DEVELOPMENT OF SERVICE LEVEL BASED PERFORMANCE APPRAISAL SYSTEM IN TECHNICAL OPERATION OF GRAMEENPHONE MOHAMMADFERDOUSALAM DEPARTMENT OF INDUSTRIAL & PRODUCfION ENGINEERING BANGLADESH UNIVERSIlY OF ENGINEERING & TECHNOLOGY DHAKA-woo, BANGLADESH JANUARY 2006 1111111111111111111111111111111 III #101073#
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DEVELOPMENT OF SERVICE LEVEL BASED
PERFORMANCE APPRAISAL SYSTEM IN TECHNICAL
OPERATION OF GRAMEENPHONE
MOHAMMADFERDOUSALAM
DEPARTMENT OF INDUSTRIAL & PRODUCfION ENGINEERING
BANGLADESH UNIVERSIlY OF ENGINEERING & TECHNOLOGY
DHAKA-woo, BANGLADESH
JANUARY 2006
1111111111111111111111111111111 III#101073#
DEVELOPMENT OF SERVICE LEVEL BASED
PERFORMANCE APPRAISAL SYSTEM IN TECHNICAL
OPERATION OF GRAMEENPHONE
BY
MOHAMMAD FERDOUS ALAM
A THESIS PRESENfED TO THE INDUSTRIAL AND PRODUCfION
ENGINEERING DEPARTMENf IN THE PARTIAL FULFILLMENf OF THE
REQUIREMENfS FOR THE DEGREE OF MASTER OF ENGINEERING IN
ADVANCED ENGINEERING MANAGEMENf
January 2006
2
The thesis titled 'Development of service level based Performance Appraisal
system in Technical Operation of Grameen Phone' submitted by Mohammad
Ferdous Alam, Student No. 040308165 (p), Session. April 2003, has been
accepted as satisfactory in partial fulfillment of the requirements for the degree of
Master of Engineering in Advanced Engineering Management on January 30,
2006.
BOARD OF EXAMINERS
1.
2.
3.
Dr. A.K.M. Masud
Assistant Professor
Dept. ofIndustrial & Production Engineering,
BUET, Dhaka, Bangladesh
Dr. Ahsan Akhtar Hasin
Professor
Dept. of Industrial & Production Engineering,
BUET, Dhaka, Bangladesh
Dr. Abdullahil Azeem
Assistant Professor
Dept. of Industrial & Production Engineering,
BUET, Dhaka, Bangladesh
Chairman
Member
Member
3
DECLARATION
It is hereby declared that this thesis or any part of this has not been submitted
elsewhere for the award of any degree or diploma.
Mohammad Ferdous Alam
4
ACKNOWLEDGEMENTS
I express my deepest sense of indebtness, heartiest thanks and gratefulness to my
project supervisor Dr. A. K. M. Masud, Assistant Professor, Department of
Industrial & Production Engineering, BUET, for providing the guidance, overall
supervision & constructive criticism throughout the progress of this research.
I would like to thank Dr. Ahsan Akhtar Hasin, Professor, IPE for his kind
permission to enable start work on the project.
Also, I would like to express my gratitude to Dr. Abdullahil Azeem, Assistant
Professor, for his inspiration & positive attitude to complete the project.
I also want to thank Mr. Abdus Salam Bhuiyan, Additional General Manager,
Human Resource Division, GrameenPhone Ltd. for his kind permission and
assistance to do the project.
I would also like to thank all the employees of Network Management department,
Technical Operation, GrameenPhone Ltd. for providing necessary information
and data for analysis part of my project.
And I want to thank all the people who are not listed here but have contributed in
any way, being my side or any other senses.
5
Abstract
Performance appraisal can be viewed as the process of assessing and recording
staff performance for the purpose of making judgments about staff that lead to
decisions. Among the various process of evaluation, the right one should be
selected depending up on the organizational type & goal.
In this project effort was given to analyze the present Performance Appraisal
System to develop a more efficient & day-to-day job dependent system in the
largest Telecommunication Provider Company of Bangladesh GrameenPhone
Ltd.
Presently the appraisal is almost a rating based process which is not a perfect
system for a service oriented company. Here uninterrupted & quality service is
the prime concern. The activities of Technical Operation are more time
dependent in the sense of fault detection & removal. And this is also directly
related to the revenue assurance which is the ultimate goal for any organization.
Here, after discussion of the present system of appraisal, the weaknesses &
disadvantages were pointed out. On that basis, a more efficient & service level
based appraisal process was developed which is a time-frame oriented system.
For this, the organizational structure, faults & their effect on service was
categorized. The SWOT (Strength, Weakness, Opportunity and Threat) analysis
was also done in this project. It was showed that the implementation of the
process can contribute in reducing network outage & ensuring revenue gain.
In short, the intention of the analysis was to develop some process which may be
justified in terms of company benefits as well as uplift employee motivation level.
