full version Performance Management At Union Bank Of India Essay

Performance Management At Union Bank Of India

Category: Business

Autor: fonta 23 November 2009

Words: 4226 | Pages: 17

PM & IR PROJECT

PERFORMANCE MANAGEMENT AT UNION BANK OF INDIA


Submitted To Prof. PANKAJ KUMAR



GROUP

Anup Gupta ABM02003
Arjun Balaji PGP21062
Harish Narayanan S PGP21071
Kaushik Prasad PGP21073
Navneet Bhaiyya PGP20185
Ramachandran R PGP21091
Sameer Bhat PGP21093
Shaktie Prakash PGP21094
Shashi Kant Ranjan PGP20195
Sumit Takkar PGP21096


TABLE OF CONTENTS

1. PURPOSE OF STUDY 3
2. PROBLEM DEFINITION 4
3. METHODOLOGY 4
4. CURRENT PERFORMANCE APPRAISAL SYSTEM 5
4.1 Appraisal Methodology 5
4.2 Incentivization 9
5. DEFICIENCIES OF THE CURRENT SYSTEM 10
5.1 Current Methodology 10
5.2 Current Performance Appraisal Report: 11
6. SUGGESTIONS AND CONTRIBUTIONS FOR IMPROVEMENT 12
6.1 Increase in evaluation frequency 12
6.2 Individual Parameters 13
6.3 Reducing Subjectivity 14
6.4 Involving the appraisee in the process 15
6.5 Making the appraisal form concise 16
6.6 Focus on future 16
6.6.1 Changing roles of HR Management 16
6.6.2 Focus on Innovative practices and innovation 18
6.7 Self Evaulation 18
7. CONCLUSION 20
8. REFERENCES 21

APPENDICES:
 EXSTING APPRAISAL FORMS: APA-1 TO APA-8
 KEY RESPONSIBILITY AREAS (KRAs)

1. PURPOSE OF STUDY

After employee selection, performance appraisal is the most important management tool for the success and growth of any organization. The performance appraisal, when properly carried out, can help to fine tune and reward the performance of present employee and align the personal goals of the employee with the organizational goals.

Performance appraisal for evaluation using the traditional approach has served the following purposes:
 Promotion, separation, and transfer decisions
 Feedback to the employee regarding how the organization viewed the employee's performance
 Evaluations of relative contributions made by individuals and entire departments in achieving higher level organization goals
 Criteria for evaluating the effectiveness of selection and placement decisions, including the relevance of the information used in the decisions within the organization
 Reward decisions, including merit increases, promotions, and other rewards
 Ascertaining and diagnosing training and development decisions
 Criteria for evaluating the success of training and development decisions
The age old performance appraisal systems in many of India’s public sector banks play the traditional role well. But the present situation demands much more from the performance appraisal system, because of which the system need to be dynamic and needs to be revamped over a period of time. Hence the purpose of this study is to analyze the current appraisal system, and suggest some changes in the methodology and in the performance appraisal form which can address the problems enumerated in this study.


2. PROBLEM DEFINITION

The traditional performance appraisal system present in union bank of India (with about 26000 employees) serves the regular purposes of control, promotion decisions, reward decisions, feedback etc. But the fallacies in the appraisal system like subjectivity, definition of the key responsibility areas (KRAs), lack of transparency etc are evident. Primary goals are assumed to be to measure and rate performance, while the reality is that the goals are to sustain, improve performance and correct poor performance.

The problem here is, on the basis of analysis and literature review, to suggest improvements and modifications to the current performance appraisal program.


3. METHODOLOGY
The methodology followed here was the in-depth interviews of HR and Personnel Managers of Administrative offices of Union Bank of India. This was followed by analysis of the performance management formats, the hierarchy, and the patterns followed in Union Bank of India. This was supplemented by literature review of many performance management related papers. Taking pointers from the current system and the research papers, some changes are suggested.

4. CURRENT PERFORMANCE APPRAISAL SYSTEM

4.1 Appraisal Methodology

The performance appraisal system in the Union Bank of India is an annual three-tiered system. The appraisal reports need to be submitted by the 30th of April each year.

The system is outlined as given below:

The Annual Performance Appraisal is a three tiered one:
 Bio-data and self appraisal
 Appraisal by the Appraising Authority
 Appraisal by the Reviewing Authority

Officers are broadly classified under two categories:
Category 1 comprises of:
 Branch Managers
 Chief Managers
 Regional Heads
 Assistant General Managers
 Zonal Heads
 Officers on deputation as M.D./G.M./B.M. etc..
 Other officers performing operational assignments at other banks.

