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Performance Appraisal Yes or No.

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Performance appraisal is the term used for evaluating employees' performance. It's like stick and carrot effect by showing employees benefits in future management tries to get work done in its desired manner. Employees are told that if they do their jobs satisfactorily then they will be rewarded. We have often seen that performance appraisal is not very appreciated by the employees. The question arises why is such the case If one is hardworking then why not appreciate the appraisal based on that struggle The answer is because mostly performance appraisal is biased and is not based on the facts.

I have never met a single person in my professional career who was satisfied with his / herperformance appraisal. I know many people who worked really hard but at the end of the year they always get low grades. Why people working hard get low grades and sluggish employees get high grades It is a big question mark on performance appraisal system.

Employees don't just dislike it they hate it and when the results are out that's the time when there is a situation of mistrust on management and supervisors and which as a result affects the working of good employees.

Reasons of performance appraisal dislikeness:

Mostly supervisors don't evaluate their subordinates on the given job objectives criteria. They evaluate

them on non objective criteria such as genders religion caste social class etc. In these cases employees become unsatisfied with their jobs and show less enthusiasm and will show destructive behaviour in some cases.

Research also showed that if an appraiser is rating someone in bad mood they will most probably rate them low. This is true in all cases even in case of teachers while marking papers if teacher is in foul mood it will affect his judgement.

There are also examples of supervisors who will favour the Obsequious subordinate over hard working and an honest subordinate.

When supervisors violate the rules and procedures of organizations then it will cause mistrust and fidgety among employees. Another reason which effects thiswhole system is that when organizations decide to pay financial benefits to employees based on these performance appraisals they create a ratio based system. For example Mr. Z is supervisor of Mr. A and Mr. B and both employees are hard working and meet all their objectives but at thetime of evaluation Mr. Z is advised to give one employee good grade and other the low grade. Now what can be done at Mr. Z's end How he can give low grade to one when both are working excellent and meeting their job objectives By giving low grade to one employee will definitely damage the working spirit of that employee and he will stop working hard and will start taking his job as a burden. Types of performance appraisals:

Performance can be evaluated on daily quarterly or annual basis. It all depends on the nature of job. I have observed in fast food outlets there is always an employee of the month. If proper attention is given to the method use to evaluate performance; it will contribute a lot in satisfying subordinates and can change their opinion about the whole process. There are number of methods use to evaluate performance. Here I am going to discuss few of these.

360-Degree Feedback:

This method involves almost everyone who interacts with the employee. The evaluator will gather feed back about employee performance from his peers subordinates and supervisors. It will help evaluator to reduce biased evaluation and covers all aspects of employee's job and behaviour.

Management by Objectives:

In this method employee and manager both with mutual consent set the goals. These goals must be realistic and attainable. This method is easy as employee cannot blame his manager in case of failure and manager can easily evaluate performance of employee based on the results.

Ratings Scale:

In this method employees are evaluated against preset of areas such as team work communication skills punctuality etc. This method is notappreciated among employees as there are many chances of biased results. Manger can easily ranked one over the other just by rating him some extra points.

General Appraisal:

This is an ongoing process between manager and employee. They discuss on preset goals and then evaluate performance based on the results of these goals and then set new goals.

Employee Self-Assessment:

This is the most dreaded method among employees because as the name suggests employees have to selfassess them. Self assessment is hard task and employees don't feel comfortable about this method. After employee's self assessment manager will discuss the differences with employee.

By adopting a proper performance appraisal method many problems can be solved but selecting one is not an easy task. We cannot remove biasness from human nature so whichever method is used it cannot be 100% reliable and even if the results are unbiased there is no guarantee that everyone feels satisfied with these. If results are based on fair grounds then the relationship between an employee and manager gets strengthen and vice versa.

