2348. Perforamnce Appaisal Process at Vodafone [Hr]

A SUMMER TRAINING REPORT

ONSTUDY OF PERFORMANCE APPRAISAL

SYSTEM AT

VODAFONE

Summer Training Project Report Submitted Towards The Partial Fulfillment For Award Of The Degree Of Bachelors of Business Administration

(2007-2010)

UNDER THE GUIDANCE OFMR. RAJESH KUMAR

Manager (Trg.)

Submitted To Submitted By

HOD – BBA DEPTT. SHIKHA GUPTARoll no.: 9071571BBA – 6th Sem

HINDUSTAN ACADEMY OF EDUCATIONAL RESEARCH TRAINING

GREATER NOIDA

1

DECLARATION

This is to certify that present thesis titled “Study of Performance Appraisal

System at Vodafone” is based on original research and has not been submitted

in part or whole for any diploma or degree of any university. The works of

other authors, wherever they have been made use of in this study, have been

duly acknowledged at relevant places.

(SHIKHA GUPTA)

2

ACKNOWLEDGEMENT

One of the most pleasant aspects of writing an acknowledgement is the opportunity to

thank all those who have contributed to it. Unfortunately, the list of expression of

gratitude- no matter how extensive – is always incomplete and inadequate. This

acknowledgement is no exception.

First of all, I wish to express my sincere gratitude to Faculty Guide, HAERT,

Greataer Noida, for giving me opportunity to do research under her profound

guidance. Because of her inspiring guidance, motivation, positive criticism,

continuous encouragement and untiring supervision this work could be brought to its

present shape.

I would like to thank all of them who in one way or the other have helped me.

SHIKHA GUPTA

3

PREFACE

This project will accomplish to understand how the people interact with

technology savy products and if they are ready for doing all the trading

through net. The project also helps in understanding the trend of the

scripts of the particular sector in different market condition.

To maintain and cope up with the growing competition from the various

online trading providers, Vodafone needs to find potential clients, also

the new investors and satisfy there needs.

The Broad objective of the project is to equipped the trainees with all

the quality which is essential to face any circumstances which can arise

while providing

All these steps help me to understand how to cope up with different

types of people and there diversified need and satisfaction level.

4

CONTENTS

Chapter 1: Introduction

Chapter 2: Objective and Methodology of the Study

Chapter 3: Organization Profile

Chapter 4: Performance Appraisal- Theoretical Review

Chapter 5: Performance Appraisal System in

Vodafone.

Chapter 6: Analysis and Interpretation of Data

Chapter 7: Conclusion and Suggestions

Annexure

5

CHAPTER 1

INTRODUCTION

6

CHAPTER 1

TITLE OF THE PROJECT:

Study of Performance Appraisal System

and Its

Effectiveness in an Organization

INTRODUCTION

The history of performance appraisal is quite brief.

Its roots in the early 20th century can be traced to Taylor's

pioneering Time and Motion studies. But this is not very helpful,

for the same may be said about almost everything in the field of

modern human resources management.

As a distinct and formal management procedure used in the

evaluation of work performance, appraisal really dates from the

time of the Second World War -not more than 60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient

art. In the scale of things historical, it might well lay claim to

being the world's second oldest profession!

There is, says Dulewicz (1989), "... a basic human tendency to

make judgements about those one is working with, as well as about

7

oneself." Appraisal, it seems, is both inevitable and universal. In

the absence of a carefully structured system of appraisal, people

will tend to judge the work performance of others, including

subordinates, naturally, informally and arbitrarily.

The human inclination to judge can create serious motivational,

ethical and legal problems in the workplace. Without a structured

appraisal system, there is little chance of ensuring that the

judgements made will be lawful, fair, defensible and accurate.

Performance appraisal systems began as simple methods of

income justification. That is, appraisal was used to decide whether

or not the salary or wage of an individual employee was justified.

The process was firmly linked to material outcomes. If an

employee's performance was found to be less than ideal, a cut in

pay would follow. On the other hand, if their performance was

better than the supervisor expected, a pay rise was in order.

Little consideration, if any, was given to the developmental

possibilities of appraisal. If was felt that a cut in pay, or a rise,

should provide the only required impetus for an employee to

either improve or continue to perform well.

Sometimes this basic system succeeded in getting the results that

were intended; but more often than not, it failed.

8

For example, early motivational researchers were aware that

different people with roughly equal work abilities could be paid

the same amount of money and yet have quite different levels of

motivation and performance.

These observations were confirmed in empirical studies. Pay rates

were important, yes; but they were not the only element that had

an impact on employee performance. It was found that other

issues, such as morale and self-esteem, could also have a major

influence.

As a result, the traditional emphasis on reward outcomes was

progressively rejected. In the 1950s in the United States, the

potential usefulness of appraisal as tool for motivation and

development was gradually recognized. The general model of

performance appraisal, as it is known today, began from that time.

9

Modern 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 in which the

work performance of the subordinate is examined and discussed,

with a view to identifying weaknesses and strengths as well as

opportunities for improvement and skills development.

In many organizations -but not all -appraisal results are used,

either directly or indirectly, to help determine reward outcomes.

That is, the appraisal results are used to identify the better

performing employees who should get the majority of available

merit pay increases, bonuses and promotions.

By the same token, appraisal results are used to identify the

poorer performers who may require some form of counseling, or

in extreme cases, demotion, dismissal or decreases in pay.

(Organizations need to be aware of laws in their country that

might restrict their capacity to dismiss employees or decrease

pay.)

