMENT BY OBJECTIVES (MBO)
 Management b objectives (MBO) also known as management by results (MBR) was
first popularized by peter Drucker in 1954 in his book the practice of management.
 Management by objectives is the process of defining specific objectiveswithin
organization members that management can convey to organization members then
deciding on how to achieve each objective in sequence. This process allows managers
to take work that needs to be done one step at a time to allow for a calm yet
productive environment.
 The management by objectives movement claimed that it overcome the problems of
trait rating. An important part of MBO is the measurement and comparison of an
employee’s actual performance with the standards set. Ideally when employees

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themselves have been involved with the goal setting and choosing the course of action
to be followed by them they are more likely fulfill their responsibilities.

DEFINITION

Management by objectives was defined as a dynamic system which seeks to integrate

the company’sneeds to clarify and achieve its profit and growth goals with managers need to
contribute and develop himself. It is a demanding and rewarding style of managing a
business.

- JOHN HUMBLE (1972)

Management by objectives can be defined as a process whereby the superior and

subordinate jointly identify common goals, define each individual, major areas of
responsibilities in terms of the results expected of him or her and use these measures as
guides for operating the unit and assessing the contribution of each of its members.

- GEORGE S. ODIORNE

6.2CHARACTERISTICS OF MANAGEMENT BY OBJECTIVES

The important characteristics of MBO are given here as follows,

compreh
ensive
multiple goal
accounta orientatio
bility n

operation participat
al character ion
istics of
MBO

simplicict
key
y and
result
dynamis
areas
m

optimizat
systems
ion of
approach
resource

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1. GOAL ORIENTATION
 Management by objectives focuses on the determination of unit and individual goals
in line with the organizational goals. These goals define responsibilities of the
organization and help to integrity the organization with its parts and with its
environment.
 MBO seeks to balance the long term objectives (profit, growth and survival) of the
firm with personal objectives of key executives.
 For seeking balance between goals al corporate departmental and personal goals will
be clearly defined and integrated.
2. PARTICIPATION
 The MBO process is characterized by a high degree of participation of the concerned
people in goals setting and performance appraisal.
 Such participation provides an opportunity to influence decisions and clarify job
relationships with superior’s subordinates and peers.
 Participation also helps toimprove the motivation and morale of the people and results
in role clarity participative decision making is a prerequisite of MBO.
3. KEY RESULT AREAS
 The emphasis in MBO is on performance improvement in the areas which are of
critical importance to the organization
 By identification of key result areas (KRA’S) MBO ensures that due attention is given
to the priority areas which have significant impact on performance and growth of the
organization.
 Key and sub-key areas are identified for each function as shown in following
examples.
 Finance (key area)
 Sub-key areas,
a. Cash flow.
b. Dividend policy.
c. Debt-equity ratio.
d. Sources of funds.
4. SUSTEMS APPROACH
 Management by objectives is a systems approach of managing an organization.
 MBO attempts to integrate the individual with the organization and the organization
with its environment.
 It seeks to ensure the accomplishment of both personal and enterprise goals y creating
goal congruence.
5. OPTIMIZATION OF RESOURCES
 The ultimate aim of MBO is to secure the optimum utilization of physical and human
resources of the organization

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 MBO sets an evaluative mechanism through which the contribution of each individual
can be measured.

6. SIMPLICITY AND DYNAMIC

 MBO is a non-specialist technique and it can be used by all types of managers. At the
same time, it is capable of being adopted by both business and social welfare
organizations.
 MBO applies to every manager whatever his functions and level and to any
organization large or small.
7. OPERATIONAL
 MBO is an operation process which helps to translate concepts into practice.
 MBO is made operation through periodic reviews of performance which are future
oriented and which involve self-control.
8. MULTIPLE ACCOUNTABILITY
Under MBO accountability for results is not centralized at particular points. Rather
every member of the organization is accountable for achieving goals set for him.
9. COMPREHENSIVE
 MBO is a total approach. It attaches equal importance to the economic and human
dimensions of an organization.
 It combines attention to detailed micro level short range analysis within the firm with
emphasis on macro level long range integration with the environment.
6.2 PROCESS OF MBO
The process of management by objectives includes followed steps,

Define
organization
goals.

Define
employee
Performanc objectives
e appraisal
Process of
MBO

Continuous
monitoring
Providing
performance
feedback
& progress
Performance
evaluation

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1. DEFINE ORGANISATION GOALS

 Goals are the critical issues to organizational effectiveness and they serve a numberof
purposes.
 Organization can also have several different kinds of goals all of which must be
appropriately managed.
 Goals set by the superiors are preliminary based on an analysis and judgment as to
what can and what should be accomplished by organization.
2. DEFINING EMPLOYEES OBJECTIVES
 After defining organizationalobjectives, the manager can then proceed to work with
employees in settingtheir objectives.
 The manager asks the objectives of employees what they want to achieve in specified
time period and with what resources.
 Managers will then discuss about what goals seem feasible for the company or
department.
3. CONTINUOUS MONITORING PERFORMANCE AND PROGRESS
 MBO process is not only essential for making managers more effective in business
organizations but also equally importance for monitoring the performance and
progress of employees.
 For monitoring performance and progress following steps are required,
 Identifying in effective programs by comparing performance with pre-
established objectives.
 Applying MBO concepts for measuring individual and plans.
 Preparing longand short range objectives and plans.
 Installing effective controls.
 Designing a sound organizational structure with clear responsibilities and
decision making authority at appropriate level.
4. PERFORMANCE EVALUATION

In this step of MBO process, performance review or evaluation are made by the
participation of the concerned managers

5. PROVIDING FEEDBACK
 Continuous feedback on performance and goals that allow individuals to monitor and
correct their own actions. Such feedback is important ingredient in MBO programs.
 This continuous feedback is supplemented by periodic formal appraisal meetings
which superiors and subordinates can reviews progress towards goals, which lead to
further feedback.
6. PERFORMANCE APPRAISAL

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 Performance appraisals are a regular review of employee performance within

organizations.
 Performance appraisal is done at the last stage of MBO process.

6.4 ASSESSMENT CENTRE

Assessment center is a systematic method of evaluation of behavior of an

individual based on multiple criteria. Assessment center is a place where a person
(staff) is assessed to decide whether he/she suitable for job or not. Assessment centre
is a method used particularly in military or management.

For example: to select officer’s assessment centre method was used in World
War 2.

In assessment centre candidate has to go from interview psychometric test or

certain examination to know his/her suitability for job.

In simple words assessment centers are used to know the suitability of

candidate for particular job with the help of various assessment methods like
interviews business games simulations etc.

WHAT ASSESSMENT CENTRE IS?

Assessment centre is,

1. Standardized procedure of evaluation.

2. A program designed to measure required skill sets for particular job.
3. A key HR process especially for recruitment and selection.
4. Its aim is the know suitability of candidate for a job.
5. Drawing conclusion with statistical process.
6.5 CHARACTERISTICS OF ASSESSMENT CENTRES

Following are the characteristics of assessment centers,

 Assessment centre have a pass or fail criteria.

 Assessment centre is geared towards filling job vacancies or selection.
 Assessment centre addresses an immediate organizational need.
 It can be used with external and/or internal candidates.
 An assessment centre may have fewer assessors and more participants.
 Assessment center involves line mangers as assessors.
 It places less emphasis on self-assessment.
 It focusses on what the individual can do now.
 Assessment centers are geared to meet the needs of the organization.
 Assessment centre assigns the role of the judge to assessors.

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6.6 ESSENTIAL ELEMENTS OF ASSESSMENT CENTRES

Assessment centers must meet the following essential elements
1. Job analysis – job analysis toe doneto understand job challenges and the competencies
required for successful execution of the job.
2. Once the job analysis isdone measurement techniques are to be selected based on job
analysis.
3. Assessment center doesn’t rely (depend) on a single evaluation method therefore there
must be multiple measurement methods selected based on job analysis.
4. Assessors behavioral observations classified into meaningful and relevant categories.
5. Multiple assessors used for each candidate
6. Multiple observations made for each dimensions
7. Systematic methods should be there to record behavior.
 Assessor should be trained to a performance standard.
 Assessors prepare behaviors reports in preparation for integration
 Integration of behaviors through pooling of information from assessors.

6.7 STAGES IN ASSESSMENT CENTRE

A typical assessment centre includes 3 important stages like,

1. Pre assessment centre

2. During assessment centre
3. Post assessment centre
1. PRE ASSESSMENT CENTRE
Pre assessment centre include the following,
a. Defining the objectives of assessment centre.
b. Get approval for assessment centre from the concerned officials.
c. Conduct job analysis.
d. Definethe competencies required for target position.
e. Identify the potential position holder and send then invitations.
f. Identify the observers.
g. Train the observers.
h. Design the assessment centre exercises.
i. Decide the rating method.
j. Make infrastructural arrangements.
k. Schedule the assessment centre.
l. Inform the concerned people of the schedule.
2. DURING ASSESSMENT CENTRE
Following steps included during the process of assessment centre.
a. Explain participants the purpose of assessment centre the procedure it would follow
and its outcome.
b. Give instructions to the participants before every exercise.
c. Distribute the competency exercise matrix sheets among observers.
d. Conduct all exercises.

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e. Conduct a discussion of all observers onevery participant rating at the end of the
session.
f. Make a report of the strengths and improvement areas of every participant.
g. Give feedback to participants.
h. Get feedback from participants and observers about the conduction of assessment
centre.

3. POST ASSESSMENT CENTRE

Post assessment centre includes the following,
a. Compile reports of all participants and submit the list of selected participants to the
concerned authorities.
b. Make improvement in the design according to the recommendations
c. Evaluate the validity of results after a definite period.

