Transcript
1 SRM School of Management
A STUDY ON THE PERFORMANCE APPRAISAL SYSTEM IN L&T – ECC DIVISION
A PROJECT REPORT
In partial fulfillment of the req
uirement for the award of the degree Of
MASTER OF BUSINESS ADMINISTRATION
BY
S.KARTHIGA (REG.NO.35080234)
Under the Guidance of
Dr.N.SANTHOSH KUMAR (Asst. Professor S.G)
SRM UNIVERSITY SCHOOL OF MANAGEMENT
KATTANKULATHUR – 603203 MAY 2010
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ACKNOWLEDGEMENT I wish to place sincere and special thanks to the Management of SRM SCHOOL OF MANAGEMENT
and our beloved DEAN for having offered this type of program as a part of the curriculum
I am highly indebt to my guide Dr. N. SANTHOSH KUMAR, for rendering valuable help in completing this training report successfully
It is my immense pleasure to extend my sincere thanks to all the members of the DEPARTMENT OF MANAGEMENT for providing their valuable support and guidance. My sincere gratitude to Mrs K.Meena Priya for providing me with an opportunity to work
with L&T ECC, Human Resource department at Chennai, as a company project guide who has
provided me with the necessary information and his valuable suggestion and comments on bringing
out this report in the best possible way.
S.KARTHIGA
DECLARATION
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I, S.Karthiga, declare that the project report entitled , “A Study on the Performance Appraisal System in Larsen & Toubro Limited – ECC Division” is carried out by myself under the supervision of Dr. N. Santhosh Kumar, School of Management Studies, SRM University, Kattankulathur is the result of the original work done by us. Date: Signature of the Student
CERTIFICATE
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This is to certify that the project entitled “A STUDY ON THE PERFORMANCE APPRAISAL SYSTEM IN LARSEN & TOUBRO LIMITED – ECC DIVISION” is a bonafide work done and submitted by S.Karthiga.
In fulfillment of the requirements for the project in Masters Of Business Administration To SRM University, Kattankulathur, Tamilnadu, during the period 2008 – 2010.
Submitted to SRM UNIVERSITY
Faculty Incharge
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LIST OF TABLES
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S.NO
PARTICULARS
PAGE NO.
1
Cadre * Satisfaction To Present PAS 40
2
Experience * Satisfaction To Present PAS 41
3
Cadre * Developmental Needs Are Expressible 43
4
Cadre * Frank Discussion 44
5
Cadre * Appraiser 46
6
Experience * Job Rotation 47
7
Cadre * Percentage Of Biasing 48
8
Descriptive Statistics 50
9
Description Of The Present Job 51
10
Performance Level
52
11
Satisfaction To Present PAS
53
12
Job Satisfaction
54
13
Self Development
55
14
Performance Level Improvement
56
15
Job Rotation
57
16
Percentage Of Biasing
58
17
Effect Of Negative Feedback
59
18
Appraiser
60
19
HRD’s T&D Activities
61
20 Significance Of PAS
62
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LIST OF CHARTS
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S.NO
PARTICULARS
PAGE NO.
1
Cadre * Satisfaction To Present PAS 40
2
Experience * Satisfaction To Present PAS 41
3
Cadre * Developmental Needs Are Expressible 43
4
Cadre * Frank Discussion 45
5
Cadre * Appraiser 46
6
Experience * Job Rotation 47
7
Cadre * Percentage Of Biasing 49
8
Descriptive Statistics 50
9
Description Of The Present Job 51
10
Performance Level
52
11
Satisfaction To Present PAS
53
12 Job Satisfaction
54
13 Self Development
55
14 Performance Level Improvement
56
15 Job Rotation
57
16 Percentage Of Biasing
58
17 Effect Of Negative Feedback
59
18 Appraiser
60
19 HRD’s T&D Activities
61
20 Significance Of PAS
63
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Introduction
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Executive Summary
Analysis And Interpretation
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Acknowledgement
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Recommendations And Suggestions
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Conclusion
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Bibliography
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Findings And Inferences
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Appendix
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Research Methodology
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Contents
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Company Profile
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Industry Profile
1. INTRODUCTION
Human Resource Management is developed as a part of management. In simple sense,
Human Resource Management means employing people, developing their resources ,utilizing,
maintaining and remunerating their services in tune with the job and organizational requirements
with a view to contribute to the goals of the organization , individual and the society (Mamoria
,1999)
In this process, the performance Appraisal plays a major part in ensuring organizational
effectiveness through correcting employees for the desired standard and improved performance, and
suggesting the change in employee’s behavior.
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A recent development in Human Resource Management indicates that the Performance
Appraisal is the basis for employee development. Performance Appraisal indicates the gap between
the level of desired performance and the level of actual performance. This gap should be bridged
through human resource development techniques like training, executive development etc.
Definition:
“The overall objective of Performance Appraisal is to improve the efficiency of an enterprise
by attempting to mobilize the best possible efforts from individuals employed in it. Such appraisal
achieves four objectives including the salary reviews, the development and training of individuals,
planning job rotation and assistance promotions”.
- CUMMINGS
Performance appraisal deals with the assessment of the extent of the employee’s achievement
in attaining the stipulated tasks, activities or results. Individual performance is the product of ability
to perform a particular job, motivation and organization support. - RAO, 1990
PERFORMANCE DOMAINS IN ORGANIZATIONS
Performance domains are those that lend themselves to evaluation of outputs. The following are
considered performance domains in organizations:
♣ Mission
♣ Process
♣ Mission critical sub system
♣ Individual
In all the above, the criteria for achievement can be listed and the outputs evaluated.
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The translation of an organization Vision into individual activities and work plan is as follows:
Strategy
Outcomes (KRA’s)
Goals
Decisions Responsibility/ authority
Activities & Tasks
Tasks Weekly/monthly/ quarterly
Roles
Outputs Results (Qualitative) Targets (Quantitative)
Work Plan
Vision/Mission
KEY ELEMENTS IN PMS:
FLOW CHART
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1.1 MEANING OF PERFORMANCE APPRAISAL
Performance appraisal may be defined as a structured formal interaction between a
subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-
annual), in which the work performance of the subordinate is examined and discussed, with a view
to identifying weakness and strengths as well as opportunities for improvement and skills
development.
Performance appraisal is the systematic description of an employee’s job relevant strengths
and weaknesses in the work-spot, normally including both the quantitative and qualitative aspects of
performance. It is a continuous process in every large scale organization.
1.2 PERFORMANCE APPRAISAL PROCESS
1. Objectives of performance appraisal should be established before hand.
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2. Standards of performance appraisal should also be established and communicated to the
Appraisees.
3. Selection of suitable appraiser should be made.
4. Collection of information by rater regarding the job and job-holder is to be carried out.
5. Method of performance appraisal is to be selected.
6. Actual performance is to be measured.
7. Actual performance must be compared with the standards.
8. Follow-up action.
NEED FOR PERFORMANCE APPRAISAL
To identify training needs of the employee.
To make the employee realize where he stands and to improve in areas where improvement
is required.
To utilize the manpower more effectively.
To improve the efficiency and productivity of the organization.
To motivate employees to perform better.
To maximize the use of human potentials.
To make the performance base/parameters of the company known to the employees.
As a tool for counseling and guidance.
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For future job assignments.
It helps the appraisers to prevent grievances and to take disciplinary measures.
PURPOSE OF PERFORMANCE APPRAISAL
The purpose of performance appraisal is to identify the issues, eliminate any potential
problems, and to set new goals for achieving high performance.
Helps to create and maintain a satisfactory level of performance among the
employees of the organization.
This system helps the superiors to have a proper understanding about their
subordinates and to facilitate fair and equitable compensation based on the
performance.
This system contributes to the employee growth and development through training,
self and management development programs.
This system is a future oriented activity showing employees where things have gone
wrong, how to set everything in order and deliver results using their potential in a
proper way.
1.3 METHODS OF PERFORMANCE APPRAISAL
With the development of the appraisal system, a number of methods or techniques of
performance appraisal have been developed.
1.3.1 TRADITIONAL METHODS
Graphics Rating Scales:
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Graphic rating scales compare individual performance to an absolute standard. In this
method, judgments about performance are recorded on a scale. This method is also known as linear
rating scale or simple rating scale. The appraisers are supplied with printed forms, one for each
employee.
These forms contain a number of objectives, behavior and trait-based qualities and characters
to be rated like quality and volume of work, job knowledge, dependability, initiative attitude etc. in
the case of workers and analytical ability creative ability, initiative, leadership qualities, emotional
stability in case of managerial personnel. These forms contain rating of scales. Rating scales are of
two types namely Continuous rating scales and discontinuous rating scales.
Ranking Method:
Under this method, the employees are ranked from best to worst on some characteristics. The
rater first finds the employee with the highest performance and the employees with the lowest
performance in that particular job category and rates the former as the best and the later as the
poorest. Then the rater selects the next highest and next lowest and so on until he rates all the
employees in that group. Ranking can be relatively easy and inexpensive, but its reliability and
validity may be open to doubt.
Paired Comparison Method:
This method is relatively simple. Under this method, the appraiser ranks the employees by
comparing one employee with all other employee in a group, one at a time.
