KCB ID 14719

Name : Yatin Mukeshbhai Bhandari

Student ID : 14719

Module Title : Recruitment selection Performance and Reward

Title of Assignment : Appraisal Reward & Performance Alignment Proposals

Due Date : 3rd March

Tutor : Nuala Osullivan

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Content:

Sr. No. Content Page No.

1 Executive Summary 3
2 E mail 4
3 Introduction 6
4 Literature Review 7
5 Specific Literature on case 14
6 Recruitment and Selection 15
7 Legal and Ethics 16
8 Dysfunctions 16
9 Methodology 17
10 Findings 17
11 Analysis 17
12 Evaluation 20
13 Conclusion 20
14 Recommendations 21

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Executive Summary:

This is a case study on three characters namely Ismail, the receptionist, Suneeta, the Accounts
Manager and Imelda the HR Director about their current problems and the way their
performances are appraised and rewarded examining the aspects of their job profile, their
designation, their experience, their skills and their abilities. The study also depicts the
Recruitment and selection aspects and the dysfunctions of the reward models on
organisational objectives. The report study is also concern with the legal and ethical issues in
appraisal and reward process of the employees. Lastly the report study gives conclusion and
the future recommendations to the firm on appraisal, reward and also the recruitment and
selection criteria’s.

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E-Mail

To

Imelda

The HR Director

Subject: Regarding Appraisal process of the employees considering their existing problems.

Respected Mam

This is in response to our last meeting where u assign me a task to prepare a report on the
current problems of the three characters of the firm namely: Imelda(HR director),
Ismail(Receptionist) and Suneeta ( Accounts Manager) which got accomplished so sending
you a report depicting the present problems and the appraisal system.

The present problems:

*) Dysfunctions of various reward models used like Myopia, Ossification, Interpretation,

Tunnel Visions for each of the characters.

*) Legal and Ethics related issues.

*) Giving inappropriate rewards to them.

*) Lack of appraisal related data etc.

The appraisal system designed in this study determines the following issues:

Objectives of PA, Job expectations, appraisal programs, performance interview, use of

appraisal data , archiving PA data for future use.

This report study indicates the appraisal and reward models for each one of them considering
legal and ethical issues and also shows the Dysfunctions of the methods chosen for reward
and appraisal in each of the case and draw necessary conclusion and recommendations with
respect to aspects of recruitment and selection that fosters the performance of the
organisation.

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I hope this report study will help you in determining the reward and appraisal models for each
of the character and also will help you in taking certain other decisions on HR at present and
so in future.

Yours faithfully

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INTRODUCTION:

Definition of Reward:

Milcivich , Newman and Milcovich (2001,p.9) State that “Employees may see compensation
as a return in exchange between their employers and themselves, as an entitlement for being
an employee of the company, or as a reward for a job well done”.

Definition of Appraisal:

Performance appraisal (PA) is a very critical management tool that measures employees’
efficiency at the workplace, and may be defined (Pearce & Porter 1986), as ” a structured
formal interaction between a subordinate and supervisor that usually takes the form of a
periodic interview (annual or semi annual) to evaluate the work performance.”
“Performance Appraisal is an objective assessment of an individual’s performance against
well defined bench marks.” By K. Aswathappa 2007.

“Performance appraisal is considered as one of the key elements of performance

management” (Suutari $ Tahvanainen 2002)

Presenting Problems:

Need to design an appraisal system linked to reward which will be able to motivate and
appropriately reward the following three members of staff of the Wall Mart PLC namely:

Ismail Hoq: The Receptionist with 8 x GCSE qualifications his task includes greeting and
taking mail deliveries, previously he didn’t get bonus of any of the other financial incentive ,
working from last two years, performing well, always conscious with the job.

Suneeta Begum: Account Manager : BA Media Art and design qualification and professional
responsibility for motivating and running an advertising team of 5 including delivering to
deadlines and within budget. Previously PRP incentives individual and team based.

