Answer No (1)

INTRODUCTION
CRITICAL INCIDENT DIARY:- Critical incident method or critical incident
technique is a performance appraisal tool which analyses the behavior of employee in
certain events in which either he performed very well and the ones in which he could
have done better. Critical incident technique is used to collect data using a set of
procedures. In critical incident method the observer observes critical human behaviors,
skills used, incidents that occur on the job.

The critical incidents method of performance appraisal is based on managers’ spending

time during the year observing and gathering behavioral data on their employees, while
looking extra carefully for those critical incidents.

At the end of the year, the managers take out all their notes on these critical incidents
and categorize them as either positive/satisfactory behaviors or negative/unsatisfactory
behaviors. An employee’s rating is then heavily influenced or even determined by which
pile of data is taller the satisfactory or the unsatisfactory .
CONCEPTS & APPLICATION
PEFORMANCE APPRAISAL USING CRITICAL
INCIDENT DIARY:-

Myself Narayan Swamy, new boss of Abhinav will start with the
process of performance appraisal by performing following steps:-
1 First ,I will thorough read critical incident diary maintained by Abhinav’s three
previous superiors on three different projects done by him ,determining and reviewing
the incidents that have taken place during the course of the projects. After which I will
find out which are positive behaviours and negative behaviours exhibited by him as per
his previous superiors.
2. Second Step involves Fact Finding which involves gathering information of the
incident from the members. I will interview some team members who worked along with
Abhinav and note down information provided by them regarding Abhinav’s behavior
while performing project in order to cross-check information mentioned in critical
incident diary.
3. This step involves Analysing the facts where I will thoroughly analyse the data
collected from the team members , which will helped me determine incidents where
Abhinav has actually showed positive behavior, i.e. utilize resources efficiently and
used extraordinary and innovative ways to tackle difficulties during the project and it
also highlights where his behavior towards his team members were not at all good,
where he tries to manipulate some figures and even he sometimes failed to achieve set
standards.

4. I will take out all notes on these critical incidents and categorize them as either
positive/satisfactory behaviors or negative/unsatisfactory behaviors and then Abhinav’s
performance results are determined by which pile of data is taller the satisfactory or the
unsatisfactory and as per results appropriate rating is assigned to Abhinav’s
performance. As he had exhibited unsatisfactory behavior more which effects his
performance results and hence his performance deteriorates.

5. The fifth step is to determine possible solutions for the issues that have been
identified during analysis , so in order to provide measures to Abhinav how he can
improve his future performance. I will interview with Abhinav where I will discuss his
performance appraisal report with him and during the session I will try to find out
reasons for such negative behaviors and Abhinav’s own views how to overcome such
problems, by this two way process, I will list out all alternatives available to tackle the
situations and at the end finalise suitable methods, techniques and approaches such as
coaching/mentoring and training which will improve his future performance.

6. Finally at last step is to evaluate whether various programs and training sessions
helped to remove the cause of the problem that was identified. A feedback is taken from
Abhinav to find out how much these sessions where successful to improve his
performance and to find out if any loopholes in the selected methods, which may require
further to work on it.

CONCLUSION
The critical incident method has the advantage of being task-focused. It focuses on
the essential duties of an employee’s job and how well she performs those duties. It is
based on direct observation by the manager and not second-hand accounts.

In this approach, managers gather information over time. They keep a log of positive
and negative incidents, recorded at the time they occurred. So, the annual
performance appraisal is not overly influenced by an employee’s most recent
accomplishments or problems.

It is an effective relationship building tool because the manager must spend more time
in the work area observing and interacting with employees, rather than in his/her
office. This gives them the opportunity to get to know each worker, to provide
coaching and guidance; and to get feedback on what is working well and what is not.

In addition, the critical incident log provides the required performance or behavior
documentation necessary for a manager to take disciplinary action with an employee.

Being , one of the best tool of performance appraisal there are some drawbacks of
critical incident diary:-

1. Many incidents may go unreported or might not be precise as the reporting of

incidents relies on memory of the respondent.
2. Biasness might creep in towards the incidents that happened recently.
3. The incidents narrated may not be representative of everyday situation that takes
place during the job.
Answer No (2)

INTRODUCTION
EMPLOYEE COUNSELLING:- Employees face lots of problems in day
to day life, they may have problem with their subordinates, colleagues, system of the
work or may have problem in personal life. This problem starts affecting their work, their
career and their performance in job.

Employee counselling is defined as a process which is initiated by the responsible

manager or counsellor for providing assistance to employees facing problems. It is
conducted to listen, understand problems and provide guidance, advices and suggest
ways to solve them. It is mainly to provide job related, personal and confidential help to
those who are facing the problems.

Employee counselling is a psychological technique and that is used in various forms.

The main objective of it is to support the employees by providing them advice,
guidance, suggestions to solve the prevailing problems and improve physical and
mental conditions, performance and which can take many forms. It is conducted with
problem-solving approach by supervisors, managers or consultants .