Forced Distribution Method:
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The rater may rate his employees at the higher or lower end of the scale under the earlier
methods. Forced distribution method is developed to prevent the raters from rating too high or too
low. Under this method, the rater after assigning the points to the performance of each employee has
to distribute his ratings in a pattern to conform to normal frequency distribution.
Checklist Methods:
The checklist is a simple rating technique in which the supervisor is given with a list of
statements or words and asked to check statements representing the characteristics and performance
of each employee. There are three types of checklist methods, namely simple checklist method,
weighted checklist method and force choice method.
Essay or Free Form Appraisal:
This method requires the manager to write a short essay describing each employee’s
performance during the rating period. This format emphasizes evaluation of overall performance
based on strength/weakness of employee performance rather than specific job dimensions.
Group Appraisal:
Under this method, an employee is appraised by a group of appraisers. The group consists of
the immediate supervisor of the employee, other supervisors who have a close contact with
employee’s work, manager or head of the department and consultants.
Confidential Reports:
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Assessing the employee’s performance confidentially is a traditional method of performance
appraisal. Under this method, the superior appraises the performance of his subordinates based on
his observations, judgments and intuitions and finally prepares report on it. This method is mostly
followed in public sector organizations.
1.3.2 MODERN METHODS
Behaviorally Anchored Rating Scales:
BARS method combines elements of the traditional rating scales and critical incident
methods. Using BARS, job behaviors from critical incident-effective and ineffective behaviors are
described more objectively. The method employs individuals who are familiar with a particular job
to identify its major components. Then they rank and validate specific behavior for each of the
components.
Human Resource Accounting:
Human Resource Accounting deals with cost of and contribution of human resources to the
organization. Cost of the employee includes cost of manpower planning, recruitment, selection,
induction, orientation, placement, training and development wages, benefits etc. Contribution of the
employees (i.e) employee services can be measured by labor productivity or value added by the
human resources.
Management by Objectives:
Management by objectives is a process whereby the superior and subordinate managers of an
organization jointly identify its common goals, define each individual’s major areas of responsibility
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in terms of results expected of him and use these measures of guides for operating the unit and
assessing the contribution of its members.
Thus, MBO focuses attention on participative management and set goals that are tangible, verifiable
and measurable.
Psychological Appraisal:
Psychological Appraisals are conducted to assess the employee’s potential. Psychological
appraisals consist of in depth interviews, psychological tests, consultation and discussion with the
employees, discussion with the superiors, subordinates and peers and reviews of other evaluation.
Evaluation is conducted in the areas of employee’s intellectual abilities, emotional stability,
motivational responses, reasoning and analytical abilities, and interpretation and judgment skills,
social ability. The psychological appraisal results are used for decision about employee’s placement,
career planning and development and training and development.
1.4 CRITERIA & TYPES OF PERFORMANCE APPRAISAL
CRITERIAS:
The criteria for designing appropriate appraisal processes also leads to an understanding of the type
of appraisal process to be selected:
Focus
Depending on the focus, the appraisal can be either Task focused or Development focused.
However, since organizations exist for achieving certain goals, the task focused cannot be dispensed
with. Hence most organizations combine both and carry out a Holistic appraisal.
Confidentiality
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Depending on the extent of confidentiality required by the system (which may sometimes be
requisite of appraisal being conducted with the sole requisite of differentiating and retaining only
good performers, or when the sharing of the process, goals and evaluation methods may affect the
conduct of further appraisals), the appraisal process can be either ‘Confidential’ or ‘Open’.
Periodicity
Depending on the industry, periodicity can be Quarterly, Bi-annual or annual. In high-skilled
industries where there demand is high and supply is low, organizations would prefer to have shorter
appraisal cycles with the intent of using reward systems to retain employees. It is also a way to keep
up with the industry standards with respect to compensation.
TYPES:
Line Manager Appraisal:
It is a mechanism to link individual goals and strategic direction. It focuses on objectives and
targets. It can combine regular informal review of performance with formal appraisal to agreed
timescales. It may also include rating scales for comparison purposes.
Self-Appraisal:
It is often used as preparation for the line manager/subordinate appraisal. Individuals take the
lead in reviewing their own performance. It encourages individuals to think about their performance
and development needs in a focused way. The combination of involvement and responsibility
generates commitment to personality taking action.
Upward Appraisal:
It is appropriate in multi-level or source appraisal settings. It may take place in the context of
the subordinate’s appraisal.
Peer Appraisal:
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Individuals nominate their own appraiser. It allows choice of peers who are respected for
relevant knowledge of professional specialization. It is relevant in situation where there may be no
immediate manager in a position to appraise.
Team review and appraisal:
Its main feature is establishing team success and areas for improvement. It aids the team-
building and objective-setting process. It encourages open and constructive comment among the
team.
Competency-based Appraisal:
It sets targets for the roles as specific objectives or other measurable objectives. It focuses on
behavioral descriptions of the standards expected in fulfilling the role. It is a development plan
specifying training, development and support towards achieving targets and competencies. It is a
system of periodic review leading to annual appraisal of performance against targets and
achievement of competences.
360-degree feedback:
Its focus is on the development of skills and competences which will improve organizational
performance. Appraisees may include either direct or other managers, subordinates, peers or
customers. Feedback is collected systematically through formally constructed questionnaires. It can
include self-assessment for comparison with the views of others. It is essentially based on ratings
which more often than not are aggregated to represent an average score.
1.5 COMMON APPRAISAL ERRORS:
Contrast Effect:
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Tendency of a rater to evaluate people in comparison with other individuals rather than
against the standards for the job.
First Impression Error:
Tendency of a rater to make an initial positive or negative judgment of an employee and
allow that first impression to color or distort the later information.
Halo/Horns Effect:
Inappropriate generalizations from one aspect of an individual’s performance to all areas of
that person’s performance. Halo error occurs when a rater assigns ratings for several dimensions of
performance on the basis of an overall general impression of the ratee.
Similar-To-Me Effect:
The tendency of individuals to rate people who resemble themselves more highly than they
rate others. This is also known as the Personal bias rating error.
Central Tendency:
The inclination to rate people in the middle scale even when their performance clearly
warrants a substantially higher or lower rating. This type of average rating fails to discriminate
between subordinates.
Negative And Positive Skew:
The tendency of rating of all individuals as higher as or lower than their performance
warrants. This is also known as Leniency or Harshness error.
Attribution Bias:
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The tendency to attribute performance failings to factors under the control of the individual
and performance successes to external causes.
Recency Effect:
The tendency of minor events that have happened recently to have more influence on the
rating than major events of many months ago. Good performance towards the end of an appraisal
period may dominate the indifferent performance during the beginning of the appraisal period or the
vice versa.
Stereotyping:
The tendency to generalize across groups and ignore individual differences. This is
attributing almost instantly, instinctively and without conscious control.
1.6 KEY ELEMENTS OF THE APPRAISAL PROCESS
The key elements of the appraisal process are
Administration
Assessment
Feedback
ADMINISTRATION PROCESS
The important factors influencing effective administration are timeliness and rigour. The
appraisal process needs to be initiated on time, administered within the time frame and results
(increments, rewards etc) awarded on time. The process itself must be carried out with a lot of rigour
and energy, such that it motivates employees to participate with the same energy and spirit.
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ASSESSMENT PROCESS
The assessment goals should focus on strengths, use a long term perspective, should build on
successive appraisal outcomes and serve as a tool for career growth.
The assessment outcomes are a clear understanding of extent of performance of the employee, his
achievement of goals, training requirements and agreed objectives for the next review period.
The assessment discussion should:
Focus on the employee accomplishments.
Point out areas for improvement.
Address questions about the year to come
Focus on competencies required for future roles
Work on defining a path forward
Provide examples to support statements
It is important for the assessor to be:
Authentic with the intent to communicate actual performance
Empathetic and supportive
Be direct and not beat around the bush, but avoid being blunt and harmful
Be equal, be human
Talk to and not talk down
Able to deliver feedback about both good and bad performance without branding the person
as good or bad.
FEEDBACK PROCESS
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There is enough material available in books, articles and on the internet about ways of giving
effective feedback. However, the key points to remember about the process itself are that:
It has to be scheduled with enough time for a complete discussion
It should leave doors open for further discussion if required
It should encourage a component of mutuality of exchange
It should provide scope to record the feedback meaningfully but objectively
It should deal with any residues that the employee is carrying
It should reinforce the faith the employee has on the system
BENEFITS OF PERFORMANCE APPRAISAL
Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and
correct existing problems, and to encourage better future performance. Thus the performance
of the whole organization is enhanced.
Performance appraisal provides motivation through achievement, feedback and by agreeing
helpful aims and targets. Performance appraisal can have a profound effect on levels of
employee motivation and satisfaction - for better as well as for worse.
The existence of an appraisal program indicates to an employee that the organization is
genuinely interested in their individual performance and development.
Performance appraisal helps in improving the performance level of the employees by
identifying the training and development needs of the employee and helps in career planning
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and development. Performance appraisal can provide a regular and efficient training needs
audit for the entire organization.
Performance appraisal helps the organization to meet the external challenge and it provides
equal employment opportunity among the employees.
Encourages teamwork, team spirit, open communication and empowers employees to take
decisions without fear of failing.
NEGATIVE ASPECTS OF PERFORMANCE APPRAISAL
Negative ratings, subjectivity, favoritism and politics may affect the relationship among the
employees.
