Performance Appraisal method in BMW

1. PROJECT ON PERFORMANCE
APPRAISAL
SUBMITTED TO: - SUBMITTED BY:
Mrs. URVIKA MATHUR AYUSHI PANDEY
(PGDM 1st year)

2. TABLE OF CONTENT
CONTENT PAGE NO
PERFORMANCE APPRAISAL 1-2
OBJECTIVES
3
METHODS 4-8
COMPANY PROFILE 9-11
P.A IN COMPANY 12

3. PERFORMANCE APPRAISAL
"A performance appraisal is meant to help employees realise
their strengths and shortcomings and receive compensation
accordingly."
Every corporatesector uses performance appraisal as a tool for knowing about
the employee and take decisions about particular employee.
 What is Performance?
Employees are performing well when they are productive. Productivity
implies both concernfor effectiveness and efficiency, effectiveness refers
to goal accomplishment. However it does not speak of the costs incurred
in reaching the goal. That is where efficiency comes in. Efficiency
evaluates the ratio of inputs consumed to outputs achieved. The greater
the output for a given input, the greater the efficiency. It is not desirable
to have objective measures of productivity suchas hard data on
effectiveness, number of units produced, orpercent of crimes solved etc
and hard data on efficiency (average costper unit or ratio of sales volume
to number of calls made etc.).
 What is Appraisal?
Appraisals are judgments of the characteristics, traits and performance of
others. On the basis of these judgments we assess the worth or value of
others and identify what is good or bad. In industry performance appraisal
is a systematic evaluation of employees by supervisors. Employees also
wish to know their position in the organization. Appraisals are essential
for making many administrative decisions: selection, training,
promotion, transfer.
Wage and salary administration etc. Besides they aid in personnel
research.
Performance Appraisal thus is a systematic and objective way of judging
the relative worth of ability of an employee in performing his task.
Performance appraisal helps to identify those who are performing their
assigned tasks well and those who are not and the reasons for such
performance.

4.  How often should appraisals take place?
Performance appraisal in any organisation will be done at a
specific period, like annually or half yearly or quarterly or
maybe regularly. It all depends upon the nature or size of the
organisation, and sometimes necessity of the managers decide
the period of performance appraisal of their employees. Most of
organisations are insisting employee appraisal should be a
continuous process and should not be limited to a formal review
once a year. The frequency of formal appraisals will depend on
the nature of the organization and on the objectives of the
system. For example, in a high technology organisation
objectives may be changing quickly so that formal appraisals
may need to be carried out more than once a year. In an
environment which is less subject to change, annual appraisals
may be sufficient. Most employees receive a formal appraisal
annually, although more frequent appraisals are often needed for
new employees, for longer serving staff who have moved to new
posts or for those who are below acceptable performance
standards.

5. Objectives of Performance Appraisal
The main objective of performance appraisals is to measure and improve the
performance of employees and increase their future potential and value to the
company. Other objectives include providing feedback, improving
communication, understanding training needs, clarifying roles and
responsibilities and determining how to allocate rewards.
 Providing Feedback. Providing feedback is the most common
justification for an organization to have a performance appraisal system.
Through its performance appraisal process the individual learns exactly
how well he/she did during the previous twelve months and can then use
that information to improve his/her performance in the future. In this
regard, performance appraisal serves another important purposeby
making sure that the boss’sexpectations are clearly communicated.
 Facilitating Promotion Decisions.Almost everyone in an
organization wants to get ahead. How should the company decide who
gets the brass rings? Performance appraisal makes it easier for the
organization to make good decisions about making sure that the most
important positions are filled by the most capable individuals.
 Rightsizing or Downsizing Decisions. If promotions are what
everybody wants layoffs are what everybody wishes to avoid. But when
economic realities force an organization to downsize, performance
appraisal helps make sure that the most talented individuals are retained
and to identify poorperformers who effects the productivity of the
organisation