6.8 USE OF ASSESSMENT CENTRE

The use of assessment centre is mainly for HR department. Following is the list of HR
functions where assessment entre method effective,
1. SELECTION: assessment centre method helps in getting right people for right job
ion right time.
2. CAREER PATH: assessment centre helps in deciding the candidate to decide his/her
career pathos career development. It is because candidate has got knowledge about a
competencies required for particular job.
3. IDENTIFY THE POTENTIAL: assessment centre helps candidate to know his/her
potential and strong areas. This helps him/her in performance appraisal.
4. IDENTIFYCATION OF TALENT: assessment center method clearly indicates the
talents available withinthe organization which helps in identifying potential people for
particular position.
5. TRAINING AND DEVELOPMENT NEEDS: assessment centers also facilitate
training and development need identification for candidate
6. SUCCESSION PLANNING:assessment centre method clearly indicates the skill
competencies of an individual it helps in succession planning. This decision of
succession planning based on assessmentcentre results helps in reducing errors or
helps in accuracy of taking right decision.

7. 360-DEGREE APPRAISAL

7.1 MEANING
The 360-degree performance appraisal is an appraisal system that
encompasses views of employee’s superior co-workers/peers, and customers. Through
360-degree performance appraisal the employee has the chance to review the mangers
which is not practiced with traditional performance appraisals.

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The 360degree appraisal gathers information from more than one source. This
appraisal system collects information from peers, subordinates, superiors and
customers internal and external so that the employee can get a well-rounded or 360-
degree view of his performance.
Performance data in a 360-degree feedback process can be generated for
individuals from the person to whom they report their direct reports their peers (who
could be team members or colleagues in other parts of the organization), and
customers.

Manager

Peers Individual Customers

Direct reports

360-degree feedback model

7.2 PROCESS OF 360-DEGREE PERFORMANCE APPRAISAL

360-degree performance appraisal offers a more complete picture of the
employee performance and guides the employee to develop the needed skills.
The procedure of conducting 360-degree appraisal is as user,

Develop questionnaire

Ensure confidentiality

Provide training / orientation

Administer the feedback

Analyze the data

Develop and distribute results

1. DEVELOP QUESTIONARIE
Questionnaire typically include from 50 to 100 items to measure different dimensions
of job performance such as,
 Communication
 Team work
 Leadership

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 Initiative
 Judgment etc.,
2. ENSURE CONFIDENTIALITY
Here steps must be taken to maintain strict confidentiality of feedback results.
For example: feedback ratings from several subordinates may be combined to mask
the identity of an individual subordinates.
3. PROVIDE TRAINING / ORRIENTATION
Training on 360-degree appraisal is to be givento all employees and why it is being
implemented in an organization
4. ADMINISTER THE FEEDBACK
Through printed forms or post the form in company website for easy access to
employees.
5. ANALYSE THE DATA
Analysis may include performance dimension summary summery performance versus
expected individual item ratings item ratings performance versus expected highest or
lowest rated items and recommendations for development.
6. DEVELOP AND DISTRIBUTE RESULTS
Feedback should be shared with the employee. It should not be mandatory that the
employee share the results with their managers.

7.3 PRINICIPLES OF 360-DEGREE PERFORMANCE APPRAISAL

The principles of 360-degree performance appraisal are as follow,
1. INVOLVING PEOPLE
 Manager should clarify performance criteria and set SMART (specific, measurable,
achievable, rewarding and time-oriented) goal to employees and accord them an
opportunity to review and interpret results.
 This will strengthen their commitment to both the overall process and specific
decisions that are made.
2. COLLECTING RELEVANT DATA
Focus of performance appraisal should be on specific job related behaviors and
outcomes rather than personality
3. NON SKEWNESS OF DATA
A large sample should be used or highest and lowest scores should be neglected in
order to ensure that one rater cannot skew the data.
4. TRAINING RATERS
Managers must be trained so that they understand what to look for and how to record
critical incidents. This will ensure that better quality of information is collected.
5. EVALUATING SUPPORTED WITH FACTS
 Managers should discuss their observations and evaluations with other managers.
These discussions can trigger thoughts and combat selective memory.
 Manager should also be required to provide a rationale for their rating to other
managers. This highlights bases and prevents manager from using the process of act o
personal grudges.

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7.4 ADVANTAGES AND DISADVANTAGES OF 360-DEGREE FEEDBACK

A. ADVATAGES
 Increased awareness and relevance of competencies through 360-degree feedback
 360-degree appraisal increases awareness of senior management that they too have
development needs
 360-degree appraisal providers more reliable feedback to senior managers about their
performance.
 Helps in identification of key development areas for the individual a department and
the organization as a whole.
 360-degree appraisal identifies strengths that can be sued to the best advantages of the
business.
 Raising the self-awareness of people managers about how they personally affect
others positively and negatively.
 360-degree appraisal supports a climate of continuous improvement
 360-degree appraisal is a relationship building processes and work interrelationships.
B. DIS-ADVANTGES
1. SKEWNEWW
Skewed and unreliable data from raters who consciously or otherwise shade their
responds to protect or punish the rater
2. FALLINGSKILL LEVELS
Skill levels stay relatively flat or even decline because the 360-degree appraisal is not
taken seriously. The numbers needed for a good appraisal can be informally fixed by
silent agreement among raters.
3. LACK OF APPROPRIATE INDIVIDUAL DEVELOPMENT PLANS
Individual development plans become window dressing people may go through the
motions to create them but expand little effort in implementation. When not held
accountable for this performance levels off.
4. OTHERS
 People not giving frank or honest feedback.
 People being put under stress in receiving or giving feedback.
 Lackof action following feedback.
 Overreliance on technology.
 Too much bureaucracy.
5. DEVELOPMENT OF CANDIDATE
Assessment centre helps in environment of skill of candidates through simulations
8. BALANCE SCORE CARD
The balanced score card is a strategy of performance management tool a semi
standard structured report that can be used by managers to keep track of the execution
of activities by the staff within their control and to monitor the consequences arising
from these actions.
Balanced scorecard is also used by individuals to track personal performance but this
is less common. The critical characteristics that define a balanced score card are,

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 Its focus on the strategic agenda of the organization concerned.

 The selection of a small number of data items to monitor
 A mix of financial and non-financial data items.

8.1 FEATURES OF BALANED SCORE CARD

financial
evaluation

communic measuring
ating the customer
stretegy perception
features of
balanced
scorecard

identifying
learning internal
and growth business
process

1. FINANCIAL EVALUATION
 Financial evaluation is the most traditional feature of balanced score card
 No executive will be interested in a balanced score card if it doesn’t include financial
evaluation feature because it deals with profits which are central to the goal of
creating shareholder value.
2. MEASURING CUSTOMER PERCEPTION
 Measuring customer perception is less straightforward feature than financial
evaluation
 Customer perception of an organization in usually evaluated via survey that asks a
company and whether they associated the company with value.
3. IDENTIFYING INTERNAL BUSINESS PROCESSES
 In order to service a companymust understand its core competencies.
 A balanced score card identifies internal business process. This involves
understanding what processes are most important to an organization in order to
succeed and evaluating how well the firm performs them.
 The main aim of this feature is to measure the firm’s efficiency in terms of most
important operations. Examples of processes these include marketing manufacturing
and distribution.

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4. LEARNING AND GROWTH

 Learning and growth are included on a balanced score card. This is a measure of how
well a company is able to develop new knowledge and processes and how well it is
able to translate this into growth and development for the firm.
 The more dynamic a firm the better it will score according to this feature of balanced
score card.
5. COMMUNICATION OF STRATEGY
Balanced score cards should help in communicating the strategy formulated to all
members of an organizationby translating the strategy into a coherent and linked set
of understandable and measurable operational targets.
8.2 PROCESS OF BALANCE SCORECARD
The balance scorecard has two phases
Phase-1 – building the scorecard
Phase-2 – implementing the scorecard

Phase-1: BUILDING THE SCORECARD

Building the scorecard contains the following steps,

1. ASSESSMENT OF ORGANISATION
Step one is the assessment of organizations foundations its core beliefs market
opportunities competition financial position short and long term goals and an
understanding of what satisfaction customer.
2. DEVELOPMENT OF OVERALL BUSINESS STRATEGY
 Development of overall business strategy is second important step of balanced score
card
 In large organizations several strategic themes are developed that contains specific
business strategies.
 Example of common strategic themes include,
 Build in business.
 Improve operational efficiency.
 Develop new productions.
 For public sector organizations.
 Build a strong community.
 Grow the tax base.
 Meet citizen requirements.
3. DECOMPOSITION OF BUSINESS STRATEGY
 In this step the business strategy is decomposed into smaller components called
objectives.
 Objectives are the basic building blocks of strategy the components or activities that
make up complete business strategies.

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4. CREATION OF STRATEGIC MAP

 Here a strategic map of the organizations overall business strategy is created.
 Using cause effect linkages,the components of strategy are connected in appropriate
scorecard categories.
 A strategy map for a transaction based company shows how an objective (effect) is
dependent on other objective and together they form a strategic thread from activities
to desired end outcomes.
5. MEASUREMENT OF PERFORMANCE
 Performance measures are developed to track both strategic and operational progress.
 To develop meaningful performance measures one has to understand the desired
outcomes and the processes that area used to produce outcomes.
 Desired outcomes area measured from perspective of internal and external customers
and,
Processes are measured from perspective of the process owner’s activities needed to
meet customer requirements.
6. REVIEW
 In this step, new initiatives are identified that need to be implemented to ensure that
our strategies are successful.
 A balanced scorecard system provides a basis for executive good strategy well and
managing change successfully.