6
Contents:
Chapter 1 10
Introd uction 10
Chapter 2 12
Theory of Performance Appraisal 12
2.1 BACK-GROUND . 122.2 WHAT IS PERFORMANCE ApPRAISAL? 132.3 BENEFHS OF ApPRAISAL. . 132.4 ApPRAISAL MF:mODS . . 162.5 TECHNIQUES IN PERFORMANCEAPPRAISAI... 232.6 SoME POINTS THATAFFECI"PERFORMANCE ApPRAISAl... 24
Chapter 3 27
Present Appraisal Process in GrameenPhone 27
3.1 PRESENT SCENARIO . 273.2 DRAWBACKS OFTHE PRESENT RATING BASEDAPPRAISALPIWCESS.. . .443.3 SoME UNFAVORABLEISSUES .44304 WFAKNFSSES FROMTHE MANAGERS' SCOPE POINTOFVlEW............... . . .463.5 WEAKNFSSES FROMEMPLOVm'5' SCOPE POINT OF VIEW 50
Justification of the proposed Appraisal process 71
5.1 Focus ONTHE BASICOBJECnVE OF PERt'ORMANCE APPRAISAL: . 715.2 FAIR & JUSIlHED PERFORMANCE EVALUATIONPROCI':SS . 725.3 QUALnY OF SERVICE &TIME-FRAME BASEDSYSTEM 73504 OJ'HER MAINADVANI"AGESOt'SERVICE LEVEL BASEDAPPRAISAL PROCESS 73
Chapter 6 82
Pre-requisites for Service Level-based appraisal 82
6.1 INTRollucnoN . 826.2 SOME PRE-REQUlsrms OF SLA BASEDAPPRAISAL . 826.3 MAIN THREATS AGAINSr SLA BASEl>APPRAISAL PRon:ss 856.4 SWOT ANALYSISOFSLA BASEIlAPPRAISAL PROCESS 88
Chapter 7 89
Concluding remarks 89
Bibliogra phy 91
7
List of tables:
Table 3.1: criteria for rating system against competencies 30
Table 3.2: Development need in different area -40
Table 3.3: Rating scale description -43
Table 4.1: Mean Time To Recovery status of Technical Operation for 2005 65
Table 4.2: Definition of Service Level Agreement for Core Network Element 65
Table 4.3: Definition of SLA for Access Network Element (Outage issue) 66
Table 4-4: Definition of SLA for Access Network Element (Quality issue) 67
Table 4.5: Definition of SLA for Network Management System Element 68
Table 4.6: Definition of Rating for achievement of SLA 69
Table 5.1: Network outage scenario from 2002 to 2005 78
Table 5.2: Fault category-wise outage distribution 79
Table 6.1: SWOT analysis ofSLA based appraisal process 88
8
List offigures:
Figure 4.1: Block diagram of Technical Operation organogram 55
Figure 5.1: Year-wise total revenue loss in million BDT 78
Figure 5.2: Fault type-wise outage analysis in 2005 79
Figure 5.3: Fault type-wise MTfR analysis in 2005 80
9
Chapter 1
Introduction
GrameenPhone is the largest mobile operator in Bangladesh with market share of
above 60%. The company started its operation on 26th March, 1997. Though it's
not an old company, it's an organized & well structured company.
As GrameenPhone is basically a service providing organization, the success of the
company is dependent on customer satisfaction which is again dependent on the
quality & efficiency of the service. Besides direct customer support & care (which
is taken care by Customer Relation Management), Technical Division is the
concerned division which is responsible for the quality & efficiency of the overall
service. Technical Division in GrameenPhone is divided into 3 departments: 1.
Planning, 2. Implementation & 3. Operation. Planning & implementation do the
job of network expansion. When a network element come into on-air status, the
responsibility to maintain the network by ensuring proper quality & efficiency
goes to Technical Operation department. So it can be said that the Technical
Operation is the bottom-line for the quality & service of the network.
The objective of the study is to propose a more realistic, more efficient & more
performance oriented appraisal system which will not only establish dynamicity
in the whole Technical Operation but also ensure employee satisfaction &performance improvement.
To achieve the desired output of the project, the theory behind the Performance
appraisal is discussed. Here the definition, the benefits, the classifications are
presented. Then the present appraisal process which is now followed in
GrameenPhone is discussed along with its weaknesses. Basically the process is an
rating based appraisal system which has many limitations to be a perfect process
for a service oriented organization like GrameenPhone Ltd. The scope & objective
of the project is then presented.
10
As the focus of the project is to develop a customized appraisal system, the
activities of different group under Technical Operation is presented in brief. Then
various types of faults are defined & categorized. The next step is to develop
Service Level Agreement for different Network element depending up on fault
categories. A rating system for achieving the SLA is developed. After development
of the whole process, the justification is showed in details. The justification part
focuses on 2 major issues: company objective & employee satisfaction. Achieving
the company objective in term of revenue saving is analyzed also. Employee
satisfaction is discussed in term of motivation & performance achievement.
As the SLA based appraisal system is not a universally applicable system for all
the organizations, there are some limitations of the developed system also. The
SWOT analysis is done in the later part of the project.
II
Chapter 2
Theory of Performance Appraisal
2.1 Back-ground
The history of performance appraisal is quite brief. Its roots in the early 20th
century can be traced to Taylor's pioneering Time and Motion studies. But this is
not very helpful, for the same may be said about almost everything in the field of
modern human resources management.
Performance appraisal systems began as simple methods of income justification.
That is, appraisal was used to decide whether or not the salary or wage of an
individual employee was justified.
