L&T

1 SRM School of Management

A STUDY ON THE PERFORMANCE APPRAISAL SYSTEM IN L&T – ECC DIVISION

A PROJECT REPORT

In partial fulfillment of the req

uirement for the award of the degree Of

MASTER OF BUSINESS ADMINISTRATION

BY

S.KARTHIGA (REG.NO.35080234)

Under the Guidance of

Dr.N.SANTHOSH KUMAR (Asst. Professor S.G)

SRM UNIVERSITY SCHOOL OF MANAGEMENT

KATTANKULATHUR – 603203 MAY 2010


ACKNOWLEDGEMENT I wish to place sincere and special thanks to the Management of SRM SCHOOL OF MANAGEMENT

and our beloved DEAN for having offered this type of program as a part of the curriculum

I am highly indebt to my guide Dr. N. SANTHOSH KUMAR, for rendering valuable help in completing this training report successfully

It is my immense pleasure to extend my sincere thanks to all the members of the DEPARTMENT OF MANAGEMENT for providing their valuable support and guidance. My sincere gratitude to Mrs K.Meena Priya for providing me with an opportunity to work

with L&T ECC, Human Resource department at Chennai, as a company project guide who has

provided me with the necessary information and his valuable suggestion and comments on bringing

out this report in the best possible way.

S.KARTHIGA

DECLARATION


I, S.Karthiga, declare that the project report entitled , “A Study on the Performance Appraisal System in Larsen & Toubro Limited – ECC Division” is carried out by myself under the supervision of Dr. N. Santhosh Kumar, School of Management Studies, SRM University, Kattankulathur is the result of the original work done by us. Date: Signature of the Student

CERTIFICATE


This is to certify that the project entitled “A STUDY ON THE PERFORMANCE APPRAISAL SYSTEM IN LARSEN & TOUBRO LIMITED – ECC DIVISION” is a bonafide work done and submitted by S.Karthiga.

In fulfillment of the requirements for the project in Masters Of Business Administration To SRM University, Kattankulathur, Tamilnadu, during the period 2008 – 2010.

Submitted to SRM UNIVERSITY

Faculty Incharge


LIST OF TABLES


S.NO

PARTICULARS

PAGE NO.

1

Cadre * Satisfaction To Present PAS 40

2

Experience * Satisfaction To Present PAS 41

3

Cadre * Developmental Needs Are Expressible 43

4

Cadre * Frank Discussion 44

5

Cadre * Appraiser 46

6

Experience * Job Rotation 47

7

Cadre * Percentage Of Biasing 48

8

Descriptive Statistics 50

9

Description Of The Present Job 51

10

Performance Level

52

11

Satisfaction To Present PAS

53

12

Job Satisfaction

54

13

Self Development

55

14

Performance Level Improvement

56

15

Job Rotation

57

16

Percentage Of Biasing

58

17

Effect Of Negative Feedback

59

18

Appraiser

60

19

HRD’s T&D Activities

61

20 Significance Of PAS

62


LIST OF CHARTS


S.NO

PARTICULARS

PAGE NO.

1

Cadre * Satisfaction To Present PAS 40

2

Experience * Satisfaction To Present PAS 41

3

Cadre * Developmental Needs Are Expressible 43

4

Cadre * Frank Discussion 45

5

Cadre * Appraiser 46

6

Experience * Job Rotation 47

7

Cadre * Percentage Of Biasing 49

8

Descriptive Statistics 50

9

Description Of The Present Job 51

10

Performance Level

52

11

Satisfaction To Present PAS

53

12 Job Satisfaction

54

13 Self Development

55

14 Performance Level Improvement

56

15 Job Rotation

57

16 Percentage Of Biasing

58

17 Effect Of Negative Feedback

59

18 Appraiser

60

19 HRD’s T&D Activities

61

20 Significance Of PAS

63


Introduction



Executive Summary

Analysis And Interpretation



Acknowledgement


Recommendations And Suggestions


Conclusion


Bibliography


Findings And Inferences


Appendix


Research Methodology


Contents


Company Profile


Industry Profile

1. INTRODUCTION

Human Resource Management is developed as a part of management. In simple sense,

Human Resource Management means employing people, developing their resources ,utilizing,

maintaining and remunerating their services in tune with the job and organizational requirements

with a view to contribute to the goals of the organization , individual and the society (Mamoria