Category 2 comprises of all officers other than those mentioned under category 1.

Officers are appraised using the KRA’s (Key Responsibility Areas) as guidelines. The KRA’s are a suggestive list, covering majority of assignments. They are drawn only for the purpose of clarity and better understanding. There can be many additions or deletions in the list of KRA’s of any role depending on the situation in which job is to be performed. All KRA’s should have an action or orientation/objective with quantitative/qualitative goals.

The officer whose performance is being appraised should submit his performance for the period ending 31st of March, by the 15th of April, same year.

The Appraising Authority appraises and forwards the report to the Reviewing Authority, regarding operational as well as non-operational assignments.



The appraisal is done for:
1. Business Dimensions
2. Qualitative Aspects of Banking
3. Managerial Dimensions
4. Overall assessment of performance

The Reviewing Authority shall review the report and may add special remarks to the report. The report is thereafter forwarded before 15th of May each year.

The Annual Appraisal Reports play a major role in the release of the increments, proper placement, assessing the areas of training, potential for shouldering higher responsibilities/promotions, etc.


BRANCHES/DESIGNATION APPRAISING AUTHORITY REVIEWING AUTHORITY
Small Branches
Officers Branch Manager Regional Manager
Accountant Branch Manager Regional Manager
Branch Manager Regional Manager Zonal Head
Medium/Large Branches
Officers Asst.Br.Manager/Accountant Branch Manager
Asst.Br.Manager/Accountant Branch Manager Regional Manager
Branch Manager Regional Manager Zonal Head
Very Large Branches
Officers Deputy Manager Chief Manager
Deputy Manager Accountant/Manager Chief Manager
Accountant/Manager Chief Manager Zonal Head
Chief Manager Zonal Head General Manager (P)
Extra Large Branch
Officers Deputy Manager Chief Manager
Deputy Manager Accountant/Manager Chief Manager
Accountant/Manager Chief Manager Asst. General Manager
Chief Manager Asst. General Manager Zonal Head
Asst. General Manager Zonal Head General Manager (P)
Service Branches
Officers Deputy Manager Manager
Deputy Manager Manager Regional Head
Manager Regional Manager Zonal Head
ADMINISTRATIVE OFFICES
Regional Office
Officers Manager Regional Manager
Deputy Manager Manager Regional Manager
Manager Chief Manager Regional Head
Chief Manager Regional Manager Zonal Head
Regional Manager Zonal Head General Manager (P)
Zonal Office
Officers Manager Asst.Gen.Manager
Deputy Manager Chief Manager Asst.Gen.Manager/Zonal Head
Manager Chief Manager Asst.Gen.Manager/Zonal Head
Chief Manager Asst.Gen.Manager/ Zonal Head Zonal Head/ G.M. (P)
Asst. General Manager Zonal Head General Manager (P)
Zonal Head Comitee of 3 G.M.’s Executive Director
Table 1: List of various officers and their Appraising Authority and Reviewing Authority


Operational Assignments Non-Operational Assignments
Business Dimension 30 -
Qualitative Aspects of Business 20 -
Managerial Dimension 40 40
Key Responsibility Areas (KRA’s) - 50
Outstanding Performance 10 10
100 100
Table 2: The marks allotted to each of the dimensions and their importance in the performance appraisal.


Promotion P e r c e n t a g e W e i g h t a g e s
Education Qualification Job Responsblity Performance Appraisal Written Test Interview
Scale1 to Scale2
(Fast Track) 5 15 20 40 20
Scale1 to Scale2
(Normal Track) 5 15 60 - 20
Scale2 to Scale3 5 15 50 - 30
Scale3 to Scale4 5 15 50 - 30
Scale4 to Scale5 - - 60 - 40
Scale5 to Scale6 - - 60 - 40
Scale6 to Scale7 - - 60 - 40
Table 3: Percentage Weightages considered for the promotion of officers from one scale to other.


The appraisal by the appraising authority considers a variety of dimensions in operational as well as non-operational assignments. They are:

Business Dimensions: Indicates the amount of contribution of the employee to the business. It could be in terms of the deposits brought in or the advances given. Importance is also given to the ability of the officer to recover the assets of the Bank. A growth percentage is noted on the basis of the business level at the beginning and end of the appraisal year.