Whether this is an appropriate use of performance appraisal -the

assignment and justification of rewards and penalties -is a very

uncertain and contentious matter.

10

Controversy, Controversy

Few issues in management stir up more controversy than

performance appraisal.

There are many reputable sources -researchers, management

commentators, psychometricians -who have expressed doubts

about the validity and reliability of the performance appraisal

process. Some have even suggested that the process is so

inherently flawed that it may be impossible to perfect it (see

Derven, 1990, for example). At the other extreme, there are many

strong advocates of performance appraisal. Some view it as

potentially "... the most crucial aspect of organizational life"

(Lawrie, 1990).

Between these two extremes lie various schools of belief. While

all endorse the use of performance appraisal, there are many

different opinions on how and when to apply it,

There are those, for instance, who believe that performance

appraisal has many important employee development uses, but

scorn any attempt to link the process to reward outcomes -such as

pay rises and promotions. This group believes that the linkage to

reward outcomes reduces or eliminates the developmental value

of appraisals. Rather than an opportunity for constructive review

and encouragement, the reward- linked process is perceived as

11

judgmental, punitive and harrowing. For example, how many

people would gladly admit their work problems if, at the same

time, they knew that their next pay rise or a much-wanted

promotion was riding on an appraisal result? Very likely, in that

situation, many people would deny or downplay their weaknesses.

Nor is the desire to distort or deny the truth confined to the

person being appraised. Many appraisers feel uncomfortable with

the combined role of judge and executioner.

Such reluctance is not difficult to understand. Appraisers often

know their appraisees well, and are typically in a direct

subordinate-supervisor relationship. They work together on a

daily basis and may, at times, mix socially. Suggesting that a

subordinate needs to brush up on certain work skills is one thing;

giving an appraisal result that has the direct effect of negating a

promotion is another.

The result can be resentment and serious morale damage, leading

to workplace disruption, soured relationships and productivity

declines.

On the other hand, there is a strong rival argument which claims

that performance appraisal must unequivocally be linked to

reward outcomes. The advocates of this approach say that

organizations must have a process by which rewards -which are

12

not an unlimited resource -may be openly and fairly distributed to

those most deserving on the basis of merit, effort and results.

There is a critical need for remunerative justice in organizations.

Performance appraisal -whatever its practical flaws -is the only

process available to help achieve fair, decent and consistent

reward outcomes. It has also been claimed that appraisees

themselves are inclined to believe that appraisal results should be

linked directly to reward outcomes -and are suspicious and

disappointed when told this is not the case. Rather than feeling

relieved; appraisees may suspect that they are not being told the

whole truth, or that the appraisal process is a sham and waste of

time.

The Link to Rewards

Recent research (Bannister & Balkin, 1990) has reported that

appraisees seem to have greater acceptance of the appraisal

process, and feel more satisfied with it, when the process is

directly linked to rewards. Such findings are a serious challenge

to those who feel that appraisal results and reward outcomes must

be strictly isolated from each other. There is also a group who

argues that the evaluation of employees for reward purposes, and

frank communication with them about their performance, are part

13

of the basic responsibilities of management. The practice of not

discussing reward issues while appraising performance is, say

critics, based on inconsistent and muddled ideas of motivation.

In many organizations, this inconsistency is aggravated by the

practice of having separate wage and salary reviews, in which

merit rises and bonuses are decided arbitrarily, and often

secretly, by supervisors and managers.

There are basically three purposes to which performance appraisal

can be put. First, it can be used as a basis for reward allocation.

Decision as to who gets salary increase, promotion, and other

rewards are determined by their performance evaluation. Second,

these appraisals can be used for identifying areas where

development efforts are needed. The performance appraisal is a

major tool for identifying deficiencies in individuals. Finally it

can be used as a criterion against which selection devices and

development programs are validated. As a key input into

management's reward and punishment decision, performance

appraisals can motivate or de-motivate employees.

14

Three different approaches exist for doing appraisals. Employees

can be appraised against

1. Absolute

standards

2. Relative

standards

3. Objectives

15

PERFORMANCE MANAGEMENT

Since organisations exits to achieve goals, the degree of success

that individual employees have in reaching their individual goals

is important in determining organisation effectiveness.

Performance system is fundamentally, a feed back process, which

require sustained commitment. The cost of failure to provide such

feedback may result in a loss of key professional employees, the

continued poor performance of employees who are not meeting

performance standards and a loss of commitment by employees, in

sum, the myth that the employee know what. they are doing

without adequate feedback from management can be an expensive

fantasy.

16

THE APPRAISAL PROCESS

1. Establishing Performance Standard

2. Communicate Performance expectations to employees

3. Measure actual performance

4. Compare actual performance with standards

5. Discussion with the employees and identification

development programs to bridge the gap.

6. Initiate action

17

THE PURPOSE OF APPRAISING PERFORMANCE

In general the appraisal systems serve a two fold purpose

1. To improve the work performance of employees by helping

them realize and use their full potential in carrying out their

firms mission.

2. To provide information to employees and managers for use

in making , work related decisions.

More specifically appraisals serve the following purposes.

a) Appraisals provide feedback to employees and help the. "'

management identify the areas where development efforts are

"' needed to bridge the gaps thereby serving as vehicles for

personal " and career development.

b) It helps management spot individuals who have specific

skills so that their promotions/transfer are in line with

organizational requirements.

c) Appraisal serve as a key input for administering a formal

organisation reward and punishment system.

d) The performance system can be used as a criterion against

which selection devices and development programs are

validated.