,1999)

In this process, the performance Appraisal plays a major part in ensuring organizational

effectiveness through correcting employees for the desired standard and improved performance, and

suggesting the change in employee’s behavior.


A recent development in Human Resource Management indicates that the Performance

Appraisal is the basis for employee development. Performance Appraisal indicates the gap between

the level of desired performance and the level of actual performance. This gap should be bridged

through human resource development techniques like training, executive development etc.

Definition:

“The overall objective of Performance Appraisal is to improve the efficiency of an enterprise

by attempting to mobilize the best possible efforts from individuals employed in it. Such appraisal

achieves four objectives including the salary reviews, the development and training of individuals,

planning job rotation and assistance promotions”.

- CUMMINGS

Performance appraisal deals with the assessment of the extent of the employee’s achievement

in attaining the stipulated tasks, activities or results. Individual performance is the product of ability

to perform a particular job, motivation and organization support. - RAO, 1990

PERFORMANCE DOMAINS IN ORGANIZATIONS

Performance domains are those that lend themselves to evaluation of outputs. The following are

considered performance domains in organizations:

♣ Mission

♣ Process

♣ Mission critical sub system

♣ Individual

In all the above, the criteria for achievement can be listed and the outputs evaluated.


The translation of an organization Vision into individual activities and work plan is as follows:

Strategy

Outcomes (KRA’s)

Goals

Decisions Responsibility/ authority

Activities & Tasks

Tasks Weekly/monthly/ quarterly

Roles

Outputs Results (Qualitative) Targets (Quantitative)

Work Plan

Vision/Mission

KEY ELEMENTS IN PMS:

FLOW CHART


1.1 MEANING OF PERFORMANCE APPRAISAL

Performance appraisal may be defined as a structured formal interaction between a

subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-

annual), in which the work performance of the subordinate is examined and discussed, with a view

to identifying weakness and strengths as well as opportunities for improvement and skills

development.

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

and weaknesses in the work-spot, normally including both the quantitative and qualitative aspects of

performance. It is a continuous process in every large scale organization.

1.2 PERFORMANCE APPRAISAL PROCESS

1. Objectives of performance appraisal should be established before hand.


2. Standards of performance appraisal should also be established and communicated to the

Appraisees.

3. Selection of suitable appraiser should be made.

4. Collection of information by rater regarding the job and job-holder is to be carried out.

5. Method of performance appraisal is to be selected.

6. Actual performance is to be measured.

7. Actual performance must be compared with the standards.

8. Follow-up action.

NEED FOR PERFORMANCE APPRAISAL

To identify training needs of the employee.

To make the employee realize where he stands and to improve in areas where improvement

is required.

To utilize the manpower more effectively.

To improve the efficiency and productivity of the organization.

To motivate employees to perform better.

To maximize the use of human potentials.

To make the performance base/parameters of the company known to the employees.

As a tool for counseling and guidance.


For future job assignments.

It helps the appraisers to prevent grievances and to take disciplinary measures.

PURPOSE OF PERFORMANCE APPRAISAL

The purpose of performance appraisal is to identify the issues, eliminate any potential

problems, and to set new goals for achieving high performance.

Helps to create and maintain a satisfactory level of performance among the

employees of the organization.

This system helps the superiors to have a proper understanding about their

subordinates and to facilitate fair and equitable compensation based on the

performance.

This system contributes to the employee growth and development through training,

self and management development programs.