Improper feedback from the concerned employee decreases the effectiveness of the
performance appraisal system and the relationship between the superiors and subordinates
may become weak.
The flow of information in the organization will be affected due to communication gap.
Fear, hesitation and ineffective communication can be the few causes of this gap.
Evaluating the performance is a long term process which leads to time consumption. The
problem with subjective measure has the opportunity for bias.
1.7 THE APPRAISAL FORM
The Appraisal form is an instrument to measure and record performance details, record
training requirements, outline aspirations, record plans for career growth and record objectives for
the next assessment period.
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With such a big list of things that the appraisal form aspires to be, it is not surprising that HR
managers have a difficult time in deciding what goes into the appraisal form. It is no wonder then,
that appraisal becomes a 10 page document that is often a difficult task to design, cumbersome
process to administer, long and winded for employees to write and impossible to read through
completely for all employees in a short period of time before the increments are due.
However, it is still true that the appraisal form has to capture all the above. To enable this,
there are few possible ways in which this can be managed.
In the section measuring performance, link it clearly to the goals set and outcomes defined in
the previous appraisal.
Any other achievement or activity that took a lot of time and effort will need to be in a
separate section.
The training needs section should be specific to the KRA’s achievement for the next review
period.
There needs to be one section where the employees write their feedback in a free-flow form.
There needs to be one section where the supervisor gives his comments, rates the employee
for his performance and gives his recommendations.
Though aspirations would be captured in the form and discussed during the appraisal, the
outcomes of career planning can be recorded separately and written as a Personal
Development Plan (PDP). This would de-clutter the appraisal form to a larger extent.
The form should not be cluttered with meaningless or complicated instructions. In fact, it is
wise to remember that the form is for the employees to fill and it should be as simple and
inviting to the employee as possible.
It is more important to have a relevant form that is interesting to fill, rather than having a
detailed form that captures ALL information that it cannot process.
1.8 LITERATURE REVIEW
1. PHILOSOPHY OF PERFORMANCE APPRAISAL PROCESS
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The articulated statement of philosophy of each organization would indicate the
organizations conception of PMS, a description of how it would be affected, and a justification of
why it has been designed that way. Philosophy statements of the system communicate its goals and
action plans and provide an opportunity to tie-in the appraisal system with that of other systems.
Some of the philosophy statements’ can be based on the following intents/premises:
Look at phenomena of performance – do not classify the employee as good or bad based on
his performance.
Serve as a minor for the person to see his performance.
Help grow the person by giving him feedback about the effectiveness of his actions.
Help the person understand where he stands wrt the organization framework and goals of the
organization.
Support the person in finding path forward by defining a career path.
Define the appraisal process as a constant feedback process – end year is the putting together
of the series – fine tuning.
Link into Business.
Why organizations need to appraise their employees?
The reasons why organizations need to appraise their employees are obvious, but to reiterate:
It aligns goals of organizations with that of the employee at every level – strategy, objectives
and action plans
It helps set up an environment of openness and dialogue.
It helps understand employees, their aspirations, motivating factors and their concerns at
work or about their growth.
It helps organization design reward systems and award increments.
It provides the employee direction, perspective and a feedback of his own competence.
It serves as a barometer to the organization for its own leadership.
2. ETHHICAL DILLEMMASS IN PERFFORMANNCE APPRRAISAL
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SRM Scchool of Managagement
42 SRM School of Management
Estimates indicate that annual infrastructure investments are projected to rise from US $ 17.14 bn. in
1995 - 96 to US $ 30.57 bn. to US $ 51.42 bn. in 2005 - 06 at 1995 - 96 prices.
Today, India is one of the six fastest growing economies of the world and Asia's biggest
Infrastructure Investment opportunity.
CONSTRUCTION INDUSTRY
BOOMING OPPORTUNITIES IN INDIA:
• COMMONWEALTH GAMES - 2010 IN NEW DELHI
• ROADS
• RAILWAYS
• AIRPORTS
• SPECIAL ECONOMIC ZONES ((SEZS)
• URBAN IFRASTRUCTURE - TOWNSHIP / MALLS / OFFICE BUILDINGS ETC.
• POWER
• SAGAR MALA
FDI IN CONSTRUCTION SECTOR IN INDIA
The Govt. of India has permitted FDI up to 100% for development of integrated townships
in India last year. India is now the second most favoured destination for FDI, behind China.
Beside these, there are projects coming up to develop Special Bio-Technology Parks and IT Parks.
3. COMPANY PROFILE
HISTORY
Larsen & Toubro Limited (L&T) is India's largest engineering and construction
conglomerate with additional interests in Electricals, Electronics and IT. A strong customer-focus
approach and constant quest for top-class quality have enabled L&T to attain and sustain leadership
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position over 6 decades. L&T enjoys a premiere brand image in India and its international presence
is on the rise, with a global spread of over 30 offices and joint ventures with world leaders.
L&T has an international presence, with a global spread of offices. A thrust on
international business has seen overseas earnings grow significantly. It continues to grow its
overseas manufacturing footprint, with facilities in China and the Gulf region.
The company's businesses are supported by a wide marketing and distribution network,
and have established a reputation for strong customer support. It believes that progress must be
achieved in harmony with the environment. A commitment to community welfare and
environmental protection are an integral part of the corporate vision.
HISTORY:
The evolution of L&T into the country's largest engineering and construction
organization is among the more remarkable success stories in Indian industry. L&T was founded in
Bombay (Mumbai) in 1938 by two Danish engineers, Henning Holck-Larsen(4.7.1907 - 27.7.2003)
and Soren Kristian Toubro(27.02.1906 – 4.3.1982). Both of them were strongly committed to
developing India's engineering capabilities to meet the demands of industry.Beginning with the
import of machinery from Europe, L&T rapidly took on engineering and construction assignments of
increasing sophistication. Today, the company sets global engineering benchmarks in terms of scale
and complexity.
BOARD OF DIRECTORS
ℵ Chairman & Managing Director - Mr A.M. NAIK
ℵ Whole-time Director & President
(Machinery & Industrial Products) - Mr J.P.NAYAK
ℵ Whole-Time Director & Chief Financial officer - Mr Y.M.DEOSTHALEE
ℵ Whole-Time Director & President - Mr .K. VENKATARAMAN
44 SRM School of Management
ℵ Whole-Time Director & President
(Electrical & Electronics) - Mr R.R.MUKHIJA
ℵ Whole-Time Director & President
(Construction) - Mr K.V. RANGASWAMI
ℵ Whole-Time Director & Senior Executive
Vice President(Heavy Engineering) - Mr M.V.KOTWAL
VISION
The L&T vision reflects the collective goal of the company. It was drafted through a large scale
interactive process which engaged employees at every level, worldwide.
L&T shall be a professionally managed Indian multinational, committed to total customer
satisfaction and enhancing shareholder value.
L&T ITES shall be an innovative, entrepreneurial and an empowered team constantly
creating value and attaining global benchmarks.
L&T shall foster a culture of caring, trust and continuous learning while meeting
expectations of the employees, stakeholders and society.
GLOBAL PRESENCE:
L&T has a global presence. A thrust on international business over the years has
seen overseas revenues growing steadily. The company has manufacturing facilities in India, China,
Oman and Saudi Arabia.
It has a global supply network with offices in 10 locations worldwide, including
Houston, London, Milan, Shanghai, Seoul. Customers include global majors in over 30 countries.
2006
ECC's Work Culture
45 SRM School of Management
Work culture emphasizes :-
ℵ Freedom to experiment
ℵ Continuous learning and training
ℵ Transparency
ℵ Quality in all aspects of work
ℵ Rewards based on performance and potential
ABOUT L&T ECC
ECC today is organized in to four Operating Companies to allow for more in-depth technology and
business development as well as to focus attention on domestic and international project execution.
Each Operating Company is further split into different Business Units (BUs) to take care of the
specific needs of various customers. The Operating Companies (OC) includes:
o Buildings & Factories Operating Company (B&F OC)
o Infrastructure (Infra OC)
o Metallurgical, Material Handling & Water (MMH &W OC)
o Electrical & Gulf Projects (E&GP OC)
ELECTRICAL & GULF PROJECTS OPERATING COMPANY (E&GP OC)
The Electrical & Gulf Projects OC (E&GP OC) offers design and construction services for all types
of industrial and project electrification works as well as for power transmission and distribution
46 SRM School of Management
projects in the domestic markets. It also extends comprehensive services for construction of
buildings and urban Infrastructure projects in the Gulf Markets.
In the area of power transmission & distribution, E&GP OC has established a strong presence with a
high reputation for execution of prestigious projects in the Gulf Region.
A. Electrical Projects (Domestic Business)
Electrical, Instrumentation & Communication (EI&C) Sector
Transmission Line & Railway Construction(TLRC) Sector
B. Gulf-Projects(International-Business)
Power Transmission & Distribution Sector (PT&D)
Buildings & Urban Infrastructure Sector (B&UI)
ELECTRICAL PROJECTS (DOMESTIC BUSINESS)
ELECTRICAL, INSTRUMENTATION & COMMUNICATION (EI & C) SECTOR
Electrical Instrumentation & Communication (EI&C) Sector provides turnkey & individual
package based solutions in the electrical infrastructure space. EI&C also provides comprehensive
services in the field of substations (upto 765kV), project electrification & instrumentation. Wide
experience coupled with superior project management skills ensure quality services to customer on a
Sustainable basis. Complete activities of the EI&C Sector are carried out through two business
units:
To focus on customized solutions; the sector operates as two Business units (BU) namely HV
Substation Business Unit and Industrial Electrification Business Unit.