18

REQUIREMENT OF THE PERFORMANCE MANAGEMENT

SYSTEM.

Reliability: The foremost requirement of a sound system is

reliability. In this contact it refers to consistency of judgement.

For any given employee, appraisals made by raters working

independently of one another should agree closely. But raters

with different perspective (e.g. supervisors, peers, subordinates)

may see the same individuals job performance very differently.

To provide reliable data, each rater must have an adequate

opportunity to observe what the employee has done and the

condition under which he or she has done it. By making appraisal

system relevant, sensitive and reliable we assume the resulting

judgement are valid as well.

19

Acceptability: In practice, acceptability is the most important

requirement of all, for it is true that human resources program

must have the support of. those who will use them.

Unfortunately, many organisations do not put much effort into

garnering the front end support and participation of those who

will use the appraisal system. Ultimately it is management's

responsibility to define as clearly as possible the type and level

of job behaviour desired of employees.

It is important to enlist the active support and cooperation of

subordinates by making explicit what aspects of job performance

they will be evaluated on.

Practicality: This implies that appraisal instruments are easy for

managers and employees to understand and to use.

For years, personnel specialists have searched for the 'Perfect;

appraisal method as if it were some kind of miraculous cure for

many pitfalls that plague organisations. Such a method does not

exist. In tommorrow's world of work far more emphasis needs to

be placed on process issues. Factors such as timing and

frequency are no less important. In sum performance appraisal is

a dialogue involving people and data. Both technical and human

issues are involved. Neither can be overemphasized at the

expense of the other.

20

WHO SHOULD EVALUATE PERFORMANCE?

The most fundamental requirement for any rater is that he or she

has an . adequate opportunity to observe the rates job performance

over a reasonable period of time. This suggest several possible

raters.

The immediate supervisor: Generally appraisal is done by this

person. He is probably the most familiar with the individual's

performance and in most jobs has had the best opportunity to

observe actual job performance. Further more, the immediate

supervisor is probably best able to relate the individual's

performings to department and organisationalobjectives.

In some jobs such as outside sales, law enforcement and

teaching, the immediate supervisor may observe a subordinate's

actual job performance rarely (and indirectly thru written

reports). Here judgement of peers play important role. However,

there is a danger of potential bias.

Subordinates: Appraisal by subordinates can be useful input to the

immediate development. Subordinates know first hand the extent

to which the supervisor actually delegates, how well he

communicates, the type of leadership he has and the extent to

which he or she plans and orgamses.

21

Self appraisal: On one hand it improves the rate's motivation and

moral, on the other it tends to be more lenient, less variable and

biased. The evidence on the accuracy of self assessment is fairly

complex.

In industry it is seen that feed back/ input is taken from various

sources -Peers, subordinates, superiors etc. Some companies have

gone step ahead in taking feedback from the customers and

integrating it into the performance management process.

22

APPROACHES TO PERFORMANCE MANAGEMENT

The traditional approach: The one dimensional model

The Job Define what results Performance contact

have to e achieved

Define a set of key

objectives against the

accountabilities

Accountabilities i.e,

output

Review performance

against the key

objectives

In this model job expectations are defined in terms of what results

have to be achieved. This model doesn't have a long term focus

and can't be used for employee development and career path

planning,

23

A satisfactory performance implies doing a job effectively and

efficiently, with a minimum degree of employee -created

disruptions. Employees are performing well when they are

productive. Yet productivity itself implies both concern for

effectiveness and efficiency. Effectiveness refers to goal

accomplishment. Efficiency evaluates the ratio of inputs consumed

to outputs achieved. The greater the output for a given input, the

more efficient the employees. Similarly, if output is a given,

consumed to get that output results in greater efficiency.

There are basically three purposes to which performance appraisal

can be put. First, it can be used as a basis for reward allocations.

Decisions as to who gets salary increases, promotions, and other

rewards are determined by their performance evaluation. Second,

these appraisals can be used for identifying areas where

development efforts are needed. Management needs to spot those

individuals who have specific skill or knowledge deficiencies. The

performance appraisal is a major tool for identifying these

deficiencies. Finally, the performance appraisal can be used as a

criterion against which selection devices and development

programs are validated.

24

Chapter 2

OBJECTIVE AND

METHODOLOGY OF THE

STUDY

25

Chapter 2

OBJECTIVE AND METHODOLOGY OF THE

STUDY

1. Objective of the study

This project aims at studying the system of performance appraisal

and its effectiveness in an organisation. Performance appraisal is

the most significant and indispensable tool for the management as

it provide useful information for decision making in area of

promotion and compensation reviews.

Thus broad objectives of the study includes:

To know the present system of performance appraisal

To know the extent of effectiveness of the appraisal system

To identify and know the area for improvement system

2. Sample of the study

The population covered for the present study consisted of

employee belonging to supervisory and the level above. For the

purpose of this study, survey covered the employee of

VODAFONE falling under supervisor and the level above.

26

The study covered a sample of 100 employee belonging to

supervisory level and above.

3. Methodology of the project

The project work has been carried out in three stages, a structured

questionnaire with objective and question was communicated

tested and finalise. During the second stage, the questionnaire was

administered to the employees at Vodafone. by contacting them.

The work relating to data entry compilation, data analysis and

report writing constituted the third stage. Interview index was

also used at some places to get information on the project subject.

The details of the methodology adopted are presented below:

The Questionnaire

Keeping in view the objective of the study, questionnaire was

designed and tested on few employees. After getting the proper

response and sanction from the concerned department the

questionnaire was finalised.

