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STUDY ON PERFORMANCE APPRAISAL

With reference to Visakhapatnam Steel Plant

Table of Content

Chapter – I Introduction

Chapter – II Company Profile

Chapter – III Theoretical Framework

Chapter – IV Analysis

Chapter – V Suggestions, Summary and Conclusions

Bibliography

Annexure

DATA PROVIDED HERE IS NOT ABSOLUTE …ITS ONLY FOR REFERENCE

CHAPTER-I

RASHTRIYA ISPAT NIGAM LIMITED

VISAKHAPATNAM STEEL PLANT

INTRODUCTION

Appraising the performance of individuals, groups, and organizations is a common

practice of all societies. Appraisal of one individual by another individual is a continuous

process and it is Natural phenomenon in human beings. This is constantly done,

consciously or unconsciously in our day-to-day interaction either in family life or in a

social setting or in an organization for that matter. While the individual or a group uses

appraisal in its own fashion depending upon the need of the situation, in an organization it

becomes necessary to adopt a formal methodology of appraisal system because of the

requirement of measuring the performance for considering suitable reward or punishment

or for assessing the potential of a person to increase the responsibilities. In short, there is a

great requirement for assessing the efficiency to gear up the productivity of the work force.

NEED FOR THE STUDY:

Provide information about the performance ranks basing on which decisions

regarding salary fixation, confirmation promotion, transfers, and demotions

are taken.

Provide feedback information about the level achievement and behavior of

sub-ordinates. This information helps to review the performance of

rectifying performance deficiencies and to set new standards of work, if

necessary.

Provide information which helps to counsel the sub-ordinates.

Provide information to diagnose deficiency in employees.

Provide information for correcting placement.

To prevent grievances and in disciplinary activities.

OBJECTIVES:

The following are the specific objectives of the present study. To study the

performance appraisal system history and their activities in VSP.

To study and assess the executive performance system and its effectiveness.

To analyze the drive towards quality that is integrated into executive performance

appraisal.

To assess the training and development needs of employees.

To identify and suggest measures to improve effectiveness specifically from quality

perspective.

To effect promotion based on competence and performance.

METHODOLOGY:

To get information about satisfaction level of employees from performance

appraisal system and its effectiveness a stratified sample survey was conducted. The

information required for making comprehensive study on the performance appraisal system

for their growth in the job career. To evaluate the performance of employees is followed by

two ways of sources. This is primary and secondary sources.

The Primary data, information about VSP and its HRD activities is gathered from

direct contacts and personal discussions with all the departmental employees in the

organization. Duties and responsibilities of HR personnel of the organization.

The secondary data can be through overall annual reports of performance of

employee in the early years. The performance of the employee can be determined through

some techniques are used by the organization. The records maintained by HR department

served as valuable source of secondary information required. Journals and magazines

formed the basis for the information on annual turnover of the steel. It includes data from

the in-house journals and journals related to steel industry, magazines and annual reports of

the VSP formed the basis for secondary data.

LIMITATIONS

The time is a major limitation. The whole study was conducted with in a

period of 2 months.

The study does not cover non-executives some executive cadre and

chairman and managing director. The study restricted itself only to Junior

Officers to General Manger’s level.

Study is quality perspective has only been qualitative the information

gathered in this regard is mostly through personal discussions.

Only the existing system is studies and no attempt has been made to identify

and complete new and dynamic performance system due to this constraints.

BRIEF DESCRIPTION OF THE STUDY:

Performance appraisal is the systematic description of an employee’s job

relevant strengths and weakness.

The basic purpose is to find out how well the employee is performing the job

and establish a plant of improvement.

Appraisals are arranged periodically according to a definite plan.

Performance appraisal is not job evaluation. Performance appraisal refers to

how well someone is doing the assigned job. Job evaluation determines how

much a job is worth to the organization and, therefore, what range of pay

should be assigned to the job.

Performance appraisal is a continuous process in every large scale

organization.

PURPOSE OF THE STUDY:

To create and maintain a satisfactory level of performance.

To contribute to the employee growth and development through training,

self and management development programs.

To help the superiors to have a proper understanding about their

subordinates.

To guide the job changes with the help of continuous ranking.

To facilitate fair and equitable compensation based on performance.

To facilitate for testing and validating selection tests, interview techniques

through comparing their scores with performance appraisal ranks.

To provide information for making decisions regarding lay off, retrenchment

etc.

To ensure organizational effectiveness, through correcting employee for

standard and improved performance and suggesting the change in employee

behavior.

CONTENT OF PERFORMANCE APPRISAL:

Every organization has to decide upon the contents to be appraised before the

program is approved. Generally, content to be appraised may be in the form of contribution

to organizational objectives (Measures) like production, cost saving, return on capital etc.,

other measures are based on:

i. Behavior which measure observable physical actions, movements.

ii. Objectives which measure job related results like amount of deposits

mobilized and,

iii. Traits which are measured in terms of personal characteristics observable in

employee’s job activities. Content to the apprised may vary with the

purpose of appraisal and type and level of employees.

Contents to be appraised for an officer’s job:

1. Regularity of Attendance.

2. Self Expression: written and Oral

3. Ability to Work with others

4. Leader ship Styles and Abilities

5. Initiative

6. Technical Skill

7. Technical Ability/Knowledge

8. Ability to Grasp new things

9. Ability to Reason

10. Originality and Resourcefulness

11. Creative Skills

12. Area of interest

13. Area of Suitability

14. Judgement Skills

15. Integrity

16. Capability for Assuming Responsibility

17. Level of Acceptance by Subordinates

18. Honesty and Sincerity

19. Thoroughness in job and organizational knowledge

20. Knowledge of Systems and Procedure

INTRODUCTION TO STEEL INDUSTRY IN INDIA

STEEL INDUSTRY:

Steel Industry is the back bone of all industrial commercial activities. Realizing

these countries planners have been formulating and updating annual plans for production of

iron and steel. In this context a number of steel plants were setup. The steel industry plays a

vital role in the growth of nation’s economy.

Steel is such a versatile commodity that every object we see in our day to day life

has used steel either directly or indirectly in its product. To mention a few it is used for

such small items as nails, pins, needles etc ., agriculture implements boilers, ship

fabrication, railway minerals, automobile parts, etc., to have machine structure.

The great investment that has gone into the fundamental research in iron and steel

technology has helped both directly and indirectly in many modern fields of today’s

civilization if steel has not been there .steel is versatile and indispensable item. The

versatility steel can be traced mainly of three reasons.

It is only metallic item, which can be continentally and economically produced, in

large quantities.

It has got very good strength coupled with density and malleability.

Its properties can be changed over a wide range .It alloys easily with many of the

common element.

INDIA’S STEEL SCENARIO

Indian steel industry has always remained isolated and protected by

government, where the steel industry was never expected to generate profit from business,

but was expected to provide employment to the unemployed .presently India is operating

with open –hearth furnaces. The existing equipment, energy and labour in Indian steel

industry are much low than developed countries.

Indian steel industry generates a significant amount of waste materials, which can

cause environmental problems. These four aspects of “WASTE MANAGMENT” namely –

residue reprocess, recycle and recovery do not hold much ground in the Indian steel

industry. The Indian companies cannot spend more for pollution control. The energy

consumption per tone is 50-100%higher than that of the international norms.

The Indian steel industries have developed a bit in recent years. The production

is growing on properly. Many techniques are being implemented in the steel industries. The

country’s aim is to sell quality steel. The government is also helping the steel industries in

their basis .The apparent consumption of steel is shown below.

The development of steel industry in India should be viewed in conjunction with

the type and system of government that had been ruling the country. The production of

steel in significant quality started after 1990. The growth of steel industry can be

conveniently started by dividing the period into pre and post independent era. In the period

of pre independence steel production was 1.5 million tones per year, which was raised to

9.0 million tones of target by the seventies. This is the present of the bold steps taken by

the government to develop this sector.

WORLD’S DEMAND FOR STEEL:

The total demand for steel in world is expected to grow at an annual rate of

1.6% between 1935 and 200 A.D. as per the study concerned by China economists.

According to their estimation total demand in advanced industrial countries on the whole is

expected to grow at 0.6% annual rate following a 2.2% rate between 1974 to 1984. Steel

demand is less in developed countries on a whole is expected go grow at a 5.5% annual

rate up to 2000 following a 3.1 annual growth rate between 1984-1994. Within the

controlling plant economy the Eastern Europe erstwhile USSR region may have 0.3%

annual steel demand growth. Steel demand in China, North Korea region would grow at

4.0 annual rates up to the end of this century at a 7.5% per annual growth during 1974-

1980.

HIGHLIGHTS OF PRESENT STEEL SCENARIO:

The world steel shows a low growth demand.

There is a threat to steel industry from competitive products like plastics, aluminum

etc.

Developed countries slowly reduced the production of steel.

Developing countries like China are planning to produce steel as much large

quantity then of present output of 80 Mtpa.

India consciously and strategically decides to invest into steel production.

Preference is given to superior quality products and high value items production.

Customer oriented approach in view of product oriented approach.

Emergence of new technology like scraps preheating.

GROWTH OF STEEL INDUSTRY:

The growth in a chronological order is depicted below:

S.No. Year Growth

1. 1830 Osier Marshall heather constructed the first manufacturing plant at port motor in Madras presidency.

2. 1874 James erskin founded the Bengal frame works.

3. 1899 Jamshediji TATA initiated the scheme for an integrated steel plant.4. 1906 Formation of TISCO

5. 1911 TISCO started production.

6. 1918 TISCO was founded.

7. 1940 Formation of Mysore Iron and Steel initiated at Bhadravati in Karnataka.

8. 1951 First Five Year Plan – The Hindustan Steel Limited (HSL) was born in.

9. 1956

The year 1954 with decision of setting up three steel plants each with 1 million tones in got steel per year at Rourkela, Bhilai, and Durgapur. TISCO started its expansion programme.

S.No. Year Growth

10. 1961-66 Third Five Year Plan – During the plan the three steel plants under HSL, TISCO and TISCO were expanded.

11. 1964 Bokaro Steel Plant came into existence.

12. 1966-69 Recession period. Till the expansion programmes were actively existed during this period.

13. 1969-74

Fourth Five Year Plan – The Salem steel plant started. Licenses were given for setting up of many mini steel plans and re-rolling mills government of India. Plants in south are each in Visakhapatnam and Karnataka. SAIL was formed during this period on 24th January, 1973.

