A-AS Level (CIE) Business Studies Paper-2: Specimen Questions with Answers 41 - 42 of 52

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Case Study-6

Farmington, Connecticut-based Otis Elevator is the world՚s largest manufacturer, installer, and servicer of elevators, escalators, moving walkways, and other vertical and horizontal passenger transportation systems. Otis products are offered in more than 200 countries worldwide, and the company employs more than 63,000 people. Among its many installations are the Eiffel Tower, Sydney Opera House, Vatican, CN Tower (Toronto) , and Hong Kong Convention Center. For years, the company had an ineffective performance management system that was excessively time consuming and inspired little confidence among employees or managers. In revamping its performance management, Otis moved toward a system that provided performance feedback based on critical strategic competencies related to the company՚s new focus on project teams. For this realignment into project teams to be successful, managers were required to demonstrate specific competencies in both team leadership and project management, as well as remain ac countable for the financial and operating results of projects.

Realizing that critical feedback in these areas could not come exclusively from immediate supervisors, Otis had a custom-designed 360-degree feedback system developed that provided managers with feedback from those most directly affected by their performance, their subordinates. encryption technology to secure all data, and allows a performance review to be completed in 20 minutes. The system allows Otis to provide performance feedback in tandem with the organization՚s strategic objectives; is far more efficient than the previous paper driven system; and perhaps, faith in the company՚s performance feedback system.

most importantly, has restored employee performance management.

Question 41 (3 of 4 Based on Passage)


Describe in Detail


Why has performance appraisal taken on increased significance in the recent years?


Data relating to performance assessment of employees are recorded, archived, and used for several purposes. The main purposes of employee assessment are:

  • To effect promotions based on competence and performance.
  • To confirm the services of probationary employees upon their completing the probationary period satisfactorily.
  • To assess the training and development needs of employees
  • To decide upon a pay raise (whereas in the unorganized sector) regular pay scales have not been fixed.
  • To let the employees, know where they stand insofar as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development.
  • To improve communication. Performance appraisal gives a formal dialogue between the superior and the subordinate of an organization, and improves understanding of personal goals and concerns.

Question 42 (4 of 4 Based on Passage)


Describe in Detail


How will appraisal convert employees into better employees?


Objectives of Appraisal, as Stated Above, Include

  • effecting promotions and transfer
  • assessing training needs
  • awarding pay increases

Appraisal data have been used for laying off low performers. The emphasis in all these is to correct the problems. The objectives of appraisal are appropriate if the purpose in appraisal is individual. In the systems approach, the appraisal objectives go beyond the traditional objectives. But it is on how the work system affects an individual՚s performance.

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