HUMAN RESOURCE PLANNING

AND
PERFORMANCE MANAGEMENT
SUBMITTED BY :- PAYAL
ROLL NO. :-832
SUBMITTED TO:- MS. JASMEET MA’AM
 INTRODUCTION
Potential is something which is appraised as soon as you float your resume in the job market
and continues through the recruitment and final selection of the individual.
The individual appears for an interview and is hired for his potential as his performance is
not apparently visible to the interviewers.
 They assess him on the basis of the documents produced or the past work experience
which reflects his potential and his usefulness to the organization for which he is probably
hired. So it can be inferred that potential appraisal is an ongoing procedure which starts as
soon as you begin your association with the organisation and continues till you are a part of
an organization.
 It is another powerful tool of employee development. Nowadays companies are heavily
relying on potential appraisal for succession planning, transfers and promotions and also for
selecting candidates for international assignments. Thus as long as individuals are viewed as
being able to handle increased or different responsibilities, they would be considered to
have potential either latent or visible.
 BEST PRACTICES IN POTENTIAL
APPRAISAL

Building the appraisal and reward of the potential into the assessment system of
the organization.
Separating the reward for potential from the reward for past performance.
Starting appraising the potential as early as possible to identify retain and
motivate the best talent of the organization.
Explaining the factors encompassing potential evaluation to all the employees well in
advance.
Communicating potential assessment to each individual at regular basis.
 DEFINING POTENTIAL APPRAISAL
• Potential appraisal may thus be defined as a process of determining an employees'
strengths and weaknesses with a view to use this as a predictor of his future
performance.
• This would help determine the promotion prospects of an individual to a higher
position and help chalk out his career plan.
• A system of developing employees for occupying higher positions in an organization
is called potential appraisal.
• Potential refers to the abilities present but not currently utilized.
 TECHNIQUES OF POTENTIAL
APPRAISAL
The following techniques can be applied for assessing the individual’s potential
which have been discussed in detail :-
Self appraisals
Peer appraisals
Superior appraisals
360degree appraisals
Management by objectives (MBO)
Psychological and Psychometric tests
Management games like role playing leadership exercises etc.
PREREQUISITES FOR POTENTIAL
APPRAISAL

The clear outline

The role of
description the qualities
required

The indicators of
quality
The feedback
• Role description :- A good potential appraisal system would be based on clarity and
functions associated with the different roles in the organization. This requires extensive job
descriptions to be made available for each job. These job descriptions should spell out the various
functions involved in performing the job.
• QUALITIES REQUIRED :- Besides job description , it is necessary to have a detailed
list of qualities required to perform each of these functions.
 Technical knowledge and skills
 Managerial capabilities and qualities
 Behavioural capabilities
 Conceptual capabilities
• INDICATORS OF QUALITIES :- A good potential appraisal system besides listing
down the functions and qualities would also have various mechanisms for judging these qualities in a
given individual. Such as rating by others, psychological tests, simulation games and exercises,
performance appraisal records.
• THE FEEDBACK :- If the organization believes in the development of human resources it
should attempt to generate a climate of openness. Such a climate is required for helping the employees
to understand their strengths and weaknesses and to create opportunities for development. A good
potential appraisal system provides opportunities continuously for the employee to know his strengths
and weaknesses. This should enable the employee to develop realistic self-perceptions and plan his own
career and development.
 METHODS FOR POTENTIAL
APPRAISAL
• Potential appraisal is not an easy task as it is concerned with taking some very crucial
decisions with regard to the employee’s future contribution and role in the organization
and thus must be done with a lot of care and caution to avoid any pitfalls.
• The various facets of one’s personality encompassing his intellectual abilities along with his
people skills and his attitude towards work and his ambitions and aspirations will showcase
the potential of the employees and will set the ball rolling for his future assignments
• Some of the well known organizations like Philips India ltd, Glaxo and Cadbury’s, Mafatlal,
National organic chemical industries, Pfizer, Sandoz, Procter and gamble have redesigned
their appraisal systems and incorporated a shift from pure performance based appraisals
to potential cum performance based appraisal systems.
THREE VERY WELL ESTABLISHED METHODS FOR
APPRAISING POTENTIAL ARE :-

1.Philips India's hi-lo

matrix appraisal system

2. GLAXO’S
PSYCHOMETRIC TESTS

3. CADBURY INDIA’S
PREVEIW APPRAISALS
 1.) PHILIP’S INDIA’S HI-LO MATRIX
APPRAISAL SYSTEM
PROBLEM CHILDREN STARS

LOW HIGH
POTENTIAL
?
PLANNED SOLID CITIZENS
SEPERATION

LOW HIGH

PERFORMANCE

1. LOW POTENTIAL LOW PERFORMANCE :- Employees in this quadrant

are termed as question marks and are aske to improve their performance
failing which they are asked to leave the organization and take up the planned
separation from the organization
2. HIGH POTENTIAL LOW PERFORMANCE :- Employees n this quadrant
are termed as problem children. The organization tries to find out the reasons
of low performance and if the reasons are traced to factors like not getting
along with their boss.
 C ONTINUED..