The process was firmly linked to material outcomes. If an employee's
performance was found to be less than ideal, a cut in pay would follow. On the
other hand, if their performance was better than the supervisor expected, a pay
rise was in order.
Little consideration, if any, was given to the developmental possibilities of
appraisal. If was felt tha t a cut in pay, or a rise, should provide the only required
impetus for an employee to either improve or continue to perform well.
The traditional emphasis on reward outcomes was progressively rejected. In the
1950S in the United States, the potential usefulness of appraisal as tool for
motivation and development was gradually recognized. The general model of
performance appraisal, as it is known today, began from that time.
12
2.2 What is Performance Appraisal?
Performance appraisal may be defined as a structured formal interaction between
a subordinate and supervisor, that usually takes the form of a periodic interview
(annual or semi-annual), in which the work performance of the subordinate is
examined and discussed, with a view to identifying weaknesses and strengths as
well as opportunities for improvement and skills development.
In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are
used to identify the better performing employees who should get the majority of
available merit pay increases, bonuses, and promotions.
By the same token, appraisal results are used to identify the poorer performers
who may require some form of counseling, or in extreme cases, demotion,
dismissal or decreases in pay. (Organizations need to be aware of laws in their
country that might restrict their capacity to dismiss employees or decrease pay.)
Whether this is an appropriate use of performance appraisal - the assignment
and justification of rewards and penalties - is a very uncertain and contentious
matter.
2.3 Benefits of Appraisal
Perhaps the most significant benefit of appraisal is that, in the rush and bustle of
daily working life, it offers a rare chance for a supervisor and subordinate to have
"time out" for a one-on-one discussion of important work issues that might not
otherwise be addressed.
Almost universally, where performance appraisal is conducted properly, both
supervisors and subordinates have reported the experience as beneficial and
13
positive.
Appraisal offers a valuable opportunity to focus on work activities and goals, to
identify and correct existing problems, and to encourage better future
performance. Thus the performance of the whole organization is enhanced.
The value of this intense and purposeful interaction between a supervisors and
subordinate should not be underestimated.
2.3.1 Motivation and Satisfaction
Performance appraisal can have a profound effect on levels of employee
motivation and satisfaction - for better as well as for worse.
Performance appraisal provides employees with recognITIon for their work
efforts. The power of social recognition as an incentive has been long noted. In
fact, there is evidence that human beings will even prefer negative recognition in
preference to no recognition at all.
The strength and prevalence of this natural human desire for individual
recognition should not be overlooked. Absenteeism and turnover rates in some
organizations might be greatly reduced if more attention were paid to it. Regular
performance appraisal, at least, is a good start.
Training and Development
Performance appraisal offers an excellent opportunity - perhaps the best that will
ever occur - for a supervisor and subordinate to recognize and agree upon
individual training and development needs. Performance appraisal can make the
need for training more pressing and relevant by linking it clearly to performance
outcomes and future career aspirations.
14
From the point of view of the organization as a whole, consolidated appraisal data
can form a picture of the overall demand for training. This data may be analyzed
by variables such as sex, department, etc. In this respect, performance appraisal
can provide a regular and efficient training needs audit for the entire
organization.
2.3.3 Recruitment and Induction
Appraisal data can be used to monitor the success of the organization's
recruitment and induction practices. For example, how well are the employees
performing who were hired in the past two years?
Appraisal data can also be used to monitor the effectiveness of changes in
recruitment strategies. By following the yearly data related to new hires (and
given sufficient numbers on which to base the analysis) it is possible to assess
whether the general quality of the workforce is improving, staying steady, or
declining.
2.3.4 Employee Evaluation
Though often understated or even denied, evaluation is a legitimate and major
objective of performance appraisal.
But the need to evaluate (Le., to judge) is also an ongoing source of tension, since
evaluative and developmental priorities appear to frequently clash. Yet at its most
basic level, performance appraisal is the process of examining and evaluating the
performance of an individual.
It is been said by some that appraisal cannot serve the needs of evaluation and
development at the same time; it must be one or the other.
15
But there may be an acceptable middle ground, where the need to evaluate
employees objectively, and the need to encourage and develop them, can be
balanced.
2.4 AppraisalMethods
In a landmark study, it was found that the three most common appraisal methods
in general use are rating scales (56%), essay methods (25%) and results- oriented
or MBO methods (13%) [1]'
In a more elaborate study the following methods were found:
2.4.1 Essay appraisal
In its simplest form, this technique asks the rater to write a paragraph or more
covering an individual's strengths, weaknesses, potential, and so on. In most
selection situations, particularly those involving professional, sales, or
managerial positions, essay appraisals from former employers, teachers, or
associates carry significant weight. The assumption seems to be that an honest
and informed statement -either by word of mouth or in writing- from someone
who knows a man well, is fully as valid as more formal and more complicated
methods.
The techniques greatest advantage - freedom of expression - is also its greatest
handicap. The varying writing skills of appraisers can upset and distort the whole
process.
The biggest drawback to essay appraisals is their variability in length and
content. Moreover, since different essays touch on different aspects of a man's
performance or personal qualifications, essay ratings are difficult to combine or
16
compare. For comparability, some type of more formal method, like the graphic
rating scale, is desirable.