TRANSMISSION LINES & RAILWAY CONSTRUCTION
Transmission-Lines
Turnkey construction of EHV transmission lines is a major area of operation for ECC. With ISO and
OHSAS certified tower-manufacturing facilities in Pondicherry and Pithampur, ECC’s transmission
line construction works have gone beyond Indian boundaries. Services offered include:
47 SRM School of Management
Design and testing of transmission line towers up to 400kV single and multi circuits
Manufacture of transmission line towers
Sourcing, selection, inspection and supply of all line materials like conductors, insulators, and hardware
Construction of lines up to 765kV including survey, foundation, erection, stringing, testing and commissioning
Other Fields
Railway Construction
As a part of Transmission Lines and Railway Construction Sector, ECC undertakes all types of
Railway Construction works involving Design, Supply, Erection, Testing and Commissioning of
Overhead equipment & Traction Sub-station, Signaling & Telecommunication systems, Supply &
Installation of Permanent way including associated embankment formation, construction of Minor
Bridges / Culvers, Supply of Permanent Way materials, Laying of Track, etc.
Clients include Central Organization for Railway Electrification (CORE), Allahabad, RVNL,
various Construction Departments of Indian Railways / Zonal Railways / Divisional Railways,
Private Siding Owners etc.
GULF-PROJECTS (INTERNATIONAL-BUSINESS)
POWER TRANSMISSION & DISTRIBUTION SECTOR L&T is one of the earliest Indian companies to venture in to the Gulf markets and over the years, it has gained significant market presence in the PT&D
Sector. It has played a significant role in the power evacuation, power transmission and distribution projects across the GCC countries. Having
executed some of the prestigious projects in this area, it has garnered customer goodwill across the Gulf countries. Projects are executed on EPC basis
for the HV Substation/ Transmission Line with complete In-house Design, Engineering, Procurement and Construction including Civil & MEP
services.
BUILDINGS & URBAN INFRASTRUCTURE SECTOR
Buildings & Urban Infrastructure Sector of L&T in the Gulf Region provides integrated construction
services for the construction of:
Residential Segment
Institutional & Commercial Segment
Township Infrastructure Segment
48 SRM School of Management
Transportation Infrastructure Segment
L&T is proud to be one among the Global leaders in the region creating Global landmarks and meeting the international quality standards of its clients
and customers.
3.1 OBJECTIVES OF THE STUDY
Primary Objective:
¥ To identify the real opinion of L&T ECC Group officers and staffs regarding the
effectiveness of the present Performance Appraisal system in their organization.
Secondary Objectives:
¥ To examine the employee level of acceptance towards various factors necessary for
appraising the employees.
¥ To identify the satisfaction level of employees towards performance appraisal system.
¥ To suggest necessary modifications in the system of approach to improve and enhance the
current appraisal system.
3.2 NEED FOR THE STUDY
Performance appraisal is the important tool to assess the performance of the employees in the
organization starting from small scale to large scale organizations. Inefficient performance appraisal
system will directly or indirectly affect the functioning of the organization’s objectives. Hence this
project was carried out to study the performance appraisal system of L&T ECC Groups to find its
effectiveness which is considered to be very vital for the success or decline of any organizations.
3.3 SCOPE OF THE STUDY
49 SRM School of Management
The present study is limited to E&GP operations in L&T ECC. It can be extended to other
companies of the ECC operations.
The study on the performance appraisal system would help the company in making its
performance appraisal procedures more effective and efficient thereby making the employees more
productive.
3.4 LIMITATIONS OF THE STUDY
¶ On account of time constraints, many respondents couldn’t be reached.
¶ Respondents were not from all cadres, so the result of the research cannot be generalized to
the entire group.
¶ The research is subjected only to the study and analysis on the effectiveness of the existing
Performance Appraisal system, designing of Performance appraisal process is not dealt.
¶ The primary data was collected with the help of structured questionnaire technique.
Therefore the study is bounded by the limitation of this technique.
3.5 HR IN L&T ECC
50 SRM School of Management
ECC recognizes that people are the real source of competitive advantage. It is through
people that ECC delivers total customer satisfaction. These values are reflected in our Human
Resources practices which have earned national recognition several times.
ECC-ites go through a process of continuous learning, assisted by training programs. Apart
from on-the-job training and technical training, over 100 programs on general management and
behavioral topics are conducted each year. Interactive CD-ROM based programmes have enabled
employees learn at their pace.
ECC has always believed in experimentation with and implementation of new ideas. HR
practices such as collaborative performance appraisal, career & succession planning, team rewards
have been institutionalized.
ECC Division has an ongoing organization development programs, which is one of the
longest sustaining OD efforts in India.
Awards for L&T HR Practices
• Asia Pacific HR Conclave Award for the company with “Most Innovative HR practices”
• National award for “Best HRD Practices” from Indian Society for Training and Development
• National Award for Outstanding Work in Human Resource Management from National HRD
Network
• Award for Outstanding Human Resources Development from Confederation of Engineering
Industry
• Integration of Information Technology with HR in ECC Division has been recognized by the
National HRD Network
HR Policy
The basic principles of ECC's Human Resources policies include
51 SRM School of Management
• Recruitment based solely on merit by following well-defined and systematic selection
procedures without discrimination
• Sustain motivated and quality work force through appropriate and fair performance
evaluation, reward and recognition systems
• Identify training needs within the Organization and design and implement those need based
training programmes resulting in continuous up gradation of knowledge, skills and attitudes
of the employees
• Maintain a quality Human Resource Management System to meet the international standards
as per ISO 9001. Plan, design, train, equip and motivate the department staff to meet this
standard of expectation.
TRAINING
ECC's Human Resources Department believes that Quality is the hallmark of any successful
venture.
Quality Training and Development of Human Resources is realized through:
Identifying training needs within the Organization and designing and implementing those need
based training programs to bring about continuous up gradation of knowledge, skills and
employee attitudes
The following brief highlights ECC's training methodology for the comprehensive development of
its 7000-odd employees.
1. Training Plan
Companies succeed in today's free market economy, only because their employees perform to their
fullest potential. Alive to this home truth, ECC draws up an annual training calendar, highlighting
the training activities for the year. Inputs to formulate this training plan are taken from the
performance review form, by interacting with ECC's Regional Offices and the higher echelons of the
52 SRM School of Management
management on the present and future requirements of the construction industry. It also includes
detailed discussions with the faculty.
ECC's training plan includes civil, mechanical, electrical, finance related and behavioural programs,
covering a wide cross-section of employees, as follows:
• A week long Supervisory Development Program and a 10 day Executive Development
Program are designed to provide an exposure to functional management and behavioral skills
to the site based engineers.
• Development of managerial staff is through intensive two-week long programs providing
exposure to holistic understanding of the business, Strategic Planning, Customer
Relationship, Enhancing Shareholder Value, Financial Management.
• For middle management, there is an exclusive nine-day program, designed in collaboration
with Administrative Staff College of India, Hyderabad.
• For top level management, there is an arrangement with Management Development Institute,
Gurgaon to conduct development programs at Company's Management Development Center,
Lonavla
Sustained effort in training has led to creation of highly skilled and motivated employees ready to
take on higher roles and responsibilities in the company.
2. Employee involvement in Training
Line executives and managers involve themselves as faculty for most of the Inhouse Programs.
90% of in house program are conducted by them.
As line mangers have better understanding of the nature of business and the unique problem
associates with the company/industry, they are able to design and deliver effective training sessions
keeping the company's and participant's need in mind.
It has been experienced that the concept of "Learning Organization" is getting effectively rooted in
ECC through the above process.
53 SRM School of Management
3.6 PERFORMANCE APPRAISAL IN L&T ECC (E&GP) OPERATIONS The process followed in L&T for performance appraisal is “review by immediate supervisor”. There are around 36 cadres and 40 business units in E&GP OC. CADRE & NO OF EMPLOYEES IN EACH CADRE
