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Harmful Effects of Poor Performance Appraisal System (Maharani Kishori Institute of Professional Studies)*

ET Cases - GSMC, 12 Pages
AUTHOR(S) : Dr. Rajeshwari Dahiya Malik - Maharaja Surajmal Institute, New Delhi

Case Preview

Harmful Effects of Poor Performance Appraisal System


“The most important thing in communication is to hear what isn’t being said.”

– Peter F. Drucker

Maharani Kishori Institute of Professional Studies (MKIPS) is among the new breed of self-financing Institutes affiliated to state technical universities established after the economic reforms of 1991. These universities have the affiliation powers, but they give only temporary affiliations, (renewed every year) to these self-financing Institutes. This ‘temporariness’ gives the universities undue advantages to exploit these ‘Businessma Owners’ (camouflaged in forms of societies, associations or trusts). These people run the colleges as business houses with poor organizational culture, poor quality and performance parameters, discriminating and exploiting the workforce. Majority of these temporarily affiliated colleges are owned by families/societies/trusts and run as family businesses. Any institution which does not receive any financial aid from Central or state government, is called self-financing. These institutions although recognized by UGC or AICTE do not get any financial support from any agency. Such institutes finance itself, through the fees paid by the students, donations received from private funding sources, such as a corporate house. These institutions can be either autonomous or private affiliated to some university................

A Wrong Beginning: Performance Appraisal System

Richa, could not focus on her work and was lost in her thoughts. How things have changed in last six years? ‘Wow…what a happy place MKIPS was!’, she thought. The workforce was happy, dedicated, pro-active with visible effervescence in the air. The workplace also was a very happy and positive with open culture and people looked forward to coming to college (Exhibit II). It ranked highest on job satisfaction, which reflected through its results..........

The Gloomy Organisational Culture: Harmful Effects

A sudden meeting was called to discuss the alarming situation at centralized admission counseling, where around 30% seats were lying vacant on the last day of admission. A total of 115 staff members were there in three different departments. Richa looked at the people present for the meeting; majority of them had been here for more than ten years. They were sitting very aloof and looked gloomy, frustrated and unhappy. Things were so different a few years earlier. A staff meeting would have been a very happy, open and stimulating experience..............

Assignment Questions

I. What is the status of higher education in India? What factors play a key role in shaping the higher / professional education ‘industry’ in India? What ethical challenges are there in treating ‘education’ as an industry? Elaborate the public-private partnership (PPP) model of solving social issues like health, education, sanitation etc.
II. Explain the characteristics of a good performance appraisal system and also the functioning an effective ‘performance management’ in modern organizations.
III. ..................


Exhibit I: Total Number of Universities in India (September 2016)

Exhibit II: Components of an Ideal Work Culture

Teaching Note Preview

Harmful Effects of Poor Performance Appraisal System



The premise of this case is to enable discussions on two very important topics 1. State of higher education in India – issues and challenges, and 2. Organisational culture, its various components and their inter relationship. It also highlights the impact of performance appraisal system and its role in determining, designing and sustaining the organizational culture. The discussion highlights the role of communication in an organization. How one seemingly small action in an organization can trigger (positive or a negative as in this case) series of actions, with compounded impact in long run. The effects of not handling the barriers to communication and their impact is also depicted through various incidents in the organization. Impact of performance appraisal system on employee motivation, involvement and commitments and future growth can also be explained through this case. Although, this case represents only one organization, but the higher education ecosystem in India is full of these types of organizations’, facing similar to even more aggrieved problems.

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

The students/participants should be encouraged to read the following mandatory reading bereft of which a meaningful discussion and adequate analysis of this case study would not be possible. The basic knowledge about organizational culture, organizational climate, their various components, performance, performance appraisal system and parameters of effective performance appraisal is mandatory requirement for participation in the case discussion. Also, the role of business communication, barriers to communication and steps to overcome these would come handy while actively involved in handling of this case. The participants are all stakeholders in higher education system of India, hence general awareness about the status, problems and recent developments would be both a prerequisite as well as outcome of this case.