PHASE-2: IMPLEMENT SCORECARD

 In this phase the organizations balance scorecard is further broken into departmental
level scorecard so that each department can focus on the elements of the complete
organizations scorecard.
 The overall scorecard of the organization reports data from department scorecard and
is reviewed byhigher management onmonthly/quarterly meetings.
9. STOCK-TAKING OF POTENTIAL
Manage potentialis an extraction from a discussion in of the performance experience
during the year. These experiences throw up areas of match and mismatch between
the manager’s potential and requirements of his/her role.
Stock taking of the manages potential form the performance management process
may need to be further fine-tuned or supplemented through other procedures.

9.1 PURPOSES/OBJECTIVES OF STOCK TAKING POTENTIAL

The purpose of stock taking of potential are explained here as follows,
 To map the total staff in the organization in terms ofhigh medium and low levels of
performance and potential.
 Take into account the helping and the hindering environment or organizational factors
affecting individual’s performance during a year.
 To create a mechanism to distinguish good performance from the substandard and
explore reasons for variations in levels of performance to optimize the talent.

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 To identify and document critical areas of each manager’s performance which need
important
 For generating concrete date on the potential of each manager to provide logical bases
for comparing comparable managers for career and succession planning.
 To build an inventory of staff potential and the diverse talent available within the
organization.
 To motivate manages by demonstrating the organizations ongoing interest in their
professional as well as personal growth and development
 To monitor prevailing work habits in various segments of the organization and
identify needs for modifications if any.
10. APPRAISAL FOR REWARD

10.1 MEANING OF REWARD

Reward is something which is offered or given to the employees in return for some
service or attainment. Reward is a dynamic instrument. Reward not only creates
opportunities for fulfillment of motivational needs but also enhances the intensity of
motivation. This means employee motivation doubles every time he/she is suitably
rewarded. Enhanced motivation leads to higher performance which in turn leads to higher
rewards.

10.2 TYPES OF REWARDS

There are two types of rewards. They are,

1. Monetary reward
2. Non-monetary reward

1. MONETARY REWARDS
Monetary reward is paid by any negotiable instrument cash, cheque money
order, direct deposit etc. it can also b any item that can be readily converted to cash
such s savings bonds or gift cards/certificates.
2. NON-MONETARY REWARDS
Non-monetary rewards are in the form of meals trips trophies, cups and mugs
personal items and clothing such as caps, shirts and sweat shirts and other items such
as tools, electronics, radios, and sports equipment’s.

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10.3 OBJECTIVES OF REWARD

The objectives of rewards for employee are given here as follow,

Improve organizational effectiveness

Support and change culture

Supportive managers

Motivate employee

Objectives Increased commitment

Fairness and equity

Improved skills

Improved quality

Develop team working

Manageable

Controllable

1. IMPROVE ORGANISATIONAL EFFECTIVES

Rewards support the attainment of the organization’s mission strategies and help to
achieve sustainable competitive advantages.
2. SUPPORT AND CHANGE CULTURE
Rewards are helpful to change the organizational culture as expressed through its
values for performance innovation risk taking, quality, flexibility and team working.
3. SUPPORTIVE MANAGERS
Rewards support individual managers in the achievement of their goals.
4. MOTIVATAE EMPLOYEE
Motivates employees to achieve high levels of quality performance
5. INCREASED COMMITMENT
Rewards enhance the commitment of employees to the organization that will,
a. Want to remain members of it
b. Develop a strong belief in and acceptance of the values and goals of the
organization.
c. Be ready and willing to exert considerable effort on its behalf.
6. FAIRNESS AND EQUITY
Reward people fairly and consistently according to their contribution and values to the
organization.

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7. IMPROVED SKILLS
Rewards upgrade competence and encourage personal development
8. IMPROVED QUALITY
Provision of rewards help to achieve continuous improvement in levels of quality ad
customer’s service.
9. DEVELOP TEAM WORKING
Rewards improve cooperation and effective team working at all level.
10. MANAGEABLE
Be easily manageable so that undue administrative burdens are not imposed on
managers and members of the personal department.
11. CONTROLLABLE
Be easily controllable so that the policies can be implemented consistently and costs
can be contained within the budget.

10.4 DESIGNING A REWARD PROGRAM

The steps to develop a reward program are as follows,

 Identification of company or group goals that the reward program will support.
 Identification of the desired employee performance or behaviors that will reinforce
the company’s goals.
 Determination of key measurements of the performance or behavior based on the
individual or group of previous achievements.
 Determination of appropriate rewards and
 Communication of program to employee.

10.5 PITFALLS OF FINANCIAL REWARD PROGRAMS

The pitfalls of financial reward programs include,

1. Performance pay related to appraisal grown in use?

2. What type of performance do we reward?
3. Who judges management standards?

1. PERFORMANCE PAY RELATED TO APPRAISAL GROWN IN USE?

 The first discussion on influences of growth of performance pay schemes is
assumption that increasing linkage between individual effort and financial reward
increases performance levels.
 This linkage between effort and financial reward increasing levels of performance has
proved an increasing trend in public and private sector.
2. WHAT FORMS OF PERFORMANCE IS REWARDED?
 The use of past appraisal ratings as evidence of achieving merit related payments
linked to achieving higher performance was the predominant factor developed in the
public services.

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 The evidence on setting performance targets have been reported inconsistent within
organization and problematic for certain professional or less skilled occupations
where goals have not been easily formulated.
3. WHO JUDGES MANAGAEMENT STANDARDS?
 The final issue of judging management standards has already highlighted issues of
inequity and bias based on gender.
 Performance appraisal or evaluation is used to provide employees with performance
feedback to serve as basis for distributing rewards and to monitor selection and
training activities.
11.0 APPRAISAL FOR RECOGNITION
11.1 MEANING OF RECOGNITION
Recognition is used to acknowledge employees fortheir achievements and
contributions. Although it should not be the sole means used the performance
appraisal provides one method for conveying appreciation and recognition.
The recognition of employee successes is often neglected by busy managers
but it is a powerful and no cost method of improving morale motivation and
employee productivity.
11.2 FORMS OF RECOGNITION PROGRAMS
Recognition can take variety of forms which are as follows,

Informal recognition structured programs

Forms

Symbolic recognition

1. STRUCTURED PROGRAMES
It includes regular recognition events such as breakfasts employee of the
month or year recognition an annual report which features the accomplishments of
employees and department or company recognition boards.
2. INFORMAL RECOGNITION
 Informal recognition also known as spontaneous recognition
 It can take the form of privileges such as working at home starting late/leaving early
or long lunch breaks.
 A job well done can also be recognized by providing additional support or
empowering employee.
3. SYMBOLIC RECOGNITION
Symbolic recognition includes coffee mugs with inscriptions provided they
reflect sincere appreciation for hard work. These letter expressions of thanks however
are far more likely to be received positively.

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11.3 GUIDELINES FOR EFFECTIVE EMPLOYEE RECOGNITION

1. DECIDE WHAT MANAGER WANTS TO ACHIEVE THROUGH

EMPLOYEE RECOGNITION EFFORTS
Many organizations use scatter approach to employee recognition. They put a lot of
employee recognition out of these and hope that some efforts will stick and create the
results they want.
2. CREATE GOALS AND ACTION PLANS FOR EMPLOYEE RECOGNITION
 The manager wants to recognize the actions behaviors approaches and
accomplishments that he wants to foster.
 To achieve these goals and action plans should be developed by the managers to
recognize employee performance.
3. FAINESS CLARITY AND CONSISTENCY ARE IMPORTANCE IN
EMPLOYEE RECOGNITION
 People need to see that each person who makes some contribution has an equal
likelihood of receiving recognition.
 At this time recognition should be provided in clear manner, fairly and consistently.

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 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE & SYLLABI

Course Code Specialization Elective- III L T P C

21E00305c Performance Management 4 0 0 4
Semester III

Course Objectives:
• To introduce performance management concept and distinguish performance management and Human
resource management
• To discuss the concept of mentoring , process, types and pitfalls
• To explain coaching and counseling for performance improvement and steps involved in counseling
process.
• To discuss the uses of appraisal system and methods of appraisal
• To impart knowledge on Learning Organization, approaches, sources and rewards, and compensation
management.
Course Outcomes (CO): Student will be able to
• Understand performance management concept and distinguish performance management and Human
resource management
• Learn the concept of mentoring , process, types and pitfalls.
• Explain coaching and counseling for performance improvement and steps involved in counseling
process.
• Design and apply different appraisal systems in an organization.
• prepare reward and compensation policy
• determine factors influencing fringe benefits in the reward and compensation policy.
UNIT - I Lecture Hrs: 8
Introduction to Performance management : Concept -Performance management vs. performance
appraisal--Performance management vs. Human resource management- Purposes- Significance .

UNIT - II Lecture Hrs: 12

Mentoring and Monitoring: Concept of mentoring - Benefits of mentoring - Characteristics of mentor-
Mentoring process-Group mentoring -Benefits -Types of Group Mentoring – Pitfalls Monitoring
performance.