14 1974-79Fifth Year Plan – The idea of setting up fifth integrated steel plant, the first sea-based plant at Visakhapatnam took a definite shape. At the end of the Fifth Five Year Plan the total installed capacity from six integrated steel plants was up to 10.6 million tons.

15. 1979-80 Annual Plan. The erstwhile Soviet Union agreed to help in setting up the Visakhapatnam Steel Plant.

16. 1980-85

Sixth Five Year Plan – Work on Visakhapatnam Steel Plant started with a big bang and top priority was accorded to start the plant. Schemes for modernization of Bhilai Stee lPlant, Rourkela Steel Plant, Durgapur Steel Plant and TISCO were initiated. Capacity at the end of sixth five year plan from six integrated plants stood 11.50 million tones.

17. 1985-91Seventh Five Year Plan - Expansion works at Bhilai and Bokaro Steel Plants completed. Progress of Visakhapatnam Steel Plant picked up and the nationalized concept has been introduced to commission the plant with 3.0 mt liquid steel capacity by 1990.

18.1992-

1997

Eight Five Year Plan – The Visakhaptnam Steel Plant was commissioned in 1992. The cost of plant has become around 8755 cores. Visakhapatnam Steel Plant started the production and modernization of other steel plants is also duly engaged.

19.1997-

2002Ninth Five Year Plan – Restructuring of Visakhapatnam Steel Plant and other public sector undertakings.

STEEL PLANTS WITH FOREIGN COLLOBORATIONS:

Sl.NO. Plant

Collaboration Capacity of

Finished Steel Products

Annual Production

1. Rourkela Steel Plant West Germany7,20,000 tones

2. Bhilai Steel Plant Erstwhile USSR7,70,000 tones

3. Durgapur Steel Plant Britain8,00,000 tones

PROBLEMS OF STEEL INDUSTRY:

LACK OF RAW MATERIALS

Non-availability of good quality raw material is another problem faced by iron and

steel industry. The modern giant blast furnace needs high grade iron ore and good

metallurgical coal.

Further the industry is unable to get good quality coke and manganese is which he

principal raw material nest to iron ore are unfortunately most of our resources of

manganese ore are of poor quality besides the non availability of good quality raw material,

regular supplies of raw materials are very much handicapped due to the absence of good

transport facilities. Another problem faced by the steel industry related to the difficulty in

getting zinc supplies for the continuous galvanizing line.

TECHNICAL PROBLEMS

Bhilai had to execute orders for shipment of rails to Iran, South Korea and

Malaysia. Because of technical limitations, Rourkela plant is unable substitute aluminum of

Zinc for the production of galvanized sheet apart from source internal technical problems;

our technology in the field of steel production is not a developed one when compared to

other advanced countries. For instance, Japan is production quality steel in spite of

importing raw material and additional material from other country.

GOVERNMENT CONTROL AND PRICING POLICY

Since 1941, Indian steel and iron industry was almost completely state regulated.

Both prices and distribution of steel were under the control of Govt. The Govt. decided to

remove statutory control over the price and distribution of all, but a few categories with

effect from 1st March 1964 the Govt., supervise tin betel and iron inducted according to the

recommendation of Raja committee. But Raj committee in fixing the steel price didn't

regulate the price of the raw materials.

CHAPTER-II

RASHTRIYA ISPAT NIGAM LIMITED

VISAKHAPATNAM STEEL PLANT

INTRODUCTION:

Steel occupies the foremost place amongst the materials in use today and pervades

all walks of life. All the key discoveries of the human genius, for instance, steam engine,

railway, means of communication and connection, auto mobile, aero plane and computers,

are in one way or other, fastened together with steel and with its sagacious and multifarious

application. Steel is versatile material with multitude of useful properties, making it

indispensable for furthering and achieving continual growth of the economy be it

construction, manufacturing, infrastructure or consumables. The level of steel consumption

has long been regarded as an index of industrialization and economic maturity attained by a

country.

BACKGROUND:

To meet the growing domestic needs of steel, Government of India decided to set up

an integrated steel plant at Visakhapatnam. An agreement was signed with erstwhile USSR

in 1979 for cooperation in setting up 3.4. Mtpa integrated Steel Plant at Visakhapatnam.

The foundation stone for the plant was laid by the then Prime Minister on 20 th January

1971.

The project was estimated at cost of Rs.3897.28 corers based on prices as on 4 th

quarter of 1981. However, on completion of construction and commissioning of the whole

plant in 1992, the cost escalated to around 8500 cr. Unlike other integrated Steel Plants in

India, Visakhapatnam Steel Plant is one of the most modern steel plants in the country. The

plant was dedicated to the nation on 1st August, 1992 by the Prime Minister, Sri

P.V.Narasimharao.

New technology, large scale computerization and automation etc are incorporated in

the plant. To operate the plant at international levels and attain such labour productivity,

the organizational manpower has been rationalized. The plant has a capacity of 3.0 Mtpa of

liquid steel and 2.656 Mtpa of saleable steel.

VSP TECHNOLOGY: STATE OF THE ART:

7 meter tall coke oven batteries with coke dry quenching.

Biggest Blast Furnace in the country.

Bell less top charging system in Blast Furnace

100% slag granulation at the Blast Furnace house.

Suppressed combustion – LD gas recovery system.

100% continuous casting of liquid steel.

Tempore and Stelmor cooling process in LMM and WRM

Extensive waste heat recovery systems.

Comprehensive pollution control measures.

MAJOR SOURCE OF RAW MATERIALS:

Iron ore lumps and fines Bailadilla, MP

BF Lime Stones Jaggayyapeta, A.P.

SMS Lime Stone Jaisalmer, Rajasthan

BF Dolomite Dubai

SMS Dolomite Madharam, A.P.

Manganese Ore Chipuripalli, A.P.

Boiler Coal Talcher, Orissa

Coking Coal Australia

Water Supply Yeluru Canal, A.P.

Power Supply Captive Power Plant

MAJOR UNITS AT VISAKHAPATNAM STEEL PLANT:

DEPARTMENTANNUAL

CAPACITYUNITS (3.0 MT STAGE)

Coke Ovens 2,261 3 batteries each of 67 ovens and 7 Meter height.

Sinter Plant 5,256 2 Sinter machines of 312 Sqm grate area each.

Blast Furnace 3,400 2 Furnaces of 3200 cu.m. Volume each.

Steel Melt Shop 3,000 3 LD converters each of 150 cu.m. Volume and six 4 strand bloom casters.

LMMM 710 4 Stand finishing Mill

WRM 850 2 x 10 stand finishing mill

MMSM 850 6 stand finishing mill.

MAIN PRODUCTS OF VISAKHAPATNAM STEEL PLANT

STEEL PRODUCTS BY PRODUCTS

Angles Nut Coke

Billets Coke dust

Channels Coal tar

Beams Anthracene Oil

Squares HP Napthalene

Flats Benezene

Rounds Toluene

Rebars Xylene

Wire rods Wash oil

VISION

To be continuously growing world –class company,We shall

Harness our growth potential and sustain profitable growth.

Deliver high quality and cost competitive products and be the first choice of

customers.

To create an inspiring work environment to unleash the creative energy of

people.

Achieve excellence in enterprise management.

Be a respected corporate citizen, ensure clean and green environment and

develop vibrant communities around.

MISSION

To attain 10 million tones liquid steel capacity through technological up gradation,

operation efficient and expansion, to produce steel at international standards of cost quality,

and to meet the aspirations of the stakeholders.

OBJECTIVES

Towards growth –Expand the plant capacity to 7MT by 2011-2012 with the

mission to attain 10.0 MT capacities in two subsequent phases.

Towards profitable –achieve net profits from 2002-2003 with special

emphasis on enhancement of production of value added steels and cost

reduction.

Towards employee –Make RINL the employer of choice .upgrade the skills

and efficiencies of employees through training and development and

maintain high levels of motivation high levels of motivation and satisfaction.

Towards customers –promote branding of products for quality and

customers preference through customers relation management.

Towards suppliers –Develop a reliable and strong supplier’s base and ensure

effective supply chain.

Towards quality –promote quality movement in all functions of the company

through quality management system.

Towards knowledge management –Become a knowledge based and

knowledge sharing company.

Towards safety, environment and society –Continue efforts towards safety

of employees, conservation of environment and be a good cooperate citizen.

CORE VALUES

Commitment

Customer satisfaction

Continuous improvement

Concern of environment

Concern of innovation

QUALITY POLICY

We, at Visakhapatnam steel plant, are committed to meet the needs and expectations

of our customers and others interested parties .To accomplish this, we will

Supply quality goods and services to customers’ delight.

Achieve quality of the products by following systematic approach through planning

document Ed procedure and timely review of quality objectives.

Continuously improve the quality of all materials, process and timely objectives.

Maintain an enabling environment which encourages team work and active

involvement of all employees with their involvement.

HR POLICY

We, at Visakhapatnam steel plant, believe that our employees are the most

important resources. To realize the full potential of employees the company is committed

to:

Provide work environment that makes the employees committed are motivated for

maximizing productivity.

Establish systems for maintaining transparency, fairness and equality in dealing

with employees.

Empower employees for enhancing commitment, responsibility and accountability.

Encourage team work, creativity, innovativeness and high achievement orientation.

Provide growth and opportunities for developing skill and knowledge.

Ensure functioning of effective communication channels with employees.

HRD POLICY

We, at Visakhapatnam Steel Plant, are committee to create an organizational culture

which nurtures employee’s potential for the prosperity of the organization. To

accomplish this, we will

Identify development needs of the employees on regular basis, provide the

necessary training and continually evaluate and monitor the effectiveness of

training so that the quality of training also upgraded.

Provide inputs to the employees for developing their attitude towards work and

for matching their competencies with the organizational requirements.

Create an environment of learning and knowledge sharing by providing the

means and facilities and also access to the relevant information and literature.

Facilitate the employees for continuous development of their knowledge base,

skills, efficiency, innovativeness, self-expression and behavior so that they

contribute positively with commitment for the growth and prosperity of the

organization while maintaining a high level of motivation and satisfaction.

Prepare employees through appropriate development programme for taking up

higher responsibilities in the organization.

Fulfill social obligation by providing training to the students of educational

institutions and to the trainees of other organization.