Qualitative Aspects of Business: These focus on the inspection, customer service and attitude of the appraisee towards the weaker section of the society.

Key Responsibility Areas: A list of the key responsibility areas (KRA) have been provided for each officer. These KRAs can be used as guidelines to appraise on operational as well as non-operational assignments. However, more KRAs may be added and included as per the discretion of the appraising authority.

Managerial Dimensions: These indicate the ability & potential of the officer to be promoted or transferred. They highlight the Leadership qualities, flexibility, and administrative & decision-making skills of the officer. These dimensions have the maximum weightage of 80 marks in the appraisal. A higher score in this dimension indicates better managerial qualities and hence better scope for promotion and greater job responsibilities.

Promotion of the officers depends on a variety of other factors as shown in table3. Though performance appraisal has maximum weightage in majority of cases, factors such as educational qualifications and interviews also play an important role. However, it has been noted that promotion to higher scales such as scale 5, 6, 7 give much greater importance to the appraisal score as compared to that in the lower scales.

4.2 Incentivization

A special group called the Chairman’s Group has been formed where the Star Performers of the regions are inducted into, and then they are invited with their whole family to a dinner, with the Chairman.

5. DEFICIENCIES OF THE CURRENT SYSTEM

5.1 Current Methodology

• It has a lot of subjectivity. Even though there is a ratings system in place, there are no clear guidelines as to how to evaluate the different achievements of an employee on an objective scale. Research suggests that lack of objectivity in the evaluation criteria can lead to discrimination on the part of the evaluator . The high degree of subjectivity in this process means that the evaluator can use his discretion to attain his political goals through this process . Furthermore, each criteria of appraisal may be differently interpreted and rated under the current system. The appraisal scores of each employee may vary from one appraising authority to another. Thus a better employee may receive lower scores because of different appraising authority.

 The system continues to be maintained as confidential.

 Certain areas of assessment can’t be quantified. The key responsibility areas (KRAs) need to be enlarged.

 The appraisal system takes place only once a year. As a result, the achievements of the employee in the beginning of the appraisal year may be overlooked or forgotten.

 Due to the annual appraisal system the employees tend to exhibit good performance only towards the end of the year and not throughout the year.

 The current system limits the number of promotions an employee can receive in a single year. This restricts the fast growth of an outstanding employee.

 The appraisee is not involved in making his/her KRAs

 There doesn’t exist a feedback system where the appraisee is given feedback immediately during appraisal or otherwise, based on his performance. Also training programs for improving weaker parts as indicated by the performance appraisal from is not present

 The KRAs are static and do not reflect the changing environment and performance requirements


5.2 Current Performance Appraisal Report:

 Under the existing system, APA-3 contains the statistical data relating to their performance at the beginning and the end of the year. The appraiser gives random rating by way of marks in APA-7 under business dimensions (maximum 30 marks) keeping in mind the overall performance. The performance in each parameter is not taken into account. As a result, performance and rating do not correlate.

 Under qualitative aspects of business, the concept of profit and profitability has assumed much significance. Though APA-3 provides for a column for profit/loss, there is need to include this aspect in APA-4.

 Under Managerial Dimension APA-6, the overall rating is given in APA-7 (maximum marks 40). However, the rating of the performance in individual parameters is not being given now.

 Undue importance is given to managerial dimensions (40 marks). As a result the appraisal score is not a true reflection of the work done by the employee in that particular year.



6. SUGGESTIONS AND CONTRIBUTIONS FOR IMPROVEMENT

The usual problems associated with performance assessment and rating like the halo effect, errors of central tendency, the impact of relationships (both good and not so good), personal prejudices, the dangers of placing too much emphasis on recent events etc. should be taken care of. Suggestions made here would be taking a step further from these problems and is for problems specific to this appraisal methodology.

6.1 Increase in evaluation frequency
Annual performance reviews are, by definition, static. Conditions change quickly, and untimely information is useless. Goals and progress must be examined frequently. It is difficult to influence change effectively when you review progress only once a year.
A half-yearly or quarterly review allows a more timely examination of goals and achievements while events are still fresh in the minds of both reviewer and reviewee. Frequent progress reviews dealing with shorter time periods makes the job manageable. So we can have a bi-annual appraisal system to occur twice a year