3. HIGH POTENTIAL HIGH PERFORMANCE :- Employees exhibiting

high potential and high performance are termed as star performers of the
organization. The major challenge lies in retaining and motivating these employees as
they race horses who will leave as soon as they get a better opportunity.

4. LOW POTENTIAL, HIGH PERFORMANCE :- These employees are

termed as the solid citizens exhibiting high levels of skill in the present jobs limited
ability to grow beyond their horizons and the current job profiles. These people can be
low on technology usage or not highly educated ,this having limited scope of promotions
to higher responsibility positions.
 2.)GLAXO’S PSYCHOMETRIC TESTS
 At stage one , series of psychometric personality tests which
measures their abilities on four factors; logic, aptitude,
deduction, and interference are administered to the potential
candidates. The potential appraisal at Glaxo is used for
succession planning as the employees are encouraged to grow
within the organization.

LOGICAL GENERAL DEDUCTIO INTERFERENC

ABILITY APTITUDE N E
  At stage two, an informal cross reference check is done, where the superiors of the
potential candidates are asked to fill up a small section on the performance appraisal form
on employee potential by listing out the attributes like attitude, accountability,
commitment, initiative, drive, leadership and ethics.

INITIATIV
DRIVE
E
COMMITM
ENT JUDGEME
NT

ACCOUNTAN LEADERSH
CY INFORM IP
AL
CROSS
ATTITUD
E REFERNC ETHICS
E CHECK
 CONTINUED…
Stage three encompasses setting up task forces to meet any minor or major
exigencies in the organization, which allows them to measure the potential
candidates general management abilities in the areas unrelated to his core field.
The above stages are substantiated with data on potential employee’s
performance and behaviour over a period of time. They also monitor as to who are
the most wanted employees in the organization, the ones who are drafted to other
departments in time of need ? Who are the one’s who would never be released by
their functional heads? Who is the most sought after by thr functional head for
resolving departmental problems?
The answer to these questions do help the organizations in identifying the
employees with potential to be picked up for training and development and for
higher positions of the organization.
However GLAXO is seriously contemplating supplementing its current methods
with the assessment centre approach for performance appraisals.
 3.)CADBURY INDIA’S PREVEIW
APPRAISALS
• Though originally the company’s appraisal system was biased towards performance appraisal they
have made a conscious decision of adding potential appraisal also.
• They are now relying on the feedback given to them by the :-
 Employee’s immediate appraisers,
 Departmental heads
 The functional vice president for appraising their potential.

• The review process addresses questions like :-

 What is the potential for the growth of the manger under review?
 What action should be taken and When ?

• Then they proceed on to rate the mangers on the six generic competencies like job knowledge,
thinking clarity, goal setting & planning, relationship Lendership & innovation which are expected
to be present in them eligible for potential appraisals.
 GOAL SETTING
& PLANNING RELATIONSHIPS

CADBURY
THINKING ’S LEADERSHIP
CLARITY
PREVIEW
APPRAIS
AL
JOB INNOVATION
KNOWLEDGE S
 POTENTIAL APPRAISAL VS. PERFORMANCE
APPRAISAL
• Potential appraisal is a forward looking process whereas pe4rformance appraisal is backward
looking process.
• Any good or worse assessment results of performance appraisal may not be a good factor for
potential appraisal
• But current performance of an employee could show evidence somewhere weather he/she is
flexible for new working conditions.
EXHIBIT I : PERFORMANCE VS. POTENTIAL
 Evaluating performance
APPRAISAL
 Evaluating potential.
 Performance targets are set.  Latent talents are explored.
 Actual performance is measured objectively  Assessments of future roles that can be
and accurately. assigned.
 Picture of current and past performance  Picture of abilities to assume challenging
through appropriate methods. responsibilities through appropriate methods.
 PROBLEMS IN POTENTIAL
APPRAISAL
• THE PROBLEMS IN POTENTIAL APPRAISAL ARE THE SAME AS
IN THE PERFORMANCE APPRAISALS AS OUTLINED BELOW :-
 UNCLEAR STANDARDS
 HALO EFFECT
 CENTRAL TENDENCY
 LENIENCY OR STRICTNESS
 RECENCY EFFECTS
 HOW TO AVOID APPRAISAL
PROBLEMS
Learn and understand the potential problems, and find out the solutions
for each.
Use the right appraisal tool. Each tool has its own pros and cons.
Train supervisors to reduce rating errors such as halo effect, leniency
error, and central tendency.
Let the rates compile positive and negative critical incidents as and
when they occur.
THANK YOU