MARKETING NETWORK OF VISAKHAPATNAM STEEL PLANT:

The products are being sold through 35 marketing centers all over the country with

four stock yards at Mumbai, Kolkata, Chennai and Hyderabad. And in other places,

consignment agencies have been contracted.

POLLUTION CONTROL AND ENVIRONMENTAL PROTECTION:

Elaborate measures have been adapted to combat air and water pollution in

Visakhapatnam Steel Plant. In order to be eco friendly, Visakhapatnam Steel Plant has

planted more than 3 million trees in are area of 35 square kilometers and incorporated

various technologies at a cost of Rs.460 crores and control measures.

ACHIEVEMNETS AND AWARDS OF VISAKHAPATNAM STEEL PLANT:

The efforts of VSP have been recognized in various forms. Some of the major

awards received by VSP are in the area of energy conservation, environment protection,

safety, Quality, Quality Circles, Rajbhasha, MOU, Sports and related awards and a

number of awards at the in individual level.

Some of the important awards received by VSP are indicted below:

ISO 9002 for SMS and all the down stream units – a unique distinction in

the Indian Steel Industry.

Indira Priya Darshini Vriskha Mitra Award 1992-93.

Nehru Memorial National Award for Pollution Control. 1992-93 and 1993-

94.

EEPC Export Excellence Award; 1994-95.

CII (Southern Region) Energy Conservation Award 1995-96.

Golden Peacock (1st Prize) “National Quality Award-96” HM in the National

Quality Competition 1996.

Steel Ministers Trophy for “Best Safety Performance – 1996”.

Selected for “World Quality Commitment Award 1997” of J*BAN, Spain.

Gold star award for excellent performance in productivity.

Udyog excellence gold medal award for excellence in Steel Industry.

Excellence award for outstanding performance in Productivity Management,

Quality and Innovation.

Ispat Suraksha Puraskar (First Prize) for longest Accident Free Period –

1991-94.

Best Labour Management Award from Government of Andhra Pradesh.

SCOPE Award for best turn around for 2001.

Environment Excellence Award from Greentech Foundation for energy

conservation in 2002.

Best enterprise award from SCOPE, WIPS for 2001-02, besides,

Best Enterprise Award from SCOPE for surpassing MOU targets – 2003-04.

ISTD Award for “Best HR Practices” – 2002.

Prime Ministers Trophy for “Best Integrated Steel Plant” 2002-03.

“World Quality Commitment International Star Award” in the Gold category

conferred by Business Initiative Directions, Paris”.

“Organizational Excellence Award” for 2003-04 by INSSAN.

RINL has been bestowed with several national accolades in the year 2005-09

significant among them being:

National Energy Conservation Award for the 6th time in succession.

National Award for Excellence in Water Management.

ICWAI Award for excellence in Cost Management.

Viswakharma Rashtriya Puraskar Award (6 out of 32 at the national level)

FAPCCI best Industrial Productivity Award.

INSAAN National Award for Organizational Excellence.

Best CEO Award.

Best Company to Work Award 2009 Awarded by “The Economic Times and

Great Place to Work Institute”.

The above awards at local regional and national level competitions in the

area of quality circles and suggestion schemes etc.

Total Quality, latest technology, sophisticated equipment, up to date knowledge,

high skills, cost consciousness, production with less cost and customer

satisfaction have become the hallmark of VSP.

STATISTICAL INFORMATION

PRODUCTION PERFORMANCE ( TONNES)

Sl.

No.Year

Hot

Metal

Liquid

Steel

Saleable

Steel

Labour

productivity

(tones/year)

1. 2000-2001 3165 2909 2507 211

2. 2001-2002 3485 3083 2757 228

3. 2002-2003 3941 3356 3056 253

4. 2003-2004 4055 3508 3169 262

5. 2004-2005 3920 3560 3173 265

6. 2005-2006 4153 3603 3237 282

7. 2006-2007 4046 3606 3290 413

8. 2007-2008 3913 3322 3074 389

9. 2008-2009 3546 3145 2701 359

COMMERCIAL PERFORMANCE (RUPEES IN CRORES)

Sl.NO. Year Sales Turn over Domestic SalesExports

1. 1999-2000 3037 2677 360

2. 2000-2001 3436 3122 314

3. 2001-2002 4081 3710 371

4. 2002-2003 5059 4433 626

5. 2003-2004 6174 5406 768

6. 2004-2005 8181 7933 248

7. 2005-2006 8469 8026 443

8. 2006-2007 9131 8487 424

9. 2007-2008 10433 9878 555

10. 2008-2009 10441 10330 78

FINANCIAL PERFORMANCE (RUPEES IN CRORES)

S.No. Year Gross Margin Cash Profit Net Profit

1. 1998-1999 15 -346 -

2. 1999-2000 252 -130 -562

3. 2000-2001 504 153 -291

4 2001-2002 690 400 -75

5. 2002-2003 1049 915 521

6. 2003-2004 2073 2024 1547

7. 2004-2005 3271 3260 2008

8. 2005-2006 2383 2355 1251

9. 2006-2007 2633 2584 1363

10. 2007-2008 3515 3483 1943

11. 2008-2009 2355 2267 1336

EXPANSION PLAN:

ProductCapacity (MT)

Additional Facilities envisagedPresent Future

Hot Metal 4.00 6.50 New BF with 3800 cum capacity

Charge Sinter 5.26 8.50 New Sinter Plant of 400 Sq.M area

Liquid Steel 3.70 6.30 SMS-2 with Two 50 Cu.m. Converters, Two 6 Std.Billet Casters and One 6 Std.Round Caster.

Saleable Steel 3.3.4 5.72 -

Wire Rod 1.05 1.65 New WRM of 600,000 T/annum

Bars and

Structural

1.95 3.40 New SBM of 750,000 T/annum

New SM of 700,000 T/annum

Seamless pipes - 0.30 Seamless Tube Plant of 300,000 T/annum.

HUMAN RESOURCE DEVELOPMENT:

It is well recognized every where that human competency development is essential

prerequisite for any growth or development of the organization. Human resource

development is a newly emerging field of study. Although development of human

beings has been in existence in some or other since the beginning of civilization, a

planned and systematic approach to HRD in the corporate sector emerged in the later

half of the 20th century. Many organizations have set up “HRD Departments” which

symbolized the recognition of importance of employee’s competency development.

CONCEPT OF HRD:

HRD in the process of helping people to acquire competencies. It is an organized

learning experience aimed at matching the organizational need for human resource with

the individual need for career growth and development. In an organizational context

HRD is a process by which the employees of an organization are helped in a continuous

and planned way to

Acquire or sharpen capabilities required to perform various functions associated

with their present or expected future roles.

Develop their general capabilities so that they may be able to discover their own

inner potentialities and exploit them to fulfill their own and organizational

development.

To develop an organizational culture where superior-subordinate relationship,

team work and collaboration among different sub-units are strong and contribute

organizational wealth or professional well being and; motivation and pride of

the employees.

FEATURES OF HRD:

Human Resources Development is planned any systematic approach to the

development of the people.

Human Resource Development is a continuous process of developing of the

competencies, motivation, dynamism and effectiveness of employees.

Human Resource Development is an inter-disciplinary concept.

Human Resource Development is a Process not merely a set of mechanisms

and techniques. The techniques like performance appraisal, counseling,

training, and organization development are used to initiate, facilitate and

promote this process.

OBEJCTIVES OF HRD:

To provide a comprehensive frame work and method for the development of

human resources in an organization.

To generate systematic information about human resource for purpose of man

power planning, succession planning and the like.

To increase the capabilities of an organization to recruit, retain and motivate

talented employees.

To create a climate that enables every employee to discover, develop and use

his/her capabilities to a fuller extent, in order to further both individual and

organizational goals.

The capabilities of each individual in relation to his/her present and expected

future roles.

The dyadic relationship between each employee and his/her supervisors.

NEED FOR HRD:

Competent and motivated employees are essential for organizational survival

growth and excellence. Over a period of time, an organization may achieve a saturation

point in term of its growth. Even to maintain such a saturation level of growth employee

competencies need to be sharpened or developed. Thus HRD is need by every organization

that is interested in the following activities.

Stability itself.

Growing

Diversifying

Renewing itself to become more effective

Improving its system and services

Change and becoming more dynamic

Playing leadership roles.

FUNCTIONS OF HRD DEPARTMENT:

Develop a HR philosophy for the entire organization.

Keep inspiring the line managers to have a consistent desire to learn and

develop.

Constantly plan and design new method and systems of developing and

strengthening the HRD climate.

Be aware of the business/other goals of the organization and direct all their

HRD effort to achieve these goals.

Monitor effectively the implementation of various HRD

subsystems/mechanisms.

Work with unions and associations and inspire them.

Conduct human process research, organizational health surveys and renewal

exercises regularly.

Influence personnel policies by providing necessary inputs to the personnel

department/top management.

HRD MECHANISMS:

The following are the mechanisms of HRD

Performance appraisal system.

Potential appraisal and development

Feedback and performance coaching.

Career planning.

Training.

Organizational development.

Rewards.

Employee welfare and quality of work life.

Human resources information system.

PERFORMANCE APPRIALS SYSTEM:

Performance appraisal system is one of the most important mechanisms in most

organizations all over the world.

As HRD oriented performance appraisal is used as a mechanism by supervisions to

Understand the difficulties of their subordinates and try to remover their

difficulties.

Understand the strengths and weakness of their subordinates and help the

subordinates to realize these.

Help the subordinates to become aware of their positive contributions.

Encourage subordinates to accept more responsibilities and challenges.

Help subordinates to acquire new capabilities.

Plan for effective utilization of talents of subordinates.

FEEDBACK AND PERFORMACNE COUNSELLING:

Knowledge of ones strength helps one to become more effective, to choose

situations in which ones strengths are required and to avoid situations I which ones

weaknesses could create problems. These also increase the satisfactions of individual.

Often, people do not recognize their strength. Supervisions in an HRD system have the

responsibility for ongoing observations and feedback to subordinates about their strengths

and their weaknesses, as well as for guidance in improving performance capabilities.

CAREER PLANNING:

The HRD philosophy is that people perform better when they feel and see meaning

in what they are doing. In the HRD system, corporate growth plans are not kept secret

doing range plans for the organizations are made known to the employees. Employees are

helped to prepare for change when ever such change is planned, in fact the employee’s help

to facilitate the change.

