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Amber limited, incorporated in year 1940, is a multinational pharmaceutical firm with 50 subsidiaries

in 20 different locations worldwide. It is listed in National stock exchange and also in New York Stock
exchange. It is one among the fortune 700 companies and is recognised as a brand name globally.
The president of the company is Mr Naik.

Q 1) What were the main drawbacks of the traditional appraisal al system of Amber ltd that was in
place until 1997? Did the new performance review system overcome these drawbacks? Explain citing
examples from the case.

A 1) The major drawbacks were of traditional appraisal system were:

 The employees could not obtain information about the expectations that company had from
them which in turn gave them no idea of how to improve their performance.
 The dependency of employees’ appraisal on this system made it a highly emotional affair. It
created unrest as it was connected to a very sensitive subject of salary and promotions.
 It did not follow a very fair approach as only the supervisor’s ratings were taken into
consideration which could have proved to be detrimental for some employees if the
supervisor had personal bias and assigned low ratings.
 The appraisal system lacked ongoing performance monitoring and feedback.
 The appraisal methodology was orthodox, did not take into consideration various factors
that could influence employee performance, for example personal factors.

The new performance review system did overcome some drawbacks of the traditional performance
appraisal system by:

 Adopting a strategy of setting objectives for the employees in alignment with the objectives
of the organisation so that the employee feels associated and knows what is expected of
him/her.
 The new system laid greater emphasis on achieving targets as the criterion for evaluating
performance unlike the system employed earlier where in only the ratings given by the
supervisor were used performance evaluation.
 The supervisors was not solely authorised to review employee’s performance and take
decisions regarding employee’s salary and promotions. The ratings given by the superior
were reviewed by seniors members of the team to check the authenticity of the feedback
provided.

Q 5) Give suggestions for making the current performance review system at Amber ltd more
effective.

A 5) Suggestions are:

 It is unrealistic to assume that one person can observe and evaluate all aspects of an
employee performance. The performance of an employee can be evaluated by anyone who
is familiar with his/her work. For example, apart from the supervisor, subordinate, peer,
team, customer, multisource and even the employee himself/herself can provide feedback.
360 Degree Appraisal is a good tool to evaluate performance and includes feedback from all
the individuals mentioned above.
 To have two separate formal performance appraisals in a year, one that focuses on
evaluation and the other that focuses on development as problems may occur if the same
performance review system is used for making evaluative decisions and identifying
development needs. The performance appraisal should not require the manager to be
simultaneously a judge as well as a helper.
 Using appropriate performance data like using a record of uncommonly good or
undesirable examples of an employee’s work related behavior at the time of performance
review will make the employees accept the feedback more readily. Performance appraisal
methods such as BARS and CRITICAL INCIDENTS METHODS use behaviour based
performance measures.
 Immediate feedback is more effective than delayed feedback. The benefit of Ongoing
Feedback is that the subordinate will be able to associate the feedback with a specific
behaviour and accordingly improve his/her performance. Ongoing feedback is inherent to
the MBO approach.
 The subordinates should get an Opportunity to Appeal against appraisal results if they see
them as inaccurate or unfair.

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