Imelda Byrne: HR Director: BA Business Management & MA Personnel & Development

with responsible for HR strategy organisation wide. Previously she had bonus.

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Hypothesis:

Hypothesis(h0): All the methods of appraisal and rewards depicted in the literature section is
linked with each other and impact the performance of the employees..

Hypothesis(h1): All the methods of Performance appraisal and rewards depicted in the
literature section is not linked with each other and it does not have any impact with the
performance of the employees.

Scope of the report:

Performance Appraisal systems and models that are applicable to the three members of the
study and also the Reward for them so as to motivate them in future and to satisfy them in
order to enforce the organisations strength , also suggesting Recruitment and Selection
elements to the firm and require to draw recommendations on the character examined .

A Literature review:

What exactly Performance appraisal is?

Appraisal helps poor performer to improve and helps employer in judging the weakness of
the employees.journal of summer (2002)

In simple language appraisal means the assessment of an individual’s performance in a

systematic way, the performance that is measured in front of factors like job knowledge,
quality and quantity of output, initiative , leadership qualities, co-operation, supervision ,
dependability and health. Assessment should not only be confined to past performance alone
but it should also assess the future potentials of the employees.

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Appraisal Process:

“Objectives of Performance
Appraisal”

“Establish Job Expectations”

“Design an Appraisal Programme”

“Appraise Performance”

“Performance Interview”

“Archive Appraisal Data”

“Use of Appraisal data for

Appropriate Purposes”

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Objectives of the performance Appraisal ,wright( 2004):

1) To make a positive impacts on promotions based on individual’s capability and

performance.
2) To give a job confirmation to the employees who are on probation .
3) To find out the training and development requirements of the employees.
4) To improve communication.
5) It is used to determine whether HR programs such as selection, training , and transfers
are effective or not.
6) To decide the pay raise and where regular pay scales have not fixed.
7) To take the future decisions on promotions, incentives , bonuses and other non
monetary benefits to the employees.

The questions in designing an appraisal Programme, Journal of management

research(2010):

*)Whose performance needs to be rated? Individual group or an organisations.

*) Who are raters? Immediate supervisor, Sub-ordinates, rating committees or self appraisal.

*)What can be the problems of rating?” Leniency or , Central tendency, spill over effect ,
status effect”.

*)What should be rated? Quality, Quantity, Timeliness, Cost effectiveness, Need for
supervision , interpersonal impact, community service.

*) Timing of evaluation? As Arthur Anderson(1997) suggested that 70 percent of the

organisation conducts appraisal once a year but it depends it can be twice a year or even
thrice

Methods of Appraisal:

Many methods have been devised to measure the quality and quantity of the employees

job performance. Most of the methods are classified into past oriented methods and future
oriented methods. The various methods of appraisal are listed below:

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1) Balance Score Card, Kaplan & Norton,1994;2001 in Porter et al(2008;57):

Under this method the performance of the employee is assessed under four factors
like how is their reputation in the mind of customer, factor to excel at, improvement
and value creation, and shareholders aspects.
2) Confidential records, k aswathapa (2007): This is the method in which the
evaluation is done on the bases on certain performance judgemental factors such as
Attendance, Self expression, Ability to work with others, reasoning power, handling
responsibility, initiative, concerns that suits the employees best, integrity etc.

3) 360 Degree appraisal (Harvard Business Review,june 2001): Under this method
the feedbacks are taken from stakeholders, superiors, team members, customers and
self.

As from the variety of performance appraisal methods so now taking those into consideration
and the applicability of them according to case given can be done but beyond that we need to
take the other activities in order to complete the process that is performance interview,
storing & Appraisal data use.

Performance Interview: Once the appraisal is made herein the raters need to discuss the
review with the ratee in order to know where the rate stands in the eyes of the superiors

Purpose of PI: Taylor and wherry (1951)

*) To change the behaviour of employees not achieved their goals

*) To maintain the behaviour of the employees who are performing well.