Insurance Ordinance (XXXIX of2000)------Ss. 6(10) and 157(1)---Securities and Exchange Commission of Pakistan Act (XLII of 1997)S.33---Providing false information and transacting insurance business in contravention of provisions of law Imposition of penalty---Appeal against---Appellant at the time of registration submitted profile of parent company stating that same was incorporated in 'New York' and the paid-up capital of same was US $ 10 million---Certificate of incorporation of said parent company however revealed that same was corporated in'Cayman' and the condensed balance sheet of said company had shown that the investors' paid-up capital was US$ 8.5 million---show cause notice was issued to the appellant under S.6(10) of insurance Ordinance 2000 for providing false information pertaining to the place of incorporation and paid up capital of the parent companyAuthority being not satisfied with the reply given by the appellant in response to show- cause notice issued to him and the averment made before him passed impugned order and imposed penalty of Rs. fifty thousand on the appellant under S.157(1) of the Insurance Ordinance 2000 for violation of S.6(10) of said Ordinance -Appellant had filed appeal against impugned order before Appellate Bench--- Authority despite having observed that it was satisfied with the various issues raised in the hearing still went on to impose penalty on the appellant---Clarification regarding the paid up capital and place of business should have been sought at the time of incorporation; and penal provision should not have been invoked--- Powers under S.157(1) of Insurance Ordinance 2000 had been delegated to the Executive Director (Insurance) however in the present case the powers had been exercised by the Director (Insurance) which were without jurisdictionInsurance Division must ensure that powers were exercised by the officers to whom powers were delegated---case in circumstances was remanded to the Executive Director (Insurance) who would obtain the necessary information and rectify the record of the appellant. [pp.384 385] A B and C. Ijaz Ahmad for the Appellant.

Kashif Siddique Joint Director and Obaid-ur-Rehman Deputy Director for Departmental Representative.

ORDER

1. This order will dispose of Appeal No.58 of 2009 filed under section 33 of the Securities and Exchange Commission (the Commission") of Pakistan Act 1997 by the appellant against the order dated 25-9-2009 (the Impugned Order") passed by the respondent.

2. The brief facts of the case are that the appellant at the time of its registration submitted profile of its parent company. Noor Sehat Health Systems Limited (NSHS) stating therein that NSHS was incorporated on 23-8-2007 in New York and the paid-up capital of NSHS was US $ 10 million . The certificate of incorporation of NSHS however revealed that NSHS was incorporated in Cayman Islands and the condensed balance sheet of NSHS as on 31-12-2008 showed that the investors' paid-up capital was US $ 8.5 million.

3. Show-cause notice (SCN") dated13-8-2009 was issued to the appellant under section 6(10) of the Insurance Ordinance 2000 (the Ordinance") for providing false information pertaining to the place of incorporation and paid-up capital of the parent company. The appellant filed reply to SCN and was provided an opportunity of hearing before the respondent . The respondent dissatisfied with the reply and the averments made before him passed the Impugned Order and imposed penalty of Rs.50 thousand on the appellant under section 157(1) of the Ordinance for violation of section6(10) of the Ordinance.

4. The appellant preferred appeal against the Impugned Order before the Appellate Bench. The appellant's counsel contended that:

(a) NSHS is an investment vehicle which in managed by its Investment Manager namely Noor Sehat Health System Management LLC (Noor Management") which is part of Galleon Group and acts as the Investment Manager of NSHS. Noor Management's principle office is based in New York and all investment activities of NSHS are managed by Noor Management therefore the profile of the appellant's parent company namely Noor Management showed its principle office in New York.

(b) The principle investor namely Galleon Fleet Fund Limited committed to make the investment of US $ 10 million. In terms of the Commitment NSHS could draw the committed capital therefore it was treated as paid - up capital in commercial sense and was not meant to mislead the commission. NSHS withdrew 85% of the said amount to capitalize the appellant which proves that the funds are available to NSHS.

(c) SCN was issued by the Executive Director (Insurance) whereas the Impugned Order has been passed by the respondent therefore the Impugned Order is coram non judice is not sustainable in law.