S.NO CADRE_
DESCRIPTION # EMP
S.NO CADRE_
DESCRIPTION # EMP
1 SR.VP 1 20 SR.EXEC.SECRETARY 1
2 M4-B 5 21 EX.SECR. 5
3 M4-A 4 22 SECR-A 1
4 M3-C 15 23 SECR-B 1
5 M3-B 25 24 SR.TO/CO-2 1
6 M3-A 31 25 SR.TO/CO-1 10
7 M2-C 48 26 TO/CO 33
8 M2-B 64 27 ST/SC 62
9 M2-A 80 28 TS/CS 58
10 M1-C 77 29 TA/CA 82
11 M1-B 146 30 DRIVER-II 1
12 M1-A 184 31 DRIVER-I 2
13 O-3 4 32 JR.TA/CA 56
14 O-2 295 33 SR.TECHN. 13
15 CA-1 2 34 TECHN. 15
16 A-1 1 35 CONTRACT 135
17 O-1 479 36 TRAINEE 29
18 S-2 193 37 DET 172
54 SRM School of Management
19 S-1 253 38 GET 129
BUSINESS UNIT DESCRIPTION AND JOB TYPE S.No
BUSINESS_UNIT_
DESCRIPTION
Technical
_Service
S.No
BUSINESS_UNIT_DESCR
IPTION
Technica
l
_Service
1 SR.VPs OF
FICE (E&GP) Technical
19
ELECTRICAL (QUALITY) Technical
2
GULF-COMMON Service
20 EDRC (TRANSMISSION
LINES) Technical
3 E&GP- HR Service 21 GULF- PROCUREMENT Technical
4 TRANS. LINES & RLY.
CONSTN. Technical
22
GULF - FAA Service
5 ELECTRICAL,INSTN.&C
OMM. Technical
23
GULF - QUALITY Technical
6 INDUSTRIAL
ELECTRIFICATION Technical
24 ELECTRICAL
(RESOURCES) Service
7 GULF-INFRA Technical 25 EDRC (SUB STATIONS) Technical
8 RAILWAY
CONSTRUCTION Technical
26 ELECTRICAL
(PROCUREMENT) Technical
9 GULF-RESOURCES Service 27 ELECTRICAL (P&M) Technical
10 SUB STATIONS Technical 28 ELECTRICAL (EHS) Service
11 ELECTRICAL (FAA) Service 29 GULF-RMCI-DUBAI Technical
12
TRANSMISSION LINES Technical
30 EDRC (INDUSTRIAL
ELEC.) Technical
13 GULF (B&UI) Technical 31 GULF - P&M Technical
14
GULF (PT&D) Technical
32 ELECTRICAL
(RISK.MGMT.) Service
15 INTERNATIONAL Service 33 GULF-HR Service
55 SRM School of Management
SERVICES
16 E&GP (IS) Service 34 GULF - IS Service
17 ELECTRICAL
(CIVIL.ENGG.) Technical
35 EDRC (RAILWAY
CONSTRUCTION)
Technical
18 EDRC
(ELECT,INST&COMM.) Technical
HIERARCHY HR DEPARTMENT IN E&GP – OC
Regional offices are at Factories are at
1. Hyderabad 1. Kanchipuram
2. Kolkata 2. Pondicherry
3. Ahmadabad
4. Chennai
5. Bangalore
6. Delhi
THREE LEVELS PERFORMANCE APPRAISAL
SKELETON OF PERFORMANCE APPRAISAL PROCESS APPRAISAL STAGE STAGE 1 Review by site / project manager
SELF- APPRAISAL
UNIT HEAD + HR
IMMEDIATE SUPERVISOR
Submission of Self-appraisal
Form
Recommendation
Discussion with Supervisor+
Business unit Head + HR
Review by Supervisor
VICE PRESIDENT HR
TRAINING & DEVELOPMENT AND
RECRUITMENT
EMPLOYEE CARE
SYSTEMS REGIONAL OPERATIONS
TRAINING & DEVELOPME
RECRUITMENT DOMESTI
C
OVERSEAS
FACTORY OPERATIONS
56 SRM School of Management
STAGE 2 Review by Region head – a Moderate View G meeting is conducted STAGE 3 Review by Business unit Head STAGE 4 Review with the core committee Note: Discussion and moderation are there in stages 2 to 4. ORGANIZATIONAL HIERARCHY OF L&T ECC (E&GP) OC
ENGINEERING & CONSTRUCTION
TRANSMISSION LINES &
INTERNATIONAL OPERATIONS
IE SUB
Regions 1…7
Regions 1…7
Sites 1…n
Sites 1…n
TL RC
Regions 1…7
Sites 1…n
QATAR
ABUDABI
OMAN
Regions 1…7
Sites 1...n
Regions 1…7
Sites 1…n
Regions 1…7
Sites 1…n
L&T ECC E&GP OC
IE - Industrial Electrification
SUB - Substations
TL - Transmission Lines
RC - Railway Construction
APPRAISAL PROCESS IN E&GP – OC Attributes
SELF APPRAISAL IMMEDIATE SUPERIOR
PROJECT MANAGER
REGIONAL PM / SECTOR PM
• Safety
• Leadership & Initiative
• Communication
• Innovation & Creativity
• Planning & Timely completion
• Customer Relations
• Professional competence & Qualification
57 SRM School of Management
BUSINESS UNIT HEAD
CORE COMMITTE
E
.
4. RESEARCH METHODOLOGY
Research Methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically. It contains the study of the
various steps that are generally adopted by a researcher in studying his research problem along with
logic behind them.
4.1 RESEARCH DESIGN:
58 SRM School of Management
A research design is purely and simply the framework or plan of a study that guides the
collection and analysis of data. Generally a research design is a blue print of the research that is to be
followed in completing the study.
Research design type: Descriptive Research – It is the research design that describes the
characteristics of any individual or relevant groups.
4.2 SAMPLING DESIGN:
Population: One Operating Company – E&GP in L&T ECC Ltd.
Sampling Unit: Individual Employees in the organization.
Sample Size: Sample size was restricted to 50 respondents.
Sampling Method: Stratified proportionate random sampling.
Nature Of Data: Primary data as well as secondary data
Method Of Data Collection: Primary data was collected by the Questionnaire survey, Interview with
the personnel of the company. Secondary data was collected with the help of the company records,
annual reports, magazines, company websites etc.
4.3 TOOLS USED FOR ANALYSIS:
The analysis is done using SPSS Inc Statistical Package.
The tools for the statistical analysis consisted of:
∂ Cross Tabulation: Cross tabulation results in tables that reflect the joint distribution of
two or more variables with a limited number of categories or distinct values. It is a merging
of the frequency distribution of two or more variables in a single table.
59 SRM School of Management
∂ Mean: The mean or average value is the most commonly used measure of central tendency.
It is used to estimate the mean when data have been collected using an interval or ratio scale.
The data should display some central tendency, with most of the responses distributed around
the mean.
∂ Percentage Analysis: The percentage analysis is to obtain the number of responses or a
relative occurrence associated with the different values of the variable and is expressed in
percentages.
5. ANALYSIS AND INTERPRETATION
5.1 CROSS TABULATIONS:
Table 1 showing the cross tabulated values between the Designation & the level of
satisfaction towards the present PAS.
Bar cha
INFEREN
Am
5.3% of t
66.7% of
Count
Cadre
Total
art 1
NCE:
mong the M
them are dis
them are sat
02468
1012
Hsa
ManagOfficer Secreta
Managers abo
ssatisfied wi
tisfied, 20%
Highly atisfied
Sa
Cadre * Sati
er
ary
out 63.15% o
ith the curre
of them are
tisfied Nei
Cadre * S
sfaction to pr
4 3 1
1
8
HighlySatisfied S
60
TABLE
of them are
ent performa
e highly satis
ther Dissati
Satisfaction
resent PAS Cr
12
10 8
30
Satisfied S D
Satisfaction to
1
satisfied, 21
ance apprais
sfied and 6.7
isfied
rosstabulation
2 1 4
7
Neitheratisfied nor
Dissatisfied
o present PAS
SRM Sc
1% of them
sal system.
7% of them a
n
1 1 3
5
Dissatisfied
chool of Manag
are highly s
Among the
are dissatisfi
Manager
Officer
Secretary
19 15 16
50
Total
satisfied,
Officer
fied with
agement
61 SRM School of Management
the current PAS. Among the Secretary level employees 50% of them are satisfied, 6.25% are highly
satisfied and 18.7% are dissatisfied with the current PAS.
Thus with regard to the satisfaction towards the current Performance appraisal system,
majority of the respondents (i.e) about 60% of them are satisfied, 16% of them are highly satisfied,
14% of them are neither satisfied nor dissatisfied, 10% of them are dissatisfied.
Table 2 showing the cross tabulated values between the Experience & the level of
Satisfaction towards the present PAS.
TABLE 2
Experience * Satisfaction to present PAS Crosstabulation Count
2 9 1 128 1 9
6 13 6 4 298 30 7 5 50
Less than 3 years6 - 10 years11 years and above
Experience
Total
HighlySatisfied Satisfied
Neithersatisfied nordissatisfied Dissatisfied
Satisfaction to present PAS
Total
Bar chart 2
INFEREN
Am
highly sat
system. A
and 11.1
responden
are satisfi
dissatisfie
Th
appraisal
Table 3
developm
0
2
4
6
8
10
12
14
NCE:
mong the re
tisfied, 75%
Among the re
% of them
nts whose ex
fied and 13.
ed with the c
his implies th
systems are
3 showing
mental nee
highly satisfied
espondents w
of them are
espondents w
m are neithe
xperience is
.8% of them
urrent perfo
hat majority
with the exp
g the cro
eds are met
d satisfied
whose exper
e satisfied, 8
whose experi
er satisfied n
above 11 ye
m are dissa
rmance appr
y of the respo
perience of 1
oss tabulat
t in the pre
neithe
Experience *
62
rience is les
8.3% of them
ience is 6 –
nor dissatisf
ears, 20.7% o
atisfied and
raisal system
ondents who
11 years and
ted values
esent PAS.
r dissati
* Satisfaction
ss than 3 ye
m are dissati
10 years, ab
fied with th
of them are
20.7% of
m.
o are satisfie
d above.