Rating scales
The rating scale method offers a high degree of structure for appraisals. Each
employee trait or characteristic is rated on a bipolar scale that usually has several
points ranging from "poor" to "excellent" (or some similar arrangement).
The traits assessed on these scales include employee attributes such as
cooperation, communications ability, initiative, punctuality and technical (work
skills) competence. The nature and scope of the traits selected for inclusion is
limited only by the imagination of the scale's designer, or by the organization's
need to know.
The greatest advantage of rating scales is that they are structured and
standardized. This allows ratings to be easily compared and contrasted - even for
entire workforces.
Each employee is subjected to the same basic appraisal process and rating
criteria, with the same range of responses. This encourages equality in treatment
for all appraisees and imposes standard measures of performance across all partsof the organization.
Rating scale methods are easy to use and understand. The concept of the rating
scale makes obvious sense; both appraisers and appraisees have an intuitive
appreciation for the simple and efficient logic of the bipolar scale. The result is
widespread acceptance and popularity for this approach.
Some disadvantages of this method are:
~ Trait Relevance
17
:.- Systemic Disadvantage
:.- Perceptual Errors
:.- Perceived Meaning
:.- Rating Errors
Graphic rating scale
This technique may not yield the depth of an essay appraisal, but it is more
consistent and reliable. Typically, a graphic scale assesses a person on the quality
and quantity of his work (is he outstanding, above average, average, or
unsatisfactory?) and on a variety of other factors that vary with the job but
usually include personal traits like reliability and cooperation. It may also include
specific performance items like oral and written communication.
The graphic scale has come under frequent attack, but remains the most widely
used rating method. In a classic comparison between the "old-fashioned" graphic
scale and the much more sophisticated forced-choice technique, the former
proved to be fully as valid as the best of the forced-choice forms, and better than
most of them [2]. It is also cheaper to develop and more acceptable to raters than
the forced-choice form. For many purposes there is no need to use anything more
complicated than a graphic scale supplemented by a few essay questions.
Field review
When there is reason to suspect rater bias, when some raters appear to be using
higher standards than others, or when comparability of ratings is essential, essay
or graphic ratings are often combined with a systematic review process. The field
review is one of several techniques for doing this. A member of the personnel or
central administrative staff meets with small groups of raters from each
supervisory unit and goes over each employee's rating with them to (a) identify
18
areas of inter-rater disagreement, (b) help the group arrive at a consensus, and(c) determine that each rater conceives the standards similarly.
This group-judgment technique tends to be fairer and more valid than individualratings and permits the central staff to develop an awareness of the varyingdegrees of leniency or severity -as well as bias- exhibited by raters in differentdepartments. On the negative side, the process is very time consuming.
Forced-choice rating
Like the field review, this technique was developed to reduce bias and establishobjective standards of comparison between individuals, but it does not involvethe intervention of a third party. Although there are many variations of thismethod, the most common one asks raters to choose from among groups ofstatements those which best fit the individual being rated and those which leastfit him. The statements are then weighted or scored, very much the way apsychological test is scored. People with high scores are, by definition, the betteremployees; those with low scores are the poorer ones. Since the rater does notknow what the scoring weights for each statement are, in theory at least, hecannot play favorites. He simply describes his people, and someone in thepersonnel department applies the scoring weights to determine who gets the bestrating.
Finally, forced-choice forms tend to be of little value- and probably have anegative effect- when used in performance appraisal interviews.
Critical incident appraisal
The critical incident technique looks like a natural to some people forperformance review interviews, because it gives a supervisor actual, factualincidents to discuss with an employee. Supervisors are asked to keep a record, a
19
"little black book," on each employee and to record actual incidents of positive or
negative behavior. For example:
There are, however, several drawbacks to this approach. It requires that
supervisors jot down incidents on a daily or, at the very least, a weekly basis. This
can become a chore. Furthermore, the critical incident rating technique need not,
but may, cause a supervisor to delay feedback to employees. And it is hardly
desirable to wait six months or a year to confront an employee with a misdeed or
mistake.
Finally, the supervisor sets the standards. If they seem unfair to a subordinate,
might he not be more motivated if he at least has some say in setting, or at least
agreeing to, the standards against which he is judged?
Management by objectives
This method is also called the Results Method. To avoid, or to deal with, the
feeling that they are being judged by unfairly high standards, employees in some
organizations are being asked to set - or help set - their own performance goals.
The MBa approach overcomes some of the problems that arise as a result of
assuming that the employee traits needed for job success can be reliably
identified and measured. Instead of assuming traits, the MBa method
concentrates on actual outcomes.
MBa methods of performance appraisal can give employees a satisfying sense of
autonomy and achievement. But on the downside, they can lead to unrealistic
expectations about what can and cannot be reasonably accomplished.
Supervisors and subordinates must have very good "reality checking" skills to use
MBa appraisal methods. They will need these skills during the initial stage of
objective setting, and for the purposes of self-auditing and self-monitoring.
20
One of the strengths of the MBO method is the clarity of purpose that flows from
a set of well-articulated objectives. But this can be a source of weakness also. It
has become very apparent that the modern organization must be flexible to
survive. Objectives, by their very nature, tend to impose a certain rigidity.