5. The departmental representative maintained that the Impugned Order was passed as the information regarding the place of principle office of the appellant's parent company and its paid-up capital was not found correct as per the record available with the Commission. The Certificate of Incorporation of NSHS revealed that NSHS was incorporated in Cayman Islands and according to the condensed balance sheet of NSHS as on 31-12-2008 the investors paid-up capital was US$ 8.5 million.

6. We have heard the parties. The appellant seemed to have provided the profile of NSHS as parent company at the time of incorporation and SCN was issued by the respondent based on the information provided and the fact USHS was In fact incorporated in Cayman Islands and the condensed balance sheet of NSHS as on 31-12- 2008 showed that the paid-up capital was actually US$ 8.5 million. The respondent was informed about the scheme of business and its organizational structure however the respondent even after holding that the appellant satisfied various concerns and queries went on to impose penalty of Rs.50000 on the appellant under section 6(10) of the Ordinance read with section 157(1) of the Ordinance. The respondent has observed that he is satisfied with the various raised in the hearing and has still gone on to impose penalty on the appellant. The Clarification regarding the paid-up capital and place of business should have been sought at the time of incorporation and penal provision should not have been invoked. The objection of the appellant regarding the exercise of the powers by the respondent has been examined in light of the S.R.O 666(1) of 2009 dated16-7-2009. The powers under section157(1) of the Ordinance have been delegated to the Executive Director (Insurance) however in this case the powers have been exercised by the Director (Insurance) and are therefore without jurisdiction. The Insurance Division must that powers are exercised by the officers to whom powers are delegated.

In view of the above we remand the case back to the Executive Director (Insurance) who shall obtain the necessary information and rectify the record of the appellant.

Insurance Ordinance (XXXIX of2000)- 118 and 124(2) Insurance claim Liquidated damages payment of principle Recovery of access amount Insurance corporation paid an amount of Rs.1391349 although it was alleged that the same was not according to calculation---Subsequent to payment of amount to appellant the Insurance Corporation issued notice for recovery of excess amount paid to her who assailed the notice before Insurance Tribunal but the same was without any avail validity - - - Employees of Insurance corporation were responsible for not making payment to appellant within specified period of ninety days and the same led to delay in payment---Corporation could not justify such delay to be beyond the control of Corporation---Calculation of liquidated damages were to be made from 22-6-2000 the date of death of insurer to 29-11-2006 along with rate of interest in accordance with law---corporation had not placed before Insurance Tribunal nor before High Court any basis of their making disputed calculation Corporation was not able to substantiate its stance through any supporting material or law---Even otherwise payment had been made to appellant therefore Insurance Corporation could not make any recovery from her---judgment passed by Insurance Tribunal was set aside and recovery memo issued by the Corporation was declared null and void without lawful authority and having no legal effect on appellant--- High Court restrained the Corporation from making any recovery from the appellant---Appeal was allowed accordingly. [p.875] A and B

Mst. Nusrat Malik Saleem v. Federation of Pakistan 2006 CLD874; PLD 1984 SC 403; 2001 CLC1743; 2001 YLR 731; 2001 MLD1169; Controlling Authority N. W. F. P. Board of Technical Education Peshawar and another v. Abdul Salam Secretary N. W.F.P. Board of Technical Education PLD1993 SC 200; Muhammad Shakir and others v. Administrator District Council Rajanpur and another 2002PLC (C.S.) 302 and The Engineer inChief Branch though Ministry of Defence Rawalpindi and another v. Jalaluddin PLD 1992 SC 207 rel.

Liaqat Ali Butt for the Appellant.

Ibrar Ahmad and Kashif Kharal for the Respondent

Date of hearing: 20th May 2010

JUDGMENT

1 . IQBAL HAMEED-UR-RAHMAN J. instant appeal has been filed under section 124(2) of Insurance Ordinance 2000 against the judgment dated 21-11-2007 passed by learned Additional District and Sessions Judge-I with powers of Insurance Tribunal Punjab Lahore.