CONCEPTS & APPLICATION

PROCESS OF EMPLOYEE COUNSELLING:-

Fallowing steps, Sameera Sharma ,Team Leader of Akansha will

take to ensure counselling session is beneficial and achieves a
successful outcome:-

1) Initiating:- At this stage the counsellor i.e Sameera Sharma will establishes a
rapport with the employee (her team member) i.e Akansha throughy many ways such
as offering a chair, closing the door to indicate privacy, which leads to developing
mutual understanding and promoting openness. So that she feels confident and openly
describes her perceptions, problems she is currently facing and concerns if any.
She will try her best to understand the feelings and concerns of the employee carefully
and attentively. The employee must feel that she is wanted and the counsellor is
interested in her genuinely.

2)Exploring: -At this stage the counsellor i.e Sameera will ask counselee ,
Akansha to describe in her own words, the situation, feelings, problems, and the
needs, so that she got to know what actually is troubling her a lot.
Once the key issue is identified, (which is in this case is that Akansha is unable to
manage her baby,home and work together so due to her inability to find work life
balance she decides to quit and approaches her team leader for her advice) she will
diagnosed the problem thoroughly. Open questions like- why do she feels quitting is
only solution? What are conditions at which she feels completely stressed ? What
facilities she thinks can be offer to her so in order to reduce stress? – may help the
employee visualize the problem from different angles. Counseller should also provide
her ways how to tackle the situation,so that it leads to win-win situation for both as
Akansha is hardworking, talented employee and the organisation don’t want to loose
an important assest. The whole exercise is meant to generate several alternative
causes of a problem.

3)Framing of action plan:-To make the counselling process successful,

Sameera frame an action plan, duly charting the do’s and don’ts. She will after
analyzing different alternatives will find out the best one which is suitable and
acceptable by Akansha to solve her problem in best way. Most suitable action plan
decided by Sameera and agreed by Akansha are:-Work from home on any 2 days in
week, Reduce working hours and Attend meetings, conferences from her home, as she
is given such flexibility which may affect her salary which will be reduced by 20 percent
per month.

CONCLUSION
If the counselling is done properly by keeping in view the conditions then it can be
expected that it would give wonderful result in improving morale, performance,
productivity and level of commitment of employees towards the organisation and their
family. It is going to develop a healthy working environment and that is essential for all
developmental activities. If genuine intention is there to solve the problem through
counselling then it is going to give better results.

Thus, counselling is used by organizations as a tool to help the employees to bring

about attitudinal changes in themselves and to adjust with the changing situations, duly
promoting the sense of mutuality.

However, it is also important to understand that counselling, per se, cannot improve the
work environment, or make the workers’productive. Along with the other tools,
counselling has to be used as a supplemental effort to bring about the required
improvements and changes in the behaviour of the employees.
Answer No (3)

INTRODUCTION
A) LINKING COMPENSATION TO PERFORMANCE:- One of the latest
strategies being followed in all sectors through out the world for retention and talent
management is “linking compensation to performance”. Commonly known as
“Performance pay” or “Performance based pay”, it links the compensation of the
employees to their performance and their contribution to the organizational goals.

It seems only logical that compensation should be directly linked to an employee’s work
performance. This practice motivates staff to work harder, increases efficiency and,
through the process of attrition, lowers the number of underperforming workers. While
employees once might have viewed annual increases with a sense of entitlement rather
than seeing the correlation between annual salary increases and professional
achievements.

Pay-for-performance compensation can come in many varieties depending on your

organization’s budget, compensation philosophy, and organizational goals. When
designing a pay-for-performance plan, you have to consider the outcomes your
organization is looking to achieve, the frequency with which you will reward employees,
and the total increase you will be budgeting to fund these programs

CONCEPTS & APPLICATION

STEPS TO LINK PERFORMANCE WITH
COMPENSATION:-
1) To make pay for performance successful, organisations need to
make a substantial investment of time, money, and effort.
Pay for performance systems require substantial initial and continuing investment.
These resources must be carefully spent on building and maintaining a system that
suits the organization’s mission and objectives.
2) Performance evaluation serves as the foundation of a pay for
performance system.
An effective performance evaluation system is a fundamental prerequisite of pay for
performance. Organisation must be able to communicate with employees regarding
what the organisation values and how it will accurately measure employee contributions
to these goals. Without this information, organisation would be unable to appropriately
distribute performance based pay increases and bonuses.

3)Organisation should select supervisors based on their supervisory

potential, develop and manage them to function as supervisors
rather than technicians or staff experts, and evaluate and pay them
based on their performance as supervisors.
Because supervisors play a pivotal role in pay for performance systems, it is essential
that they be able and willing to perform the important supervisory functions inherent in
performance-based pay systems. To achieve this goal, organisations must select, train,
and pay supervisors based on their demonstration of qualities that are suited to a pay
for performance environment.

