POTENTIAL APPRAISAL & IT’S

ROLE IN SUCCESSION PLANNING

1. SUBMITTED BY-

ANKIT KUMAR MISHRA

V I V E K K U M A R PA N D E Y

ASHOK KUMAR VERMA

NIKUNJ KUMAR SINGH

VIVEK KUMAR SHARMA

SUBMITTED TO- DR. ANSHU YADAV

 POTENTIAL APPRAISAL

• Introduction
• The potential appraisal refers to the appraisal i.e.
identification of the hidden talents and skills of a person. The
person might or might not be aware of them. Potential
appraisal is a future-oriented appraisal whose main objective
is to identify and evaluate the potential of the employees to
assume higher positions and responsibilities in the
organizational hierarchy. Many organizations consider and
use PA as a part of the performance appraisal processes.
 CONT….

• To advise employees about their overall career

development and future prospects
• Help the organization to chalk out succession plans
• Motivate the employees to further develop their skills and
competencies.
• To identify the training needs.
DEFINITIONS
 DEFINITIONS

• Potential appraisal is a future oriented

appraisal aimed to identify and evaluate the
potential of the employees to assume higher
positions and responsibilities in the
organizational hierarchy
PURPOSE OR NEED OF POTENTIAL APPRAISAL

• To inform employees of their future prospects

• To update training and recruitment activities
• To advise employees about the work to be done to
enhance their career opportunities
• To enable the organization to draft a management
succession programme
• Motivate the employees to further develop their skills and
competencies
 CONT…

• Process of identifying hidden skills and abilities

in a person
• The time for potential appraisal is not fixed
• It is future oriented process
• Part of performance appraisal
• It does not guarantee promotion
 TECHNIQUE OF POTENTIAL APPRAISAL

• Self – appraisals
• Peer appraisals
• Superior appraisals
• Psychological and psychometric tests
• Management games like role playing
• Leadership exercises.
 POTENTIAL APPRAISAL AND
DEVELOPMENT:
• Potential appraisals are required to:

1. Inform employees about their future prospects

2. Help the organization chalk out a suitable succession plan

3. Update training efforts from time to time

4. Advice employees about what they must do to improve their career
prospects.
STEPS FOLLOWED WHILE INTRODUCING A GOOD
POTENTIAL APPRAISAL SYSTEM:
• Role description
• Qualities needed to perform the roles
• Rating mechanism
--- rating by others
--- tests
--- games
---- records
• Organizing the system
• Feed back
THE PHILIPS MODEL:

Problem child Stars

Planned separation Solid citizens

• The Philips model:

1. Low potential, high performance

2. High potential, low performance

3. Low potential, high performance

4. High potential , high performance

ATTRIBUTES IN A POTENTIAL EMPLOYEE:

• Ability to foresee future opportunities

• Consistency in approach and performance

• Responsive to conditions whatever come in the way

• Person with high level of integrity

• Broader vision and micro perception.

FACTORS AFFECTING POTENTIAL APPRAISAL:

• Conceptual effectiveness:

1. Vision

2. Business organization

3. Entrepreneurial orientation

4. Sense of reality
• Operational effectiveness:

1. Result orientation

2. Individual effectiveness

3. Risk taking

4. Control
• Inter personnel effectiveness:

1. Network directedness

2. Negotiating power

3. Personal influence

4. Verbal behavior
• Achievement motivation:

1. Drive

2. Professional ambition

3. Innovativeness

4. stability
 BEST PRACTICES:
• Build the appraisal and reward of potential into your
assessment system

• Clearly separate reward for potential from reward for

past performance

• Start evaluating potential as early as possible to

identify the best talent
 SUCCESSION PLANNING

• To ensure the availability

of right managerial
personnel at the right time
in right position for
continuing organizational
vitality and strength.
STEPS IN SUCCESSION PLANNING:

• Prepare & develop a management staffing plan

• Staffing & development---recruitment, selection,
placement.

