CAIIB · ABM · Chapter 5

Performance Management

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.

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Q

Define performance appraisal in banking context.

A

Formal review of employee's work output, behaviour, contribution over defined period for placement, promotion, rewards decisions.

Q

Why is PMS critical for banking industry?

A

Links individual effort to strategy; ensures fair rewards; identifies development needs; builds talent pipeline for leadership roles.

Q

Distinguish formal from informal appraisal systems.

A

Formal: structured, periodic, documented, mandatory in banks; Informal: subjective, undocumented, only in very small organisations.

Q

State three primary objectives of performance appraisal per McGregor.

A

Maintain skills inventory; determine performance-linked increments; foster individual development through skill upgradation.

Q

Name the six-step appraisal evaluation process.

A

Set standards → Communicate → Measure performance → Compare benchmarks → Provide feedback → Implement corrective measures.

Q

What are performance standards in appraisal?

A

Quantitative (deposit growth, NPA%, audit score) and qualitative (customer behaviour, teamwork) definitions of 'good' for the role.

Q

Explain the Essay/Free-Form appraisal method.

A

Unstructured, open-ended appraiser description of employee; subjective; used for top management where rigid formats inappropriate.

Q

What is Straight Ranking method?

A

Oldest method; ranks employees in order of merit; drawback—difficult comparing employees with varying traits and roles.

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