UNIT - III Lecture Hrs:12

Coaching and counseling : Coaching for performance improvement -. Concept - Tips for effective coaching
Counseling -Functions of counseling- Steps in counseling process

UNIT - IV Lecture Hrs:12

Annual Stock taking: Stock taking of performance -Uses –Appraisal system design : Process and
approaches - Appraisal methods - MBO and Assessment centre -360 degree appraisal - Balanced score card.
Stock taking of potential- Appraisal for reward - Appraisal for recognition
UNIT - V Lecture Hrs:12
Learning organization : Concept of learning organization- Learning approaches- Learning sources -
Importance of learning-. Characteristics of learning organization- Reward and compensation Management -
Concept and types of compensation- Objectives - Competitive compensation design - Fringe benefits-
Objectives -Factors influencing fringe benefits - Types of fringe benefits
Textbooks:
1. Performance Management, A.S.Kohli, T.Deb,Oxford.
2. Prem Chadha, Performance Management, McMillan.
57
 R21 Regulations

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

(Established by Govt. of A.P., ACT No.30 of 2008)
ANANTHAPURAMU – 515 002 (A.P) INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA; MBA (General Management); MBA (Business Management)
COMMON COURSE STRUCTURE
Reference Books:
 Performance Management, Bagchi, Cengage Learnings.
 Performance Appraisal and Management, Sharma, Davinder, HPH
 Performance Management, Herman,Aguinis, Pearson Education.
 Performance Management and Appraisal Systems, T.V.Rao, Response.
 Performance management, Kandula, PHI.
 360 Degree Feedback and Assessment and Development Centres, T.V.Rao, Excel.
 Performance Management, Dinesh k.Srivatsava, Excel

Online Learning Resources:

NPTEL :: Management - NOC:Performance and Reward Management
https://www.tutorialspoint.com/performance_management

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UNIT-5

LEARNING ORGANISATION

1. CONCEPT OF LEARNING ORGANISATION

1.1 MEANING
 Learning organization is one which facilitates the learning of all its employees and
continuously transforms itself as a whole. Learning organization is a skill in creating
acquiring and transferring knowledge and it modifying its behavior to reflect new
knowledge and insights.
 The concept of learning organization has the underlying idea of transforming an
organization through an open learning approach to present and future performance.
 Learning organizations are coming into being to empower people to enable change.
Learning organizations encompasses small business establishment’s academic institutions
hospitals government agencies nonprofit organizations where people gather to accomplish
something that is beyond the scope of the individual.

NOTE: Learning organization creates acquires, transfers knowledge thereby empowers people
to enable change.

1.2 DEFINITION
The essence of organization learning is the ability to use the amazing mental
capacity of all its members to create the kind of processors that will improve its own.
NANCY DIXON
Learning organizations are organizations where people continually expand their
capacity to create the results they truly desire new and expansive patterns of thinking are
nurtured where collective aspiration is set free and where people are continually learning to
learn together.
ACCRODING TO SENGE
Learning organization is one that both learns and encourages learning in people. It
creates space for people to question think and learns and constantly reframes the world and
their part in it.
ACCRODING TO HANDY

NOTE: MEANING OF LEARNING

Learning is the process of acquiring the ability to respond adequately to a situation which may
or may not have been previously encountered. It is a process by which new behaviors are acquired.

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1.3 CREATING LEARNING ORGANISATION

The process of creating learning organizations include following steps,

Commitment of top management

Sharing of commitment and creation of vision

Wider acceptability of learning organization

New technology of entire work force

Commitment of entire workforce

Creating learning organization

1. COMMITMENT OF TOP MANAGEMENT

 Creation of learning organization may require major changes in the existing techniques
structures beliefs processes, values and even goals.
 Any major organizational change can be successful only if it has received the commitment
of top management.
 Since creating learning organization is a major organizational change it must have
commitment of top management.
2. SHARING OF COMMITMENT AND CREATION OF VISION
 Top management commitment provides way for commitment of those managers who will
act as change agents during the process of creating learning organization with such kind of
commitment vision of learning organization is created.
 Vision represents what the organization and its members can be in future. Therefore,
organization create projections about where it should go and what challenges lie ahead.
3. WIDER ACCEPTABILITY OF LEARNING ORGANISATION
 Once vision of learning organization is created it willcommunicate throughout the
organization for wider acceptability of desirability of learning organization.
 In this communication emphasis is put on circumstances like,
 Creation of learning organization
 Utility of learning organization
 Type of changes likely to be made.
 Role of different groups of personnel in creating learning organization.
 Time frame for creating learning organization.

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4. NEW TECHNIQUES/STRUCTURES/PROCESSES
 Creation of learning organization requires total transformation of existing organization i.e.
aligning existing techniques structures and processes to the requirements of learning
organization.
 What kind of changes will be required depends on the nature and functionality of existing
techniques structures processes?
 It is quite possible that some of the existing techniques structures and processes are suitable
for new situation.
5. COMMITMENT OF ENTIRE WORK FORCE
 Changing of existing techniques structures and processes facilitates the creation of learning
organization but it doesn’t work effectively unless there is a commitment of the entire
workforce for the learning organization.
 This commitment is required because workforce have to work with different mindsets in
new situation. They have to change their old assumptions beliefs norms and values that are
not suitable to new situation.
6. CREATION LEARNING ORGANISATION
 After completion of the above steps the learning organization is created.
 A kind of culture is created in which everyone takes care of his own learning and
development as well as helping others and receiving help from others in learning and
development.
1.4 CORE ACTIVITIES OF LEARNING ORGANISATIONS
Learning organization focus on systematic problem solving with the proper deployment of
tools to achieve this following are the core activities of learning organization.
 Brainstorming tools dynamic thinking tools structural thinking tools computer based tools.
 Systematic experimentation.
 Employee friendly performance management and compensation schemes.
 Rewarding of good performance and positive behavior after evaluation and
 Employment of people who can execute the organizations quality philosophy.

2. LEARNING APPROACHES
2.1 LEARNING
Learning is the process of acquiring the ability to respond adequately to a situation
which may or may not have been previously encountered the favorable modification of
response tendencies consequent upon previous experience. Thus learning can be defined as
permanent change in behavior as a result of prior experiences.

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2.2 LEARNING APPROACHES

Learning approaches are of 3 forms which area as follows,

Learning approaches

Behavioristic approach cognitive approach constructive approach

1. BEHAVIORIST APPOACH
Behaviorist approach was developed by B.F skimmer in behaviorist approach three basic
assumptions are there like,
a. Learning is manifested by change in behavior
b. The environment shapes behavior
c. The principles of cognitive (how close in time two events must be for a bond to be
formed) and reinforcement (that an event will be repeated) are central to explaining the
learning process.

For behaviorist approach learning is the acquisition of new behavior through conditioning which is
in 2 forms,

 Classical conditioning.
 Operant or Instrument conditioning.

CLASSICAL CONDITIONING

In classical conditioning the behavior becomes a reflex response to stimulus as in case of

Ivan Pavlov’s dog theory.

FOR EXAMPLE: Pavlov struck a bell when the dogs were fed. If the bell was soundedin
close association with their meal the dogs learned to associate the sound of the bell with food. After
a while at the more sound of the bell they respond by drooling.

OPERANT OR INSTRUMENT CONDITIONING

In operant conditioning there is reinforcement of the behavior by a reward or a punishment.

The word operate refers to the way in which behavior operates on the environment.

2. COGNITIVISM APPROACH
 Cognitivist approach includes two assumptions as follows,
 That the memory system is an organized processor of information and that prior knowledge
plays an important role in learning
 Cognitivists consider how human memory.Works to promote learning the major difference
between cognitivists and behaviorists is the locus of control over the learning activity the
individual learner is more important to cognitivists than the environment that behaviors
emphasize.

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3. CONSTRUCTIVISM APPROACH
 Constructivism views learning as a process in which the learner actively constructs or builds
new ideas or concepts based upon current and past knowledge or experience.
 Constructivism itself has many variations such as active learning discovery learning and
knowledge building.Regardless of the variety constructivism promotes a student’s free
exploration within a given frame work or structure.
 Aspects of constructivism can be found in self-directed learning transformations learning
experiential learning situated cognition and religious practice.

3.0 LEARNING SOURCES

Some of learning includes the following,

Primary documents
Secondary documents
Tertiary documents
Sources of learning library sources
Internet sources
Sources from bibliographic
From colleagues

1. PRIMARY DOCUMENTS
 A primary document is a document that was written at the time of an event or period of
research.
 Primary documents include literary texts letters speeches and historical documents such as
diaries and birth certificates.
 A live news feed is a primary source recording events as they unfold.

2. SECONDARY DOCUMENTS
 A secondary document is written after an event usually the authors will not have witnessed
the event themselves. Such documents are written with reference to primary documents.
 Core texts academic texts related to the topic being studies are an example of secondary
documents.
3. TERTIARY DOCUMENTS
 Tertiary documents usually act as pointers to primary and secondary documents
 These include indexes, directories bibliographies and other categorized collection of
information.
 FOR EXAMPLE: checking the bibliography of books can help to lead you to further
research material or looking at the list of similar stories on a news website.

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4. LIBRARY SOURCES
 Library is one of the best sources of learning.
 It is often possible to go to a physical library without being a member and search through
the shelves and access publications and other resources.
 A lot of libraries will have a retrieval system to help you to locate documents such systems
are commonly accessed via a computer.
 Retrieval system enables to search a database of titles at the library title of book or
publication etc.
5. INTERNET SOURCES
 There is a phenomenal amount of information available online via web pages’ forums social
media blogs and so on.
 As there is so much information available and because such information can be published
quickly and easily by anybody and at any time.
 For many subjects the internet can be a very important place to research and learn
information
 In some disciplines the internet may be the most appropriate or only way of gathering
information. This can be particularly true of subjects related to technology or current affairs.
6. SOURCES FROM BIBILKORAPHIES
 Another way of locating information books or publications which might have a bearing on
the topic being researched is to check through bibliography of core texts or related books.
 Authors will consult other scholars and by checking their bibliography to enhance their own
learning.
7. SOURCES FROM COLLEAGUES
 It is always worth discussing your study with friend’s family and colleagues.
 With this you will find that they have some interesting points of view and sometimes they
may help with sourcing of information.
8. OWNS AND OTHERS EXPERIENCE
 A primary source of learning is experience
 A distinction can be made between learning from own experience and learning from
experience of others.
 Collecting direct experiences can be very costly yet is likely to produce more unique
outcomes while learning from others experience usually involves less cost but tend to
produce less unique outcomes.

