Global Travel Group

CONTENTS

Acknowledgement        

Executive Summary        

Introduction        

QUESTION 01:        

Explain the weaknesses/ rater errors that you identified in this case.        

QUESTION 02:        

If you are the head of the Human Resource in the above company, how do you guide Rebecca to carry out an effective appraisal process for her team to measure the individual contribution and reward accordingly?        

Conclusion        

ACKNOWLEDGEMENT

I wish to express my sincere gratitude to the lecturers of module 3,

Mr. Priyantha Ranasinghe

Mr. C. Gannile

&

Ms. Tharanga Samarakkody

for the guidance and encouragement in carrying out this project work and also for teaching us in this course.

I also wish to express my gratitude to the officials and other staff members of IPM and my colleges who helped during the period of my project work.

Executive Summary

Rebecca Fernando is a Head of Marketing at the company of “Global Travel Group”, a leading travel company in Colombo, Sri Lanka. Rebecca has an unusual heavy work load because she is the one who is responsible for her company’s newly opened branches and she is busy with attending overseas conferences and completing appraisal form for her team. As she doesn’t have sufficient time she was not able to establish specific individual sales volumes and objectives and she completed the 30 appraisal forms with in a day.

Rebecca has done some major errors while she was doing the performance appraisals and due to those errors her company had to face many problems including significant downfalls in its sales volume and also the labor turnover has gone so high the management had to hire new 20 staff members within 06 months of time.

So, I’m going to discus about those errors that Rebecca has done on the appraisals and the solutions that can be taken in order to make sure that these mistakes won’t happen again.

Introduction to PMS

Performance management is a process of creating a working environment which people can perform the best of their abilities in order to meet an organization’s goals. It can be define as a process to plan, evaluate, and improve an individual’s performance on the job and prepare him/her to take on higher responsibilities, in order to achieve personal and organizational goals.

Performance appraisal is an important part of performance management system. Many organizations now a day have a formal employee performance appraisal system. It is the systematic observation and evaluation of employees’ performance. Performance appraisal may be defined as the process of which supervisors evaluate the performance of subordinates, typically on an annual or semiannual basis for the purpose of strategic, developmental and administrative. Through the performance appraisal the organization gets information on how well an employee is doing his/her job during the appraisal period.

When handling HR activities such as promotions, salary increment, accessing bonus and training needs, it is very important of having a common criterion.

Performance appraisal provides that common criteria and transparency on taking HR decisions as well as rewarding employees and it will not cause for any favourations and personal bias. In the other hand it will enhance the motivation, commitment and job satisfaction when the employee’s incentives, promotions and bonus are based on their performance.

Some of the most commonly used performance appraisal methods are rating methods, management by objective, and management by walking around, balance score card and 360 degree feedback.

Generally the organization expects that performance appraisal should be completely accurate and objective. However, the performance appraisal process is not accurate and objective, as resulting in rating errors. Common rating errors are Strictness or Leniency, Central tendency, Halo effect, Horn effect and Recency error.

Halo effect

Rating an employee based on one positive behavior and allows it to influence for all the other areas of rating. This occurs when the employee is especially very good in one skill or friendlier towards the appraiser.

Horn effect

This error occurs when manager focuses on one negative side of the employee and generalized it into an overall poor appraisal rating.

Error of the central tendency

A performance rating error which all employees are rated as an average, neither high nor law.

Leniency error

A performance rating error, which the rater tends to give employees unusually high rating. The managers rate their subordinates higher than their actual performance being very lenient.

Harshness

A performance rating error, which the rater tends to give employees unusually law rating. Managers mark their subordinates lower than their actual performance.

Recency error

The appraiser has committed the recency error when the appraisal is based on the employee’s recent behavior without considering the work records through the entire appraisal period.

Contrast error

An error which an employee’s evaluation is based either upward or downward because of comparison with another employee just previously evaluates. For example an average employee could be seen as productive when compared with the poor performer. The same employee could be seen as unproductive when compared with a higher performer.

Personal bias

Personal bias occurs when managers become more favorable towards the employee with whom they have something in common. For example if the manager and the employee both are from same town, school or university the manager may unknowingly get more favorable impression towards the employee. The similarity is based on race, religion, gender or some other category which can be result in discrimination.