Work-standards approach
Instead of asking employees to set their own performance goals, many
organizations set measured daily work standards. In short, the workstandards
technique establishes work and staffing targets aimed at improving productivity.
When realistically used, it can make possible an objective and accurate appraisal
of the work of employees and supervisors.
To be effective, the standards must be visible and fair. Hence a good deal of time
is spent observing employees on the job, simplifYing and improving the job where
possible, and attempting to arrive at realistic output standards.
The most serious drawback appears to be the problem of comparability. If people
are evaluated on different standards, how can the ratings be brought together for
comparison purposes when decisions have to be made on promotions or on
salary increases? For these purposes some form of ranking is necessary.
Ranking methods
For comparative purposes, particularly when it is necessary to compare people
who work for different supervisors, individual statements, ratings, or appraisal
forms are not particularly useful. Instead, it is necessary to recognize that
comparisons involve an overall subjective judgment to which a host of additional
facts and impressions must somehow be added. There is no single form or way to
do this.
21
Comparing people in differen t units for the purpose of, say, choosing a service
supervisor or determining the relative size of salary increases for different
supervisors, requires subjective judgment, not statistics. The best approach
appears to be a ranking technique involving pooled judgment. The two most
effective methods are alternation ranking and paired comparison ranking.
There are mainly 2 types of ranking:
• Alternation ranking
• Paired-comparison ranking
2.4.10 Assessment centers
So far, we have been talking about assessing past performance. What about the
assessment of future performance or potential? In any placement decision and
even more so in promotion decisions, some prediction of future performance is
necessary. How can this kind of prediction be made most validly and most fairly?
One widely used rule of thumb is that "what a man has done is the best predictor
of what he will do in the future." But suppose you are picking a man to be a
supervisor and this person has never held supervisory responsibility? Or suppose
you are selecting a man for a job from among a group of candidates, none of
whom has done the job or one like it? In these situations, many organizations use
assessment centers to predict future performance more accurately.
Typically, individuals from different departments are brought together to spend
two or three days working on individual and group assignments similar to the
ones they will be handling if they are promoted. The pooled judgment of
observers - sometimes derived by paired comparison or alternation ranking -
leads to an order-of-merit ranking for each participant. Less structured,
subjective judgments are also made.
22
-, 2.5 Techniques in performance appraisal
Certain techniques in performance appraisal have been thoroughly investigated,
and some have been found to yield better results than others.
2.5.1 Encourage Discussion
Research studies show that employees are likely to feel more satisfied with their
appraisal result if they have the chance to talk freely and discuss their
performance. It is also more likely that such employees will be better able to meet
future performance goals [3].
Employees are also more likely to feel that the appraisal process is fair if they are
given a chance to talk about their performance. This is especially so when they
are permitted to challenge and appeal against their evaluation [4].
Constructive Intention
It is very important that employees recognize that negative appraisal feedback is
provided with a constructive intention, i.e., to help them overcome present
difficulties and to improve their future performance. Employees will be less
anxious about criticism, and more likely to find it useful, when the believe that
the appraiser's intentions are helpful and constructive [5].
In contrast, other studies [6] have reported that "destructive criticism" - which is
vague, ill-informed, unfair or harshly presented - will lead to problems such as
anger, resentment, tension and workplace conflict, as well as increased resistance
to improvement, denial of problems, and poorer performance.
23
Set Perfonnance Goals
It has been shown in numerous studies that goal-setting is an important element
in employee motivation. Goals can stimulate employee effort, focus attention,
increase persistence, and encourage employees to find new and better ways to
work [7].
The useful of goals as a stimulus to human motivation is one of the best
supported theories in management. It is also quite clear that goals which are
specific, difficult and accepted by employees will lead to higher levels of
performance than easy, vague goals (such as do your best) or no goals at all [8].
Appraiser Credibility
It is important that the appraiser (usually the employee's supervisor) be well-
informed and credible. Appraisers should feel comfortable with the techniques of
appraisal, and should be knowledgeable about the employee's job and
performance.
When these conditions exist, employees are more likely to view the appraisal
process as accurate and fair. They also express more acceptance of the appraiser's
feedback and a greater willingness to change [9].
2.6 Some points that affect Performance Appraisal
2.6.1 Conflict and Confrontation
Invariably the need anses during a performance appraisal to provide an
employee with less than flattering feedback.
24
The skill and sensitivity used to handle these often difficult sessions is critical. If
the appraisee accepts the negative feedback and resolves to improve, all is well.
But if the result is an angry or hurt employee, then the process of correction has
failed. The performance of an employee in such cases is unlikely to improve and
may deteriorate even further.
2.6.2 Common Mistakes
Where performance appraisal fails to work as well as it should, lack of support
from the top levels of management is often cited as a major contributing reason.
Opposition may be based on political motives, or more simply, on ignorance or
disbelief in the effectiveness of the appraisal process.
It is crucial that top management believe in the value of appraisal and express
their visible commitment to it. Top managers are powerful role models for other
managers and employees.
Those attempting to introduce performance appraisal, or even to reform an
existing system, must be acutely aware of the importance of political issues and
symbolism in the success of such projects.