*) To find the superiors behaviour so that they can continue the same.
*) Promotion, transfer and layoffs decisions.

*) Feedbacks and disciplinary actions.

Reward:

Rewards or remuneration comprises of wages, salaries, incentives , Fringe benefits,

perquisites and other non monetary benefits. Reward policy or strategy needs to be same as it

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follows with respect to the business strategy by (Michael Armstrong). Appraisal system in
public and private both is especially designed for the issues of payments, bonuses and other
payments related to merit ,Journal of Public Administration Maldivis (oct 2001)

Examining various reward models:

Reinforcement Theory (K Aswathapa 2007): This theory emphasised on person actually

experiencing the reward.

Equity Theory: This theory mainly emphasis on fair dealings with the employees with
respect to pay that they receive for what they deserve to be.

(Image taken from Employee reward by Michael Armstrong,1996 figure : 1,p.7)

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Reward process:

“Job Description”

“Job Evaluation”

“Job Hierarchy”

“Pay Survey”

“Pricing Jobs”

By: (K aswathapa,2007)

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Specific Literature on Case( Appraisal Methods):

1) Checklist, by Decenzo(2002): Under this the rates behaviours are examined and
checklist forces the appraise to judge the pair of behaviour that can be favourably
“yes” or unfavourably “no” decides the Appraiser.

2) Behaviourally Anchored Rating Scales(Tzinger etl, Canadian journal of

administrative sciences,dec97):
Behaviourally Anchored Rating Scales, sometimes called behavioural expectation
scales, are rating scales whose scales points are determined by statement of effective
and non effective behaviours . it represents a range of descriptive statements of
behaviour varying from least effective to the most effective.

Example:

Highly good performance

Good performance

Slightly good performance

No good no poor performance

Slightly Poor performance

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Highly poor performance

Source: C. Hulin Fogh and M.R. Blood, “ Development of first – level Behavioural
Job Criteria.” (Journal of applied Psychology,1971,55(1),pp.3-8.)

3) 360 Degree appraisal by pieperal,etl, Harvard business review(2001): Under this

method the feedbacks are taken from stakeholders, superiors, team members,
customers and self.
4) Management by Objectives Journal of Occupational Psychology,(sep87): Under this
method the goals are set by superiors and subordinates then it is accessed by
comparing it with the standards and then again new goals are formulated.
Subordinates who achieved the task are allowed again in goal setting. Here both
superior and sub ordinates work for some specific goals and then percentage are given
for each of the goals, the employees are given scores on each of the goals and that is
how the overall scores are obtained which decides the ratings and ratings are used for
the reward.

Specific Literature on Case (Reward Models):

Principal Agency Theory (Jensen & Mecklins,1986): It deals with the achievement of the
organisational goals by keeping the interest of the employees and also the organisations
interest. It ca be on behaviour oriented (performance pay) or result oriented(commissions and
profit sharing).

Tournament Theory Rosenbaum,(1989): In this theory series of task is given to the

employees and the employee performing the series of challenging task are rewarded.

Human Capital Theory, Forth & Millward, (2000): Here the pay of the employee is based
on the skills that are being upgrade by the employees, if there is a significant rise in the skills
pay too will rise at the same time by same number.

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Power dependency Theory Pfeffer & Salancik,(2003): Here the skills that employee is
possessing reflects the reward of the employee.

Risk reward Theory, Pepper (2006): This refers to reward on risk criteria and the risk
associated skills.

Recruitment and Selection: Recruitment and selection are the main issues that are to be
considered by human resource specialist. HRM and the rest of the management studies
mainly concentrates on the process of selection and induction of the newly hired employees.
These aspects have taken a great attention of experts of the field. But as Murphy(1994)
Observes ” Substantial volume of research in the areas of selection and appraisal is both
blessing and curse”.