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4. IMPORTANCE OF LEARNING

Learning is all pervasive and without it civilized life cannot exist. Learning is
important because of following reasons,

Stay update

Self-esteem enhancement

Access to new opportunities

Importance of learning controls behavior

Determines employee’s behavior

Helps in differentiation

Development of dysfunctional behaviors

Developing new skills

Enhance social life

1. STUDY UPDATE
 Learning across our lives is essential for staying up to date in an ever changing world.
 If we stop learning things we can stagnate and actually move backwards especially in
professional lives.
2. ENHANCED SELF ESTEEM
 Self-esteem means confidence in one’s own worth or abilities.
 Learning new things is very important for our self-esteem. Learning something new keeps
brain cells active and allows individuals to succeed at something new.
3. ACCESS TO NEW OPPORTUNITIES

Learning something new gets individuals to access new and different opportunities
and the chance to try new experiences that might be the best ones for individuals they have
ever tried.

4. CONTROLS BEHAVIOR

Learning offers significant insights into controlling employee behaviors in an

organization.

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5. DETERMINES EMPLOYEE BEHAVIOR

Learning process helps managers to determine the extent to which an employee’s

behavior can be attributed to learning.

6. HELPS IN DIFFERENTIATION
Learning also helps managers to differentiate between learning a skill and acquiring
skill naturally and in understanding whether a skill is an acquired one or something that an
employee is born with.
7. DEVELOPMENT OF DYSFUNCTIONAL BEHAVIORS
 With the process of learning managers can work as teachers to instruct the employees to
engage in behavior which enable the originations to achieve its goals.
 Thus managers can check the growth of dysfunctional behaviors such as absenteeism
indiscipline and foster the development of functional behaviors by getting feedback and
rewards.
8. DEVELOPING NEW SKILLS
 With the help of learning process an individual develops his skills.
 Developing a new skill will influence the way of doing things day to day and individuals will
make doing things quicker and easier saving time, energy and stress.
9. ENHANCED SOCIAL LIFE
 By learning something different an individual meet new people some of whom will have
similar interests to individual and interested in some of the same things.
 With this an individual can make new friends and thereby his social or work life get
enhanced.

4.1 COMPONENTS OF LEARNING ORGANISATION

Senge has elaborate five central characteristics for the learning organization as,

System thinking

Team learning

Characteristics of learning organization team vision

Personal mastery

Mental models

1. SYSTEM THINKING
 A business is a complex system which comprises many sub systems
 To acquire a holistic understanding of the system it is essential to grasp the connectivity and
interaction of its parts.
 Therefore, senge points out that the ability to examine any process of a whole system and
recognize how the pars affect each other is critical.

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2. TEAM LEARNING
 It has been observed that people in teams possess the ability the capture a greater degree of
learning as compared the learning imbibed at an individual level.
 Senge recognizes that many teams exhibit signs of negative synergy of groupthink. Senge
stresses the need to overcome such difficulties by encouraging meaningful dialogue and
suspension of over assumption and judgment.
3. TEAM VISION
 The impact of the overall capability of the group to realize the vision of the organization is
much greater than that of any single individual. So the vision must be created by entire
organization or group of people within the organization.
 It is the task of senior management to ensure that vision is communicated to the employees.
4. PERSONAL MASTERY
 Personal mastery describes the urge to dedicate once entire life to learning
 It is the ability to judge one’s priorities in life and then work towards them by conscious
application of principles most important to achieving these goals.
 Mastery cells for understanding of one’s strengths and weaknesses.
 An individual need to know the art of managing creative stress which is the gap between
desired goals and reality.
5. MENTAL MODELS
 Mental models are deeply embedded assumption and generalization we all carry regarding
how the world works and our own actions.
 These models need constant examination as they tend to influence people of arrives at
conclusions before scrutinizing the facts.
 Senge’s view is that these models are constraints for organization’s innovations.

5.0 CHARACTERISTICS OF LEARNING ORGANISATION

Characteristics of learning organization are as follows,
1. LEARNING CULTURE
An organizational climate that nurtures learning. There is a strong similarly with those
characteristics associated with innovation. A learning culture should be,

 Future oriented.
 With free exchange and flow of information.
 With commitment to learning personal development.
 Valuing people.
 With climate of openness and trust.
2. PROCESSES
 Process that encourages interaction across boundaries is another important characteristic of
learning organization.
 These processes are infrastructure development and management processes (like strategic
planning, competitor analysis capability planning team and organization development) etc.

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3. TOOLS AND TECHNIQUES

 Learning organization should consider methods that aid individual and group learning, such
as creativity and problem solving techniques.
4. Skills and motivation to learn and adapt.
5. Learning organization provides continuous learning opportunities.
6. Learning organization link individual performance with organizational performance.
7. Learning organization continuously aware of and interact with their environment.

6. REWARD AND COMPENSATION MANAGEMENT

6.1 REWARD MANAGEMENT

Reward management means the financial reward on organization gives its
employees in return for their labor. Reward system not only includes material rewards but
also non material rewards,
Rewards may of two forms,
1. Financial rewards.
2. Non-financial rewards.

FINANCIAL REWARD: includes basic and performance pay and employee benefits together
comprise total remuneration.

NON-FINANCIAL REWARDS:Includes recognition praise promotion achievement

responsibility and personal growth.

OR

MONETORY REWARDS: paid by any negotiable instrument like cash, cheque, money order,
and direct deposit.

NON-MONITARY REWARDS: are in the form of meals trips trophies, cups and mugs, personal
items and clothing such as caps, shirts and other items like tools, electronics, radios and sports
equipment.

DEFINITION

Reward management is concerned with the formulation and implementation of strategies and
policies that aim to reward people fairly equitably and consistently in accordance with their value to
the organization.

ARMSTRONG AND MURLIS

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6.2 OBJECTIVES OF REWARD MANAGEMENT

The objectives of reward management include the following,
1. IMPROVE ORGANISATIONAL EFFECTIVENESS
Rewards support the attainment of the originations mission strategies and help to
achieve sustainable competitive advantage.
2. SUPPORT AND CHANGE CULTURE

Reward system underpin and as necessary help to change the organizational culture
as expressed through its values for performance innovation risks taking flexibility and team
working.

3. MOTIVATE EMPLOYEES
Rewards motivate employees to achieve high levels of quality performance.
4. INCREASED COMMITMENT
Reward system enhance the commitment of employees to the organization that will,
a. Want to remain members of it.
b. Develop a strong belief in acceptance of goals of the organization.
c. Be ready and willing to exert considerable effort.
5. IMPROVED QUALITY
Reward management help to achieve continuous improvement in levels of quality
and customer service.

6. ACHIEVE INTEGRATION
Be an integrated part of the management process of the organization. This
involves playing a key role in a mutually reinforcing and coherent range of personal
policies and process.
7. CONTROLLABLE
Be easily condonable so that the policies can be implemented consistently and
costs can be contained within the budget.

6.3 AREAS OF REWARD MANAGEMENT

Areas of reward management categorized into four areas as follows,

Non-financial rewards
Employee benefits
Areas of reward management pay structures
Performance orientation&
measurement.

1. NON-FINANCIALREWARDS

Non-financial rewards are those that satisfy the individual needs for challenges
responsibility variety influence in decision recognition and career opportunities.

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2. EMPLOYEE BENEFITS
Employee benefits (including pension plans) are those that satisfy the
employee’s needs for personal security and provide remuneration in forms other than
pay which may be tax efficient.
3. PAY STRUCTURE
Pay structure defines fair and competitive levels of remuneration through the
combined results of wage and gallery surveys and job evaluation
4. PERFORMANCE ORIENTATION AND MEASUREMENT
Measurement and management of performance i.e. measures of performance in
relation to outputs (contribution and the achievement of objectives and standards of
performance) and inputs (application of skills and competencies and behaviors affecting
performance) leading of design and operation of pay for performance schemes,
continuous development and training programs.

6.4 COMPENSATION MANAGEMENT

CONCEPT OF COMPENSATION
Compensation is the total amount of the monetary and non-monetary pay
provided to an employee by an employer in return for work performed as required
compensation may achieve several purposes assisting in recruitment job performance
and job satisfaction.
Compensation may be used to,
 Recruit and retain qualified employees.
 Increase or maintain morale/satisfaction.
 Reward and encourage peak performance.
 Reduce turnover and encourage company loyalty.

6.5 COMPONENTS OF COMPENSATION

A typically compensation of an employee comprises of,

1. FINANCIAL COMPENSATION

A. DIRECT METHODS: These are as follows,

 WAGES AND SALARY

 Wages represents hourly rates of lay and salary refers to the monthly rate of pay
irrespective of the number of hours put in by an employee
 Wages and salaries are subject to annual increments.
 Wages and salaries differ from employee to employee and depend upon the nature of job
seniority and merits.
 INCENTIVES
 Incentives also called as payments by results. Incentives are paid in addition to wages
and salaries. Incentives depend upon production sale, profits, or cost reduction efforts.
These are,
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 Individuals incentive schemes

 Group incentive programs
B. INDIRECT METHODS: These includes,
 FRINGE BENEFITS
Fringe benefits include such employee benefits as provident fund, medical care
hospitalization accident relief health insurance canteen unigram recreation etc.
 PREQUISITES
These are allowed to executives and include company car, club membership paid
holiday furnished house etc., perquisites are offered to retain competent executives.