The common mistakes generally occur from:
• Fear of Failure [10]
• JudgmentAversion
• Feedback-Seeking [n]
• Appraiser Preparation
• Employee Participation
• Performance Management
25
2.6.3 Bias Effects
In performance appraisal the Matthew Effect [12] is said to occur where
employees tend to keep receiving the same appraisal results, year in and year out.
That is, their appraisal results tend to become self-fulfilling: if they have done
well, they will continue to do well; if they have done poorly, they will continue to
do poorly. The Matthew Effect suggests that no matter how hard an employee
strives, their past appraisal records will prejudice their future attempts to
Improve.
There is other research [13] to support the theory that poor performers might not
be given a fair chance to improve. A study of supelVisors in nearly 40 different
organizations found that subordinates tend to be divided into two groups: in-
groupers and out-groupers.
It is not clear how supelVisors make the distinction between in groupers and out
groupers. Whatever the criteria, it is clearly not objective, equitable or reliable.
This bias must inevitably lead to a distortion of the appraisal process. It must also
be a source of frustration for those employees who are discriminated against.
There are some other points which also affect performance appraisal such as:
• Frustra tion
• Awareness Training
• Developing Poor Performers
• Counseling, Transfer, Termination
26
Chapter 3Present Appraisal Process in GrameenPhone
3.1 Present scenario
Though GrameenPhone is not an old company, it's an organized & well
structured company. It has an overall organogram which is split into several
small organograms. The HR in GrameenPhone is a well-organized division
directed by a director. It has 4 sections:
1) HR Operations,
2) Recruitment & Selection,
3) Health, safety & environment &
4) HR Development.
Presently HR Operations conducts a Performance Evaluation Program
(appraisal) which is done in yearly basis. There are some defined process, form,
timeframe for the appraisal. The appraisal is done in a quite fair way in which the
inputs are given after having feedback from both the parties: the appraiser & the
appraisee. The appraiser & the appraisee sit in a meeting & exchange their views
about the performance related issues. There are some parts in the appraisal form
such as:
a. Personal Information,
b. Achievement against agreed target,
c. Achievement! accomplishments (other than agreed targets, if any),
d. Level of performance as per job description for current job,
e. Business Competency,
f. Perceived Development needs,
g. Objectives for next year,
h. Immediate supervisor's comments,
27
1. Second level supervisor's comments,
J. Performance as a whole,
k. Employee's comments,
I. Director's assessment & Approval (if applicable).
Here is a brief description of the above mentioned points:
3.1.1 Personal Information
This is a Summary Sheet for filling personal information part.
3.1.2 Achievement against Agreed Targets
An integral part of the employee appraisal system emphasizes that employees are
evaluated on performance against agreed targets. As a first step the appraisee
completes self-assessment of performance against targets. Targets are usually
expressed in a statement which also includes specific performance indicators
agreed previously with the appraiser that has to be achieved or accomplished
within a specified period of time. The achievement against each target is
evaluated in part B through discussion between appraiser and appraisee and
agreement is reached on appraisee's achievement against targets (e.g. High,
Medium or Low in terms of specific performance criteria agreed during last
review).
3.1.3 Achievement/accomplishments
In case an employee has achievements/accomplishments other than set targetsmentioned in Part-B, it will be mentioned in Part C.
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3.1.4 Performanceas perjob description
Appraisee's level of performance as per job description for current job (e.g.
Highly Satisfactory, Satisfactory or Unsatisfactory during current year) will be
assessed here.
3.1.5 BusinessCompetencies
Business competencies are specifically relevant to GrameenPhone and represent
the core skills needed by all management staff. Competencies are clearly defined
skills and behaviors which underpin effective performance. To aid observation
and assessment, examples of the results of effective and poor competency are
given. These are referred to as POSITIVE and CONTRA indicators.
Positive indicators: These are examples of expected results of when a competency
is employed effectively thus indicating good performance. For example, an
indicator of someone who effectively manages their work is the ability to break
work down into manageable tasks.
Contra indicators: These are examples of expected results of a poor competency,
which indicates areas for improvement. For example, an indicator of a poor
competency level in managing work is someone who fails to prioritize work
effectively.
There are 8 competencies in this part. Appraiser will evaluate each of the
competencies by ticking performance rating as applicable.
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Ranng system against competencies
Table 3.1: Criteria for rating system against competencies
Rating CriteriaAlways demonstrates exceptional performance, far exceeds job
Excellentrequirements, initiative and outputs are of high quality, significantly
contributes to Company growth. Is performing at the highest
standards expected in the role
Performance better than normally expected, producing good results
that exceed requirements of the job, accomplishments exceedsHigh
requirements, very competent and knowledgeable individual. There
are some relatively minor skill areas to develop.
Performance consistently meets the requirements of the position,
Averagemaintains acceptable performance standard, meets objectives and
demonstrates desired performance level. There are still some areas to
develop.
Performance requires improvement in some of the important areas
Marginalcritical to current position, partially meets job requirements, some
gap in achieving desired output, needs further improvements/training
In some areas.