This system is a future oriented activity showing employees where things have gone

wrong, how to set everything in order and deliver results using their potential in a

proper way.

1.3 METHODS OF PERFORMANCE APPRAISAL

With the development of the appraisal system, a number of methods or techniques of

performance appraisal have been developed.

1.3.1 TRADITIONAL METHODS

Graphics Rating Scales:


Graphic rating scales compare individual performance to an absolute standard. In this

method, judgments about performance are recorded on a scale. This method is also known as linear

rating scale or simple rating scale. The appraisers are supplied with printed forms, one for each

employee.

These forms contain a number of objectives, behavior and trait-based qualities and characters

to be rated like quality and volume of work, job knowledge, dependability, initiative attitude etc. in

the case of workers and analytical ability creative ability, initiative, leadership qualities, emotional

stability in case of managerial personnel. These forms contain rating of scales. Rating scales are of

two types namely Continuous rating scales and discontinuous rating scales.

Ranking Method:

Under this method, the employees are ranked from best to worst on some characteristics. The

rater first finds the employee with the highest performance and the employees with the lowest

performance in that particular job category and rates the former as the best and the later as the

poorest. Then the rater selects the next highest and next lowest and so on until he rates all the

employees in that group. Ranking can be relatively easy and inexpensive, but its reliability and

validity may be open to doubt.

Paired Comparison Method:

This method is relatively simple. Under this method, the appraiser ranks the employees by

comparing one employee with all other employee in a group, one at a time.

Forced Distribution Method:


The rater may rate his employees at the higher or lower end of the scale under the earlier

methods. Forced distribution method is developed to prevent the raters from rating too high or too

low. Under this method, the rater after assigning the points to the performance of each employee has

to distribute his ratings in a pattern to conform to normal frequency distribution.

Checklist Methods:

The checklist is a simple rating technique in which the supervisor is given with a list of

statements or words and asked to check statements representing the characteristics and performance

of each employee. There are three types of checklist methods, namely simple checklist method,

weighted checklist method and force choice method.

Essay or Free Form Appraisal:

This method requires the manager to write a short essay describing each employee’s

performance during the rating period. This format emphasizes evaluation of overall performance

based on strength/weakness of employee performance rather than specific job dimensions.

Group Appraisal:

Under this method, an employee is appraised by a group of appraisers. The group consists of

the immediate supervisor of the employee, other supervisors who have a close contact with

employee’s work, manager or head of the department and consultants.

Confidential Reports:


Assessing the employee’s performance confidentially is a traditional method of performance

appraisal. Under this method, the superior appraises the performance of his subordinates based on

his observations, judgments and intuitions and finally prepares report on it. This method is mostly

followed in public sector organizations.

1.3.2 MODERN METHODS

Behaviorally Anchored Rating Scales:

BARS method combines elements of the traditional rating scales and critical incident

methods. Using BARS, job behaviors from critical incident-effective and ineffective behaviors are

described more objectively. The method employs individuals who are familiar with a particular job

to identify its major components. Then they rank and validate specific behavior for each of the

components.

Human Resource Accounting:

Human Resource Accounting deals with cost of and contribution of human resources to the

organization. Cost of the employee includes cost of manpower planning, recruitment, selection,

induction, orientation, placement, training and development wages, benefits etc. Contribution of the

employees (i.e) employee services can be measured by labor productivity or value added by the

human resources.

Management by Objectives:

Management by objectives is a process whereby the superior and subordinate managers of an

organization jointly identify its common goals, define each individual’s major areas of responsibility


in terms of results expected of him and use these measures of guides for operating the unit and

assessing the contribution of its members.

Thus, MBO focuses attention on participative management and set goals that are tangible, verifiable

and measurable.

Psychological Appraisal:

Psychological Appraisals are conducted to assess the employee’s potential. Psychological

appraisals consist of in depth interviews, psychological tests, consultation and discussion with the

employees, discussion with the superiors, subordinates and peers and reviews of other evaluation.