Legal and Ethics:

Fairness notions of legality is directly concerned with the processes in a way the reward is
given to the employees. It is very essential for the employers to reward the employee as per
the agreement signed at the same time of contract. Procedure way of justice impacts the
employees commitment, behaviours, intent Cohen – Charash & Spector, (2001). EEOC
guidelines and the court decisions with respect to the settlement of the claimed especially on
hiring discrimination process. As per law the organisation needs to have formalised appraisal
& Reward system and even the reward needs to be minimum as per the law of minimum
wage, and also need to consider of child labour acts for recruitment and the discrimination in
selection with respect to ethnicity (Journal of summer,80,vol19 Issue2,p14-18) EU
Employment laws, the employment equality& diversity (2010), claim on sex discrimination
etc.

Dysfunctions: These are the factors that negatively impact appraisal and the reward models
of the human resource system; it hinders the corporate objectives and the HR objectives of
the firm. Smith P(1995) Journal of public Administrator. The some of the dysfunctional
behaviour are Tunnel vision that is focussing only towards the main target, Sub- optimisation
is narrow objectives at expense of co-ordination, , Myopia that is short termised, Ossification
is when employee feels risk of innovation and gets rigid, Gaming is the manipulation of
performance indicator to achieve the target, Misinterpretation is fraudulent of account and the
other task.

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Appraisal Outline:

Personnel Rewards Given

Ismail Hoq -
Suneeta Begum PRP Incentive
Imelda Byrne Bonus

Appraisal align to the reward methods chosen:

Personnel Appraisal Method Rewards Method

Ismail Hoq 1) Checklist Expectancy Theory,
2) BARS tournament theory.
Suneeta Begum 1) 360 Equity Theory, Principal
2) BARS Agency Theory,
3) MBO
Imelda 1) 360 degree Risk reward, Bonus( group
bonus scheme)

Results / Findings:

Reward Management

Character Rewards Given Reward Method Fits With

Literature
Ismail Hoq(Receptionist) Salary no other rewards “Expectency theory,
Tournament theory”
Suneeta Begum(Accounts Salary with PRP Incentive “Principal Agency Theory”
Manager)
Imelda (HR Director) Salary with Bonus “Risk Reward, Bonus
Scheme”

Discussion /Analysis:

Ismail Hoq’s Appraisal methods and the factors affecting appraisal:

Bases of pay or appraisal factor Appraisal method

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Job performance, customer response Checklist

Value of work performed , work quality BARS

Behavioural Anchored Rating Scales can be applicable to decide the reward for the Ismail as
it depicts the performance of the employees that is evaluated with the standard ratings set as
shown in the literature and even the checklist method is applicable as it focus on various
aspects of the job like behaviour, customer response, responsibility handling, order handling
etc.

Reward Method link with Appraisal system for Ismail:

The reward method chosen in the case of Ismail is Tournament theory as under this the task is
given to the employees and on addition to it the other new task is given and reward is given
on the bases of achievements Rosenbaum,(1989) it is applicable in the case of Ismail as he is
receptionist and needs to deals with the customers and also having a team of four members so
competitive atmosphere can be created by setting this reward system hence tournament
theory is very precise for the case of Ismail.

Dysfunctions:

The tournament theory deals with setting of task and reward on task achieved so there may be
chance of concentration towards only those task and leads to go away from the other task and
the corporate objectives(Tunnel Vission), and as the tasks are short term so it may also leads
to Myopia.

Suneeta Begum’s Appraisal methods and the factors affecting appraisal :

Bases of pay or appraisal factor Appraisal method

Potential Personnel ,team leading, group 360 feedback’
decision making
Managerial Skills MBO

The appraisal system applicable in the case of Suneeta begum is BARS as it deals with the
Ratings of different aspects of the job profile and the Suneeta Begum is the Accounts
Manager and she is having the team so different aspects like leadership qualities, Co-
ordination, Customer response, Objective setting etc can be rated to judge her performance
therefore BARS technique is applicable . Balance score card is also applicable as they work

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in a team an responsible for the sake of accounts so Customer thinking, innovation and
learning and the serving to shareholders etc can be scored to assess the performance of
Suneeta.