2. NON-FINANCIAL BENEFITS
Non-financial benefits include of following,
 Challenging job responsibilities.
 Recognition of merits.
 Growth prospects.
 Comfortable working conditions.
 Job sharing.
 Flex time.
 Competent supervisions.

6.6 COMPENSATION MANAGEMENT

Compensation management is the strategic process of aligning pay incentives and benefits
(rewards) of employees with organizational goals and objectives.

In the globalization era, where the business environment has become increasingly
complex and challenging designing and effective compensation management program should
have needed to attract and retain talent which is an important function of the organizational
effectiveness.

DEFINITION

Computer management refers to payment system which determines employee wages or

salary direct and indirect rewards.

ACCORDING TO I. KESSLER

Compensation management is a process of determined cost effective pay structure

designed to attract and retain provide an incentive to work hard and structured to ensure that pay
levels are perceived as fair.

STEPHEN P. ROBBINS, EILEEN B. STEWARD

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OBJECTIVES OF COMPENSATIN MANAGEMENT

Objectives of compensation managerial are explained here under,

Attracting and retaining personnel

Motivating personnel

Objectives optimizing cost of compensation

Consistency in compensation

1. ATTRACTING AND RETAINING PERSONNEL

 From organizations point of view compensation managers aims at attracting and
retaining right personnel in an organization
 In the present day context management turnover is a big problem particularly in high
knowledge based origination to prevent this proper compensation programme is helpful.
2. MOTIVATING PERSONNEL
 Compensation management aims at motivating personnel for higher productivity.
Monetary compensation has its own limitations in motivating people for superior
performance.
 According to ALFIE KOHN corporate incentive plans not only fail to work as intended
but also undermine the objectives they intend to achieve. He argues that this is due to
inadequate psychological assumption on which reward systems are based.
3. OPTIMIZING COST OF COMPENSATION
Compensation management aims at optimizing cost of compensation buy establishing
some king of linkage with performance and compensation.
4. CONSISTENCY IN COMPENSATION
 Compensation management tries to achieve both internal and external consistency.
 Internal consistency involves payment on the basis of criticality of jobs and employee’s
performance jobs.
 External consistency involves similar compensation for a job in all organizations.

7. CONCEPT AND TYPE OF COMPENSATION

7.1 TYPES OF COMPENSATION
The compensation received by workers is two types,
1. Direct compensation.
2. Indirect compensation.
1. DIRECT COMPENSATION
Direct compensation refers to monitory benefits offered to employee in return of
the service provided by them to the organization. Various types of direct compensation
include,

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leave travel
allowance

medical
house rent
reimbursem
allowance
ent

types of
direct
compenstio
special n
basic salary
allowance

bonus conveyane

1. HOUSE RENT ALLOWANCE

 Organist ions either provide accommodations to its employee who is from different state
or country or they provide house rent allowances to its employees.
 This is done to provide them social security and motivate them to work.
2. BASIC SALARY
Salary is the amount received by the employees for the work done by him/her for
a certain period say a day, a week, a month etc.
3. CONVEYANCE
Organizations provide for cab facilities to their employees. Few organizations
also vehicles and petrol allowances to their employees to motivate them.
4. BONUS
Bonus is paid to the employees during festive season to motivate them and
provide them the social security. The bonus amount usually amounts to one month’s
salary of the employee.
5. SPECIAL ALLOWANCE
Special allowance such as overtime mobile allowance meals commissions travel
expensed reduced interest loans club memberships etc, are provided to the employees to
motivate them for increased productivity.

6. MEDICAL REIMBERSMENT
 Organizations also look after the health conditions of their employees.
 The employees are provided with med claims for them and their family members. These
medi-claims include health insurance and treatment bills reimbursement.

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7. LEAVE TRAVEL ALLOWANCE

 These allowances are provided to retain the best talent in the organization
 The employees are given allowances to visit any place they wish with their families. The
allowances are scaled as per the position of employee in the organization.

2. INDIRECT COMPENSATION
Indirect compensation refers to non-monetary benefits offered to employees for the
services provided by them to organization. These are given as follows,

Hospitalizati
on
Overtime Leave
policy policy

Types of
indirect
compensation Flexible
Insurance
timings

Holiday
Retirement
homes
benefits

1. HOSPITALISATION
The employees should be provided allowances to get their regular checkups say
at an interval of one year. Even their dependents should be eligible for the medi-claims
that provide them emotional and social security.
2. LEAVE POLICY
 It is the right of employee of get adequate number of leave while working with the
organization
 The organizations provide for paid leaves such as casual leaves medical leaves (sick
leaves) and maternity leaves etc.
3. FLEXIBLE TIMINGS
Organizations provide for flexible timings to the employees who cannot come to
during normal shifts due to their personal problems and valid reasons.
4. HOLIDAY HOMES
Organizations provide for holiday homes and guest house for their employees at
different locations. These holiday homes are usually located in hill station and other
most wanted holiday spots.

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5. RETIREMENT BENEFITS
Organizations provide for pension plans and other benefits for their employee’s
which benefit them after they retire from the organization at the prescribed age.
6. INSURANCE
Organizations also provide for accidents insurance and life insurance for
employees. This gives employees the emotional security and they feel themselves valued
in the organization.
7. OVERTIME POLICY
Employee should be provided with the adequate allowances and facilities during
their overtime if they happened to do so such as transport facilities overtime pay etc.

8. OBEJECTIVES OF COMPENSATION
The objectives of compensation are as follows,
 To recruit and retain qualified employees.
 To increase or maintain morale or satisfaction of an employee.
 To motivate employees for better performance.
 To attract and retain skilled and talented work force.
 To determine basic wages and salary administration.
 To achieve internal and external equity.
 To ensure equal pay for work i.e. each individual pay is fair in comparison to that of
another person doing a similar job.
 To support communication and reinforce an organizations culture value and competitive
strategy.
 To reduce turnover and encourage company loyalty.
 To control cost a rational compensation system helps the organization to obtain and
retain workers at a reasonable cost.

9. COMPETITIVE COMPENSATION DESIGN

Every organization has its own HR policy to progress and plan its human
resources accordingly. This entails varying ranges in compensation structures.
The compensation structures strategic decisions the follows HR policy and are to
be in line with operational mission besides taking care of legal and political constraints.
9.1 PURPOSE OF COMPETITIONS COMPENSATION DESIGN
The main purpose of compensation in any organization is to ascertain the job and
employees worth qualifying its relative value and defining the significance of different
components in the structure of competitive development.
The above considerations will help the organization to frame the most acceptable
structure in line with the market conditions and the employee’s expectations to develop
a sense of belongingness in the company.

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FACTORS INFLUENCING COMPENSATION DESIGN

Factors

Internal external

Job evaluation cost of living

Organization strategy economic influences

Technology government regulations

Human capital stakeholders

HR policy cultures and customs

Cost implication

Employee’s acceptance

1. INTERNAL FACTORS
(i) JOB EVALUATION
Job evaluation is a technique to determine the relative worth of job to an
organization. It is a judgmental process of wherein jobs of different values are
classified for determining compensation level. Job evaluation helps to,
 Provide a way to rand all jobs in an organization
 Provide a way to compare jobs on a fair basic
 Provide a way to classify new or changed jobs.

(ii) ORGANISATIONAL STRATEGY

Organizational strategy may include growth expansion through organic or
inorganic routes and maintenance plans which specifies the types of jobs and
positional requirements of the organization.
(iii) TECHNOLOGY
Technology intensive jobs will be rated higher than other jobs in the organization
(iv) HUMAN CAPITAL
 The type and quality of employees an organization has or will require affect
compensation level.
 The level of education and experience required for a position is a deciding factor in
compensation level.

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(v) HR POLICY
 An organizations HR policy provides general guidelines on how human resources are
managed and utilized for seeking competitive advantage.
 Organization which values its employees will place a premium on its human resources
to maintain competitiveness.
(vi) COST IMPLICATION
 The overall cost of compensation should be within budgetary provision of the
organization.
 The current level of compensation to existing employees is an important consideration in
deciding compensation levels.
(vii) EMPLOYEES ACCEPTANCE
 Compensation levels determined by job evaluation program should be generally
acceptable to employees.
 The scarcity of qualified candidates (demand supply gaps) also raises level of
compensation.
2. EXTERNAL FACTORS
(i) COST OF LIVING
Inflationary pressures on the economy tend toaffect cost of living of people. For
example, if the inflation rate increases then increased compensation shall be required
in order to maintain quality of life standards of employees.
(ii) ECONOMIC INFLUENES
Various micro and macro-economic factors affect the overall economic
conditions of a region or country which affects general standards of living and
compensation levels.
(iii) STAKEHOLDERS
Stakeholders like trade unions shareholder’semployeesetc., have impact on
compensation levels. For example, strong trade unions negotiate a higher
compensation level for the employees with management.

(iv) GOVERNMENT REGULATIONS

Various laws in respect of compensation such as minimum wages act, 1948
payment of wages act, 1936 etc., effect compensation level.
(v) CULTURES AND CUSTOMES
There are broadly two types of economic societies i.e. materialistic and non-
materialistic. In materialist cultures compensation levels are generally high in order
to enable people to have higher purchasing power compared to non-materialistic
culture.