Evaluation is conducted in the areas of employee’s intellectual abilities, emotional stability,

motivational responses, reasoning and analytical abilities, and interpretation and judgment skills,

social ability. The psychological appraisal results are used for decision about employee’s placement,

career planning and development and training and development.

1.4 CRITERIA & TYPES OF PERFORMANCE APPRAISAL

CRITERIAS:

The criteria for designing appropriate appraisal processes also leads to an understanding of the type

of appraisal process to be selected:

Focus

Depending on the focus, the appraisal can be either Task focused or Development focused.

However, since organizations exist for achieving certain goals, the task focused cannot be dispensed

with. Hence most organizations combine both and carry out a Holistic appraisal.

Confidentiality


Depending on the extent of confidentiality required by the system (which may sometimes be

requisite of appraisal being conducted with the sole requisite of differentiating and retaining only

good performers, or when the sharing of the process, goals and evaluation methods may affect the

conduct of further appraisals), the appraisal process can be either ‘Confidential’ or ‘Open’.

Periodicity

Depending on the industry, periodicity can be Quarterly, Bi-annual or annual. In high-skilled

industries where there demand is high and supply is low, organizations would prefer to have shorter

appraisal cycles with the intent of using reward systems to retain employees. It is also a way to keep

up with the industry standards with respect to compensation.

TYPES:

Line Manager Appraisal:

It is a mechanism to link individual goals and strategic direction. It focuses on objectives and

targets. It can combine regular informal review of performance with formal appraisal to agreed

timescales. It may also include rating scales for comparison purposes.

Self-Appraisal:

It is often used as preparation for the line manager/subordinate appraisal. Individuals take the

lead in reviewing their own performance. It encourages individuals to think about their performance

and development needs in a focused way. The combination of involvement and responsibility

generates commitment to personality taking action.

Upward Appraisal:

It is appropriate in multi-level or source appraisal settings. It may take place in the context of

the subordinate’s appraisal.

Peer Appraisal:


Individuals nominate their own appraiser. It allows choice of peers who are respected for

relevant knowledge of professional specialization. It is relevant in situation where there may be no

immediate manager in a position to appraise.

Team review and appraisal:

Its main feature is establishing team success and areas for improvement. It aids the team-

building and objective-setting process. It encourages open and constructive comment among the

team.

Competency-based Appraisal:

It sets targets for the roles as specific objectives or other measurable objectives. It focuses on

behavioral descriptions of the standards expected in fulfilling the role. It is a development plan

specifying training, development and support towards achieving targets and competencies. It is a

system of periodic review leading to annual appraisal of performance against targets and

achievement of competences.

360-degree feedback:

Its focus is on the development of skills and competences which will improve organizational

performance. Appraisees may include either direct or other managers, subordinates, peers or

customers. Feedback is collected systematically through formally constructed questionnaires. It can

include self-assessment for comparison with the views of others. It is essentially based on ratings

which more often than not are aggregated to represent an average score.

1.5 COMMON APPRAISAL ERRORS:

Contrast Effect:


Tendency of a rater to evaluate people in comparison with other individuals rather than

against the standards for the job.

First Impression Error:

Tendency of a rater to make an initial positive or negative judgment of an employee and

allow that first impression to color or distort the later information.

Halo/Horns Effect:

Inappropriate generalizations from one aspect of an individual’s performance to all areas of

that person’s performance. Halo error occurs when a rater assigns ratings for several dimensions of

performance on the basis of an overall general impression of the ratee.

Similar-To-Me Effect:

The tendency of individuals to rate people who resemble themselves more highly than they

rate others. This is also known as the Personal bias rating error.

Central Tendency:

The inclination to rate people in the middle scale even when their performance clearly

warrants a substantially higher or lower rating. This type of average rating fails to discriminate

between subordinates.