TRAINING:

Training is linked with performance appraisal and career development. Employees

generally are trained on the job or through special in house training programmes. For some

employees (including executives) outside training may be utilized to enhance, update to

develop specific skills. This is especially valuable if the external training can provide

expertise, equipments, or sharing of experience that is not available within the organization.

In house training programmes are developed by in house trainers or consultants

hired for the task and periodic assessments are made of the training needs within needs,

managers and employees who attend in house or outside training events are also expected

to submit proposals concerning any changes they would like to suggest on the basis of their

new knowledge. The training received by employees is thus utilized by the organization.

ORGANISATION DEVELOPMENT:

The function includes research to ascertain the psychological health of the

organization. This is generally accomplished by means of periodic employee surveys.

Efforts are made to improve organizational health through various means in order to

maintain a psychological climate that is conductive to productivity. The organizational

development or systems experts also help any department or unit in the company that has

problems such as absenteeism, low resistance to change.

REWARDS:

Rewarding employee’s performance and behaviors is important part of HRD.

Appropriate rewards not only recognize and motivate employees, but also communicate the

organization value to the employees. In HRD systems, innovations and use of capabilities

are rewarded in order to encourage the acquisition and application, newsletter

announcements, increase in salary bonuses, special privileges and desired training rewards

may be given to individual as well as to teams, departments, main and other units within the

organization.

EMPLOYEE WELFARE AND QUALITY OF WORK LIFE:

Employees at lower in the organization usually perform relatively monotonous task

and have fewer opportunities for promotion or change. This is particularly true in

developing countries. In order to maintain their work commitment and motivations the

organization must provide some welfare benefits such as medical insurance, disability

insurance, holidays and vacation.

Quality of work life programmes generally focus on the environment within the

organization includes basic physical amenities such as food and beverage facilities.

Recreation and aesthetic and psychological and motivations, factors such as flexible work

hours, freedom to suggest change or improvements, challenging work and varying degree

of autonomy.

HRD IN VISAKHAPATNAM STEEL PLANT:

The VSP has a nice HRD department with talented and experienced staff. It is

following more or less all the above mentioned HRD mechanisms. The HRD staff is very

friendly and cooperative.

PHILOSOPHY OF HRD:

Employees of the company are its greatest and most valuable resources.

While on the hand HRD should appropriately harness employees potential

for the attainment of company as its corporate responsibility should create an

enabling the best opportunity for self expression all round development and

fulfillment.

People are more than mere resources and therefore, it will be a person with

all the respect and sensitivity that are all the respect and sensitivity that is

warranted when employees are seen as more than mere instrumentality.

HRD as a management function will be given a place of strategic priority

along with function like production, maintenance, materials or finance in the

overall scheme of management action in the company.

HRD does not refer to training alone or it is just a new name for training. In

RINL/VSP, HRD several management functions, for the development and

growth of employees.

HRD should eventually be a core philosophy of all management action and

should not remain merely a report mental/sectional activity.

All functional and divisional heads responsible for various activities of the

company will the HRD spirit and suitably integrate HRD into their plans,

decisions and actions.

HRD OBJECTIVES:

To provide initially a suitable match between employee competence

levels and company’s work requirements.

To foster an appropriate climate and culture which nature. Employee

competence and crease adequate motivational levels for the application of

their abilities to assigned job/roles with required commitment.

To enable employees seek great identification with the company by infusing

most management decisions and actions with the requisite care, concern and

development approach.

To work towards enabling the employees and other stakeholders ask self

fulfillment even work for the growth and prosperity of the company.

To utilization enable to employees and the organization to achieve its

mission and objectives and business goals through HRD.

HRD GROUP KEY ACTIVITY:

TQM and in house programmes.

Nomination to external programmes.

Organization research and organization development.

Membership with professional bodies.

Performance appraisal for executives.

Human resource information.

In plant training for management studies.

Lectures by eminent personalities.

Corporate presentations.

Interactions with professional academicians and consultants.

CHAPTER-III

PERFORMANCE APPRAISAL SYSTEM

INTRODUCTION:

Performance appraisal is widely used in the society. The parent evaluates the

behaviour of their children, teacher evaluates their student and employers evaluate their

employees. However, formal evaluation of employees is believed to have been adopted for

the first time during First World War. The systematic performance appraisal was quite

prominent in the recent years. Credit goes to Walter Dill Scott for “systematic performance

appraisal technique” of man-man rating system (or merit rating). It was used for evaluating

military officers. Once the employee has been selected, trained the motivated, he is then

appraised for his performance. Performance appraisal is the step where the management

finds out how effective it has been at hiring and placing employees if any problems are

identified, steps are taken to communicate the employee and to remedy them. A

performance appraisal is a process of evaluating the performance and qualification of

employee according to job and its requirement. It is also known as the process of

estimating and judging the value, excellence. Qualities of status of some object person or

things. Individually and collectively, it is the part of all other staffing process, like

recruitment, selection, placement etc.

TRENDS IN PERFORMANCE APPRAISAL:

Item Former Emphasis Present Focus

Terminology Merit-rating Performance appraisal

Purpose Determining qualification of wage increase, promotion, transfer, lay off.

Development of the individual, improved.

Application For rank and file workers For managerial and technical personnel.

Factors rates Personal traits Performance results or accomplishments.

Techniques Rating scales with emphasis upon scores Mutual goal-setting, critical incidents, group, appraisal.

CONCEPT OF PERFORMANCE APPRAISAL:

Performance evaluation or performance appraisal is the process of assessing

performance and progress of employee or of a group of employee on a given job and his

potential for future development. In concept of all formal procedure used working

organization to evaluate personality, contribution and potential of employees.

The main characteristic of performance appraisal is a follows:

1. Performance appraisal is the process consisting of series of steps.

2. It is the systematic examination of employee’s strength and weakness in terms

of jobs.

3. Performance appraisal is the scientific or objective study. Formal procedure is

used in the study the same approach is adopted for all job holders for that result

is comparable.

4. It is an organizing or continuous process where in the valuation is arranged

periodically according to a definite plan.

5. The main process performance appraisal is to secure information necessary for

making objective and correct decision on employees.

OBJECTIVES OF PERFORMANCE APPRAISAL:

The main purposes of performance appraisal are as follows:

1. To provide a valid data base for personnel decision concerning placements, pay,

promotion, transfer, punishment etc.

2. To diagnosis the strength and weakness of individuals so as to identify further

training needs.

3. To provide coaching, counselling, career planning and motivation to

subordinates.

4. To develop positive, superior-subordinate relations and there by reduce

grievances.

5. To facilitate research in personnel management.

6. To test the effectiveness of the recruitment, selection, placement and induction

programme.

Thus performance appraisal aims at both judgmental and developmental efforts.

DEFINITION:

Performance evaluation or performance appraisal is the process of assessing the

performance and progress of an employee or of a group of employees on a given job and

his potential for future development.

FORMAL DEFINITION.

“It is the systematic evaluation of the individual with respect to his/her performance

on the job and his/her potential for development”.

According to Flippo

“Performance Appraisal is the systematic, periodic and an impartial rating of an

employee’s excellence in matters pertaining to his present job and his potential for a better

job”.

Uses:

1. It provides valuable information for personnel decisions such as pay

increase, promotions etc.

2. It helps to judge the effectiveness of recruitment, selection, placement and

orientation system of the organization.

3. It is useful in analyzing training and development needs.

4. It can be used to improve performance though appropriate feedback,

working and counselling to employees.

5. It facilitates Human Resource Planning and succession planning.

A competitive sprit is created and employees are motivated to improve their performance.

Process of Performance Appraisal:

Establishing Performance standards – the appraisal process begins with the

setting up of a criteria to be used for appraising the performance of employees. The

criteria are specified with the help of job analysis, which reveals the contents of job.

This criteria should be clear, objective and in writing.

Communicating the standards – the standards are conveyed to the employees and

the evaluators. A feedback regarding the standards should be obtained from the

evaluators and the employees for revision or medication.

Measuring performance - this requires choosing the right techniques of

measurement, identifying the internal and external factors influencing performance

and collecting information on results achieved.

Comparing the actual with the standards – actual performance is compared with

the predetermined performance standards. Such comparison will reveal the

deviation, which may be positive or negative.

Discussing the appraisal - The results of the appraisal are communicated to and

discussed with the employees. Along with the deviation, the reason behind them are

also analysed and discussed. Such discussion will enable the employee to know his

weaknesses and strengths.

Taking corrective actions – through mutual discussions with employees, the steps

required to improve performance are identified and initiated. Training, caching,

counselling etc, are examples of corrective actions that help to improve

performance.

METHODS OF PERFORMANCE APPRAISAL:

Several methods and techniques are used for evaluating employee performance.

These may be classified into Traditional and Modern Methods.

Traditional Methods

Ranking Methods: In this technique, evaluator assigns relative ranks to all

employees in the same work unit doing the same job. Employees are ranked

from the best to the poorest on the basis of overall performance. The relative

passion of an employee is reflected in the numerical rank. It is one of the

simplest methods. It is time saving and comparative evaluation technique of

appraisal.

Man-to-Man comparison method: In this method, certain factors are selected

for the purpose of analysis and the rater for each factor designs a scale. A scale

of man is also created for each selected for each factor. Then each man to be

rated is compared with the man in the scale, and certain scores are awarded to

him. In other words, a whole man is compared to a “key man” in respect of one

factor at a time. This method is used in job evaluation and is known as the

factor comparison method.

Paired comparison method – This is a modified form of man to man ranking.

Herein, each employee is compared with all others in pairs on at a time. The

number of times an employee is judged better than other determines his rank.

Comparison is made on the basis of overall performance.

Forced distribution method – In these techniques the rater appraise an

employee according to a predetermined distribution scale. It is assumed that it

is desirable to rate only two factors by this method that is job performance and

promotability. For this purpose a five poking performance scale is used without

any descriptive statement and employees are placed between two extremes of

good and bad performance.

Graphic rating scales method – It is a numerical scale indicating different

degrees of a particular train. The rater is given a printed form for each

employee to be rated. The form contains several characteristics relating to the

personality and performance of employee. Intelligence, attitude, quality of

world, leadership skills judgement etc., are some use characteristics. This

method is widely used as it is easy to understand. It allows a statistical

tabulation of scores and a ready comparison of scores among the employees is

possible. The approach is multi-dimensional as several significant dimensions

of the job can be considered in evaluation.