Mandatory Reading

  • 1. Cascio , Wayne F., Managing Human Resources: Productivity, Quality of Work Life, Profits, Tata McGraw Hill
  • 2. Robbins, S. P. , Organisational Behaviour , Pearson Education, India
  • 3. Kaul , Asha , Business Communication –Second Edition , Prentice –Hall of India, New Delhi.
  • 4. Dessler, Gary, Human Resource Management, Prentice –Hall of India, New Delhi 2008


Assignment Question

1. What is the status of higher education in India? What factors play a key role in shaping the higher/professional education ‘industry’ in India? What ethical challenges are there in treating ‘education’ as an industry? Elaborate the public-private partnership (PPP) model of solving social issues like health, education, sanitation etc.
2. Explain the characteristics of a good performance appraisal system and also the functioning of an effective ‘performance management’ in modern organizations.
3. What are the various components of organizational culture, and how to manage them? How does a barrier in communication affect the satisfaction level of employees? Suggest steps to overcome these barriers and maintain a healthy work culture.


This case study sensitizes the participants regarding two very important concepts of human resource management and their inter relationship. How change in leadership results in shift in communication, and hence resulting in complete reversal of organizational culture. It also presents us the fatalness of absolute authority. The barriers to communication should be identified and rectified, before they start engulfing the very ‘essence’ of ‘happy workplace’. The case also questions the public-private-partnership model taken up by government as panacea for all problems. The case study although hypothetical is inspired very closely by real incidences. It also forces the participants to discuss and explore flaws in education system of the country. Accordingly, the class orchestration can be carried out as per Exhibit TN I.............


Rs 0
Product code: HRM-1-0066, HRM-1-0066A


This case study is meant to teach the students/participants i.e. the budding managers or future bosses, how, a seemingly harmless ‘Performance Appraisal System’ using wrong variables or parameters can harm the organization. This case is presented through an institution based at New Delhi, India. Education is a big industry, and management education is the most lucrative part of this industry. The biggest impact of economic reforms of 1991 has been in the area of higher education. Establishment of various technical universities with the authority to temporarily affiliate self-financing colleges has resulted in mushrooming of management and engineering colleges around the country. These colleges are the breeding ground for various malpractices in the name of education. Dummy leadership, misleading objectives, poor techniques of assets management are common problems with these institutes. The use of their self-defined ‘Performance Appraisal’ techniques is also such a tool for discrimination of the ‘well-qualified’ workforce, and creating a negative organization culture. This case study presents the ill-effects of poorly-defined performance appraisal techniques and its impact in long-run. It also gives a clear picture of the causes of this issue. The case study also highlights the importance of communication in an organization, and ill-effects of barriers to communication. It also helps us to understand the concept of organizational culture and work environment and the role these play in job satisfaction.

Pedagogical Objectives

  • To understand the relationship between leader and organizational culture especially in terms of understanding of organizational goals and objectives.
  • To understand the concept of performance appraisal and how to decide the parameters for performance appraisal system.
  • To understand the importance of communication in an organization, and how to effectively manage and utilize informal communication.
  • To understand the concept of power play and succession planning in an organization.
  • To debate on the ethical dilemma of treating ‘education’ as an industry is also an important point of discussion.

Case Positioning and Setting
This is a very useful tool for teaching inter-relationships between various concepts of organizational behavior to the students of MBA, Executive MBA or Executive Development Programs, and also undergraduate students of BBA, BBM, and B.Com. In the area of Human Resource Management (HRM) this case study can be used for teaching: Performance appraisal system, Organisational culture and climate, Employee Morale and motivation, and Power- Authority dynamics. Specifically in Organisational Behaviour area this can be used for – Role of leadership, Organsiational culture, and Change Management. Also, it can be very useful for teaching internal formal and informal communication in an organization, Barriers to communication and how to overcome them. It will help in understanding the relationship between communication and employee morale. This case can also be used for strategic management, how poor succession planning leads to leadership crisis and acts as the starting point for various wrong business practices.

* GSMC 2017, IIM Raipur

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