6. Methods of performance appraisal
 BEHAVIORALLY ANCHORED RATING SCALES:-
Behaviourally Anchored Rating Scales (BARS) is a relatively new
technique which combines the graphic rating scale and critical incidents
method. It consists of predetermined critical areas of job performance or
sets of behavioural statements describing important job performance
qualities as good or bad (for e.g. the qualities like inter-personal
relationships, adaptability and reliability, job knowledge etc). These
statements are developed from critical incidents.
In this method, an employee’s actual job behaviour is judged against the
desired behaviour by recording and comparing the behaviour with BARS.
Developing and practicing BARS requires expert knowledge.
A behaviourally anchored rating scale is an employee appraisal system
where raters distinguish between successfuland unsuccessfuljob
performance by collecting and listing critical job factors. These critical
behaviours are categorized and appointed a numerical value which is used
as the basis for rating performance.
Performance Points Behaviour
Extremely
good
7 Can expect trainee to make valuable suggestions for increased sales and to
have positive relationships with customers all over the country.
Good 6 Can expect to initiate creative ideas for improved sales.
Above
average
5 Can expect to keep in touch with the customers throughoutthe year.
Average 4 Can manage,with difficulty, to deliver the goods in time.
Below
average
3 Can expect to unload the trucks when asked by the supervisor.
Poor 2 Can expect to inform only a part of the customers.
Extremely
poor
1 Can expect to take extended coffee breaks and roam around purposelessly.

7.  HUMAN RESOURCE ACCOUNTING METHOD
Human ResourceAccounting is a method to measure the effectiveness
of personnel management activities and the use of people in an
organization.HRA is the process ofAssigning, budgeting, and reporting
the costof human resources incurred in an organization, including wages
and salaries and training expenses.
Human resources are valuable assets for every organization. Human
resource accounting method tries to find the relative worth of these assets
in the terms of money. In this method the Performance appraisal of the
employees is judged in terms of costand contribution of the employees.
The costof employees include all the expenses incurred on them like
their compensation, recruitment and selection costs, induction and
training costs etc whereas their contribution includes the total value added
(in monetary terms). The difference between the costand the contribution
will be the performance of the employees. Ideally, the contribution of the
employees should be greater than the costincurred on them.
 MANAGEMENT BY OBJECTIVES(MBO):-
“Management by objectives is a process whereby the superior and
subordinate managers of an organisation jointly identify its common
goals, define each individual’s major areas of responsibility in terms of
the results expected of him, and use these measures as guides for
operating the unit and assessing the contribution of each of its members.”
Much of the initial impetus for MBO was provided by Peter Drucker
(1954) and by Douglas McGregor (1960). Drucker first described
management by objectives in 1954 in the Practice of Management.
Drucker pointed the importance of managers having clear objectives that
supportthe purposes ofthose in higher positions in the organisation.
McGregor argues that by establishing performance goals for employees
after reaching agreement with superiors, the problems of appraisal of
performance are minimised. MBO in essence involves the setting out
Clearly defined goals of an employee in agreement with his superior.

8. Carroll and Tosi(1973), in an extensive account of MBO, note its
following characteristics:
1. The establishment of organisational goals.
2. The setting of individual objectives in relation to organisational goals.
3. A periodic review of performance as it relates to organisational goals.
4. Effective goal-setting and planning by top management.
5. Organisational commitment.
6. Mutual goal-setting.
7. Frequent individual performance reviews.
8. Some freedom in developing means of achieving objectives.
MBO is, thus, a method of mutual goal-setting, measuring progress
towards the goals, taking action to assure goal attainment, feedback, and
participation. It is a result oriented philosophy, enabling an employee to
measure progress toward a goal which the employee often has helped to
set. In the goal-setting phase of MBO, a superior and subordinate discuss
job performance problems and a goal is agreed upon. Along with mutual
goal-setting, a major componentof MBO is the performance review
session between the superior and subordinate, which takes place regularly
to evaluate progress towards specified goals.
The key features of management by objectives are as under:
Superior and subordinate get together and jointly agree upon .the list the
principal duties and areas of responsibility of .the individual’s job.
The subordinate sets his own short-term performance goals or .targets in
cooperation with his superior.
They agree upon criteria for measuring and evaluating .performance.
From time to time, as decided upon, the superior and .subordinate get
together to evaluate progress towards the .agreed-upon goals. At those
meetings, new or modified goals .are set for the ensuing period.
The superior plays a supportive role. He tries, on a day-to-.day basis, to
help the subordinate achieve the agreed upon .goals. He counsels and
coaches.
In the appraisal process,the superior plays less of the .role of a judge and
more of the role of one who helps the .subordinate attain the organisation
goals or targets.

