Performance Appraisal

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CAB CALLING

July-September, 2008

Developing Performance Appraisal System for Performance Leadership in Banks Dr. Shambhu Nath Chowdhury*

*Senior Manager, Personnel Administration and HRD, Paschim Banga Gramin Bank, Howrah

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the organizational goals. In short, appraisals frequently fail to deliver a dependable measure of the value and contribution of employees who are assessed. Many appraisal systems examine performance on traits exhibited by individuals. Examples of such traits might be oral communication, leadership, awareness of social environment, initiative, organization and planning. Review of performance on trait criteria can be justified if the traits relate to the individual's job. However, trait appraisal can cause misunderstanding and disagreement between the manager and his subordinates. If a manager tells his subordinate that he needs to demonstrate more leadership qualities and show more initiative on projects, it is not much helpful because it does not focus on exactly how the individual has been deficient and specifically what can be done by him to improve his performance. PAS is traditionally used as a mechanism of controlling employee through salary administration, reward administration, promotion, and disciplinary actions. Another feature of traditional PAS is its confidentiality. This traditional PAS results in unawareness of employees of their strengths and weaknesses in relation to their capabilities in different positions in the organization throughout their career. The traditional PAS fails to identify the potentialities of employees in performing the new roles in new positions. This is basically because of the confidential nature of the appraisal. Due to these drawbacks, traditional PAS fail to develop employees and organizations.

July-September, 2008

appraisal system in which the reporting officer is required to assess each of his appraisee officers on technical skills, human skills and conceptual skills. All these are defined for different categories of roles and the assessment has to be made on a five-point scale. Corporation Bank, UCO Bank, Central Bank of India, Dena Bank and Bank of Baroda has introduced similar self-appraisal formats. Punjab National Bank has, primarily, a development-oriented appraisal form. There are ten different formats available for ten different categories of employees. The bank started the system with a self-appraisal by the appraisee. Studies of the operating system of the successful organizations, in general, reveal that a good PAS is the corner stone to navigate an organization successfully in this globalized environment of uncertainty and continuous change. They have, therefore, developed and employed such system and harnessing maximum benefits. But, like many fields of organizational development, the PSBs are lagging behind in this area too. Most of the PSBs have an Annual Appraisal System that is historic in nature and documents the past activities. It is a one time annual affair only. Study of the format of annual appraisal of many of the PSBs reveal that they are basically uniform in character with emphasis in historical events and little or no importance for future growth. In comparison with the new generation banks and progressive organizations, the appraisal system in PSBs, thus, is basically dysfunctional. The PAS, as an important component of Performance Management System, is yet to be conceived and made operational. But developing and implementing a PAS seems overdue and vitally important.

Performance Appraisal Systems in Indian Banks
Banking services is one sector where a great degree of attention is being paid to Performance Appraisal Systems. Several of the public sector banks (PSBs) have changed their PAS or are in the process of changing them. State Bank of India has recently adopted an open system of appraisal. Its associate banks are likely to follow the same after detailed experiences of...
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