Negative And Positive Skew:

The tendency of rating of all individuals as higher as or lower than their performance

warrants. This is also known as Leniency or Harshness error.

Attribution Bias:


The tendency to attribute performance failings to factors under the control of the individual

and performance successes to external causes.

Recency Effect:

The tendency of minor events that have happened recently to have more influence on the

rating than major events of many months ago. Good performance towards the end of an appraisal

period may dominate the indifferent performance during the beginning of the appraisal period or the

vice versa.

Stereotyping:

The tendency to generalize across groups and ignore individual differences. This is

attributing almost instantly, instinctively and without conscious control.

1.6 KEY ELEMENTS OF THE APPRAISAL PROCESS

The key elements of the appraisal process are

Administration

Assessment

Feedback

ADMINISTRATION PROCESS

The important factors influencing effective administration are timeliness and rigour. The

appraisal process needs to be initiated on time, administered within the time frame and results

(increments, rewards etc) awarded on time. The process itself must be carried out with a lot of rigour

and energy, such that it motivates employees to participate with the same energy and spirit.


ASSESSMENT PROCESS

The assessment goals should focus on strengths, use a long term perspective, should build on

successive appraisal outcomes and serve as a tool for career growth.

The assessment outcomes are a clear understanding of extent of performance of the employee, his

achievement of goals, training requirements and agreed objectives for the next review period.

The assessment discussion should:

Focus on the employee accomplishments.

Point out areas for improvement.

Address questions about the year to come

Focus on competencies required for future roles

Work on defining a path forward

Provide examples to support statements

It is important for the assessor to be:

Authentic with the intent to communicate actual performance

Empathetic and supportive

Be direct and not beat around the bush, but avoid being blunt and harmful

Be equal, be human

Talk to and not talk down

Able to deliver feedback about both good and bad performance without branding the person

as good or bad.

FEEDBACK PROCESS


There is enough material available in books, articles and on the internet about ways of giving

effective feedback. However, the key points to remember about the process itself are that:

It has to be scheduled with enough time for a complete discussion

It should leave doors open for further discussion if required

It should encourage a component of mutuality of exchange

It should provide scope to record the feedback meaningfully but objectively

It should deal with any residues that the employee is carrying

It should reinforce the faith the employee has on the system

BENEFITS OF PERFORMANCE APPRAISAL

Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and

correct existing problems, and to encourage better future performance. Thus the performance

of the whole organization is enhanced.

Performance appraisal provides motivation through achievement, feedback and by agreeing

helpful aims and targets. Performance appraisal can have a profound effect on levels of

employee motivation and satisfaction - for better as well as for worse.

The existence of an appraisal program indicates to an employee that the organization is

genuinely interested in their individual performance and development.

Performance appraisal helps in improving the performance level of the employees by

identifying the training and development needs of the employee and helps in career planning


and development. Performance appraisal can provide a regular and efficient training needs

audit for the entire organization.

Performance appraisal helps the organization to meet the external challenge and it provides

equal employment opportunity among the employees.

Encourages teamwork, team spirit, open communication and empowers employees to take

decisions without fear of failing.

NEGATIVE ASPECTS OF PERFORMANCE APPRAISAL

Negative ratings, subjectivity, favoritism and politics may affect the relationship among the

employees.

Improper feedback from the concerned employee decreases the effectiveness of the

performance appraisal system and the relationship between the superiors and subordinates

may become weak.

The flow of information in the organization will be affected due to communication gap.

Fear, hesitation and ineffective communication can be the few causes of this gap.

Evaluating the performance is a long term process which leads to time consumption. The

problem with subjective measure has the opportunity for bias.

1.7 THE APPRAISAL FORM

The Appraisal form is an instrument to measure and record performance details, record

training requirements, outline aspirations, record plans for career growth and record objectives for

the next assessment period.