Critical incident method – In this method the superior keeps a written record

or critical (either good or bad) events and how different employees behaved

during such events. The rating of the employee depends on the positive or the

negative behaviours during these events. These critical incidents are identified

after through study of the job and discussions with the staff. This method helps

to avoid vague impressions and General remarks as the rating are based on

actual records of behaviour.

Group appraisal method – Under this method, a group of evaluators assess

employees. This group consists of the immediate supervisors of the employees,

other supervisors having close contact with the employer’s work, head of the

department and a personnel expert. The group determines the standards of

performance for the job, measures actual performance of an employee’s analysis

the causes of poor performance and offers suggestions for improvement in

future.

Grading method – under this method, the rater considers certain factors, and

marks them accordingly to a scale. The selected factor may be analytical ability,

co-operation, dependability self-expression, job knowledge. They may be

graded as “A”- outstanding, “B” – very good, “C” – good/average, “D” – fair,

“E”-poor. The actual performance of an employee is then compared with these

grade definitions and he is allotted the grade which best described his

performance.

Forced choice Distribution method – In this method, the rating elements are

several sets of pair’s phrases or adjectives relating to job proficiency or personal

qualification. The rater is asked to indicate which of the phrases is most and

least descriptive of the employee.

Checklist method – In this method, series of questions are presented

concerning an employee’s behaviour. Here rater does not evaluate employee

performance, he supplies reports about it and the personnel department does the

final rating.

Free Essay Method – In this method, the supervisor makes a free form, open

ended appraisal of an employee in his own words and puts down his impression

about the employee. The description is always as factual and concrete as

possible.

Field review method - In this method, a trainer employee from the personnel

department interviews line supervisors to evaluate respective subordinates. The

supervisor is required to give his opinion about the progress of his subordinates

and his plan of action in cases requiring for consideration.

The traditional methods have given above focus on the traits of an employee than

his job performance. In the absence of predefined performance criteria or

standards, the personal bias or subjectivity of the evaluator affects the ratings. This

approach caused the following responses:

The very nature of the appraisal system led to criticism.

Criticism exercised a negative impact on goal attainment.

Criticism increased antagonism and defensiveness among employees

resulting in inferior performance.

Managers generally are not qualified to assess personality traits.

Some managers discourage good performances by over emphasizing

shortcomings and almost neglecting good work.

In order to overcome these weaknesses some new techniques of performances appraisal

have been developed.

Modern methods

Assessments centre method – An assessments centre is a group of employee

drawn from different work units. These employees work together on assignments

similar to the one they would be handlings when promoted. The most important

feature of the assessments centre is job related simulations. Evaluators observe and

rank the performances of all participants. This group evaluates all employees are

both individually and collectively by using simulations techniques like role playing,

business games and in basket exercises? Employees are Evaluated on the basis of

job related characteristics considered important for job success. The evaluators

prepare a summary report and feedback is administered on a face to face basis to the

employees who ask for it. An assessment centre generally measures interpersonal

skills, communicating ability to plan and organise etc. Assessments centres are not

only methods of appraisal but help to determine training and development needs of

employees and provide data for human resource planning.

Human resource accounting method – Human resource are a valuable asset

for any organization. This asset can be valued in terms of money. When competent

and well trained employees leave an organization the human asset is decreased and

vice versa. Under this method performance is judged in terms of costs and

contributions of employees. A cost of human resources consists of expenditure on

human resource planning, recruitment, selection, induction, training, compensation

etc. Contribution of human resources is the money value of labour productivity or

value added by human resources. Difference between cost and contribution will

reflect the performance of employees. This method is still in the transitory stage

and is therefore, not popular at present.

Behavioural Anchored Rating Scales (BARS) – This method combines

graphic rating with critical incidents method. BARS are description of various

degrees of behaviour relating to specific performance dimensions. Critical areas of

job performance and the most effective behaviour for getting results are determined

in advance. The rater records the observable job behaviour of an employee and

compares these observations with BARS. In this way an employee’s actual

behaviour is judged against the desired behaviour. This steps involved are

Collect critical incidents - Persons with knowledge of the identify job to be

appraised describe specific examples of both effective and ineffective job

behaviours.

Identify performance dimensions – The persons then clusters the behavioural

incidents into a smaller set (usually 5-10) of performance dimensions.

Retranslate the incident – Another group of knowledgeable persons assign

each incident to the dimension that it best describes. Incidents for which there is

less than 75% agreement with the first group are not retranslated.

Assign scales to incidents – The second group rates each incident on a 7 or 9

point scale. Rating is done on the basis of how well the behaviour described in the

incident represents the performance on the appropriate dimensions. Means

(average) and standards deviations are then calculated for the scale values assigned

to each incident.

Develop final instrument – A subset of the incident that meets both the

retranslation and standard deviation criteria is used as a behavioural anchor for the

final performance dimensions. A final BARS instrument typically comprises a

series of vertical scales that the endorsed by the include incidents. Each incident is

positioned on the scale according to its mean value.

360 degree performance appraisal – This is a new concept in performance

appraisal, where the feedback is collected from all around – the employee, the

superior, the subordinates, the peer group, and the customers. The evaluation is

very comprehensive in terms of the employee’s skills, ability, styles, and job related

competencies. This system has the following advantages:

a) Higher validity and reliability of the evaluation.

b) Self evaluation by the employees gets compared with the perception of others.

c) Helps in maximizing employee potential in the face of challenges.

ADVANTAGES OF BARS:

Ratings are likely to be accurate because these are done by experts.

The method is more reliable and valid as it is job specific and identified observable

and measurable behaviour.

Ratings are likely to be more acceptable due to employee participation.

The use of critical incidents is useful in providing feed back to the employee being

rated.

Limitations of the bars:

It is very time consuming and expensive to develop BARS for every job.

Behaviours used are more activity oriented than result oriented.

Appraisal by results or MBO (Management by Objectives) – The concept of

management by objectives was developed by Peter Drucker in 1954. Since, then MBO has

become an effective and operational technique of performance appraisal and a powerful

philosophy of managing.

MBO has been defined as “a process whereby the superior and subordinate

managers of an organization jointly identify its common goal, define each individual’s

major areas of responsibility in terms of results expected of him and use these measures as

guides for operating the unit and assessing the contributions of each its members”. In other

words, MBO involves appraisal of performance against clear, time bound and mutually

agreed job goals.

PROCESS OF MBO:

Set organization goals – Goals of the organization in key areas of performance are

laid down. These goals are defined in clear, precise and measurable terms. A

through analysis of internal and external environment of the organization is made to

set these goals.

Defining performance targets – On the basis of organizational goals, performance

standards for each employee are defined. Every subordinate writes down his own

performance goals, which are work related, and career oriented. His manager also

writes down the goals he thinks the subordinate should strive for. The two then

discuss them, reach an agreement and put the agreed goals in writing. Thus,

employees at all levels are involved in goal setting. The goals are periodically

reviewed and revised to keep them flexible and upto date.

Performance review – Frequent performance review, meetings between manager

and subordinates are held. In these meetings progress is assessed, weaknesses and

constraints are identified and steps to be taken to improve performance are decided.

Subordinates actively participate in this process. This leads to self control by the

employees.

Feed back – After every performance review feedback on performance is

communicated to the employee so that he can regulate and improve upon his own

performance. On the basis of performance review rewards are decided. New goals

and performance targets are determined for the next period.

ADVANTAGES:

Ends – means chain

Role clarify

Objective appraisal

Motivation and commitment

Management development

Co-ordination

LIMITATIONS:

Difficulty in goal setting

Problem of participation

Lack of understanding

Time consuming and expensive

Inflexibility

SHORT COMINGS OF PERFORMANCE APPRAISAL:

The ideal approach to performance evaluation is that in which the evaluator is free

from personal biases, prejudices, and idiosyncrasies. This is because when an evaluation is

objective, it minimizes the dysfunctional behavioural of the evaluator, which may be

detrimental to the achievement of organizational goals. The factors which impede objective

evaluations are:

The halo effect – The halo effect is a “tendency to let the assessment of an

individual one trait influence the evaluation of that person on other specific traits”.

There is this effect in appraisal when the appraiser assigns the same rating to all

traits regardless of an employee’s actual performance on these traits.The halo effect

refers to the tendency to rte an individual consistently high or low or average on the

various traits, depending upon whether the rater’s overall impression of the

individual is favourable or not. This means that the halo effect allows one

characteristic, or occurrence (either good or bad) to Influence the rating of all

performance factors. The halo effect problem can be alleviated by:

Providing a training programmer to the evaluators.

Restructuring the questions by requiring the evaluator to consider each question

independently.

Leniency or strictness tendency - Every evaluator has his own value system which

acts as a standard against which he makes his appraisals. Relative to the true or

actual performance an individual exhibits, some supervisors have a tendency to be

liberal in their rating, that is they consistently assign ‘high values’ to their

employees, while at other times they may have a tendency to assign consistently

‘low rating’. The former tendency is known as ‘positive leniency error’ while the

latter as ‘negative leniency error’. Both these trends usually arise from varying

standards of performance observed by supervisors and from different interpretations

of what they evaluate in employee performance. The tendency can be avoided by

holding meeting or training sessions for raters so that they may understand what is

required of them in rating.

The central tendency problem - It is the most commonly found error. It assigns

“average ratings” to all the employees with a view to avoiding commitment or

involvement; or when the rater is in doubt or has inadequate information or lack of

knowledge about the behaviour of the employee, or when he does not have much

time at his disposal. The ranking tools discussed earlier are aimed at avoiding this

problem.

Similarity error – This type of error occurs when the evaluator rates other people

in the same way he perceives himself. This error also washes out if the same

evaluator appraises all the people in the organization.

Miscellaneous biases – Bias against employees on ground of sex, race, religion or

position is also a common error in rating. For example, a higher rating may be

given to a senior employee. The rater may also be influenced by organizational

influence and give higher rating to those holding higher positions.

Social differentiation – Rating is sometimes impeded by the evaluator’s style of

behaviour. Pious has classified raters as high differentiations that is using most of

the scale; or ‘low differentiators’ – that is, using a limited range of the scale. “Low

differentiators tend to ignore or suppress differences, perceiving the universe as

more uniform than it really is.

High differentiators, on the other hand, tend to utilise all available information to

the utmost extent and thus are better able to perceptually deny anomalies and

contradictions than low differentiators”. A social differentiation makes evaluation

using ‘trait’ criteria unreliable.