Response to Questionnaire

In all 96 questionnaire were given to employees falling in the

27

category of supervisors and above. Out of which 48 could be

collected back duly completed. The researcher individually

contacted the employees to get response on the questionnaire.

Data entry and analysis

It has been an uphill task to enter the enormous data received

through the questionnaire which consisted nearly 20 questions.

Resgonse to the descriptive questions though very few but was

valuable for the purpose of study. Hence these were further

structured in time with the system adopted for compilation and

data analysis.

Limitations

Many employees gave guarded answers to some crucial questions.

Some of them did not fill the questionnaire due to lack of time

Response could not be collected from the total sample selected.

Some of the questionnaire could not be completed due to reasons

other than time factor. The confidentiality of the system created

some problem in getting information.

28

Chapter 3

ORGANISATION

PROFILE

29

Chapter 3

ORGANISATION PROFILE

.

Vodafone over the years

As Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc.

Then known Racal Telecom Limited, approximately 20% of the company's

capital was offered to the public in October 1988. It was fully demerged from

Racal Electronics Plc and became an independent company in September

1991, at which time it changed its name to Vodafone Group Plc.

Following its merger with Air Touch Communications, Inc. (‘Air Touch’), we

changed our name to Vodafone Air Touch Plc on 29 June 1999 and, following

approval by the shareholders in General Meeting, reverted to our former

name, Vodafone Group Plc, on 28 July 2000.

Key milestones in the development of Vodafone can be found in the following

sections, organized by year:

2007

Vodafone agrees to acquire Tele2 Italia SpA and Tele2 Telecommunication

Services SLU from Tele2 AB Group. (October)

Vodafone announces completion of the acquisition of Hutch Essar from

Hutchison Telecommunications International Limited. (May)

30

Safaricom, Vodafone’s partner in Kenya announces the launch of M-PESA,

an innovative new mobile payment solution that enables customers to

complete simple financial transactions by mobile phone. (February)

Vodafone agrees to buy a controlling interest in Hutchison Essar Limited, a

leading operator in the fast growing Indian mobile market, (February)

Vodafone announces agreements with both Microsoft and Yahoo! to bring

seamless Instant Messaging (IM) services to the mobile which can be

accessed from both the PC and mobile handsets. (February)

Vodafone signs a series of ground-breaking agreements which will lead to the

mobilizing of the internet.  You Tube agrees to offer Vodafone customers

specially rendered You Tube pages on their mobile phones. With Google,

Vodafone announces its intention to develop a location-based version of

Google Maps for. With eBay, Vodafone announces it is to offer the new eBay

mobile service to customers, With MySpace.com Vodafone announces an

exclusive partnership to offer Vodafone customers a My Space experience via

their mobile phones. (February).

Vodafone reaches 200 million customers (January)

2006

Sale of 25% stake in Switzerland's Swiss COM (December)

Sale of 25% stake in Belgium's Proximus. (August)

The number of Vodafone lives! Customers with 3G reached 10 million in

March 2006.

We acquired Telsim Mobil Telekomunikasyon Hostetler (Turkey) in May 2006.

Launch of mobile TV capability and Vodafone Radio DJ, which offers a

personalized, interactive radio service streamed to 3G phones and PCs.

3G broadband through HSDPA launched offering faster than 3G speeds.

Japan business sold to Softbank.

31

‘Make the most of now’ global marketing campaign launched.

Sir John Bond succeeds Lord MacLaurin as Chairman.

2005

We completed the acquisition of MobiFon S.A. (Romania) and Oscar Mobile

a.c. (Czech Republic) (May).

Launch of Vodafone Simply, a new easy-to-use service for customers who

want to use voice and text services with minimum complexity (May).

Introduction of Vodafone Passport, a voice roaming price plan that provides

customers with greater price clarity when using mobile voice services abroad

(May).

2004

We launched our first 3G service in Europe with Vodafone Mobile Connect

3G/GPRS data card.

We have 14 Partner Networks with new agreements in Cyprus, Hong Kong

and Luxembourg.

Vodafone live! with 3G launched in 13 markets (November).

2003

At the GSM Association Awards Ceremony in Cannes, France, we won the

mobile industry's most prestigious awards in two categories, Best Consumer

Wireless Application or Service and Best Television or Broadcast Commercial

for its global consumer service, Vodafone live! Our premium handset for

Vodafone live!, the Sharp GX10, won the Best Wireless Handset Award for

the Sharp Corporation.

Vodafone live! attracts 1 million customers in its first six months.

Verizon Wireless and Vodafone co-operate on laptop e-mail, internet and

corporate applications access for the US and Europe.

Arums Sarin succeeds Sir Christopher Gent as Chief Executive.

32

2002

We trial our global mobile payment system in the UK, Italy and Germany. The

trial enables customers to purchase physical and digital goods using their

mobile phone.

We launch the first commercial European GPRS roaming service. Customers

are able to seamlessly access services such as corporate e-mail, intranet and

personalized information on their mobile phones, laptops or PDAs over

GPRS.

The Vodafone Group Foundation is launched, with plans to contribute £20

million to community programmers, guided by the Group Social Investment

Policy.

In October, we announce the launch of Vodafone live!, a new consumer

proposition, and Mobile Office, a new business proposition. In November,

Vodafone Remote Access is launched as part of Mobile Office. The service

gives business customers an easy way to connect to their corporate LAN to

access e-mail, calendar and other business specific applications whilst on the

move.