Reward Method link with Appraisal system for Suneeta Begum:

Principal Agency theory is applicable in the case of Suneeta Begum as goals are aligned and
the expectation is high as she deals with sales and she needs employer for the compliance of
the firm so on the bases of performance of the agents that is Suneeta and her team the reward
is set by the principal.

Dysfunctions:

In this case there is a chance of manipulation in the objectives by the agents as the
expectation is high so called as Gaming, as goals relating to sales are aligned with the
performance so even there is a chance of Misinterpretation .

Imelda’s Appraisal methods and the factors affecting appraisal :

Bases of pay or appraisal factor Appraisal method

Skill transferability, Leadership Concern 360 degree feedback
Forward planning, decision making and
objective settings, subjective judgement.

The appraisal method applicable in the case of Imelda is 360 feedback method as Imelda is
the HR director who is at the superior position responsible for the every aspect of the firm the
sub-ordinates, customers, the corporate objectives, and for the self development and
contribution in accomplishing the corporate goals and so as the departmental goals. Under
this Imelda do self appraisal then the sub-ordinates appraises the performance and the
superior also appraise the performance the Board of directors and Customer feedback is also
taken as an appraisal and that is how the performance data is used as a reward, considering all
these factors bonus of the Imelda is declared.

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Reward Method link with Appraisal system for Imelda :

Risk reward is applicable as at the top level it is risk that is rewarded like framing some
innovative strategies to increase the productivity of the department it may prove costly for the
firm, in the case of Imelda she is rewarded on her skills that is associated with the risk related
strategies that results to increase the productivity of the firm.

Dysfunctions:

Sub optimisation can be a dysfunction in the case of Imelda as she may narrow down he
objectives at expenses of co-ordination, and equally misinterpretation and gaming is possible
as she is the HR director and even more risk can leads to failure if reward is given on risk
rewarded method.

Evaluation:

Hence it is very important for the firm to have effective performance appraisal system and the
reward policy at individual and at the organisational level as it is responsible for factors like
motivation, developing capabilities of the team and the individual, training and development
needs can be assessed, sustaining success of the organisation, employees satisfaction, goal
achievement etc. hence it is very important for the firm to carry appraisal and reward
functions effectively non biased and legally so as to motivate the employee and the
organisation as a whole.

Conclusion:

The various appraisal methods depicted in the case shows the relative applicability with the
character examines and also determines the importance of appraisal and reward system in the
organisation and also shows the importance of recruitment and selection of the employees on
those factors hence it is concluded form the study that appraisal and reward play a significant
role in determining the employees performance namely Ismail, Suneeta and Imelda and so as
their expectations which relates the performance of the organisation as a whole and their
individual performance.

Hypothesis Conclusion:

Hence it is proved that every most of the appraisal methods have linked with the reward
models and affects the performance of the employee significantly.

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Recommendations:

Academic and practical:

The characters examined in the case can be rewarded by considering many other aspects
which the study does not consider, even firm can make use of other reward methods like
Power dependency in the case of Ismail, Expectancy Model in the case of Suneeta, Human
Capital Theory Creative Destruction Theory and Bonus mode in the case of Imelda and also
the other appraisal systems like Observation method for Suneeta, Rating Scales for Ismail,
Field review method (where the expert judge the performance) for Imelda. It is also
recommended to the firm to emphasis more on recruitment and selection criteria so as to
foster the higher level of performance and commitment, firm could also try to avoid
dysfunctions.

Limitations:

The study does not consist of motivational aspects of the reward system and also it does not
cover the technical grounds of the performance indicators that helps in assessing the
quantitative performance of the employees and it also doesn’t cover the empirical study over
the characters, various statistical tools can be used to support the reward models to draw
precise conclusion over the characters examined.

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References:

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International Journal of Human Resource Management,vol19 issue6,p1152-1169.

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15) Peiperl C, Maurya A(2001), Getting360 degree feedback right, Harvard Business
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journal).

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