Spill Over Effect – This type of error occurs when past performance rating

influences the current rating.

STEPS FOR MAKING APPRAISAL SUCCESSFUL:

Existence of an atmosphere of confidence and trust.

The results of performance rather than personality traits should be given due weight.

The supervisor should analyse the strengths and weaknesses of employee and advise

him.

The appraisal programmes should be less time consuming and less costly.

The results of appraisal should be immediately communicated to the employee.

A post appraisal interview should be arranged.

Training can be used to improve the standards of performance appraisal.

The right appraisal tools should be chosen to minimize arising problem.

PERFORMANCE APPRAISAL AT VISAKHAPATNAM STEEL PLANT

COMPONENTS:

When to appraise:

Performance appraisal across all levels at Visakhapatnam Steel Plant is conducted twice in

a year. The Human Resource Department sends the appraisal forms to the concerned

departments after duly filling the staff details.

Who should appraise:

The immediate superior of the employee not below the Assistant Manager cadre shall be

the Reporting Officer. In case the employee is directly working under the supervision of

any higher officer.

PROCEDURE:

The Human Resource Department prepares appraisal forms for each and every category of

employee and at the start of the appraisal period; it sends these forms to the concerned

departments after filling in the necessary details of the employee to be appraised which is

called ‘background information’.

The staff should have worked at least for a period of 6 months to be appraised by an officer.

In case the appraise reports to more than one Reporting officer in an appraisal year, on

transfer, promotion etc., the personnel department would forward the appraisal forms to

Reporting officer concerned for the period the appraise reports to them.

The assessment of an employee is primarily governed under a 2 tie system that is

assessment by the Reporting Officer as well as by the Reviewing Officer, where the

assessment is subject to concurrence of the Consenting Authority, which will be final.

The assessment has done on the basis of certain attributes/factors which help in

defining the job requirements of a particular job. Usually a 4 point scale or a 10 point scale

for each factor is used for rating. Once the reporting officer gives his rating and comments

if any, the same shall be put to the reviewing officer who after careful scrutiny of the

appraisal will pass his remarks.

After the Reviewing Officer’s comments are given and duly signed by him, he can advice

the reporting officer to discuss the appraisal with the employer or, in certain cases may

decide to discuss the appraisal with the employee himself but in the presence of the

Reporting Officer.

The Reporting Officer after rating the employee on various attributes will give his remarks,

which are communicated to the reviewing officer. Later these are discussed with the

employee to know his reaction. After the discussion with the employee, the reporting

officers give his final remarks and his suggestions for improvement of the employee

performance. The reviewing officer for further comments later scrutinizes these.

The complete appraisal report is then sent back to the personnel department in a

confidential cover. The personnel department will then check the appraisal report for

irregularities and any adverse entries against any of the employee made by the reporting

officer will be communicated to the employee in a covering letter asked him/her to improve

and a copy of the same will be placed in his/her personal file.

OBJECTIVES OF PERFORMANCE APPRAISAL SYSTEM:

To appraise the individual’s performance on the work assigned to him and qualities

he is expected to show on the job in performing his tasks as expected by the

organization through his supervising officers and to assess the potential for higher

responsibilities.

To generate inputs for promotions, confirmation, placements, training and personnel

and developmental decisions in respect of the individual so appraised.

To assess the professional, managerial, behaviour and other training and

development needs and provide information to the personnel/HRD department for

the development decisions.

GUIDELINES FOR APPRAISERS:

The employee should be appraised for his/her present position.

Judgement should be based on the entire review period and not on isolated

incidents.

Snap judgements should be avoided.

Each factor under considerations should be appraised independently without being

influenced by other factors.

It is advisable that the individual being assessed should compare with others of the

same rank employed on more or less similar type of work.

Over – rating as well as under –rating diminishes the value of the assessment.

Reason for giving rating of the attribute should be well substantiated.

A copy of the adverse remarks communicated to the employee should be attached to

the appraisal form.

ABOUT THE FORMS:

Content of the forms:

BACKGROUND INFORMATION of the employee to be filled in by the Personnel

Department which contains:

1. Name

2. Designation

3. Date of Joining

4. Department

5. Employee Number

6. Special assignments

7. Qualifications

8. Commendations

9. Punishments and warnings awarded during the year (with reasons).

ATTRIBUTES FOR PERFORMANCE/POTENTIAL ASSESSMENT;

For Officers:

Professional knowledge and application

Capacity to achieve results

Dependability

Judgement and decision making

Communication Skills (Written or oral)

Leadership

Planning and organizing ability

Cooperation and team spirit

Adaptability

Personality

For Technical/Non-Technical Staff (Common Attributes):

Job knowledge: Knowledge and understanding of job assigned.

Quality of work: Thoroughness and accuracy of work done without mistakes,

neatness and present ability should be considered.

Conduct: Ability to get on with other fellow employees.

Regularity: Punctuality and regularity of attendance.

Leadership: Ability to get work done by subordinates giving them clear guidance.

Cost consciousness: Ability to foresee the resource requirement for any task and

complete assignments with minimum waste.

For Technical Staff only:

Safety Consciousness: Habits and work practices in respect of personal safety and

safety of fellow employees.

Care of tool and equipment: Manner in which tool and equipment handling is done

ensuring better tool life and less maintenance and damage.

For Non-technical Staff only:

Dealing with others: Ability to appreciate others point of view and approach in dealing with

customers, supplies or any other outsiders in conformity with organizational requirements.

RATING OF ATTRIBUTES:

The common factors and the ratings under which the appraisals are made as follows:

QUANTITY OF OUTPUT: Extent of target fulfilment and completion of assigned tasks.

RATING REASON

15-13 Output of work exceptionally high and above expectations/task assigned despite high degree of difficulty of tasks.

12-10 Fulfilment of all tasks/targets despite constraints.

9-7 Tasks assigned generally met with moderate effort.

6-4 Output below target/expectation despite lack of constraints. Moderate effort.

3-1 Output far below expectation. Target/Tasks not fulfilled. Low effort.

QUALITY OF OUTPUT: General excellence of output, the extent of work free from

efforts.

RATING REASONS

15-13 Excellent quality of output accurate in work under all conditions.

12-10 Does a thorough and accurate job.

9-7 Generally produces work of acceptable quality.

6-4 Work barely up to the mark.

3-1 Works consistently below required standards.

COST CONTORL: Awareness of cost aspects in the job. Optimum utilisation of available

resources and reduction of wastes.

RATING REASONS

10-9 Always makes optimum utilisation of resources.

8-7 All assigned tasks completed within the specific cost parameters.

6-5 Generally keeps within cost parameters and time schedules.

4-3 Conscious of the need to affect economy and manage time.

2-1 Wasteful in work. Lacks desire to complete assignments in time.

JOB KNOWLEDGE AND SKILL: Knowledge pertaining to the area of work and related

areas.

RATING REASONS

10-9 Excellent ability to anticipate future work needs ahead of time.

8-7 Good knowledge of his own job and related areas.

6-5 Knowledge adequate in own area.

4-3 Knowledge inadequate in own and related areas.

2-1 Poor knowledge. No motivation to learn.

DISCIPLINE: Adherence to company policies and rules.

RATING REASONS

10-9 Exemplary behaviour and conduct.

8-7 Good behaviour and conduct.

6-5 Discipline is generally good.

4-3 Conduct and discipline within manageable limit.

2-1 Low in discipline.

INTIATIVE: Ability to be self reliant and move forward on a task without outside

direction.

RATING REASONS

10-9 Totally self-reliant. A self starter

8-7 Good initiative

6-5 Generally shows good initiative

4-3 Needs guidance, instructions and follow up.

2-1 Always requires to be told.

COMMUNICATION: Skills and desire to share available information with all concerned.

RATING REASONS

10-9 Excellent clarity of thought and expression.

8-7 Shares information with all concerned.

6-5 Has moderate skill and desire to share information.

4-3 Only believes in downward communication.

2-1 Lacks both the skill and the will to communicate

MANAGEMENT OF HUMAN RESOURCES: Effective control and utilisation of

subordinates, ensuring discipline, integrating employees into teams and motivating them for

higher levels of performance.

RATING REASONS

5 Excellent control over and utilisation of people.

4 Good utilisation of people

3 Plays basically a controlling function

2 Has little control

1 Has to control over his/her people.

CHAPTER-IV

DATA ANALYSIS AND INTERPRETATION:

A sample of 60 respondents was elected at random from different departments.

A survey was conducted by way of questionnaire to find out whether the employees

are satisfied with the existing system and their opinions on rated areas.

The questionnaires consists of 19 questions to evaluate the performance of the

employees in VSP and this questionnaire is submitted to all departmental executives in the

organization and they take 20 minutes to fill the questionnaire.

After the filling of questionnaire, the analysis part of the study is started. The

graphical representation is based on the response to the answers submitted by the

employees and these are analysed in the percentage form.

By knowing the percentage, we can identify the performance of the employee and to

identify the way of thinking of employees. By this analysis, we can determine the

deficiencies in the organization.

The responses were given by respondents were tabulated and a score sheet is

prepared and graphically represented in the following study.

Data collected from 60 different categories of respondents from different departments

TABLE NO.4.0

Sl.NO. RATING RESPONDENTS PERCENTAGE

1. Junior officer 18 30

2. Junior manager 16 26.66

3. Assistant manager 12 20

4. Deputy manager 9 15

5. Manager 5 8.33

TOTAL 60 100

The above table No.4.0 shows that most of the respondents are Junior Manger (30%),

Junior Manager (26.66%) and Assistant Manager (20). They are all front line engineers

some of them are directly recruited as a junior manager and some of them are internally

promoted candidates.

BAR DIAGRAM 4.0

HAPPY BEING ASSOCIATED WITH VSP:

TABLE NO.4.1


1. Strongly disagree 0 0

2. Disagree 0 0

3. Agree 32 53.3

4. Strongly Agree 28 46.7

TOTAL 60 100

The above table No.4 1 shows that most of the respondents (46.7 %) are strongly

agree. Because, the employees in VSP are satisfied to do work with pleasure. The

organization provide favourable climate to employees in their work life. So, employees of

VSP are happy to work with the organization. Some of them are Agree (53.3 %).