2001

We acquire Ireland's leading mobile communications company, Eircell.

Vodafone and China Mobile (Hong Kong) ltd (CHMK) sign a 'strategic alliance

agreement'.

The Group completes the acquisition of a 25% stake in Swisscom Mobile.

We introduce instant messaging to our networks, a faster and more efficient

way to communicate using text messages via SMS or WAP.

First global communications campaign launched in August. The campaign

features TV, cinema, print, online and outdoor media, each version asking the

question, 'How are you?'.

33

First Vodafone Partner Agreement with TDC Mobil A/S, Denmark's leading

mobile operator. The agreement is the first of its kind in the mobile industry

and means Vodafone and TDC Mobil will cooperate in developing, marketing

and advertising international roaming products and services to international

travellers and corporate customers.

We make the word's first 3G roaming call (between Spain and Japan).

2000

On 4 February, terms are agreed with the Supervisory Board of Mannesmann

by which Mannesmann would become a part of the Vodafone community. The

transaction almost doubles the size of the Vodafone Group.

The agreement to acquire Mannesmann AG receives European Commission

clearance on 12 April 2000.

Verizon Wireless is launched in May, the combination of Vodafone AirTouch's

and Bell Atlantic's US cellular, PCS and paging assets.

Vodafone Essar is a cellular operator in India that covers16 telecom circles in

India .the name of the company ,the marketing brand used is simply Vodafone

.its offers both prepaid postpaid GSM cellular phone coverage through out

India and is especially strong in the metros. Vodafone Essar provides 2G

services based on 900Mhz and 1800Mhz digital GSM technology ,offering

voices and data services in 16 of the countries 23 license .the company is

often praised for its aware winning advertisement which all follow a

clean ,minimalist look .Sep 19 2007;Vodafone the world leading international

mobile communication company has fully arrived in India .Vodafone Essar

announced today that the Vodafone brand will be launched in India from 21st

sep onward .The popular and endearing brand ,Hutch will be transitioned to

Vodafone across India .this marked a significant chapter in the evolution of

Vodafone as a dynamic and ever growing brand .Vodafone the world leading

mobile tel Essar in may 2007 &company was formally renamed Vodafone

Essar in July 2007 .Asim Ghosh , Managing Director of Vodafone. Vodafone

group ‘s communication company completed the acquisition of Hutch Arun

34

Sarin is visiting in India even as the British operator bid for a majority stake in

India mobile services operator Hutchison Essar has run into tough competition

Vodafone Essar is owned by Vodafone 67%Essar group 33%.on 11feb 2007

Vodafone agreed to acquired the controlling interest of 67% held by

CheungKong holding in hutch Essar for US$11.1 billion, piping Reliance

communication, Hinduga group and Essar group, which is the owner of the

remaining 33%.the whole company was valued at U S D 18.8 billion .the

transaction closed on 8 may 2007

In December 2006 Hutch Essar re launched the “Hutch” brand nation

wide ,consolidating its services under a single identity .the companioned into

agreement with NTT Do Co Mo to launch i-mode mobile internet service in

India during 2007 .the company used to be named Hutchison Essar ,reflecting

the of its previous owner ,Hutchison .the brand was marketed as Hutch .after

getting the necessary government approvals with regard to the acquisition of

a majority by the Vodafone group .The company was rebranded as Vodafone

Essar.

Vodafone have both Prepaid& Postpaid &have a15.36 million subscribers and

17.04% market. share in India and operator 16 circle

35

Chapter 4

PERFORMANCE

APPRAISAL

36

Chapter 4

PERFORMANCE APPRAISAL

Since organisation exist to achieve goals, the degree of success

that individual employees have in reaching their individuals goals

is important in determining organizational effectiveness. The

assessment of how successful employees have been at meeting

their individual goals, therefore, becomes a critical part of HRM.

This leads us to the topic of performance appraisal.

PURPOSE

There are basically three purposes to which performance

appraisal can be put.

First, it can be used as a basis for reward allocations.

Decisions as to who gets salary jncreases, promotions, and

other rewards are determined by their performance

evaluation.

Second, these appraisals can be used for identifying areas

where development efforts are needed. Management needs

to spot those individuals who have specific skill or

knowledge deficiencies. The performance appraisals is a

major tool for identifying these deficiencies.

37

Finally the performance appraisal can be used as a criterion

against which selection devices and development programs

are validated. It is one thing to say, for example, that our

selection process is successful in differentiating

satisfactory performers from unsatisfactory performers.

38

HE APPRAISAL PROCESS

Established performance standard

Communicate performance expectations to employee

Measure actual performance

Compare actual performance with standards

Discuss the appraisal with the employees.

If necessary, initiate the corrective action

The appraisal process begins with the establishment of

performance standards. These should have evolved out of job

analysis and the job description discussed under human resource

planning. These performance standards should also be clear and

objective enough to be understood and measured. Too often, these

39

standards are articulated in some such phrase as "a full day's

work" or "a good job". Communication only takes place when the

transference has taken place and has been received and

understood by the subordinate. Therefore feedback is necessary

from the subordinate to the manager. Satisfactory feedback

censures that the information communicated by the manager has

been received and understood in the way it was intended.

The third step in the appraisal in the measurement of

performance. To determine what actual performance. To

determine what actual performance is, it is necessary to acquire

information about it. We should be concerned with how we

measure and what we measure.

What we measure is probably more critical to the evaluation

process than how we measure, since the selection of the wrong

criteria can result in serious dysfunctional consequences. And

what we measure determines, to a great extent, what people in the

organization will attempt to excel at.