With such a big list of things that the appraisal form aspires to be, it is not surprising that HR

managers have a difficult time in deciding what goes into the appraisal form. It is no wonder then,

that appraisal becomes a 10 page document that is often a difficult task to design, cumbersome

process to administer, long and winded for employees to write and impossible to read through

completely for all employees in a short period of time before the increments are due.

However, it is still true that the appraisal form has to capture all the above. To enable this,

there are few possible ways in which this can be managed.

In the section measuring performance, link it clearly to the goals set and outcomes defined in

the previous appraisal.

Any other achievement or activity that took a lot of time and effort will need to be in a

separate section.

The training needs section should be specific to the KRA’s achievement for the next review

period.

There needs to be one section where the employees write their feedback in a free-flow form.

There needs to be one section where the supervisor gives his comments, rates the employee

for his performance and gives his recommendations.

Though aspirations would be captured in the form and discussed during the appraisal, the

outcomes of career planning can be recorded separately and written as a Personal

Development Plan (PDP). This would de-clutter the appraisal form to a larger extent.

The form should not be cluttered with meaningless or complicated instructions. In fact, it is

wise to remember that the form is for the employees to fill and it should be as simple and

inviting to the employee as possible.

It is more important to have a relevant form that is interesting to fill, rather than having a

detailed form that captures ALL information that it cannot process.

1.8 LITERATURE REVIEW

1. PHILOSOPHY OF PERFORMANCE APPRAISAL PROCESS


The articulated statement of philosophy of each organization would indicate the

organizations conception of PMS, a description of how it would be affected, and a justification of

why it has been designed that way. Philosophy statements of the system communicate its goals and

action plans and provide an opportunity to tie-in the appraisal system with that of other systems.

Some of the philosophy statements’ can be based on the following intents/premises:

Look at phenomena of performance – do not classify the employee as good or bad based on

his performance.

Serve as a minor for the person to see his performance.

Help grow the person by giving him feedback about the effectiveness of his actions.

Help the person understand where he stands wrt the organization framework and goals of the

organization.

Support the person in finding path forward by defining a career path.

Define the appraisal process as a constant feedback process – end year is the putting together

of the series – fine tuning.

Link into Business.

Why organizations need to appraise their employees?

The reasons why organizations need to appraise their employees are obvious, but to reiterate:

It aligns goals of organizations with that of the employee at every level – strategy, objectives

and action plans

It helps set up an environment of openness and dialogue.

It helps understand employees, their aspirations, motivating factors and their concerns at

work or about their growth.

It helps organization design reward systems and award increments.

It provides the employee direction, perspective and a feedback of his own competence.

It serves as a barometer to the organization for its own leadership.

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SRM Scchool of Managagement


Estimates indicate that annual infrastructure investments are projected to rise from US $ 17.14 bn. in

1995 - 96 to US $ 30.57 bn. to US $ 51.42 bn. in 2005 - 06 at 1995 - 96 prices.

Today, India is one of the six fastest growing economies of the world and Asia's biggest

Infrastructure Investment opportunity.

CONSTRUCTION INDUSTRY

BOOMING OPPORTUNITIES IN INDIA:

• COMMONWEALTH GAMES - 2010 IN NEW DELHI

• ROADS

• RAILWAYS

• AIRPORTS

• SPECIAL ECONOMIC ZONES ((SEZS)

• URBAN IFRASTRUCTURE - TOWNSHIP / MALLS / OFFICE BUILDINGS ETC.

• POWER

• SAGAR MALA

FDI IN CONSTRUCTION SECTOR IN INDIA

The Govt. of India has permitted FDI up to 100% for development of integrated townships

in India last year. India is now the second most favoured destination for FDI, behind China.

Beside these, there are projects coming up to develop Special Bio-Technology Parks and IT Parks.