2. It is stated that the instant appeal is the outcome of an Insurance Policy No.504825814-7 for an amount of Rs.1000000 obtained by the husband of the appellant namely Malik Muhammad Saleem. It is further stated that after the death of the insured Malik Muhammad Saleem on22-6-2000 the claim was duly lodged by the appellant instantaneously but the same had been repudiated by the respondents on 29-3-2001 in view of the same the appellant agitated the matter before the Wafaqi Mohtasib who passed the findings () in favour of the appellant vide order dated 8-9-2001. The same had been assailed by the respondents before the President of Pakistan in appeal. The said appeal of the respondents had been dismissed vide order dated 22-7-2002. The respondents filed a review application the same also did not find favour with the President of Pakistan and the same was also dismissed on20-8-2002. Thereafter the appellant had lodged a claim without liquidated damages for an amount of Rs . 10 70000 on 1 6-10-2002 . Thereafter the appellant claimed an amount of Rs.1070000 excluding the claim of the liquidated damages which was not paid by the respondents to the appellant. In view of the same the appellant was compelled to again file a complaint before the Wafaqi Mohtasib for non-payment of the liquidated damages which was allowed by the Wafaqi Mohtasib vide its findings dated 18-4-2003 but subsequently the said findings in favour of the appellant had been recalled by the Wafaqi Mohtasib by passing a revised findings against the appellant on 2-6-2004. The appellant assailed the findings of the Wafaqi Mohtasib dated 2-6-2004 before the President of Pakistan and the same was dismissed on 30-11-2005. The said order of the President of Pakistan was thereafter assailed before this Court in Writ Petition No.1374 of2006 which was allowed by this Court vide order dated 18-4-2006 and the said case of the appellant is reported as Mst. Nusrat Malik Saleem v. The Federation of Pakistan 2006 CLD874 holding that under section 118 of the Insurance Ordinance 2000 the appellant was entitled to liquidated damages in case of delay in payment of insurance claim from the date of completion of case which could only be refused by promptly paying the claim or it is proved that delay occurred due to circumstances beyond the control of insurer. The respondents assailed the said order passed by this Court in Writ Petition No.1374 of2006 dated 18-4-2006 through C.P. No.982/L of 2006 before the honourable Supreme Court of Pakistan which stood dismissed vide order dated 24-11-2006. Along with the respondents the appellant had also filed C.P. No.983/L of 2006 before the honourable Supreme Court of Pakistan in both the petitions leave was refused and it was held that the delay had been caused by the employees of the Corporation in the payment of the claim and resultantly the respondents were directed to pay the liquidated damages which the respondents paid through cheques for an amount of Rs.1391349 on29-11-2006.

3. It is stated that thereafter the respondents issued a letter for the recovery of Rs.1145390 on 20-12-2006. The said letter was impugned by the appellant before the Insurance Tribunal along with the claim for the unliquidated damages. The same has been dismissed vide order dated 9-1-2007. The respondents also filed counter appeal before the Insurance Tribunal. Both the applications were consolidated and consolidated issues were framed and after recording of evidence vide consolidated judgment dated 21-11-2007 the same were dismissed. Hence the instant appeal has been preferred before this Court.

4. Learned Counsel for the appellant submitted that under section 118(1) of the Insurance Ordinance 2000 the insurance claim was to be paid within a period of 90 days and if the same is not paid within the specified period then under section 118(2) 5% high base rate was to be paid and the same was allowed by this Court in Writ Petition No.1374 of 2006. It is further argued that this Court vide order dated18-4-2006 has allowed the liquidated damages from 22-6-2000 till the payment; as such the liquidated damages were to be calculated from the said date till the payment of the liquidated damages and the learned Insurance Tribunal did not comprehend the same and unjustly and unlawfully dismissed the application of the appellant. It is further submitted that through the instant appeal the appellant does not press to the extent of the unliquidated damages but to the extent of the recovery letter dated 20-12-2006 issued in violation of the law as well as the judgment of this Court titled as Mst. Nusrat Malik Saleem v. Federation of Pakistan 2006 CLD 874 as well as law laid down in PLD 1984SC 403 2001 CLC 1743 2001 YLR731 and 2001 MLD 1169 this appeal be accepted and the impugned recovery letter dated 20-12-2006 issued by the respondents be declared as null and void and without lawful authority having no legal effect on the appellant; as such the appellant is not liable to make refund to the respondents.