One of the most challenging tasks facing managers is to present

an . accurate appraisal to the subordinate and then have the

subordinate accept the appraisal in a constructive manner.

40

Appraising performance touches on one of the most emotionally

charged activities the assessment of another individual's

contribution and ability. The impression that subordinates receive

about their assessment has a strong impact on their self-esteem

and, very important, on their subsequent performance.

The final step in the appraisal is the initiation of corrective

action when necessary. Corrective action can, be of two types.

One is immediate and deals predominantly with symptoms. The

other is basic and delves into causes. Immediate corrective action

often described as "putting out fires," whereas basic corrective

action gets to the source of deviation and seeks to adjust the

difference permanently.

Immediate action corrects something right now and gets things

back on track.

41

Chapter 5

PERFORMANCE

APPRAISAL SYSTEM IN

VODAFONE

42

Chapter 5

PERFORMANCE APPRAISAL SYSTEM IN

VODAFONE

In Vodafone they have the system of performance appraisal of

their employees. The main objective of this performance

appraisal system is to evaluate the performance, promote their

employees and to arrange for their various training programmes

if they require for enhancing their skills in their respective areas

and in contribution enhancement..

Employees are evaluated by how well they accomplish a specific

set of objectives that have been determined to be critical in the

successful completion of their job. This approach is frequently

referred to as . management by objectives. Management by

objectives is a process that converts organization~l objectives

into individual objectives. It can be thought of as consisting of

four steps: goal setting, action planning, self- control, and

periodic reviews. In goal setting, the organization's overall

objectives are used as guidelines from which departmental and

individual objectives are set. In action planing, the means are

determined for achieving the ends established in goal setting.

That is, realistic plans are developed to attain the objectives.

43

Self-control refers to the systematic monitoring and measuring

of performance. Finally, with periodic progress reviews,

corrective action is initiated when behaviour deviates from the

standards established in the goal-setting phase. Vodafone uses

very constructive performance appraisal process while

evaluating its employees. Its evaluation is based on

quantitativewise and objectivewise.

Company set goals to its employee by properly reporting with its

employees and then evaluating them upto what extent it has been

achieved and if there is failure in reaching the target what are the

causes or reasons behind it.

Every evaluator has his or her own value system which acts as a

standard against which appraisals are made. Relative to the true

or actual performance an individual exhibits, some evaluator~

mark high and others low. The former is referred to as positive

leniency error and the latter as negative leniency error. When

evaluators are positively lenient in their appraisal, an individual's

performance becomes over- stated; that is, rated higher than it

actually should. Similarly, a negative leniency error understates

performance, giving the individual a lower appraisal. As such

there is no scope of error as far as the Vodafone company is

concerned, but sometimes over estimation of target brings

about a description in the evaluating criteria. Thus, though chances

44

are less, positive leniency errors have been stated to be committed.

Outcome of Performance Appraisal

As far as Vodafone company is concerned, there are four outcomes

possible:

a. Outstanding -If the performance evaluated by the

management turns out to be outstanding. If the employee

performs in such a way as to collect 3 consecutive

outstanding performance into his/her credit) he / she gets

promoted.

b. Excellent -If the performance evaluated by the management

turns out to be excellent. If the employee performs in such a

way as to collect 3 consecutive excellent performance into

his/her credit, he/she gets promoted.

c. Good -If the performance evaluated by the management turns

out to be good. The management sends the employee to the

training programme to improve his/.her skill to perform

form.

d. Below average -If the performance evaluated by the

management turns out to be below average. And, if the

employee collects 3 below average to his/her credit, then

he/she dismissed

45

Duration of Appraisal System

The time constraints enables the employee to show or project

his/her capabilities in term of performance as per the duration

allowed. In Vodafone, the performance appraisal system is carried

out annually.

46

Feedback

The company provides the annual feedback to its employees and

thus, in term bring out the highlights of the self assessment

programme. This enables the better communicaiton between the

management and employees ad thus, helps in promoting the

business future.

Response

There are mixed responses from the feedback by the employees. It

has helped some of the employees in motivating themselves while

those who felt bad were thoroughly communicated and all the

confusion and failure part were discussed with employees.

47

Chapter 6

ANALYSIS AND

INTERPRETATION OF

DATA

48

Chapter 6

ANALYSIS AND INTERPRETATION OF DATA

After collecting the data on "Performance Appraisal System" data

was Analyzed and interpreted. The various topics covered for

analysis and interpretation of data are: )

1. Promotions

A promotion may be defined as an upward advancement of an

employee in an organisation to another job, which commands

better pay/wages, better status / prestige and higher

opportunities / challenges and responsibility, a better working

environment, hours of work and facilities etc.

Promoters have a salutary effect on the satisfaction of the

promoted person's need for esteem, belonging and security. They

also afford an opportunity for greater self-actualizing action

through more varied and challenging assignments. The promotion

policies differ from an organisation to another.

The guidelines for departmental promotion in are same for male

and female employees. The period of experience required for

filling a higher post departmentally varies from 3-5 years. 5 years

experience for promotion to managerial staff and 3 years

49

experience for promotion to Junior Management staff is needed.

The other area of promotion apart from seniority are merit and

fitness. Though these guidelines are not in a written format the

supervisor and manager get it at the time of appraisal from the

personnel department.

50

As per the guidelines from the personnel department employees

are to be promoted accordingly. However there is confusion

among the employee as these guidelines are not being explained

time to time, many are not aware of the existing promotion policy

in the organisation.