9.  THE MBO PROCESS
MBO as a mutual goal setting exercise is most appropriate for technical,
professional, supervisory, and executive personnel. In these positions,
there is generally enough latitude and room for discretion to make it
possible for the personto participate in setting his work goals, tackle new
projects, and discover new ways to solve problems. This method is
generally not applied for lower categories of workers because their jobs
are usually too restricted in scope. There is little discretionary opportunity
for them to shape their jobs.
MBO may be viewed as a system of management rather than an
appraisal method. A successfulinstallation of MBO requires written
mission statements that are prepared at the highest levels of top
management. Mission statements provide the coherence in which top-
down and bottom-up goal setting appear sensible and compatible. MBO
can be applied successfully to an organisation that has sufficient
autonomy, personnel, budget allocation, and policy integrity. Managers
are expected to perform so that goals are attained by the organisation.
Too often MBO is installed top-downin a dictatorial manner with a little
or no accompanying training. If properly implemented, it serves as a
powerful and useful tool for the success ofmanagerial performance.

10. MBO is a tool that is inextricably connected with team building so that
the work commitment of team members can be increased and their desire
to excel in performance can be inspired. It is important to have effective
team work among a group of managers or a group of subordinates. The
group of employees or subordinates must be looked upon as a team that
needs to be brought together. Goals should be set by manager-subordinate
pairs, and also by teams. The basic superior subordinate relationship in an
organisation is in no way undermined in this conceptof team goal setting.
Lines of responsibility, authority, and accountability remain clear.
 360 degree feedback method:-
This method is truly one of the modern methods of performance appraisal
system. Customer feedback method is used, especially for sales staffs
who deal with sales activity in the organisation. Under this method of
appraisal system, customer feedback is directly linked with employee
performance. This method of assessment could be unbiased and reliable
since customers who are outsiders may give correct judgement about
employee performance than the insiders who are superiors.
Companies like Cognizant and Wipro software solutions are using
customer feedback method to assess the performance of their sales staff
in order to hike salaries.
Some industry experts say placing a higher weight age on customer
feedback may fail to motivate employees because customer feedback may
vary from customer to customer. Depending on the current state of mind,
psychology and perception of the customers may give different feedback
for same degree of sales service.

11. BAYERISCHE MOTOREN WERKE (BMW)
TYPE: - AKTIENGESELLS CHAFT(AG)
TRADED AS: - FMB:BMW
INDUSTRY: - AUTOMOTIVE
FOUNDED: - 7 MARCH 1916
FOUNDER: - FRANZ JOSEF POPP,
KARL RAPP, CAMILLO CASTIGLIONI
HEADQUAETERS: - Munich, Bavaria, Germany
KEY PEOPLE: - HaraldKrüger (CEO)
Norbert Reithofer
(Chairmanof the Supervisory Board)
PRODUCTS:- Luxury vehicles, sports cars, motorcycles, bicycles

12. BAYERISCHE MOTOREN WERKE (BMW)
Bayerische motoren werke known under its abbreviation BMW, is a germen
luxury vehicle, motorcycle, and engine manufacturing company founded in
1916. It is one of the best-selling luxury automakers in the world. The company
is a component of the Euro Stoxx 50 stock market
index. Headquartered in Munich, Bavaria, BMW is the parent company
of Mini and Rolls-RoyceMotorCars. The company
produces motorcars under the BMW Motorsport division and motorcycles
under BMW Motorrad, and plug-in electric cars under the BMW i sub-brand
and the "iPerformance" model designation within the regular BMW lineup.
BMW IN INDIA
BMW India was established in 2006 as a sales subsidiary in Gurgaon (National
Capital Region). A state-of-the-art assembly plant for BMW 3 and 5 Series
started operation in early 2007 in Chennai. Construction of the plant started in
January 2006 with an initial investment of more than one billion Indian Rupees.
The plant started operation in the first quarter of 2007 and produces the
different variants of BMW 3 Series, BMW GT, BMW 5 Series, BMW 7 Series,
BMW X1, BMW X3, BMW X5, Mini Cooper S, Mini Cooper D and Mini
Countryman. Furthermore, it has expanded its model range to include the BMW
Z4, BMW X6, BMW M Cars, and BMW i8. There are a total of 31 variants of
BMW cars on offer in the Indian market today.

13. PERFORMANCE APPRAISAL METHOD IN BMW
Different company’s uses different method of performance appraisal, BMW
SANGHAI CLASSIC uses rating scale methods.
Rating scales consists of several numerical scales representing job related
performance criterions such as dependability, initiative, output, attendance,
attitude etc. Each scales ranges from excellent to poor. The total numerical
scores are computed and final conclusions are derived. Advantages –
Adaptability, easy to use, low cost, every type of job can be evaluated, large
number of employees covered, no formal training required. Disadvantages –
Rate’s biases.

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