AIPNBOA raises anomalies in Appraisal System of Officers in PNB

AIPNBOA (All India Punjab National Bank Officers’ Association) has taken up the anomalies in the appraisal system and highlighted the clear discrimination shown by the Circle Heads by drastically reducing the marks under their discretion without any proper justification.

AIPNBOA has said that the changed APAR system through UDAAN is also creating various anomalies and the system changes for both field level and administrative level officers are impacted negatively. AIPNBOA has again taken up with MD & CEO vide letter dated 15.07.2025 highlighting the shortcomings in the system and demanded for a discussion with our association to work towards a more equitable and credible system.

What AIPNBOA said to MD&CEO

The Annual Performance Appraisal Report (APAR) is one of the most consequential instruments in the career of an officer in the Bank. It is relied upon not only for deciding promotions and placements, but also as a benchmark of an officer’s capabilities and suitability for key assignments. Given the human-centric nature of banking, the fairness and credibility of this process are vital for ensuring morale, motivation, and organizational harmony.

The officers’ performance appraisal system in our Bank is conducted in accordance with the PNB (Officers’) Service Regulations, 1979, and the guidelines issued by the Government of India and Ministry of Finance from time to time. In particular, the Annual Performance Appraisal Report formats for officers were revised through the Ministry of Finance, Department of Financial Services (DFS) letter dated 23rd March 2012, which the Bank implemented vide PAD Circular No. 108 dated 25th July 2012. Over time, the formats were modified further to include new priorities such as digitalization, communicated vide HRDD Circular No. 771 dated 26th March 2018.

In line with these changes, the appraisal process gradually transitioned from paper-based formats to an online system integrated with HRMS. With the launch of the HR Transformation Project UDAAN, a series of digital tools was introduced, including skill assessment modules, Role Clarity Tool for KRA allocation, quarterly appraisals, PMS Profiler, 360-degree feedback mechanisms, leadership coaching, and cohort-based comparisons. These changes were formalized through a series of circulars, culminating in the comprehensive appraisal policy under HRDD Circular No. 960 dated 9th June 2025.

Under the UDAAN framework, KRAs are assigned using the Role Clarity Tool and measured through the PMS Profiler, supplemented by self-appraisals and assessments by reporting authorities. Performance evaluation has been expanded beyond business targets to include compliance, conduct risk, customer service, managerial ability, and training completion. Officers are grouped into cohorts based on scale, geography, and role for purposes of comparison.

As per the appraisal policy communicated vide HRDD Circular No. 960 dated 9th June 2025 and earlier HRDD Circular No. 893, the system now also mandates quarterly assessments of officers, along with the traditional annual assessment. This approach will impose an unnecessary administrative burden. Officers will now find themselves spending a disproportionate amount of time preparing, reviewing, and recording quarterly appraisals, leaving less time and energy for actual operational responsibilities.

For many years, officers in the field have expressed concern that their appraisals tend to be systematically lower than those of officers posted in administrative offices. This is because field officers’ performance is assessed mainly through budgetary and quantitative parameters, which are often heavily influenced by external factors, while administrative officers are assessed qualitatively, leaving their scores largely to the discretion of their reporting and reviewing authorities. Officers who directly face customers, bring business, and shoulder the most visible responsibilities have therefore often found themselves at a disadvantage compared to their peers in administrative roles. This imbalance was widely discussed, and AIPNBOA raised it repeatedly, emphasizing that it was unjust and demoralizing.

The management did recognize the matter and set up a team to resolve it. However, rather than studying the realities of various roles and designing a calibrated response, an external consultancy was brought in, and a rigid, formulaic KRA-based system was imposed. This was premised on the flawed assumption that all types of work, across all roles and locations, could be neatly defined and measured within a uniform set of KRAs. What resulted was a system that neither addressed the earlier grievances nor established fairness. The unique, dynamic nature of many administrative and support roles cannot be captured entirely by a pre-determined matrix of KRAs. In administrative offices, much of the work officers do emerges out of evolving priorities, ad-hoc exigencies and the nuanced understanding of their seniors and these cannot be frozen into measurable KRAs in advance.

However, while the stated intent of these changes was to create a structured and uniform appraisal mechanism, the way these tools have been designed and implemented has given rise to numerous anomalies and unintended consequences, which we have been consistently raising in our representations to the management.

One of the most significant issues relates to the misalignment of KRAs with officers’ actual roles. Many officers in administrative and support functions continue to be assessed on KRAs such as loan sanctioning or disbursement, even though they are not the sanctioning authority. Officers responsible for documentation, credit notes, and other back-office tasks are appraised based on outcomes that depend on other entities altogether, leading to unfair assessments. This misalignment has left officers frustrated and demoralized.

The scoring mechanism embedded in the PMS Profiler has also proven to be opaque and incomprehensible to most officers. The use of varying formulas, proportionate, threshold-based, and turnaround time-based has made it impossible for officers to understand how their contributions are actually scored, particularly when team performance and individual inputs are conflated. This lack of transparency has eroded faith in the system and discouraged genuine engagement.

The cohort grouping mechanism, which was expected to enable fairer comparisons, has also failed to deliver in practice. Officers with vastly different responsibilities are often clubbed into the same cohort merely to satisfy numerical thresholds. This results in flawed benchmarking, as officers are compared against peers whose operational realities are entirely different.

Another critical concern is the way managerial dimension marks continue to be allotted. Despite the advent of digital scoring, arbitrary and subjective reduction of marks remains widespread. We have documented many instances where officers achieving near-perfect PMS scores have been given extremely low scores, sometimes as little as one mark out of twenty under managerial dimensions by the reviewing or accepting authority, while others with weaker PMS performance are given disproportionately high discretionary marks. These patterns, which were highlighted in letters dated 14th November 2024 and 18th August 2023 and discussed by undersigned in person with you on 04.02.2025 at HO, clearly reflect continued misuse of discretion at the Circle level and have resulted in widespread disillusionment.

AIPNBOA found it particularly unfortunate that instead of addressing the root cause namely, the undervaluation of field officers’ contributions the chosen solution appears to have been to lower the scores of administrative officers in an attempt to create parity. This approach, cutting the longer line rather than extending the shorter one, has further alienated both groups. Officers across roles feel demotivated and confidence in the system has been steadily eroded.

The consequences of this flawed framework are evident. Officers in the field continue to feel overburdened and under-recognized. Officers in administrative offices feel unfairly penalized for no fault of their own. Teamwork is suffering. Mutual trust in the appraisal process has been severely damaged. If the objective was to build a fair, transparent and motivating appraisal system, AIPNBOA said that it regrets to submit that it has failed to achieve these outcomes.

This is not merely a technical or procedural matter but a fundamental question of fairness, morale, and the Bank’s ability to retain motivated officers willing to take up challenging assignments. AIPNBOA believes it is imperative that the matter be taken up with the seriousness it warrants, and convene a detailed meeting at the earliest with association, so that the association may present concerns fully and work towards a more equitable and credible system.