BAR DIAGRAM 4.1

IS THERE PERFORMANCE APPRAISAL SYSTEM IN RINL/VSP:

TABLE NO.4.2


1. Yes 60 100

2. No. 0 0

TOTAL 60 100

The above Table No.4.2 shows total numbers of respondents (100%) are agree.

Because the employees in VSP are satisfied to do work with pleasure. The organization

provide favourable climate to employees in their work life. So, employees of VSP are

happy to work with the organisation.

BAR DIAGRAM 4.2

EMPLOYEES OPINION ON PRESENT PERFORMANCE APPRAISAL SYSTEM

IN RINL/VSP.

TABLE NO. 4.3


1. Excellent 06 10

2. Good 27 45.40

3. Moderate 22 36.60

4. Bad 05 7.8

TOTAL 60 100

The above table No.4.3 explains about the present performance appraisal system,

most of them agreed as good (45.40%). Some are Moderate (36.60%). Some employees

says excellent who are benefited in their work life (10%) and very less persons say it is bad

(7.8 %). By this we can evaluate the drawbacks of the present system in VSP.

PIE DIAGRAM .4.3

PERFORMANCE APPRAISAL SYSTEM HELPS IN ASSESSING COMPTENCY

TABLE NO.4.4


1. Strongly disagree 4 6.66

2. Disagree 15 25

3. Agree 36 60


TOTAL 60 100

The above table no.4.4 explains the performance appraisal system helps in assessing

competency of employees. Here, employees agree (60%). Most of the employees think that

the performance appraisal system is used to measure the competencies of them.

PYRAMID DIAGRAM .4.4

PERFORMANCE APPRAISAL SYSTEM CREATES AN EFFECTIVE WORK

ENVIRONMENT AND POSITIVE RELATIONSHIPS.

TABLE NO.4.5



2. Disagree 16 26.6

3. Agree 37 61.6


TOTAL 60 100

The above table 4.5 explains that the performance appraisal helps in creating a

effective work environment the employee are agreed (61.6 %), employees are strongly

agree (11.8 %). Employees are strongly disagreeing (26.6%) to the statement. By this we

can understand the behavioural attitude of an employee towards performance appraisal

system. Most of them are agreed and fewer members are disagreed.

LINE DIAGRAM NO.4.5

PERFORMANCE APPRAISAL SYSTEM HELPS TO KNOW THE STRENGTHS

AND WEAKNESS OF SUBORDINATES.

TABLE NO. 4.6



2. Disagree 12 20

3. Agree 40 66.6


TOTAL 60 100

The above table no.4.5 explains about does the performance appraisal system helps

in knowing the strengths and weakness of subordinates to this statement employees are

agree (66.6% ) and employee are strongly agree ( 13.4 %). So, employees (66.6%) are

agree to this system is useful to knowing the strengths and weakness of subordinates and it

is an important activity to assess the performance of the employee.

DOUGHNUT DIAGRAM: 4.6

LOW PERFORMANCE IS DUE TO LACK OF SKILL

TABLE NO. 4.7



2. Disagree 36 60

3. Agree 18 30

4. Strongly Agree 0 0

TOTAL 60 100

The above table no.4.7 explains that employees disagree that low performance is

due to lack of skills (60%), agree the statement (30%) strongly agree (0%) and employees a

strongly disagree (10%) By the above analysis employees are not agree because less

performance due to lack of guidance about the work not due to lack of skills.

BAR DIAGRAM: 4.7

PERFORMANCE APPRAISAL HELP IN ASSESSING THE TRAINING NEEDS

OF THE SUBORDINATES

TABLE 4.8


1. Yes 21 35

2. No 10 16.6

3. Sometimes 29 48.4

4.

TOTAL 60 100

The above table No.4.8 shows the employees think performance appraisal helps in

assessing the training needs of the subordinates (35 %). Employees (16.6 %) are

sometimes it is and employees (48.4 %) tick. No. By this analysis the responses most of

the percentage said yes and sometimes, very low percentage say no. Due to this analysis we

can assess that almost employees are aware of performance appraisal is necessary for

training.

BAR DIAGRAM: 4.8

PERFORMANCE APPRAISAL SYSTEM ENCOURAGES PEOPLE TO PLAN

THEIR WORK WELL IN ADVANCE.

TABLE NO.4.9



2. Disagree 16 26.6

3. Agree 39 65


TOTAL 60 100

The above table no.4.9 shows that respondents agree (65%). Disagree (26.6 %)

Strongly disagree (0%) and remaining strongly agree (8.4 %). With the statement

performance appraisal system encourages people to plan their work well in advance.

CONE DIAGRAM .4.9

THE OBJECTIVES OF THE PERFORMANCE APPRAISAL SYSTEM ARE

CLEARLY SPELT OUT

TABLE NO.4.10



2. Disagree 11 18.4

3. Agree 49 81.6


TOTAL 60 100

The above table No.4.10 explains about the objectives of the performance appraisal

system is clearly spelt out to the employees. As per my survey most of the employees are

agree (81.6 %) and some employee are disagree (18.4 %). The organization creates

awareness to employees about the objectives of the performance appraisal we can

determine through response.

PIE DIAGRAM: 4.10

BEST PERSON TO CONDUCT PERFORMANCE APPRAISAL SYSTEM

TABLE NO.4.11


1. Superior 46 76.8

2. Subordinates 4 6.6

3. Peers 5 8.3

4. HOD 5 8.3

TOTAL 60 100

The above table No. 4.11 explains regarding who is the best person to conduct

performance appraisal system in the organisation. Half of the employees agreed that their

superior (76.8 %) employees are agreed that their peers (8.3 %) employees are agreed that

their HOD (8.3 %) and remaining employees are agreed that their sub-ordinates are the best

person. This response is based on their way of thinking about the person above cadre to

him/her. It can be determine through close relation with their superiors.

CYLENDER DIAGRAM: 4.11

PERFORMANCE APPRAISAL SYSTEM IN VSP/RINL

TABLE NO. 4.12


1. Performance and Potential appraisal

11 18.3

2. Team appraisal 4 6.8

3. Self appraisal 35 58.3

4. 360 degree appraisal 10 16.6

TOTAL 60 100

1 The above table No. 4.12 explains about the best performance appraisal in

Visakhapatnam Steel Plant according to employees are agreed with self appraisal (58.3%)

360 degree appraisal (16.6%) Performance and potential appraisal (18.3 %) and team

appraisal (6.8 %). As per my survey, I observe that the employees in VSP/RINL are

genuine to assess their performance on their own.

PYRAMID DIAGRAM: 4.12

MANAGERS CAN GET WORK OUT OF EMPLOYEES WITHOUT

PERFORMANCE APPRAISAL SYSTEM:

TABLE NO.4.13



2. Disagree 22 36.6

3. Agree 33 55


TOTAL 60 100

The above Table No.4.13 shows that the majority of respondents (55% %) express agree,

and remaining respondents (36.6%) are disagree to the statement. By these methods, the

managers can motivate the employees to work done. So most of the employees can accept

this technique in their job career.


AWARENESS PROGRAMMES REGARDING PERFORMANCE APPRAISAL

SYSTEM SHOULD BE CONDUCTED PERIODICALLY:

TABLE NO.4.14



2. Disagree 5 8.3

3. Agree 51 85


TOTAL 60 100

The above table No.4.14 agree by (85%) respondents and (6.7%) employees are

strongly agree the statement i.e. awareness programmes are conducted periodically. In

VSP, awareness programmes regarding performance are take place twice in a year.

LINE DIAGRAM: 4.14

PEOPLE HAVE AN OPPORTUNITY TO PARTICIPATE IN THEIR APPRAISAL

IN THE ORGANISATION:

TABLE NO.4.15


1. Yes 30 50

2. No 6 10

3. Partially 24 40

4. TOTAL 60 100

The above table No.4.15 shows that the majority of (50%) respondents say yes to

the above statement. (40% ) say partially and (10%) expressed No to the given statement.

So, most of the employees are participate in the appraisal system.

CONE DIAGRAM: 4.15

SUPERIORS IN THIS ORGANISATION GIVE FEEDBACK TO THEIR

SUBORDINATES WITH ADEQUATE CARE AND CONCERN.

TABLE NO.4.16


1. Strongly disagree 5 8.3

2. Disagree 14 23.3

3. Agree 38 63.4


TOTAL 60 100

The above table No.4.15 shows that (63.4 %) respondents agree with the statement

(5% ) strongly agree and remaining (23.3 %) respondents disagree to the statement

superiors give feedback to their subordinates with adequate care and concern.


PERFORMANCE APPRAISAL SYSTEM FORMS PROPER BASIS FOR MAKING

DECISIONS REGARDING PROMOTIONS AND REWARDS SYSTEM:

TABLE NO.4.17



2. Disagree 21 35

3. Agree 39 65


TOTAL 60 100

The above table No.4.17 fully explains about whether the performance appraisal

system forms proper basis for making decisions regarding promotions and rewards system

in among employees (65 %) agree.

DOUGHNUT DIAGRAM: 4.17

VISAKHAPATNAM STEEL PLANT/RINL GO BY MERIT (OR) SENIORITY WITH RESPECT TO PROMOTIONS

TABLE NO.4.18


1. By Merit 0 0

2. By Seniority 32 53.4

3. By Both 28 46.6

4. None 0 0

TOTAL 60 100

The table No.4.17 explains about whether Visakhapatnam Steel Plant gives

promotions by Merit or Seniority. (53.4%) respondents say that by both Merit and

Seniority (46.6%) respondents by Merit ( ) respondents by seniority. VSP gives

promotion on the basis of merit and seniority.

BAR DIAGRAM: 4.18

PERFORMANCE APPRAISAL SYSTEM EFFECTS ON THE ORGANSIATION

DEVELOPMENT:

TABLE NO.4.19


1. Yes 28 46.6

2. No 8 13.4

3. Partially 24 40

TOTAL 60 100

This Table No.4.19 represents performance appraisal system effects on the

organization development (46.6 %) of the employees say that Yes (13.4%) say No and

(40%) say partially for this question. By this response we can assess that it effects the

organizational development.

CONE DIAGRAM 4.19

CHAPTER-V

SUGGESTIONS, SUMMARY AND CONCLUSIONS

SUGGESTIONS:

Samples of 60 responds, selected at random from JO to middle level management

from different departments were sought for their opinions on the existing appraisal system.

A survey was conducted (by way of questionnaire and discussion) to find out

whether the employees are satisfied with the existing system and their opinions on related

areas.