s between
sfied
n
SRM Sc
ears, about 1
isfied with th
out 88.9 % o
he current s
highly satisf
them are n
ed with the c
n the Cad
Less tha
6-10 yea
11 years
chool of Manag
16.7 % of th
he current a
of them are s
system. Am
fied, 44.8%
neither satisf
current Perfo
dres & w
n 3 years
rs
and above
hem are
appraisal
satisfied
mong the
of them
fied nor
ormance
whether
agement
Bar cha
INFEREN
Ab
their deve
% of the
developm
Managers
expressibl
11
Count
Cadre
Total
rt 3
NCE:
bout 23.9% o
elopmental n
e Managers
mental needs
s, 10.5% of
le in the curr
02468
1012
Strongagre
Cadr
ManagOfficer Secreta
of the Mana
needs are ex
, 63.15% o
are express
f the Office
rent PAS.
gly e
Agre
Cad
re * Developm
er ary
agers,15.8 %
xpressible in
of the Offic
sible in the
ers are in t
ee Neith
dre * Develo
mental needs a
5 3 3
11
Strongly agree
Deve
63
TABLE 3
% of the Offic
the current
cers , 70%
current per
the opinion
her Disag
pment need
are expressib
912
7
28
Agree Nn
elopmental nee
cers, 30% of
performanc
of the Se
rformance a
n that their
gree
s
le Crosstabula
4 2
6
Neither agreenor disagree
eds are expres
SRM Sc
f Secretaries
ce appraisal
ecretaries ju
appraisal sys
developmen
Man
Offic
Sec
ation
3 2
5
Disagree
ssible
chool of Manag
, strongly ag
system. Abo
ust agree th
stem. 14.3%
ntal needs
nager
cer
retary
21 19 10
50
Total
gree that
out 42.8
hat their
% of the
are not
agement
64 SRM School of Management
With regard to the criteria that, whether the developmental needs of the respondents are
expressible in the performance appraisal system, about 22% of them strongly agree,56% of them
agree, 12% of them neither agree nor disagree, and 10% of them disagree. This implies that
approximately one half of the respondents agree that their developmental needs are expressible.
Table 4 showing the cross tabulated values between the Cadres & Whether the current
PAS provides a frank discussion between the appraiser and the appraise.
Cadre * Frank Discussion Crosstabulation
Count
4 9 2 2 17 4 10 1 15
9 3 18
6
14 28 6 2 50
Manager Officer Secretary
Cadre
Total
Strongly agree Agree
Neither agreenor disagree Disagree
Frank Discussion
Total
TABLE 4
Bar chart 4
INFEREN
Ab
that a fran
Managers
11.8% of
Th
is carried
system, m
appraisal p
Table 5
appraisa
NCE:
bout 23.5% o
nk discussio
s, 66.7% of t
the Manager
his implies th
d out betwee
majority of
process.
5 showing
l process s
02468
10
Stronagre
of the Mana
on exits dur
the Officers,
rs totally dis
hat although
en the appr
the Officers
the cross
should be d
ngly ee
Agr
C
gers, 26.7%
ring the curr
, 50% of the
sagree to this
h large perce
raiser and th
s disagree.
tabulated
done.
ree Ne
Cadre * Fran
65
of the Offic
rent perform
e Secretaries
s context.
entage of the
he appraise
They expec
d values be
ither Dis
nk discussio
cers ,33.3% o
mance apprai
s, agree that
e respondent
during the
ct a better
etween the
sagree
on
SRM Sc
of the Secret
isal system.
a frank disc
ts agrees tha
current per
exchange o
e Cadres
M
O
S
chool of Manag
taries strong
About 53%
cussion exits
at a frank dis
rformance a
f views dur
& by who
Manager
Officer
Secretary
gly agree
% of the
s. About
scussion
appraisal
ring the
om the
agement
Bar cha
Officers, 4
the Manag
60% of th
superior, H
prefer tha
them prefe
Count
Cadre
Total
rt 5
45.5% of th
gers, 15% of
he Engineers
HOD, Projec
This implie
at the apprai
fer their Imm
ManagOfficer Secreta
02468
1012
Immsu
he Secretarie
f the Officer
s, 54.5% of
ct manager,
s that about
isal process
mediate super
Cadre *
er
ary
mediate perior
es, prefer the
rs, prefer the
the Senior O
Team Leade
t 48% of the
is carried o
riors to appr
Appraiser Cro
7 5 5
17
Immediate Superior
HOD A
Cadre * App
66
TABLE 5
eir immediat
eir HOD’s to
Officers, pre
er).
e responden
out by all to
raise them.
osstabulation
6 3
9
Head Of theDepartment
Appraiser
All above
praiser
te superiors
o be their app
efer that app
ts,(i.e) appro
whom they
1
2
et All the abo
SRM Sc
to be their
praiser. 31.5
praisal is don
oximately o
y are accoun
6 112 26 1
24 5
ove Total
Manage
Officer
Secreta
chool of Manag
INFER
E:
About
of
Mana
% o
appraiser. 3
5% of the Ma
ne by all(Im
ne half of th
ntable. Also
9 0 1 0
er
ary
RENC
t 37%
the
agers,25
of the
1.5% of
anagers,
mmediate
he them
34% of
agement
Table 6
practiced
showing t
d to identif
the cross t
fy the emp
tabulated v
loyee’s po
values of E
tential in n
Experience
new areas.
& Whethher job rotaation is
Bar Cha
INFEREN
Co
– 10 years
that there
05
10152025
art 6
NCE:
onsidering th
s, and 17.2 %
potentials in
Yes
E
TAB
he job rotatio
% of the res
n new areas
No
Experience
BLE 6
on factor, ab
spondents w
are identifie
o
* job rotatio
67
bout 66.7% o
with an exper
ed. But 100%
on
Less th
6 - 10 y
11 year
an 3 years
years
rs and above
of the respon
rience of 11
% of the res
ndents with a
years and a
spondents wi
an experienc
above are of
ith an exper
ce of 6
opinion
rience of
SRM Scchool of Managagement
68 SRM School of Management
less than 3 years, 33.3% of the respondents with an experience of 6 – 10 years, and 82.8% of the
respondents with an experience of 11 years and above feel that job rotation is not practiced to
identify their potentials in new areas.
This implies that majority of the respondents with the experience of 6 – 10 years are given
the opportunity to bring out their knowledge, skills, and ability through job rotation, while majority
of the respondents with an experience of less than 3 years, and greater than 11 years are not provided
with the job rotation facilities.
Table 7 showing the cross tabulated values of Cadres & Percentage of biasing in the
current performance appraisal process.
TABLE 7
Cadre * Percentage of biasing Crosstabulation Count
12 4 16 4 11 1 16
8 18 4
8 31 11 50
Manager Officer Secretary
Cadre
Total
0 % 1 % - 50 % 51 % - 99 %Percentage of biasing
Total
6
Bar chart 7
INFEREN
Ab
the curren
44.5% of
Managers
current pe
Th
are of opin
that favori
5.2 DES
02468
1012
NCE:
bout 25% of
nt performan
f the Secreta
s, 6.25% of
erformance a
his implies th
nion that som
itism is obvi
SCRIPTIV
0%
f the Officers
nce appraisa
aries, feel th
the Officers
appraisal sys
hat majority
me degree o
ious in the cu
VES - MEA
1% -
Cadre * P
s, 22.3% of
al system. W
hat there ar
s, 33.4% of
stem.
of the Mana
f biasing is p
urrent perfor
AN
- 50% 5
Percentage
69
the Secretar
While 75%
re traces of
the Secretar
agers feel th
prevalent, an
rmance appr
51% - 99%
of Biasing
Manager
Officer
Secretary
ries are of op
of the Man
biasing(< 5
ries feel bia
pinion that th
nagers, 68.7
50% ). And
asing is obvi
here is no bi
7% of the O
d about 25%
ious (> 50%
iasing in
Officers,
% of the
%) in the
here is nil bia
nd majority o
raisal system
asing, while
of the Secret
m.
majority of
taries strong
f officers
gly agree
SRM Scchool of Managagement
70 SRM School of Management
5.3 PERCENTAGE ANALYSIS:
Frequency Table
Table 8 showing the descriptive statistics of the factors that are necessary for
appraising the employees.
