COMPARISON OF PERFORMANCE APPRAISAL OF DIFFERENT COMPANIES UNDER FMCG SECTOR IN INDIA.docx

COMPARATIVE ANALYSIS OF FMCG COMPANIES IN TERMS OF PERFORMANCE APPRAISAL

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COMPARISON OF PERFORMANCE APPRAISAL OF DIFFERENT COMPANIES UNDER FMCG SECTOR IN INDIA PERFORMANCE APPRAISAL MEANING Performance appraisal, also known as employee appraisal, is a method by which the job  performance of an employee is evaluated (generally in terms of quality, quantity, cost and time). Performance appraisal is a part of career development.

TYPES 

Management by objective (MBO)

Behaviorally anchored rating scales (BARS) 360 Degree Assessment center General appraisal FMCG industry follows the modern techniques for performance appraisal and certain similarities has been noticed in the studies between the competitors and differences also to take the competitive advantages.    

COMPANY- PROCTER AND GAMBLE (P&G) P&G's core to the performance appraisal is work the 'Work and Development plan' (W&DP) system that P&G has globally across all organizations, functions etc. The W&DP had four components – 

1. Previous years plan versus the results 2. Areas for further growth and development 3. Near-term and long-term career interests 4. Development and training plan for the year ahead.

In terms of 'Appraisal performance' this W&DP document is review on a quarterly basis to monitor/track the performance. The performance appraisal is done using Forced Distribution method in which feedback is collected by using 360-degree feedback method . Also it has pre system to evaluate employee performance so as to reach an objective human resource decision which is backed by documentation proof. It is majorly based on Management by Objective (MBO)  principle which concentrates on end result.

Process-

In terms of the 1st step steps in performance appraisal i.e. 'Defining the job' - with W&DP the employee and his/her one level up manager . 2 level up manager agrees on the work and development plan for the year ahead, which defines clearly the actions together with deadlines i.e. 'defining the job'. P&G use ratings to assess contributions relative to others at job level, in order to manage compensation and career progression according to the company's principles, as follows: - Reward competitively - Reward for performance - Support the business For these ratings P&G uses forced distribution method , in this method various percentages are allocated to several performance categories. The portions in each category need not be symmetrical. In Procter and Gamble the top 5%, middle 90% and bottom 5% method is used to rate the employees in various categories.

COMPANY- PEPSI CO. The jobs are evaluated on yearly basis under 360o method ; the competent employees are rewarded in shape of promotions, bonus, increments and annual holidays and promotion. The results of an appraisal can be used to identify areas for further development of the employee. The organization also uses different questionnaires, which consist of numerous questions about the behavior of the employee, and then on the basis of these answers personality of the employee is judged. When evaluation is made the unsatisfactory performers are given warning. The employee after warning is put under observation, for some period of time and if the employees’  performance is still unsatisfied then are demoted or fired.

COMPANY- NESTLE Ratio in Smart objectives and Competencies: SMART objectives 70% Competencies 30% 360-degree-performance-appraisal-   Typically, performance appraisal has been limited to a feedback process between employees and supervisors. However, with the increased focus on teamwork, employee development, and customer service, the emphasis has shifted to employee feedback from the full circle of sources depicted in the diagram below. This multiple-input approach to performance feedback is sometimes called “360-degree assessment” to connote that full circle. 360 DEGREE PERFORMANCE APPRAISAL Self-Assessment:   This form of performance information is actually quite common but usually used only as an informal part of the supervisor-employee appraisal feedback session. Supervisors frequently open the discussion with: “How do you feel you have  performed?” In a somewhat more formal approach, su pervisors ask employees to identify the key accomplishments they feel best represent their performance in critical and noncritical performance elements. 

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Peers, peers are often the most relevant evaluators of their colleagues’ performance. Peers have a unique perspective on a co-worker’s job performance and employees are generally very receptive to the concept of rating each other. Peer ratings can be used when the employee’s expertise is known or the performance and results can be observed. Sub ordinates : An upward-appraisal process or feedback survey (sometimes referred to as a SAM, for “Subordinates Appraising Managers”) is among the most significant and yet controversial features of a “full circle” performance evaluation program. Both managers being appraised and their own superiors agree that subordinates have a unique, often essential, perspective. Customers: Internal customers are defined as users of products or services supplied by another employee or group within the agency or organization. External customers are outside the organization and include, but are not limited to, the general public. Superiors : Evaluations by superiors are the most traditional source of employee feedback. This form of evaluation includes both the ratings of individuals by supervisors on elements in an employee’s performance plan and the evaluation of programs and teams by senior managers.

90%- 100% Outstanding Performance is the exceptional and exceed the expectations, consistently demonstrates excellence standards in the job requirement. 75%-89% Good Performance is good meets the requirement. 60%-74% Fair Performance is fair needs some improvements . By using this form the appraisers can effectively assess the employees and can make the best decision, by using it they can come to know about the performance of the employees regarding their KPI, competencies as well as about the SMART objectives they achieved related to them. Example: For example a manager grade an employee 1 who is very good in his work and his performance is high, but because of the strictness of the manager this employees gain grade 6 form 10. Now an employees whose performance and involvement in the work is low than the employee 2 but he is graded by the manager who is a lenient manager, now the manager grade him 8. 

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