5. On the other hand learned counsel for the respondents submitted that the respondents were in a fix on the passing of the order by the honourable Supreme Court of Pakistan in C.Ps. Nos.982/L and 983/L of 2006 whereby the respondents were directed to make payment to the appellant within three days of the compliance of the order and inadvertently an excess amount of Rs.1145390 had been paid although the actual calculation as pointed out by the audit which the appellant was entitled to as liquidated damages was only to the tune of Rs.245959 and since the respondents have paid an amount of Rs.1391349; therefore they have paid an excess amount of Rs.1145390 to the appellant which has been claimed by the respondents- Corporation on the basis of the actual calculation as has been detailed in Exh.R/2 and the Insurance Tribunal has rightly adjudicated the matter and allowed the actual liquidate d damages which the appellant is bound to refund to the respondent- Corporation; that the impugned order does not require any interference by this Court; as such this appeal merits dismissal.

6. Arguments pro and contra heard material made available on record pursued.

7. It is admitted fact that the claim of the appellant had not been made within the specified period of 90 days as prescribed under section 118(1) of the Insurance Ordinance 2000 and for ready reference the same is reproduced below:--

118. Payment of liquidated damages on late settlement if claims. (1) It shall be an implied term of every contract of insurance that where payment on a policy issued by an insurer becomes due and the person entitled thereto has complied with all the requirements including the filing of complete papers for claiming the payment the insurer shall if he fails to make the payment within a period of ninety days from the date on which the payment becomes due or the date on which the claimant complies with the requirements whichever is later pay as liquidated damages a sum calculated in the manner as specified in subsection (2) on the amount so payable unless he proves that such failure was due to circumstances beyond his control."

Further subsection (2) of section 118 of the Insurance Ordinance 2000 also entitles the appellant for a claim of liquidated damages at the rate of 5% on the high base rate. This Court had also determined that the claim of the appellant was to be paid as well as the same has been upheld by the apex Court in C.P. No.982/L of 2006 vide order dated 24-11-2006 that the employees of the Corporation were responsible for not making the payment to the appellant within the specified period of ninety days and the same led to the delay in the payment to the appellant which the respondent/Corporation could not justify said to be bound the control of the Corporation; as such the calculation is to be made from 22-6-2000 the date of the death of Malik Muhammad Saleem to 29-11-2006 along with the rate of interest in accordance with law. Thereafter the respondents paid an amount of Rs.1391349 although the respondents alleged that the same is not according to the calculation but they have not placed before the Insurance Tribunal nor before this Court any basis of their making a calculation to the tune of Rs.245595. The respondents have not been able to substantiate their stance through any supporting material or law. Even otherwise the payment has been made to the appellant; therefore the respondents can not make any recovery from the appellant. Reliance is placed on Controlling Authority N.W.F.P Board of Technical Education Peshawar and another v. Abdul Salam. Secretary N.W.F.P. Shakir and others v. Administrator District Council Rajanpur and another 2002 PLC (C.S.) 302. In the Engineer in Chief Branch through Ministry of Defence Rawalpindi and another v. Jalaluddin PLD 1992 SC 207 it has been held that;--

Recovery of amount paid on basis of incorrect order and the recipient had received same on bona fide belief that he was entitled to it payer was not entitled to recover the amount from the payee during the period when incorrect order remain in field and principle of locus poenitentiae would be applicable to the case"

8. In the above perspective this appeal is accepted and the judgment dated21-11-2007 passed by the learned Insurance Tribunal is set aside. Resultantly the Impugned recovery memo dated 20-12-2006 issued by the respondents is declared null and void without lawful authority and having no effect on the appellant and the respondents are restrained from making any recovery from the appellant.
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Publication:Insurance Journal
Geographic Code:9PAKI
Date:Jul 31, 2014
Words:3973
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