TABLE 8
From the Mean values exhibited in the above table, we can infer that the respondents are in
the opinion that the above criteria are necessary for appraising the employees. The order of their
preference is as given below:
Bar chart 8
Order of Preference
Quality of work
Qualification
Plan of work
Initiative
Communication
Leadership
Innovation
Speed
Customer Relations
1 Quality of work 94%
2 Qualification 82%
3 Plan of the work 66%
4 Initiative 64%
5 Communication 56%
6 Leadership Qualities 46%
7 Innovation 42%
8 Speed 38%
9 Customer relations 38%
Descriptive Statistics
50 1.00 3.00 1.2200 .5066950 1.00 3.00 1.4200 .6091150 1.00 2.00 1.0600 .2399050 1.00 3.00 1.3600 .5252850 1.00 3.00 1.6600 .62629
50 1.00 3.00 1.7800 .70826
50 1.00 3.00 1.7400 .6642550 1.00 3.00 1.6400 .6627150 1.00 3.00 1.5800 .7309550
Qualification Initiative Quality of workPlan of WorkInnovationRelation with Customers& subordinatesSpeedLeadership Qualities CommunicationValid N (listwise)
N Minimum Maximum Mean Std. Deviation
Table 9 showing thhe percentage of respponse for thhe Descripption of thee present joob:
Bar cha
present j
D
D
Perc
ent
50
40
30
20
10
0
INFEREN
art 9 repr
ob:
Description
Description of the
Challenging
NCE:
resenting t
of the prese
e present job
Interesting
TABLE 9 the percen
ent job
Normal
of the ntage of reesponses ffor the Deescription
71
SRM Scchool of Managagement
W
is interest
responden
Table 1
performa
Bar cha
performa
P
Pe
Perc
ent
70
60
50
40
30
20
10
0
With regard to
ting, 34% of
nts feel that t
10 showin
ance level
art 10 repr
ance level
Performance
erformance level
Good
o the descrip
f them feel it
their job is q
ng the pe
in the com
resenting th
in the com
e level
NeeFair
ption of the p
t is normal,
quite interest
ercentage
mpany:
he percent
mpany:
eds Improvement
72
present job 4
and 18% of
ting.
of respon
TABLE 10 tage of res
48% of the r
f them feel it
nse for th
ponses for
SRM Sc
respondents
t is challeng
he self-de
r the self-d
chool of Manag
feel their job
ging. Majorit
scription
b nature
ty of the
of the
descriptionn of the
agement
INFERENNCE:
Ab
is fair, and
wish to re
bout 66% of
d 22% of the
ender even be
f the respond
em feel they
etter perform
dents feel tha
y need some
mance than w
at their level
improveme
what they giv
of performa
nt. This imp
ve-in presen
ance is good
plies that few
ntly.
d,12% of them
w of the resp
m feel it
pondents
Table 1
present P
11 showing
Performanc
g the perc
ce appraisa
centage of
al system:
f response for the leevel of saatisfaction to the
Bar cha
the prese
art 11 repr
ent Perform
BAR C
S
Sa
Percent
70
60 50
40 30
20 10
0
resenting th
mance appr
CHART 11
atisfactio
TABLE 1he percent
raisal syste
atisfaction t
Highly Satisfie
on to pres
to present P
Neith
Satisfied ed
11 age of resp
em:
73
sent PAS
ponses for
PAS
Diher satisfied no
r the level
ssatisfiedo
SRM Sc
of satisfacction to
chool of Managagement
INFERENNCE:
W
responden
them are
PAS.
Table 12
the curre
Bar cha
satisfacti
Jo
Jo
Percent
120
100
80
60
40
20
0
With regard
nts are highl
dissatisfied.
2 showing
ent apprais
art 12 re
ion, which
ob Satisfa
ob Satisfact
Yes
t
to the leve
ly satisfied,
. This impli
the percen
al system p
TAB
epresenting
h the curren
action
tion
No
el of satisfa
60% of the
ies that majo
ntage of res
provides:
BLE 12
g the perc
nt appraisa
74
action to th
m are satisf
ority of the
sponse for
centage o
al system p
he present a
fied, 14% of
respondent
r the additio
f response
rovides :
SRM Sc
appraisal sy
f them are n
s are satisfi
ystem, 16%
neutral, and
ed with the
of the
10% of
current
onal job saatisfaction,, which
es for thee additionnal job
chool of Managagement
INFERENNCE:
Ab
of additio
fact. From
job satisfa
bove table sh
onal job satis
m this we can
action to the
hows that m
sfaction from
n infer that t
employees.
majority of th
m the curren
the current a
he responden
nt appraisal
appraisal sys
nts (i.e) abou
system. On
stem is effec
ut 96% of the
nly 4% of th
ctive in prov
em get some
hem disagree
viding the ad
e degree
e to this
dditional
Table 13
system f
3 showing
facilitates s
g the perce
self develo
entage of r
pment:
response ffor the factt that the current apppraisal
Bar cha
appraisa
art 13 rep
l system fa
TA
resenting
acilitates se
ABLE 13
the percen
elf develop
ntage of re
pment:
esponse foor the factt that the ccurrent
75
SRM Scchool of Managagement
INFEREN
W
appraisal
that the cu
Table 14
improve
S
S
Per
cent
100
80
60
40
20
0
P
P
Per
cent
0
70
60
50
40
30
20
10
NCE:
With regard to
system assis
urrent apprai
4 showing
the low pe
Self Deve
Self Developm
Yes
Performan
Performance
By advic
o the self d
sts in their d
isal system i
the percen
erformance
elopment
ment
nce level
level Improve
By Trainince
development,
developmen
is appreciabl
ntage of res
e level of t
No
Improvem
ement
By Rules & Reng
76
, about 86%
t. Only 14%
ly effective a
sponse for
the employ
B
p
o
ment
egulatio
% of the resp
% of them di
and facilitate
the organi
yees.
Bar char
ercentage
rganization
SRM Sc
pondents ag
isagree to th
es the self de
izational in
TABLE rt 14 re
of resp
nal initia
chool of Manag
gree that the
his fact. Thi
evelopment.
nitiatives ta
14
current
s shows
aken to
epresenting
ponse fo
atives tak
g the
or the
ken to
agement
improve the low peerformancee level of tthe employyees.
INFERENNCE:
To
training p
feel that t
8% of the
performan
Table 1
rotation
Bar cha
job rotat
o improve t
programs wh
the organizat
em feel that n
nce level.
15 showing
is practice
art 15 repr
tion is prac
the low per
hich the maj
tion gives c
necessary ru
g the perc
d to identi
TABLresenting th
cticed to id
rformance o
ority of the
ounseling or
ules and regu
centage of
fy their po
LE 15 he percent
dentify thei
77
of the empl
respondents
r some advi
ulations are
f response
otential in n
tage of res
r potential
loyees, the
s(i.e) 64% h
ces to impro
framed to he
e from the
new areas.
sponse from
in new are
SRM Sc
organizatio
have opted. A
ove the perf
elp the empl
n provides
About 28%
formance lev
loyees devel
various
of them
vel. And
lop their
e respondeents whethher job
m the resp
eas.
pondents wwhether
chool of Managagement
INFEREN
Jo
Jo
Per
cent
100
80
60
40
20
0
Ab
them agre
majority o
their versa
Table 1
appraisa
Bar cha
current a
NCE:
ob Rotatio
bout 78% of
ee that job r
of the respon
atile potentia
6 showing
l system.
art 16 repr
appraisal sy
ob Rotation
Yes
on
No
f the respond
otation is pr
ndents are de
als.
g the perce
resenting t
ystem.
dents are of
racticed to i
evoid of job
entage of r
opinion that
dentify their
b rotation pra
t job rotation
r potentials
actices, there
n is not prac
in new area
eby they are
cticed. Only
as. This imp
e unable to b
y 22% of
lies that
bring out
response fofor the leveel of biasinng in the ccurrent
the percent
78
TABLE 16
tage of ressponse for the level of biasingg in the
SRM Scchool of Managagement
INFEREN
W
biasing(<
level of b
system. Fr
exits in th
Table 17
Back
Bar chaFeedback
P
Pe
Per
cent
70
60
50
40
30
20
10
0
NCE:
With regard to
50%) is pre
biasing( > 5
rom this we
he current app
7 showing
art 17 repk:
Percentage
ercentage of b
0 %
o the biasing
valent in the
0%), and 1
can infer th
praisal syste
the percen
presenting
e of biasin
biasing
51 % - 50 %
g factor, abo
e current app
6% of them
hat majority
em.
ntage of res
the perce
ng
51 % - 99 %
79
out 62% of
praisal system
m feel that th
of the respo
sponse for
TABLE 17
entage of
the respond
m, while 22%
here is no b
ondents agre
the effect
response
SRM Sc
dents feel th
% of them fe
biasing in th
ee that favori
of negativ
for the ef
chool of Manag
at certain de
eel that there
he current a
itism or subj
ve feed
egree of
e is high
appraisal
jectivity
ffect of neegative
agement
INFEREN
Ab
34% of th
them feel
feedback w
Table 18
Bar cha appraiser
E
E
Percen
70
60
50
40
30
20
10
0
NCE:
bout 62% of
hem feel tha
it leads to
with a positi
8 showing
rt 18 repre
r:
Effect of N
ffect of Neg
TFrustration
t
f the respon
at negative fe
frustration.
ive outlook,
the percen
esenting th
Negative
gative feed
HeTriggers to workn
ndents feel th
feedback trig
This implie
and they con
ntage of res
he percenta
feed bac
back
elps to correct yk hard
80
hat the nega
ggers them t
s that on the
nsider them
sponse for
TABLE 18 age of respo
ck
you
ative feedba
o work even
e whole the
as an opport
choosing t
onse for ch
SRM Sc
ack helps to
n more effic
respondent
tunity to imp
the apprais
hoosing the
chool of Manag
correct them
ciently, whil
s view the n
prove and de
ser:
mselves,
e 4% of
negative
evelop.
e
agement
A
A
Per
cent
50
40
30
20
10
0
Appraiser
INFEREN
Ab
Of the De
48% of th
superior,
appraisers
Table 19
HRD’s T
NCE:
bout 14% of
epartment, w
hem prefer t
peers etc. T
s than confin
9 showing
Training an
Appraiser
HImmediate S
r
uperior
f the respond
while 34% of
that the appr
This implies
ning to a sing
the percen
nd Develop
Head Of the DeAll the above
dents prefer
f them prefe
raisal proces
s that majo
gle person.