Inadequate performance, does not meet job requirements, quality of
• Per cell outage: Total no. of outage minutes for a cell down in a year
• No. of cell: Total no. of cell at the end of the year
• Total cell outage= Per cell outage X No. of cell
• Total revenue loss= Total cell outage X Average revenue loss for a cell
outage for one minute (around BDT 20.00)
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In the analysis, it may be observed tha t no. of cell in the network is increasing day
by day. This is because of the huge expansion & roll-out project on-going in
recent years in GrameenPhone. And as the no. of cell is increasing, the outage
minutes is also increasing which ultimately increasing the revenue loss. So to
maintain a reduced outage level is becoming more crucial day by day. A base
station comprises of 3 cells. So if a base station is down for 1 hour, the revenue
loss can be showed as follows:
• Revenue loss for a base station down for one hour= BDT 20.00 X 3 X 60
= BDT 3600.00.
So, if this time-frame based service level can be implemented, the Technical
operation engineers will focus more on reducing the outage duration. This will
ultimately ensures the revenue gain of the whole organization.
In the analysis, it can be observed that the reasons of outage are mainly:
1. Optical fiber
2. Low Capacity Transmission
3. External Power Problem
Most of the faults of such categories are time dependent to remove. So by
implementing this time dependent SLA based appraisal, if at least 10% of the
outage duration can be reduced, then the total saving of the revenue saving can
be showed as follows:
• Revenue saving= 10% of Total revenue loss 903.63 million BDT = 90.363
million BDT
This figure is very significant which justifies the proposed process in term of
revenue gain.
8\
Chapter 6
Pre-requisites for Service Level-based appraisal
6.1 Introduction
There are a number of practical problems which may lead to an unsuccessful SlA
based appraisal process. It is said that the process may sometimes ignore
qualitative goals. It can also obscure true success/failure.
As Service Level-based appraisal relies on self-control rather than external
checks, it is not effective
• In organizations that have little trust in subordinates, nor
• Those that are autocratic
6.2 Some pre-requisites of SLAbased appraisal
The most important ingredient in the implementation of a unit Service Level-
based appraisal program is the creation of a subordinate-centered participative
management atmosphere. Such an atmosphere must consciously and diligently
be created by the boss. However, this does not mean that the boss relinquishes
control of his subordinates. Participation is defined as "mental and emotional
involvement of a person in a group situation which encourages him to contribute
to group goals and share responsibility in them." This mental and emotional
involvement does not usurp power from the chain of command.
6.2.1 Commitment
The atmosphere desired for Service Level-based appraisal is built from mutual
trust and commitment. Subordinates must be given the opportunity to formulate
their own objectives. Objectives that are forced upon them by well-meaning
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bosses will not insure the subordinate commitment that IS necessary toaccomplish the program successfully.
6.2.2 Integrity
In addition, this atmosphere requires that there be complete integrity in thesuperior-subordinate communications regarding the formulation of subordinateobjectives. There can be no changes of objectives or objective-measuring systemswithout the agreement of both the superior and subordinate. In other words,service level-based appraisal dictates that there can be no surprises ormisunderstandings about the original meaning of objectives when they arereviewed for accomplishment at the end of the Service Level-based appraisalcycle.
Knowledge level
Thorough knowledge of Service Level-based appraisal theory and methods isultimately important for all participants. If education is confined to a flashyhandout or a superficial briefing, the Service Level-based appraisal program willfail. Time and effort are needed to discuss the implications of the programthoroughly and to then practice the skills that are required. Objective writing,objective setting, and objective reviewing all demand a learning process and apractice session before application to a real situation. All of this takes time andtrouble. Even though the demands of Service Level-based appraisal education aretaxing, commitment to thorough knowledge and training for the entire unit willbe rewarded in time saved and results achieved in the operation of a successfulevaluation program.
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Administration
Assistance must be available during the implementation of the program.
Generally managers in a rising telecom operator are already busy, so the
administrative procedures of the program must be kept to a minimum.
Minimal Paperwork
Objectives are a personal agreement between superior and subordinate; no one
else needs a copy of these objectives. In fact, the objectives may be handwritten.
Managers should not get caught in the usual red tape of administration.
6.2.6 Few Objectives
One of the best ways to keep administration procedures to a minimum is to
concentrate only on a few objectives. Remember that objectives are improvement
goals and should not be formulated for each routine responsibility; objectives
should concentrate on the key results desired.
Length of Time to Implement
Implementation of this management procedure will require patience from the
commander. Overnight results are not to be expected. It takes several MBO cycles
to firmly establish this program and in some cases to produce realistic objectives.
Implementation time varies, depending upon the degree of change required in
the supervisor's management style, the difficulty of creating the participative
atmosphere, etc. Patience and commitment to Service Level-based appraisal willbe needed.
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6.2.8 Human Relations Problems
The implementation of Service Level-based appraisal will meet with the normal
resistance to change that greets any new proposal. In addition, probably the most
serious problem that the manager will face is the feeling from some subordinates
that SLA based appraisal is a manipulative device. These subordinates will feel
that this appraisal exists to demand greater output from them. If the superior is
insensitive to this reaction and does not dispel it in the objective-setting session,
then he can only expect low-performance objectives from these individuals.
6.3 Main threats against SLAbased appraisal process
6.3.1 Difficulties to make goals clear and explicit
One set of difficulties comes from trying to make goals clear and explicit. Not all
goals that are important; for instance, qualitative goals can be neatly defined.