• Ensure congenial organizational environment to retain the

desired managerial personnel

• Develop a good performance appraisal system to get

feedback.
• Prepare management resource inventor
-- personal data
-- performance records
-- skills
-- potential
-- career goals
-- career paths of managerial personnel
 HR SCORECARD

 Measures HR Deliverables and objectives

 Quantitatively demonstrate HR’s contribution tofirm’s financial results and
profitability
 Measure the degree of alignment between business strategy and HR
deliverables
 H R Scorecard links the things people do with thestrategy of the firm.
 MEANING OF HR SCORE CARD

• An HR scorecard is a visual representation of key measures of

human resource department achievements, productivity and other
factors important to the organization. Factors measured include
costs, hiring, turnover, training, performance management and
alignment with corporate goals. Most HR scorecards are tied to
corporate goals or strategic plans and are designed to track and
measure the efficacy of human resource activities and enable
managers to make targeted investments in HR and organizational
structures. Scorecards include current data and comparisons to
previous time periods, such as the previous quarter or year, and
historical data to show improvements toward goals.
 COSTS

• Human resources costs that are measured and

reported on through scorecards include adherence
to budgets, recruiting costs to attract and hire staff
and costs of benefits such as group health insurance.
Tracking costs through scorecards enables
managers to plan human resources goals and
expenditures and control costs in specific areas and
set realistic budgets.
 HIRING

• Hiring is tracked in human resources scorecards by numbers

of employees hired by department, business unit or
location. Hiring goals, position vacancies and time to fill
positions are other hiring indicators tracked in scorecards.
This information gives managers a way to see how well
human resources fulfills the company’s need for new
personnel, and where HR may benefit from extra resources
to increase or improve hiring practices.
 TURNOVER

• Turnover is the rate at which a company gains and loses

employees and is commonly compared to the rate of
industry turnover. Turnover costs companies money to
recruit staff and in lost productivity and low morale
amongst other employees. High employee turnover
indicates employees are unhappy due to issues such as
work environment, lack of opportunities, management
conflict or compensation. Low employee turnover
indicates employee satisfaction, making lowering turnover
a significant goal.
 DEVELOPMENT OF HRSCORECARD
 The development of an HR Scorecard must be done with four
perspectives in mind as follows:
A financial perspective to address strategies that satisfy customers
A customer perspective that asks what customer want
An internal perspective that addresses the stated desires of customers and
designs processes consistent with those desire learning perspective that
taken into account .
HR employees can implement steps to align HR goals with the overall
company mission, vision and business objectives.
 HR SCORECARD IMPLEMENTATION
It has seven stepsmodel:
 Clarify the business strategy
 Develop HR Architecture
 C r e a t e a strategy map of the firm
 Business Indicators
 Results
 Identify HR Deliverables in the map
 A l i g n HR Architecture with HR Deliverables
 D e s i g n HR Scorecard
 Execute/Implement
 HR SCORECARD

Strategic Objectives Key Performance Indicators

Drive Long term • Shareholder value

Shareholder Value • Shareholder value growth

Enhance Employee • Profit per Employee

Productivity • Revenue per Employee
 HR SCORECARD

Strategic Objectives Key Performance Indicators

Create Positive • Ranking in “Best Place to Work Annual

Work Environment Survey” (conducted by Fortune
Magazine)
• % of Employee Turn Over

Enhance “Internal • Employee Satisfaction Index

Customer” (Employee) • Employee stability
Satisfaction • Improved Process cycle times
 HR
SCORECARD
Strategic Objectives Key Performance Indicators

Apply Excellent • Average lead time to recruit employees

Recruitment Process • Recruiting cost per employee
• Performance of New Recruits during the
First Two Years of Employment

• Average Lead Time to Develop Strategic

Develop Strategic Competencies
Competencies
• Average Lead Time to Close Strategic
Competencies Gap
• % of Strategic Competencies Available
within the Organization
 HR
SCORECARD
Strategic Objectives Key Performance Indicators

• Number of Qualified Talents per

Implement Best Talent
Strategic Positions
Management Practices
• Progress of Talent Development Plan
(actual vs. plan)
• % of Senior Managers who Have Been
Promoted Internally

• Average Competency Assessment

Optimize Performance
Scores
Management System
• Number of Performance Feedback
Session Conducted per Year
 HRARCHITECTURE
 T h e HR function (services)
 T h e HR management system
 Supporting policies and practices such as
 Create links between promotions and competencies
 Provide skills training
 Attract and retain high performers
 Strategic Employee Behaviours
 HR STRATEGY MAP
Drive Long term
Shareholder Value

Enhance ROI of HR Enhance Employee

Financial
Strategic Initiatives Productivity

Enhance “Internal
Internal Create Positive
Customer” (Employee)
Customers Work Environment
Satisfaction

Apply Excellent Develop Strategic Implement Best Optimize

HR Internal Recruitment Performance
Employee Talent Management
Process Process Practices Management System
Competencies

Learning Develop Internal HR Deploy HRIS System

Capabilities