ntage of re
pment activ
epartmee
81
r that the app
er their imm
ss is carried
ority of the
esponse for
vities:
TABLE 19
praisal proce
mediate super
d out by all
respondents
ess is carried
riors to be th
including th
s are intere
d out by the
heir appraise
he HOD, Im
sted to hav
eir Head
ers. And
mmediate
ve many
r the level of satisfacction towaards the
SRM Scchool of Managagement
Bar cha
towards
INFEREN
Co
66% of th
neutral an
is doing w
Table 2
performa
Per
cent
70
60
50
40
30
20
10
0
art 19 rep
the HRD’s
NCE:
onsidering th
he responde
nd 8% of the
well regardin
20 showing
ance appra
HRD's T&
HRD's T&D A
Highly Satisfi
presenting
s Training
he Human R
ents are sati
em are dissa
ng the Trainin
g the perc
aisal system
&D Activitie
Activities
NeithSatisfied
ed
the percen
and Devel
Resource De
sfied, 16%
atisfied. This
ng & Develo
centage of
m:
es
Dissaer satisfied no
82
ntage of re
lopment ac
epartment’s
of them are
s implies tha
opment activ
f response
atisfied
esponse fo
ctivities:
Training &
e highly sat
at majority o
vities.
for the s
SRM Sc
or the leve
& Developme
tisfied, while
of the respon
significanc
chool of Manag
el of satis
ent activitie
e 10% of th
ndents feel th
ce of the c
faction
s, about
hem are
he HRD
current
agement
83 SRM School of Management
TABLE 20
Bar chart 20 representing the percentage of response for the significance of the
current performance appraisal system:
INFERENCE:
Identification of Employee potential
Significance of PAS
Significance of PAS
All the above Identification of Training needs Promotion
Percent
40
30
20
10
0
About 34% of the respondents feel that the current appraisal system is carried out to identify
the employee’s potential, 32% of them feel that it is to identify the training needs, 12% of them feel
that it is to provide promotions, and 22% of them feel that it is to serve all the above purposes.
84 SRM School of Management
6. FINDINGS AND INFERENCES
The current appraisal system is effective to a high degree, and majority of the employees are
satisfied with the appraisal system.
Identification of training and development needs through appraisal process is found to be
good.
HR department’s activities towards the performance enhancement of the employees are
appreciably great.
During the appraisal process a frank discussion is carried out between the appraiser and the
apraisee.
Majority of the employees prefer the appraisal system to be carried out by the group
consisting of immediate superiors, HOD/Manager, peers etc.
Almost all the respondents prefer the criteria like Quality of work, qualification and plan of
work etc are found to be effective in the appraisal system process to evaluate their
performance.
The company takes initiative to improve the low performance of the employees mainly
through training programs.
Job rotation is not emphasized well in the current performance appraisal process.
Majority of the employees insist to adapt 360 degree appraisal system.
The current performance appraisal system does not provide scope for communicating overall
business goals.
No periodic orientation of programs on performance appraisal is conducted.
85 SRM School of Management
7. RECOMMENDATIONS AND SUGGESTIONS
» Individual Performance objectives can be set during the beginning of every year.
» There can be a monthly review of individual/team objectives.
» Online Appraisal system can be adapted to make the process faster and more effective.
» Appraisal process can be carried out by obtaining the performance feedback of the
employees from all including immediate superiors, HOD and peers.
» Performance Appraisal system should be made more transparent.
» The company can gradually adapt to 360 degree feedback for the appraisal process to be
even more effective.
» Constant attention, continuous effort to take corrective measures can be emphasized in the
appraisal system.
» HRM/HRD/personnel department can consider the results of Performance Appraisal System
for career planning and development of the employees.
» Orientation programs can be organized before conducting Performance Appraisal System.
» Time limit can be scheduled for each and every step involved in the performance appraisal
process.
» There should be a performance feedback session, so that the employees can be more effective
in their future work.
» Superiors can be even more unbiased, employees can work thoroughly on self appraisal and
these can be continued in future for the continuous improvement of the organization.
86 SRM School of Management
8. CONCLUSION
A Larsen and Tubro group company is well diversified at many locations. They are
succeeding from their existence because of the efforts and contribution of the management and the
employees towards the organization.
ECC strongly believes that to be in business, up gradation of employees' knowledge and
skills are essential. Hence investment in Human Resources is one of the top priorities of the
Management.
From this study it is concluded that the effectiveness of the current performance Appraisal
system in the organization is high. The organization feels that appraisal system is a motivating tool
to the employees and follows it in order to get the maximum output from the employees. Though
there is a very small amount of dissatisfaction shown towards the appraisal system, it can be
completely eradicated by making some innovative modifications.
All these efforts and hard work of the management as well as each an every employee is the
secret behind the success of the enterprise.
87 SRM School of Management
A STUDY ON PERFORMANCE APPRAISAL SYSTEM OF L&T ECC
E&GP.
QUESTIONNAIRE Dear Respondents,
Your sincere feedback through this questionnaire will be beneficial to improve the Performance Appraisal System at L&T ECC. And your kind Cooperation will help me complete my project in time. I – GENERAL INFORMATION 1. Name (optional): 2. Gender : a) Male [ ] b) Female [ ] 3. Age : a) Below 25 years [ ] b) 26 – 35 years [ ] c) 36 -45 years [ ] d) 46 – 55 years [ ] e) Above 55 years [ ] 4. Cadre: a) Managerial level [ ] b) Officer level [ ] c) Secretary level [ ] 5. Designation: ----------------------------------- 6. Experience : a) Less than 3 years [ ] b) 3- 5 years [ ] c) 6 – 10 years [ ] d) 11 years and above [ ]
88 SRM School of Management
II – STUDY RELATED INFORMATION 1. How do you describe your present job? a) Challenging [ ] b) Interesting [ ] c) Normal [ ] 2. Describe your performance level in your company: a) Good [ ] b) Fair [ ] c) Needs improvement [ ] 3. a) Are you satisfied with the present appraisal system followed in your organization? a) Highly Satisfied [ ] b) Satisfied [ ] c) Neither satisfied nor dissatisfied [ ] d) Dissatisfied [ ] e) Highly Dissatisfied [ ]
b) Give Reason
4. a) What in your opinion should be the time period of conducting continuous Appraisal?
a) Quarterly [ ] b) Half Yearly [ ] c) Yearly [ ]
b) Any specific reason
5. a) Does the performance appraisal gives an additional job satisfaction to you? a) Yes [ ] b) No [ ] b) If yes, at what level it gives an additional job satisfaction:- a) Very high level [ ] b) High level [ ] c) Moderate [ ] d) Low level [ ] e) Very low level [ ] 6. a) Does the performance appraisal system facilitate to increase your self development? a) Yes [ ] b) No [ ] b) If yes, at what level the performance system is helpful for your self-development? a) Very high level [ ] b) High level [ ] c) Moderate level [ ] d) Low level [ ] e) Very Low level [ ]
89 SRM School of Management
7. a) What is your opinion on being rated in the following attributes for your performance appraisal?
Attributes
Strongly Agree
Agree
Neither
Disagree
Strongly Disagree
a. b. c. d. e. f. g. h. i.
Professional competence & Qualification Customer relations Planning monitoring & timely completion Innovation & Creativity Leadership Initiative Communication Speed Quality of work
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
b) What other Attributes do you think are necessary for evaluating Performance appraisal?
90 SRM School of Management
8.” Current Appraisal system provides a frank discussion between you and the appraiser” a) Strongly Agree [ ] b) Agree [ ] c) Neither Agree nor Disagree [ ] d) Disagree [ ] e) Strongly Disagree [ ] 9.” Current Appraisal system allows you to express your developmental needs”
a) Strongly Agree [ ] b) Agree [ ] c) Neither Agree nor Disagree [ ] d) Disagree [ ] e) Strongly Disagree [ ]
10. At low performance level, how does your organization improve the performance level of the employee?
a) By advice [ ] b) By training [ ] c) By de-promotion [ ] d) by rules & regulations [ ]
11. Is Job Rotation practiced in order to identify your potential in new areas of the job? a) Yes [ ] b) No [ ]
12. What percentage of biasing is there in the current performance appraisal system? a) 0% [ ] b) 1% - 50% [ ] c) 51% - 99% [ ] d) 100% [ ] 13.a) What is the effect of Negative feedback on your performance? a) Frustration [ ] b) Triggers to work hard [ ] c) Helps you to correct yourself [ ] b) If any other, Specify 14. Appraisal should be done by;
a) Immediate Superior[ ] b)Team Leader[ ] c) Project manager [ ] d) Head of the Department [ ] e) All the above [ ]
91 SRM School of Management
15. According to you, Performance Appraisal in your organization is for; a) Promotion [ ] b) Identification of the employee’s potential [ ] c) Transfer [ ] d) Identification of Training needs [ ] e) All the above [ ]
16. What would be your key objectives for the next 6 months? a. b. c. 17. Explain the Agenda (your plan) for meeting your desired objectives.
18. Training and Development activities by HRD is
a) Highly satisfied [ ] b) Satisfied [ ] c) Neither satisfied nor dissatisfied [ ] d) Dissatisfied [ ] e) Highly Dissatisfied [ ] 19. What is your opinion, if the organization adapts 360 degree appraisal?
20. Give your suggestions to improve the performance appraisal system of your organization.
92 SRM School of Management
THANK YOU!!!
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