3. COMPANY PROFILE

HISTORY

Larsen & Toubro Limited (L&T) is India's largest engineering and construction

conglomerate with additional interests in Electricals, Electronics and IT. A strong customer-focus

approach and constant quest for top-class quality have enabled L&T to attain and sustain leadership


position over 6 decades. L&T enjoys a premiere brand image in India and its international presence

is on the rise, with a global spread of over 30 offices and joint ventures with world leaders.

L&T has an international presence, with a global spread of offices. A thrust on

international business has seen overseas earnings grow significantly. It continues to grow its

overseas manufacturing footprint, with facilities in China and the Gulf region.

The company's businesses are supported by a wide marketing and distribution network,

and have established a reputation for strong customer support. It believes that progress must be

achieved in harmony with the environment. A commitment to community welfare and

environmental protection are an integral part of the corporate vision.

HISTORY:

The evolution of L&T into the country's largest engineering and construction

organization is among the more remarkable success stories in Indian industry. L&T was founded in

Bombay (Mumbai) in 1938 by two Danish engineers, Henning Holck-Larsen(4.7.1907 - 27.7.2003)

and Soren Kristian Toubro(27.02.1906 – 4.3.1982). Both of them were strongly committed to

developing India's engineering capabilities to meet the demands of industry.Beginning with the

import of machinery from Europe, L&T rapidly took on engineering and construction assignments of

increasing sophistication. Today, the company sets global engineering benchmarks in terms of scale

and complexity.

BOARD OF DIRECTORS

ℵ Chairman & Managing Director - Mr A.M. NAIK

ℵ Whole-time Director & President

(Machinery & Industrial Products) - Mr J.P.NAYAK

ℵ Whole-Time Director & Chief Financial officer - Mr Y.M.DEOSTHALEE

ℵ Whole-Time Director & President - Mr .K. VENKATARAMAN


ℵ Whole-Time Director & President

(Electrical & Electronics) - Mr R.R.MUKHIJA

ℵ Whole-Time Director & President

(Construction) - Mr K.V. RANGASWAMI

ℵ Whole-Time Director & Senior Executive

Vice President(Heavy Engineering) - Mr M.V.KOTWAL

VISION

The L&T vision reflects the collective goal of the company. It was drafted through a large scale

interactive process which engaged employees at every level, worldwide.

L&T shall be a professionally managed Indian multinational, committed to total customer

satisfaction and enhancing shareholder value.

L&T ITES shall be an innovative, entrepreneurial and an empowered team constantly

creating value and attaining global benchmarks.

L&T shall foster a culture of caring, trust and continuous learning while meeting

expectations of the employees, stakeholders and society.

GLOBAL PRESENCE:

L&T has a global presence. A thrust on international business over the years has

seen overseas revenues growing steadily. The company has manufacturing facilities in India, China,

Oman and Saudi Arabia.

It has a global supply network with offices in 10 locations worldwide, including

Houston, London, Milan, Shanghai, Seoul. Customers include global majors in over 30 countries.

2006

ECC's Work Culture


Work culture emphasizes :-

ℵ Freedom to experiment

ℵ Continuous learning and training

ℵ Transparency

ℵ Quality in all aspects of work

ℵ Rewards based on performance and potential

ABOUT L&T ECC

ECC today is organized in to four Operating Companies to allow for more in-depth technology and

business development as well as to focus attention on domestic and international project execution.

Each Operating Company is further split into different Business Units (BUs) to take care of the

specific needs of various customers. The Operating Companies (OC) includes:

o Buildings & Factories Operating Company (B&F OC)

o Infrastructure (Infra OC)

o Metallurgical, Material Handling & Water (MMH &W OC)

o Electrical & Gulf Projects (E&GP OC)

ELECTRICAL & GULF PROJECTS OPERATING COMPANY (E&GP OC)

The Electrical & Gulf Projects OC (E&GP OC) offers design and construction services for all types

of industrial and project electrification works as well as for power transmission and distribution

http://www.lntecc.com/homepage/building.htm

http://www.lntecc.com/homepage/infra.htm

http://www.lntecc.com/homepage/metal.htm

http://www.lntecc.com/homepage/gulf.htm


projects in the domestic markets. It also extends comprehensive services for construction of

buildings and urban Infrastructure projects in the Gulf Markets.