Respondents were asked whether the promotion is well defined in

the organisation. The responses are given below:

N=96

Response Number Percentage

Yes 16 16.66

No 52 54.16

Can't say 28 29.16

From the above table, it can be seen that 30% agree that promotion

is well defined in the organisation. However 54% were not able to

say it as there is lack of information about the promotion policy.

Every employee need to be communicated about the existing

promotion policy.

16

52

28

0

10

20

30

40

50

60

Yes No Can't Say

Series1

51

Respondent were also asked to suggest any change in the policy.

The responses were as given below:

Response Number Percentage

Merit not recognized 20 20.83

Does not define career plan 26 16.66

Not integrated with business 0 0

Heterogeneity within policy for 56 58.83

different position

Majority suggested for no change in the policy. It seems they are

satisfied with the current policy.

52

Aligning goal

Respondent were asked about the present system, does it help in

aligning individual goal with those of the organisation. The

responses were as given below:

Response Number Percentage

Yes 44 45.83

No 12 12.5

Can't say 36 37.5

No response 4 4.16

Here the response from the supervisor were 45.83% for the factor

that it help in aligning their goal with those of organisation.

44

12

36

4

05

1015

202530

3540

45

Yes No Can't Say Noresponse

Series1

53

Career Progress

Career progress is something which is continuous, with the input

from organisation in term of training, feedback and counselling.

In today's changing scenario this has to be followed in every

organisation so that an individual make progress in the career

adding value to himself and the organisation. Respondent were

asked about the current system helping in their career progress.

Career advancement is the most motivating factor when employee

aspire for the advancement of his career and for better

opportunities to use his/her talents. From the organisation's point

of view, it is necessary to develop in manager. Some expectations

of opportunities for the future in order to keep their motivation

high. Career planning means helping the employee plan his career

in terms of his capabilities with the context or organisational

needs. Individual, after becoming aware of some of his/her

capabilities and career and development opportunities chooses to

develop himself/herself in a direction that improves his/her

chances of being able to handle new responsibilities. It is also the

responsibility of the employer to help him/her to identify the

career opportunity, make choices and develop his/her career and

provide opportunities for career planning and succession planning

54

Question asked was as follows:

Are the issues like career planning and succession planning a part

of companys policy

The responses to the above were as given below:

Response Number Percentage

Yes 16 16.66

No 44 45.83

Cant say 36 37.5

Here only 46% of the respondent gave response that it does not

while 38% gave response that there is no career development plan

at all.

16

44

36

0

10

20

30

40

50

Yes No Can't Say

Series1

55

Feedback

Providing feedback playa constructive role. It helps the employee

know his/her weakness and strength. Feedback provides for the

area of improvement.

Respondent were asked about the frequency of feedback based on

their performance. The responses were as given below:

Response Number Percentage

Rarely 24 25

On a few occasion 40 41.66

Sometimes 24 25

Often 8 8.34

Almost always Nil Nil

41 percent responded that feedback is provided though on a few

occasion. The frequency has to increase both from the individual

and organisation point of view to keep the individual motivated for

work in line with the organisational expectation.

56

0

5

10

15

20

25

30

35

40

Rarely On a few

occasion

Sometimes Often Almost

alw ay s

Remedial measure

Based on the performance the remedial measures are taken to do

away with weakness if any and build on the strength and add to

the existing capability

57

Response on the remedial measure were as given below:

Response Number Percentage

Job rotation 44 45.83

Sent to training programme 40 41.66

Counselled 12 12.5

Any other Nil Nil

None Nil Nil

Here the response were both for job rotation and training

programme. During the course it was felt that more training input

is to be provided to the employee to overcome the weakness and

improve upon the existing capability of the employee.

05

1015202530354045

Job rotation Sent to

training

program

Counselled Any other None

58

PROMOTION POLICY AND PERFORMANCE APPRAISAL

SYSTEM

Respondent were asked whether the promotion policy is linked

with the performance appraisal system

The responses were as given below:

Response Number Percentage

Yes 54 56.25

No 28 29.15

Cant say 14 14.58

Majority response were that promotion policy is linked with the

performance appraisal system.

54

28

14

0

10

20

30

40

50

60

Yes No Can't Say

Series1

59

SWOT ANALYSIS

STRENGTHS

Strong customer oriented and high performance.

Quality products and services and improved product

proposit ion.

Strategy oriented and better geographic balances.

Better brand image.

WEAKNESS

Paper compilation of the f inancial reports (stock reports).

Inventory management, and procurement processes.

Lack of feedback.

OPPORTUNITIES

Branch expansion for rapid growth

Increase focus on value creation

Improve shareholders return

Broadening of the demographic base

Tie up with MNC’s

Integrated sales and service approach

THREATS

Competit ive products and offers.

Strong competit ion.

60

Chapter 7

CONCLUSIONS &

SUGGESTIONS

61

Chapter 7

CONCLUSIONS & SUGGESTIONS

Conclusion

The analysis and interpretation of data on study of performance

appraisal and its effectiveness in an organization led to the

following conclusions:

The promotion rule though defined need to be communicated to

every employee before appraisal process is done and also

justify the promotion as a result of the appraisal. That the

promotion policy followed differs at different position and

category. A uniformity has to be there in the implementation of

promotion policy at all levels

The process of performance appraisal followed in Vodafone at

the supervisory and above level IS to say not good but of

satisfactory level. The employees do not rate it very good

The appraisal outcome has to be used frequently for the

purpose of reward on performing well together with the

feedback on the performance. Also when performance goes

down employee has to be given feedback and motivated to do

better.