SUGGESTIONS FOR A BETTER PERFORMANCE APPRAISAL SYSTEM:

For improvement of the performer the appraisal can be conducted quarterly so that better results can be achieved

For better results, Appraisal system should be connected to incentive scheme.

As the appraisal is directly linked to promotion or career progression of an employee, there should be transparency in discussing the appraisal report.

Objective and fair assessment can induce seriousness towards appraisal and help increase motivation among employees.

It should be ensured that employees take appraisal system seriously. To achieve this, they should be given proper awareness on appraisal system. (Especially for new comers and internally promoted employees).

If areas of improvement are linked with present year tasks, then we may get better results.

o For example, tasks in blast furnace department can be segregated into three categories, like

productive tasks, safety tasks & Job related tasks.

o Under each category again 5 points should be there. Each employee is required to fulfill at least 3 points in each category.

Discussion between the appraiser and appraise regarding the appraisal should be transparent and open.

Appraisal system should be made online so that it will be transparent and punctual.

REASONS WHY PERFORMANCE APPRAISAL DOES NOT FORM A PROPER BASIS FOR DECISIONS REGARDING PROMOTIONS:

Biased evaluation is not a proper indication of an employee’s performance standards.

Lack of awareness of appraises, regarding the appraisal techniques and in dealing with post appraisal tools like counseling.

Reliance on seniority rather than on performance.

Manipulations, impression, ideas and deludes can damage the credibility of the appraisal.

SELF APPRAISAL AS THE BEST FORM OF EVALUATION OF ONE’S PERFORMANCE:

This refers to the evaluation that the employee makes of himself, generally. The

employee and the supervisor discuss their perceived differences here. The aim is not only

to assess the appraise, but also to encourage his development, to build teamwork and to link

his job performance with organisation’s goals.

Self-appraisal can be very effective, as it provides the employee with an opportunity

to participate in the appraisal process and set performance targets for himself. Numbers of

organisations encourage discussions regarding differences in subjective rating between the

employee and the supervisor so as to ensure active involvement from both sides.

SUMMARY:

The “Quality” revolution has changed the way in which many organisations operate.

With global competition, the drive to provide better quality and to satisfy external and

internal customers has been activated. In Visakhapatnam Steel Plant, an attempt was made

to integrate this though Performance Appraisal System.

Visakhapatnam Steel Plant executive Performance Appraisal System mainly aims at

“Result Oriented Executives”. To bring this about, many activities are to be initiated, like

Performance based recognition, competencies to handle future/current jobs, career growth

etc and PAS designed to provide the key inputs that all the above need to be achieved.

Their system of appraisal in the first instance looked “fool-proof” and well designed

to suit the quality generation, for it has integrated in itself some wonderful concepts. But,

when this study is completed the result/conclusions showed that the employees, who

actually are participants in the system, do feel that this system is not very effective.

Surprised by this result, an attempt was made to analyse the REASONS FOR

DISSATISFACTION of executives with their performance appraisal system. They are:

1. Mostly this system is not helping the person to assess his capabilities the assessment is mostly dependent upon the obedience with his boss.

2. Self-assessment does not carry enough weight age. So, the drive to sincerely appraise ones own self is lacking.

3. Potential review is integrated in the PAS. But, potential being the capability to take up the future job cannot be judged by the performance on the present job.

4. Training needs identified either through self assessment or team assessment are consolidated and only a few of them are finalised after several rounds of filtering. This indirectly results in deputing for training programmes which are not relevant to the appraise and only an eye wash technique.

5. The employees are assessed by a team of appraisers, who are their superiors. The problem here is that, the team of appraisers who do not have regular interaction with the appraise, may give a rating which can be mostly subjective.

6. Tasks and targets do not reflect the efficiency of executing them.

7. Absence of a proper reward and punishment system.

8. Lack of time spent by the appraiser and apprise during the performance review.

9. A good number of employees are not satisfied with the ceiling prescribed for distribution in an appraisal group.

10. Employees feel that filling the appraisal form is a routine job, and the procedure and method should keep on changing from time to time.

11. While going through the analysis it seems that a good number of people are uncertain about each question asked to them which clearly shows that there might be some fault existing in the system which could be explored and overcome. However, none of the above reasons identified are so damaging that they cannot overcome. With slight changes in appraisal format and rating pattern the problems would be mostly solved and a better Performance Appraisal System can be evolved.

CONCLUSION

VIZAG STEEL - YESTERDAY, TODAY AND TOMMORROW

YESTERDAY

The momentous decision to establish a Steel Plant at Visakhapatnam was

announced in the Parliament in 1970 by the then Prime Minister, Smt. Indira Gandhi. The

foundation stone for this massive project was laid in 1971. The Detailed Project Report was

prepared in 1977. However, it was only in 1979 with the Government of erstwhile Soviet

Union offering techno-economic cooperation, the cabinet approved the proposal for setting

up of an integrated Steel Plant at Visakhapatnam.

The 7 M tall Coke Ovens with Dry Quenching facility, the 3,200 cum Blast

Furnaces and the 100% Bloom Casting technology and fully computerized Rolling Mills

are only some of the unique features of VSP's most modern assembly of global

technologies.

However, the journey of Vizag Steel has not been very smooth. 22 long years

between conception and commissioning resulted in an increase of project cost to over Rs.

8,500 Crores. The implication of this was very high interest and depreciation charges,

resulting in accumulated loss of Rs. 2,033 Crores even before start of the operations.

Distant raw material linkages coupled with lack of captive mines for major raw

materials, have resulted in high raw material costs too.

Also, by the time the plant started its full-fledged operation, it had to operate in the

decontrolled regime of iron & steel. After a short period of operations, tumultuous times

were experienced due to internal technological problems like the coke oven set back.

All these problems led VSP to its nadir point - it's reporting to BIFR. After that, the

plant has exhibited dramatic turn around and has been making profits continuously for the

past 4 years.

TODAY

RINL, in spite of operating at 120% of its rated capacity, registered 2% growth in

saleable steel production and the total sales have been improved by 4%. The Organization

has become net positive in 2008-09, having wiped out all accumulated losses and registered

Rs.1251 Crores net profit after taxes. The efforts have been duly recognized both by the

Government and the society and a number of accolades have been bestowed, significant

among them being the National Energy Conservation Award for the 6th time in concession,

the National Award for Excellence in "Water Management, the National Award for

Excellence in Cost Management, the QCFI Award and the Viswakarma Puraskars.

TOMMORROW

In line with the vision in National Steel Policy envisaging 110 MT steel by 2019-20,

Vizag Steel is also planning to expand its capacity. Considering the buoyancy in domestic

steel market for long products, which is the product mix of VSP and the high acceptance of

VSP's brand image in the market, an expansion plan has been proposed. The expansion plan

of doubling the capacity of the plant has been cleared in a record time of 10 months and the

entire Vizag Steel collective is totally geared up for completing the expansion in the

stipulated 36 months. The consultant is in place and the funds are in hand. The expansion

should give a strong footing for VSP's growth.

The expansion program is progressing well as per plans and the present focus is on

creating an enabling infrastructure such as roads, water, power etc., for smooth execution.

Also thrust is on finalization of the specifications and placement of orders. To leverage

from our brand leadership in the long segment category, expansion has been cast to enhance

volumes in the long product category. A seamless tube mill is also been envisaged to

reduce the dependence on imports in view of the huge requirement by the oil and gas

sector.

BIBLIOGRAPHY

K.K.Ahuja’s “HUMAN RESOURCE MANAGEMENT”, Kalyani Publishers.

ARUN MONAPPA and MIRZA’s “PERSONNEL MANAGEMENT’, Tata Mc Graw-Hill.

ASWATHAPPA’s “HUMAN RESOURCE AND PERSONNEL MANAGEMENT” Tata Mc Graw-Hill.

P.SUBBA RAO’s “HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS”, Himalaya Publishing House.

V S P RAO and P.S.NARAYANA “MANAGEMENT”, Premier Book Company, New Delhi.

Locher, A.H.& Teel, K.S.(1977) Performance appraisal – a survey of current practices, Personnel Journal, Vol.56 No.5 p. 245-257.

Magazines and Periodicals

In House Magazines of Visakhapatnam Steel Plant.

Records & Statistics complied by Personnel/Central Employee Relations Section of Visakhapatnam Steel Plant.

ANNEXURE

Below statements have been framed basing on a rating scale, using the code given below each statement, please tick your choice (ü)

1. Happy being associated with VSP?

1) Strongly disagree 2) disagree 3) agree 4) Strongly agree

2. Is there performance appraisal system in RINL/VSP?

1) YES 2) NO

3. Employee opinion on present performance appraisal system in VSP?

1) Excellent 2) Good 3) Moderate 4) Bad

4. Performance appraisal system helps in assessing competency.


5. Performance appraisal creates an effective work environment and positive relationships.


6. Performance Appraisal system helps to know the strength and weakness of the subordinates.


7. Low performance is due to lack of skill.


8. Performance Appraisal helps in assessing the training needs of the subordinate.

1) Yes 2) No 3) Sometimes

9. Performance Appraisal system encourage people to plan their work well in advance.


10. The objectives of performance appraisal system are clearly spelt out.


11. Best person to conduct performance appraisal system.

1) Superiors 2)Sub-ordinates 3) Peers 4) HOD12. Best performance appraisal system in VSP.

1) Performance and Potential Appraisal 2) Team Appraisal 3) Self-appraisal 4) 360o Appraisal

13. Managers can get work out of employees without performance appraisal system.


14. Awareness Programmes regarding Performance Appraisal system should be conducted periodically.


15. People have an opportunity to participate in their appraisal in the organization.

1) Yes 2) No 3)Partially

16. Superiors in this organization give feed back to their subordinates with adequate care and concern.


17. Performance Appraisal System forms proper basis for making decisions regarding promotions and rewards system.


18. VSP/RINL goes by merit or by seniority with respect to promotions.

1) By Merit 2) By Seniority 3) Both 4) None

19. Performance Appraisal System effects on the organization’s development.

1) Yes 2) No 3)Partially

20. According to you are there any shortcomings in the present performance Appraisal System in Visakhapatnam Steel Plant? If, yes what are they?

a)

b)

21 What suggestions do you make to improve the present performance appraisal system in Visakhapatnam Steel Plant?

a)

b)

Signature:Date:

Name Designation Emp.No. Department

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