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10. FRINGE BENEFITS

MEANING
 Fringe benefits also referred as employee’s benefits or benefits in kind or perquisites or
perks. These include various types of non-wage compensation provided to employees in
addition to their normal wage or salary.
 Fringe benefits may be defined as wide range of benefits and services that employees
receive as an integral part of their total compensation package. They are based on critical
job factors and performance. These include benefits such as paid vacation pension health
and insurance plans etc.
 The purpose of fringe benefits is to increase the economic security of staff members and
in doing so improve worker retention across the organization. As such it is one
component of reward management.
DEFINITION
Fringe benefits are any wage cost not directly connected with the employee’s productive
effort performance service or sacrifice.
ACCORDING TO BALCHER
Fringe benefits are those benefits which are provided by an employer to or for the
benefit of an employee and which are in the form of wages salaries and time related
payments.
ACCORDING TO COCK MAR

10.1 CHARACTERISTICS OF FRIGNE BENEFITS

Different from regular wages

Provided for employee motivation

Characteristics of useful but unavoidable expenditure

Fringe benefits not directly linked with efforts

Beneficial to all employees

1. DIFFERENT FROM REGULAR WAGES

 Fringe benefits are different from regular wages as such benefits are those payments
which an employee enjoys in addition to wages receives.
 It is a supplementary payment and provides support to an employee.
2. PROVIDED FOR EMPLOYEE MOTIVATION
 Fringe benefits are not given to employees for performing certain jobs but are offered to
encourage them to take more interest in work assigned.
 Such benefits motivate employees and raise their morale.
 They make the job in the organization ore interesting attractive and lively due to added
purchasing power.

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3. USEFUL BUT AVAIDABLE EXPENDITURE

 Fringe benefits constitute a labor cost for employer.
 It is a useful expenditure but also an avoidable on as compared to wage which must be
paid regularly
4. NOT DIRECTLY LLINKED WITH EFFORTS
 Fringe benefit is not a direct reward for the efforts made or production given by an
employee.
 It is given on the basis of considerations such as length of service sickness and hazards
of life which he encounters.
 Such benefits are offered as and when required and not regularly like wages.
5. BENEFICIAL TO ALL EMPLOYEES
 Fringe benefit is a labor cost but its benefit should be made available to the entire labor
force and not to a small group of employees
 Fringe benefit should be made available to all employees. For example: subsidized
canteen facility is a fringe benefit but subsidized vegetarian thali need not be treated as a
fringe benefit as it is available only to vegetarian employees.

11. OBJECTIVES OF FRINGE BENEFITS

The objectives of fringe benefits are explained here as follows,

Employers prefer fringe benefits

To raise employer morale

Objectives of fringe benefits to provide protection to employees

To develop good corporate image

To retain competent employees

To supplement direct remuneration creating

sense of belongingness

1. EMPLOYERS PREFER FRINGE BENEFITS

Employers prefer this indirect remuneration to direct pay increase.
2. TO RAISE EMPLOYEE MORALE
Liberal package of fringe benefits raises the morale f employees
3. TO PROVIDE PROTECTIN TO EMPLOYEES
Fringe benefit is for the needs of employees and protects them against certain hazards of
life, particularly those which an individual cannot himself provide for.
4. TO DEVELOP GOOD CORPORATE IMAGE
Fringe benefits improve the organizational image in the eyes of the public with a view to
improve its market position and bringing about product acceptance it.

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5. TO RETAIN COMPETENT EMPLOYEES

 Fringe benefits create satisfied labor force. In addition, the management an attract and
retain competent personnel in the organization by offering liberal package of fringe
benefits.
 Therefore, fringe benefits area called golden hand cuffs.
6. TO SUPPLEMENT DIRECT REMUNERATION
Fringe benefits supplement regular pay of employed. It rises the total earning of an
employee and provides better life and welfare to him.
7. TO CREATE SENSE OF BELONGINGNESS
Fringe benefits helpful to create sense of belongingness among employees and to retain
them.
8. To meet requirements of various legislations related to fringe benefits.

11.1 PRINCIPLES OF FRINGE BENEFITS

The following principles must govern the administration of fringe benefits

 Benefits and services must be provided to the employees on the basis of a genuine
interest in the protection and promotion of their wellbeing.
 The benefit must satisfy a real need. Employees resist or are indifferent to any benefit
which is not liked by them.
 The benefit must be cost effective
 The benefit should be as broad based as possible
 Administration of the benefits should be preceded by sound planning.
 The wishes of employees as expressed by their union representations and the bargaining
power of the union must be considered.
 Employees should be educated to make use of the benefits.

12. FACTORS INFLUENCING FRINGE BENEFITS

Factors influencing fringe benefits are as follows,

 Absolute and per capital cost of fringe benefits.
 Organization financial ability to provide the benefits.
 Employees deficiencies or needs.
 The bargaining strength of trade unions.
 Employees significance to the organization.
 Tax benefits to the organization and individual employees.
 Need for building public image for the organization.
 Organizations awareness and policy towards social responsibility
 Employee’s reactions to the benefits.

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13. TYPES OF FRINGE BENEFITS

Types of fringe benefits

Payment for employee welfare and recreational old age & retirement
Time not security facilities benefits
worked.

Hours paid shift paid canteens provident fund

Of holidays premium vacation consumer societies gratuity
Work housing medical benefits
employees counseling pension
Legal aid deposit lined
Education -insurance
Transportation
Miscellaneous

Retrenchment layoff compensation

Compensation

1. PAYMENT FOR TIME NOT WORKED

(i) HOURS OF WORK
 Section 51 of the factories act, 1948 specifies that no adult worker shall e required to
work in a factory for more than 48 hours in any week.
 Section 54 of the act restricts the working hours to 9 in any day. In some organizations
the number of working hours is less than the legal requirements.
(ii) PAID HOLIDAYS
 According to factories at, 1948 an adult worker shall have a weekly paid holiday
preferable Sunday.
 Some organizations allow the workers to have two days are paid holidays in a week.
(iii) SHIFT PREMIUM
Companies operating second and third shifts pay a premium to the workers who are
required to work during the odd hours shift.

(iv) PAID VACATION

Workers in manufacturing mining and plantations who worked for 240 days during a
calendar year are eligible for paid vacation at the rate of one day for every 20 days
worked in case of adult workers and at the rate of one day for every 15 days worked in
case of child workers.

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2. EMPLOYEE SECURITY
Physical and job security to the employee should also be provided with a view to
promoting security to the employee and his family members. Employee security
includes.
(i) RETRENCHMENT COMPENSATION
 The industrial disputes act, 1947 provides for the payment of compensation in case of
lay off and retrenchment.
 The non-seasonal industrial establishment employing so or more workers have to give
one months’ notice or one month’s wages to all the workers who are retrenched after
one year’s continues service.
 The compensation is paid at the rate of 15 days’ wage for every completed year of
service.
 Workers are eligible for compensation even in case of closing down of undertakings.
(ii) LAY OFF COMPENSATION
 In case of lay off employees are entitled to layoff compensation at the rate of 50% of the
total of the basic wage and dearness allowance for the period of their lay off except for
weekly holidays
 Lay-off compensation can normally be paid up to 45 days in a year.
3. WELFARE AND RECREATIONAL FACILITIES
(i) CANTEENS
 No employee’s benefits have received as much attention in recent years as that of
canteens.
 Some organizations have statutory obligation to provide such facilities as per section 46
of factories act, 1948, imposes a statutory obligation to employees to provide canteens in
factories such facilities voluntarily.
 Food stuffs are supplied at subsidized prizes in these canteens. Some companies provide
lunch rooms when canteen facilities are not available.
(ii) CONSUMER SOCIETIES

Most of the large organizations located for away from the two wins and which
provide housing facilities near the organization set-up the consumer store in the
employee’s colonies and supply all the necessary goods at fair prices.

(iii) HOUSING
 Of all the requirements of the workers decent and heap housing accommodation is of
great significance.
 The problem of housing is one of the main causes for fatigue and worry among
employee and this comes in the way of discharging their duties effectively.
 Most of the organizations are located for from towns where housing facilities are not
available hence most of the organizations built quarters nearer to factory and provided
cheap and decent facilities to their employees.
 While few organizations provide housing loans to employees.

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(iv) EMPLOYEECOUNSELLING
 Organizations provide counseling service to the employee regarding their personal
problems through professional counselors.
 Employee counseling reduces absenteeism turnover tardiness etc.
(v) LEGAL AID

Organizations also provide assistance or aid regarding legal matters to employees as and
when necessary through company lawyers or other lawyers.

(vi) EDUCATION
 Organizations provide educational facilities not only to the employees but also totheir
family members.
 Educational facilities include reimbursement of fee setting up of school’s colleges
hostels providing grants in aid to the other schools.
 Further the organizations provide reading rooms and libraries for the benefits of
employees.
(vii) TRANSPORTATION

Companies provide conveyance facilities to their employees from the place of their
residence to the work place as most of the industries are located outside town and all
employees may get this facility.

(viii) MISCELLANEOUS

Organizations provide other benefits like organizing games sports with awards
setting up of clubs Christmas gifts, Diwali, Pongal and Pooja gifts, birthday gifts, leave
travel concession and awards productivity performance awards etc.

4. OLD AGE AND RETIREMENT BENEFITS

(i) PROVIDENT FUND
 Provident fund is main for economic welfare of the employees.
 The employee’s provident fund family pension and deposit linked insurance act, 1952
provides for the institution of provident fund for employees in factories.
 Provident fund provides for monetary assistance to the employees their dependent
during post retirement life.

(ii) GRATUITY

Gratuity is given for the people whocompleted 5 years’ period of job and is provided
to the employee either on retirement or at thetime of physical disability and to the
dependents of the deceased employees.

(iii) MEDICAL BENEFITS

 Some of the large organizations provide medical benefits to their retired employees and
their family members.