The organization at present doesn't lay career planning and

62

career succession plans.

In Vodafone feedback is being provided to the employee

though on a few occasion.

Performance appraisal in Vodafone is done on an annual basis.

More emphasis on training and job rotation as remedial

measures.

The mechanism of counseling pre-performance and post

performance is not in practice at the organisation in strict term.

During. the course of study suggestion came from the employee

side for the need of counselling.

Suggestions

The study undertaken bring some interesting result.

Training the Appraisee: It is proposed that appraiser be trained

for clear understanding of the system and its objective and also

counselled to be honest, fair, just, unbiased in appraising the

appralsee.

Factors/traits of evaluation: It is proposed that appraisee

evaluated on above factors/traits be given suitable remark or

justification for being given different quantitative grade.

Greater clarity has to be has to there in terms of job

63

responsibility. This is possible when the appraisal is done on

the basis of the description.

In the organization, performance appraisal is done on an annual

basis which should be done Quaterly to make it more effective.

Consistency is demanded in the promotional policy. It should

not change every year.

Monetary difference between two grades should not be large, it

should be motivating in nature.

Performance appraisal system should be made more transparent

and rationale.

Performance feedback: The performance feedback sessions

should be improved which would results in increasing

employee motivation to improve performance. The following

could be incorporated.

Pin point the problem behaviour and make sure the

employee is aware of it

Make sure the employee understands the consequences of

the problem behaviour. Get employee's commitment to

change and make sure he cares about the change

Assistance should be provided to improve poor performance.

64

Make a realistic plan appropriate to the behaviour and set a

time frame for improvement.

To make sure to review performance time to time

The other change which has to be incorporated at the

supervisor and the level above are:

These should be listing down of task undertaken during the

last one year and the result achieved.

In some areas of performance there should be self appraisal

and more and more counselling so that employee improve

upon weak area and understand what is expected of him/her

at the organization level.

Based on the above an open appraisal system is suggested.

65

In an open appraisal the employee would come together to set the

targets, to understand the mutual expectations and support to be

provided by the appraiser to the employee for achieving mutually

accepted goals/targets. Through this process of setting targets the

interpersonal relationship between the appraiser and the employee

would improve.

The open appraisal system reduces the whims and fancies of the

appraiser. It promotes result-orientation as it is based on

performance rather than on personality based appraisal.

66

Annexure

a) Questionnaire

b) Bibliography

67

QUESTIONNAIRE

TO STUDY PERFORMANCE APPRAISAL SYSTEM

Q.1. Is the promotional policy well defined in your organization?

a. Yes b. No c. can't say

Q.2. Do you know the objectives of the Performance appraisal system.

If yes kindly specify.

Q.3. How often the performance appraisal form is filled or

Performance Appraisal is done.

a. fortnightly. b. monthly c. six-monthly. d. annually

e. not fixed.

Q.4. On what basis is the performance appraisal done.

a. merit cum seniority b. seniority cum merit. c. merit

only

d. seniority only. e. any other. Pl. specify

Q.5 Who appraises you?

a. appraisal committee. b. your immediate supervisor

c. self-appraisal d. 360 degree appraisal.

e. any other please specify

Q.6. What methods are being used for performance appraisal

a. forced choice distribution method. b. essay method

68

c. ranking method. d. critical incident

method

e. any other, kindly specify

Q.7. In your opinion does it identify the training needs?

a. to a large extent b. to some extent c. cant say d. not at

all

Q.8. Is the promotional policy linked with the performance appraisal

system

a. yes b. no c. can't say

Q.9. Are the issues like career planning and succession planning a part

of company's policy

a. yes b. no c. can't say.

Q.I0 Does the system help you in aligning your goals with those of the

organization.

a. yes b. no c. can't say

Q.11. What role does top management play in the performance

appraisal. kindly comment.

Q.12. Are you a part of the appraisal committee

a. yes b. no

69

Q 13 .Do the employees get the feedback of performance appraisal

a. yes, every time. b. often, but not always.

c. only when required

d. rarely e. never

Q.14 Does the organization provide counseling after the appraisal.

a. always b. often c. rarely d. never. e. can't say.

Q.15. Who does the counseling

a. trained professionals b. untrained counselors. c. can't say

Q.16. What kind of remedial measures are taken.

a. job rotation b. sent to training programmes c.

counseled

d. any other, kindly specify

Q.17. How do you rate the overall assessment of performance appraisal

a. Outstanding b. Very good c. Good d. Satisfactory

e. Poor

70

Q.18. What do you feel are the positives in the performance appraisal

system in your organization, Kindly mention

Q.19 What do you feel are the shortcomings of the performance

appraisal system being followed in your organization, Kindly

mention

Q.20. For how long have you been working in this organisation

Q.21. Suggestion towards improving the performance appraisal system

in your organisation

71

BIBLOGRAPHY

1) Flippo EdwinB., Personnel management, Edition sixth, Tata Mc

Graw Hills, 1984, p.g. 225-230

2) Gupta, C.B., Human Resource Management, Edition

Fifth(Reprint),Sultan Chand and Sons, New Delhi 2006, P.G. 5.3-

5.10

3) Rao, P. Subba,Essentials of Human Resource Management and

Industrial Relations;Edition Second, Himalaya Publishing House,

New Delhi 2005, p.g.206-210

72

WEB SITES SURFED

www.google.com

www.indiatimes.com

www.msn.com

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