Vagueness in goals may give employees the maneuverability they need to get the
job done in a dynamic environment. In fact, in a dynamic environment attempts
to set goals may be futile. Finally, focusing on particular goals may lead
employees to ignore other parts of the job.
Problem in participatory process
A second area of concern is the participation of manager and employee in goal
setting. This requires a level of trust that is hard to achieve in a situation of
uneven power. The employee can perceive joint goal setting as manipulative if the
relationship with his or her manager is not good. In addition, a natural tension
exists if we assume that goal theory is operating. According to goal theory, more
productivity is a result of higher goals being set and accepted by the employee
alone. Goal setting is a difficult task to handle within the supervisor-subordinate
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relationship. Participation takes a great deal of both parties' time. One or both
may feel the time can be better spent.
Mislaid offeedback to the employee
Third, the information required to provide feedback to the employee may not be
developed in the organization or may be impossible because of the nature of the
task. MBO also assumes that the outcomes of work are the only important
variables to consider in defining good performance. Often, however, how the
work is done is as important as what is accomplished. The former variable is hard
to program into Service Level-based appraisal.
Not perfect for pay related decisions
As a performance appraisal method for a pay-for-performance program, Service
Level-based appraisal is not very useful. There is no way other than qualitative
judgments to decide who is doing better or worse, other than accomplishing or
not accomplishing goals. This leads to a nominal measurement, but more is
needed for the program to operate. Service Level-based appraisal is much better
suited to bonus or incentive systems.
Requires more time
Service Level-based appraisal process takes time in initiating, planning
monitoring, evaluating, and revising. Moreover since one of the most important
elements of efficient administration of a Service Level-based appraisal program is
adhering closely to the time schedule it needs extra time & activities to track it.
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Possibilities to become extra burden
The process may generate lots of admin activities. It also needs constantattention. It has the potential to be a paper shuffling exercise, especiallywhen theprocess is not monitored and evaluated
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6.4 SWOTanalysis of SIA based appraisal process
The SWOT analysis of the proposed appraisal system is showed below:
Table 6.1: SWOT analysis of SLAbased appraisal process
INTERNAL FACTORS.... ....
• Fair & justified Performance evaluationprocess
• Guarantees participation by allorganization members
• Promotes continuity (Changing theGuard)
• Can be tailored to fit units of differentsizes and compositions
• Can be implemented at any level withinthe organization
• Improves planning• Increases communication• Focuses on performance• Motivate employees by providing
feedback on how they are doing• Greater satisfaction from improved
managerial efficiency and effectivenessWealillesses}i ••.i•.••i..••i••..•••i..... . .
• The Length of Time to implement theprocess is comparatively long.
• There may be feeling from somesubordinates that SLAbased appraisalis a manipulative device.
• To make goals clear and explicit is adifficult job.
• To involve all in the participatoryprocess is sometimes a complexprocess.
• To evaluate all the job in a quantitativemanner is not always possible.
• The process is not perfect for payrelated decisions.
EXTERNAL FORCES
Opportunities.
• As it's a Quality of Service (QoS) &time-frame based system, the image ofthe organization will be enhanced.
• Because of increased subscribersatisfaction, the overall businessopportunities will be uplifted.
• As this is a organizational objectivesoriented appraisal, it'll ultimatelystrengthen the company position.
• The process is capable to increaserevenue gain which may lead to boostup the market share.
Threats
• The process may be lead to becomeextra administrative burden, which maykeep the management more engaged.
• This is a threat for the company iflesstime is spent to deal with suchadministrative activities rather thanfocusing on the main business.
• The process has some pre-requisitessuch as commitment, integrity, higherknowledge level etc. which is dependenton the socio-economic status of thecountry also.
• The employees may also feel that theyare bonded by more rules & regulationsthan other companies which may risedissatisfaction.
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Chapter 7
Concluding remarks
The major responsibilities for setting performance appraisal tone and climate
rest with managers and the human resources department. However, even when
managers and human resources do their jobs well, employees who come at the
process with a negative or defensive approach are not likely to gain from the
process or to prosper over the long term. The constant key is for employees to
participate actively and assertively, but to keep a problem-solving mindset, and
keep focused on how things can be improved in the future. No matter who
initiates it, performance appraisal is about positive open communication between
employee and manager.
By improving the probability that good performance will be recognized and
rewarded and poor performance corrected, a sound appraisal system can
contribute both to organizational morale and organizational performance.
Moreover, the alternative to a bad appraisal program need not be no appraisal
program at all, as some critics have suggested. It can and ought to be a better
appraisal program. And the first step in that direction is a though tful matching ofpractice to purpose.
Even with the many advantages, Service Level-based appraisal must be examined
realistically. This technique is not a panacea for all management ills; it will not
solve all of management's problems.
In addition, successful Service Level-based appraisal implementation is not easy.
It requires that the manager understand sophisticated, modern management
theory. He must be able to create a participative management atmosphere within
his organization in order for Service Level-based appraisal to operate. Service
Level-based appraisal definitely requires commitment from the participants.
89
Conclusively, Service Level-based appraisal is a welding technique that joinspersonnel-centered management to results-centered management.
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