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 This benefit creates a feeling of permanent attachment with the organization to the
employee even while they are in service.
(iv) PENSION
 The government of India introduced a scheme of employee’s pension for the purpose of
providing family pension and life insurance benefits to the employees.
 Both the employer and employee contribute to this fund. Contribution to this fund is
from the employee contributed in to the provident fund to the tune of 1.5% of employee
wage.
(v) DEPOSIT LINKED SCHEME
 Employees deposit linked insurance scheme was introduced in 1976 under provident
fund act, 1952.
 Under this scheme with member of the employee provided fund dies while in service his
dependent will be paid on additional amount equal to the average balancing during the
last year in his account (the amount should not be less than Rs. 1000/- at any point of
time). Under the deposit linked insurance is Rs.10.000/-.

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Code: 17E00314

MBA III Semester Supplementary Examinations October 2020

PERFORMANCE MANAGEMENT
(For students admitted in 2017 & 2018 only)

Time: 3 hours Max. Marks: 60

All questions carry equal marks
*****
SECTION – A
(Answer the following: 05 X 10 = 50 Marks)
1 (a) Discuss the need for performance management in organizations.
(b) Explain performance appraisal.
OR
2 State the purpose and significance of performance management in detail.

3 (a) List out the characteristics of a Mentor.

(b) Explain about the types of group mentoring.
OR
4 (a) How will you manage Pitfall in performance review?
(b) Discuss the mentoring process.

5 (a) Explain types of counseling.

(b) How does counseling improve employee’s mental wellness?
OR
6 (a) Explain the steps involved in counseling process.
(b) How will you conduct effective coaching?

7 (a) What is stock taking of performance?

(b) Discuss the appraisal system design.
OR
8 Explain different performance appraisal methods in detail.

9 (a) Explain the importance of learning approach in organization.

(b) Discuss the types of compensation.
OR
10 (a) List and discuss the types of Fringe benefits.
(b) Explain about competitive compensation design.

SECTION – B
(Compulsory question, 01 X 10 = 10 Marks)
11 Case Study:
The time-consuming and ineffective annual performance appraisal was causing dissatisfaction
amongst employees and managers. Productivity gaps occurred due to unclear work expectations
and irregular feedback provided to employees. Being a rapidly growing organization, Saksoft
found that the manual appraisal system wasn’t able to meet the changing requirements, when it
came to employee appraisals. Managing spreadsheets and numerous emails related to appraisal
process became overwhelming for all the stakeholders.
Tracking employee goal achievements, prioritizing important tasks, access to past appraisal
data, and absence of constructive ongoing feedback was some challenges which made their
appraisal process disorganized and inconsistent.
The company needed a well-structured performance review process to continue being a
fast-growing on-demand technology solution provider.
Question:
Suggest suitable appraisal method and Justify with your answer.
*****
Code: 17E00314

MBA III Semester Regular & Supplementary Examinations November/December 2019

PERFORMANCE MANAGEMENT
(For students admitted in 2017 & 2018 only)

Time: 3 hours Max. Marks: 60

All questions carry equal marks
*****
SECTION – A
(Answer the following: 05 X 10 = 50 Marks)
1 (a) Explain the purpose and significance of performance management.
(b) Write the importance of performance appraisal.
OR
2 (a) Enlist and discuss on modern methods of performance appraisal.
(b) Which method of performance appraisal would you prefer and why?

3 (a) List the importance of mentoring.

(b) What are the basic characteristics of a mentor?
OR
4 (a) Write the types and benefits of group mentoring.
(b) Discuss common pitfalls of performance review.

5 (a) Explain the functions of counseling.

(b) How does coaching influence improvement in employee’s performance?
OR
6 (a) Discuss the steps in counseling process.
(b) As a HR manager suggest tips for effective coaching.

7 (a) Discuss in detail about the various types of performance appraisal system.
(b) Explain in detail about the “Balance Score Card”.
OR
8 (a) Explain the role of assessment centre in improving performance.
(b) Why do we need appraisal for recognition?

9 (a) Explain the various learning approaches.

(b) Write the characteristics of a learning Organization.
OR
10 (a) Discuss the factors influencing Fringe benefits.
(b) What are the objectives of compensation management?

SECTION – B
(Compulsory question, 01 X 10 = 10 Marks)
11 Case Study:
The client is a high growth mobile application software company, providing creative solutions to a
range of national and international clients. The client wanted to drive individual performance
cohesively towards shared business objectives in order to further improve company
performance.
There wasn’t a mechanism in place to review the future demands of the business and to
translate that down into meaningful objectives for each employee.
Question: Any support, direction or allocation of activities typically would happen within the open
office, discuss your suggestions.
*****
Code: 17E00314

MBA III Semester Supplementary Examinations May 2019

PERFORMANCE MANAGEMENT
(For students admitted in 2017 only)

Time: 3 hours Max. Marks: 60

All questions carry equal marks
*****
SECTION – A
(Answer the following: 05 X 10 = 50 Marks)
1 Briefly explain the role and concept of performance management in organizational development.
OR
2 Critically examine the relation between performance management and human resource
management.

3 Briefly explain the role and advantages of mentoring.

OR
4 Briefly explain the types and pitfalls in monitoring the performance.

5 Briefly discuss the effective steps for counseling process.

OR
6 Discuss the role and key issues involved in coaching.

7 Differentiate between processes of judgment versus process of analysis.

OR
8 Briefly discuss the designing and methods involved in appraisal system.

9 Briefly explain the significance and characteristics for learning.

OR
10 Discuss the objectives and influencing factors for designing the Fringe benefits.

SECTION – B
(Compulsory Question, 01 X 10 = 10 Marks)
11 Case study:
In early 2012, Donna Morris, senior vice president of global people resources at Adobe, was
feeling frustrated. The company’s annual review process, facilitated by her team, wasn’t delivering
on its goals. If performance reviews were supposed to provide employees with valuable feedback,
why did voluntary attrition always spike in the months after review time? If reviews were supposed
to help managers mold a more effective team, why were they distracting managers from their
most meaningful work for weeks at a time? “As a company, we were continuing to evolve from
box software that takes 12 to 18 months to release to cloud-based software, real-time services,
and cutting-edge digital marketing”. Donna says. “But on the people resources side, a lot of our
core processes had stayed the same. We just weren’t seeing positive results from the way we
had been addressing performance”.
Contd. in page 2

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Code: 17E00314

In most corporations, managers must divide employees into groups – for example, maybe
15 percent of people can be assigned the highest rating. Those ratings then determine salary
increases. Employees are also typically ranked meaning that every interaction with a teammate
could be viewed as a competition rather than collaboration. After months of brainstorming and
soliciting feedback from employees, Donna and her team landed on a solution – check-ins. Adobe’s
new check-in culture revolves around clear expectations, frequent feedback – both positive and
constructive – and no ratings or rankings. Voluntary attrition has decreased substantially,
suggesting that employees who are performing at the top of their game feels valued and employees
who have room to improve feel supported and encouraged. Managers can make their own
decisions about salary increases and are trained on the most effective ways to make those
decisions.
Questions:
(a) How you value the mentoring and monitoring will help the employees in their performance?
(b) What kind of training to be provided for employees in attaining the company’s objectives and goals?

*****

Page 2 of 2
Code: 17E00314

MBA III Semester Regular Examinations November/December 2018

PERFORMANCE MANAGEMENT
(For students admitted in 2017 only)
Time: 3 hours Max. Marks: 60
All questions carry equal marks
*****
SECTION – A
(Answer the following: (05 X 10 = 50 Marks)
1 Briefly explain keys to high performance.
OR
2 Briefly explain the significance and purpose of performance management.

3 Briefly discuss the essential characteristics of a Mentor.

OR
4 Discuss the steps involved in group mentoring and its benefits.

5 Briefly explain the tips involved in effective coaching.

OR
6 Define the counseling and elaborate its functions.

7 Briefly discuss the importance and steps involved in balanced score card.
OR
8 Briefly examine the role and benefits of 360 degree appraisal system.

9 Give an account on concept, approaches and sources for learning.

OR
10 Discuss the objectives and types of compensation management.

PART – B
(Compulsory question, 01 X 10 = 10 Marks)
11 Case study:
Candy making is a fun business, and so it's no surprise that it's fun to work at the Jelly Belly
Candy Company of Fairfield, California. But at this family-owned company, there's no fooling around
when it comes to promoting employee performance and job satisfaction. So when Jelly Belly decided
to overhaul and automate its antiquated employee performance and talent management process, it
was looking for a serious solution to help give its employees across the United States fair, accurate
performance appraisals.
Herman Goelitz Candy was founded in 1869 by Albert and Gustav Goelitz, whose great-
grandsons own and run Jelly Belly today. The Jelly Belly Candy Company makes Jelly Belly brand
jelly beans in over 50 flavors, as well as candy corn and other treats. Introduced in 1976 and
named by former U.S president Ronald Reagan as his favorite candy, the company's jelly beans
are exported worldwide.
Contd. in page 2

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Code: 17E00314

Like almost every smart company, Jelly Belly recognizes that employees are more likely to
stay with their employer when they feel connected and recognized for their efforts. Programs for
managing and evaluating employee performance are critical to aligning corporate and employee
values and priorities.
Having a variety of jelly bean flavors is great-a variety of employee appraisal processes
in a single company is not. The task of updating and consolidating the performance
management process fell to Margie Poulos, HR Manager of Jelly Belly's Midwest operations. She
and a small team of Jelly Belly HR staff were charged with finding a single automated system
that could be used for all of Jelly Belly's 600employees in three locations.
The driving factor behind Jelly Belly's performance management automation was the belief that
thorough, accurate reviews help employees to better understand what's expected of them, so that
they can set clear, measurable objectives. That translates into higher employee satisfaction,
said Jeff Brown, Jelly Belly's Director of Human Resources. "When employees feel they have
gotten a thorough and accurate review, it boosts their morale,".
Questions:
(a) How automation helps the performance management?
(b) Is there any necessity of coaching and counseling for employees?

*****

Page 2 of 2