1. Team 9: Appraisal Vesa Mikkola Suvi Skippari

2. Agenda  Purposes for Performance Appraisal  Performance Appraisal System  Job Specific Appraisal  Reducing Errors

3. Purposes for Performance Appraisal  Developmental - Provide performance feedback - Identify individual strengths/weaknesses - Recognize individual performance - Assist in goal identification - Evaluate goal achievement - Identify individual training needs - Reinforce authority structure - Allow employees to discuss concerns - Improve communications - Provide a forum for leaders to help  Administrative - Document personnel decisions - Determine promotion candidates - Determine transfers and assignments - Identify poor performance - Decide retention or termination - Decide on layoffs - Validate selection criteria - Meet legal requirements - Evaluate training program/progress - Personnel planning - Make reward/compensation decisions

4. Reasons why BPC needs formal appraisal BPC should use a mix of both developmental and administrative appraisal practices:  Support promotion from within policy  Ensure that training programs are effective  Motivate employees to perform better  Objective way of judging performance  To provide documented employee performance history

5. Performance Appraisal System  System should comply to performance standards: - Strategic relevance: System must align organizational needs and goals with individual needs and goals - Criterion deficiency: System to include entire range of employee activities and responsibilities - Criterion Contamination: System should consider both internal and external factors that may affect outcome - Reliability: Consistent system that provides reliable data

6. Management by Objectives (MBO) Philosophy  MBO underlying philosophy for BPC’s appraisal  Upper management sets strategic vision & goals, MBO filters these ideas down the organizational ladder, where the goals turn into individual performance targets  MBO and Balanced Scorecard techniques used  All employees’ objectives in line with organizational goals due to MBO

7. Job Specific Appraisal  Interns – Development Purposes  Management Trainee – Development Purposes  Center Manager – Compensation and Development Purposes  Country VPs – Compensation Purposes  Heads of Key Functions – Compensation Purposes  CEO – Compensation Purposes

8. Interns  Type:Supervisor Appraisal  Level:Management Trainee  Method:Behaviorally Anchored Rating Scale (BARS)  Frequency:Once at end of internship  No salary increases or bonuses offered  Excellently rated internship will help candidates in selection process

9. Management Trainee  Type:Mix of Manager & Peer Appraisal  Level:Center Manager, Other Management Trainees  Method:Balanced Scorecard  Frequency:Quarterly  Promotion and salary increases as appropriate  Training according to evaluation

10. Center Manager  Type:360-Degree Appraisal  Level:Subordinates, Domestic Peers, Domestic VP, Customers  Method:Balanced Scorecard  Frequency:Every 6 months, Customer feedback continuously  Promotion and salary increases as appropriate  Training according to evaluation

11. Country VPs  Type:Manager Appraisal  Level:CEO, Heads of Key Functions  Method:MBO  Frequency:Every 6 months  Promotion and salary increases as appropriate  Performance based bonuses according to organizational development

12. Heads of Key Functions  Type:Manager Appraisal  Level:CEO  Method:MBO  Frequency:Every 6 months  Performance based bonuses according to organizational development

13. CEO  Type:Manager Appraisal  Level:Board of Directors  Method:MBO  Frequency:Yearly  Performance based bonuses according to organizational development  Stakeholders should have some influence

14. Reducing Errors  Training of appraisers in proper evaluation techniques will minimize rating errors  Appraiser training reduces all rating errors, mainly similar-to-me error and contrast error  Standardized appraisal system based on job mean that leniency/strictness error and recency error minimized  Appraiser evaluation history assessed on occasion, which reduces error of central tendency among others  Evaluations may be viewed by managers one level above appraiser to ensure reliability