4)Communication, training, and transparency are essential elements

of a good pay for performance system.
The key to the effectiveness of a pay for performance system rests with clarifying the
mission and objectives of the organisation, how these are linked with employees’
efforts, and consequently, what competencies, behaviors, and/or outcomes the
organisation values. Open communication regarding goals and progress; training in the
philosophy and mechanics of the pay system; and transparency regarding how the
system operates can mobilize the workforce in the desired direction.

5)Checks and balances are necessary.

Organisations can greatly facilitate the real and perceived fairness of the pay system by
building in appropriate checks and balances. Although knowledge about the
organisation pay for performance plan and transparency regarding its outcomes can
help supervisors and employees understand how the system should work, other
mechanisms to ensure fairness are needed to further raise and maintain confidence in
the system.
6)Pay for performance systems should be evaluated regularly and
modified when necessary.
Organisation should conduct an ongoing evaluation of the compensation system to help
them ascertain whether organisational goals are being met and identify ways to improve
the process.

CONCLUSION
One of the major advantages of performance-based pay is that it gives employees
more reason to work hard and perform better. When an employee knows that he can
be compensated more, he is willing to put more time and effort into his job. When you
are paid on salary, you can only be motivated by that amount of money for so long.
With performance-based compensation, employees work harder and it ultimately
rewards the company as well.

This form of compensation also has a few potential drawbacks. For example, when the
business suffers for reasons outside of the employee's control, it may be harder to
perform well. Sales may not come as easily and it can lead to lower paychecks for the
employees. This form of compensation also leads to income gaps in society as a
whole. Over the years, performance-based compensation has increased while the gap
between wealthy and poor has grown. Part of this is due to the fact that those with this
pay structure earn more.

INTRODUCTION
B) INCENTIVES SCHEMES:- An arrangement under
which additional payments are made to employees as a means of increasing
production. The Incentive Schemes are the programs designed to encourage and
motivate workmen for higher efficiency and greater output. Incentives includes the
monetary rewards given to the workmen in recognition of their achievement of specific
results during a specified time period.

Incentives take many different forms and vary wildly from company to company. Smaller
firms might have a more informal incentive program, which might be as simple as a
manager giving an employee a gift card to thank them for putting in extra hours on a
project. In larger companies, there may be a formalized reward system through which
employees can earn big-ticket items, like trips or electronics, for meeting specific goals.
Ultimately, what makes an incentive an incentive is value. Simply recognizing good
work is not an incentive. Incentives must be something an employee perceives as
valuable, though value does not have to be monetary.

CONCEPTS & APPLICATION

INCENTIVE SCHEME FOR SALE EXECUTIVE
The Gantt Task System:-
This is a modified variety of Taylor Plan which guarantees to the worker the payment of
fixed wages for all output below the standard established by time and motion study.
The worker, whose performance is above the standard, is paid a large premium bonus –
a bonus percentage multiplied by the value of standard time.

Under this method minimum wages are guaranteed. When a worker fails to turn out the
required quantity of a product, he simply gets his time rate without any bonus. But if he
completes the task within time he gets extra wages.

Therefore the sales executives who achieve the minimum target (say 25 gift items)
receive the fixed wage. If less than the minimum gift items (i.e.<25 gift items) then only
minimum wage is paid. For >25 gift items incentive scheme designed is as fallows:-

Number of gift items % of incentive

25-50 gift items 20% additional
50-75 gift items 35% additional
75-100 gift items 50% additional
100-125 gift items 70% additional
125-150 gift items 85% additional
Greater than 150 gift items 100% additional +free tickets of
amusement park for whole family of
employees

Important merits of Gantt Bonus System are as follows:

1. This system is easy to understand and calculate.

2. This system encourages the workers to complete their work in standard time.

3. This system is useful from the point of view of the employer also, because it causes
economy in the cost of production.

CONCLUSION
Improving sales numbers is perhaps the most common reason executives seek out
incentive compensation management plans. It's no surprise, either - ICM plans have
been proven time and again to increase sales numbers and, as a result, company
profits. 

By offering bonuses, merit increases and other rewards to employees who meet sales
targets, employers will be able to increase motivation among a sales team, which will
result in better sales numbers. Salespeople, like most employees in any industry, are
motivated by financial incentives. Offering extra compensation for ramped
up performance will boost sales, quickly and effectively.

Employee Incentive Programs have proven very successful in arousing motivation in

employees and increasing the overall performance of the company. An incentive
program is a great way to show employees that you value their input while at the same
time increasing your businesses potential.

Many HR Managers just think that incentive programs for employees are just a cherry
on the cake, an extra that can be discarded, but that would be a mistake. Incentivizing
your employees is a core component of creating, developing and retaining a world-class
team. With a bit of creative thinking and planning, you’ll have a carrot that everyone will
want to bite.