In the area of power transmission & distribution, E&GP OC has established a strong presence with a

high reputation for execution of prestigious projects in the Gulf Region.

A. Electrical Projects (Domestic Business)

Electrical, Instrumentation & Communication (EI&C) Sector

Transmission Line & Railway Construction(TLRC) Sector

B. Gulf-Projects(International-Business)

Power Transmission & Distribution Sector (PT&D)

Buildings & Urban Infrastructure Sector (B&UI)

ELECTRICAL PROJECTS (DOMESTIC BUSINESS)

ELECTRICAL, INSTRUMENTATION & COMMUNICATION (EI & C) SECTOR

Electrical Instrumentation & Communication (EI&C) Sector provides turnkey & individual

package based solutions in the electrical infrastructure space. EI&C also provides comprehensive

services in the field of substations (upto 765kV), project electrification & instrumentation. Wide

experience coupled with superior project management skills ensure quality services to customer on a

Sustainable basis. Complete activities of the EI&C Sector are carried out through two business

units:

To focus on customized solutions; the sector operates as two Business units (BU) namely HV

Substation Business Unit and Industrial Electrification Business Unit.

TRANSMISSION LINES & RAILWAY CONSTRUCTION

Transmission-Lines

Turnkey construction of EHV transmission lines is a major area of operation for ECC. With ISO and

OHSAS certified tower-manufacturing facilities in Pondicherry and Pithampur, ECC’s transmission

line construction works have gone beyond Indian boundaries. Services offered include:

http://www.lntecc.com/homepage/gulf.htm#rail

http://www.lntecc.com/homepage/gulf_trans.htm


Design and testing of transmission line towers up to 400kV single and multi circuits

Manufacture of transmission line towers

Sourcing, selection, inspection and supply of all line materials like conductors, insulators, and hardware

Construction of lines up to 765kV including survey, foundation, erection, stringing, testing and commissioning

Other Fields

Railway Construction

As a part of Transmission Lines and Railway Construction Sector, ECC undertakes all types of

Railway Construction works involving Design, Supply, Erection, Testing and Commissioning of

Overhead equipment & Traction Sub-station, Signaling & Telecommunication systems, Supply &

Installation of Permanent way including associated embankment formation, construction of Minor

Bridges / Culvers, Supply of Permanent Way materials, Laying of Track, etc.

Clients include Central Organization for Railway Electrification (CORE), Allahabad, RVNL,

various Construction Departments of Indian Railways / Zonal Railways / Divisional Railways,

Private Siding Owners etc.

GULF-PROJECTS (INTERNATIONAL-BUSINESS)

POWER TRANSMISSION & DISTRIBUTION SECTOR L&T is one of the earliest Indian companies to venture in to the Gulf markets and over the years, it has gained significant market presence in the PT&D

Sector. It has played a significant role in the power evacuation, power transmission and distribution projects across the GCC countries. Having

executed some of the prestigious projects in this area, it has garnered customer goodwill across the Gulf countries. Projects are executed on EPC basis

for the HV Substation/ Transmission Line with complete In-house Design, Engineering, Procurement and Construction including Civil & MEP

services.

BUILDINGS & URBAN INFRASTRUCTURE SECTOR

Buildings & Urban Infrastructure Sector of L&T in the Gulf Region provides integrated construction

services for the construction of:

Residential Segment

Institutional & Commercial Segment

Township Infrastructure Segment


Transportation Infrastructure Segment

L&T is proud to be one among the Global leaders in the region creating Global landmarks and meeting the international quality standards of its clients

and customers.

3.1 OBJECTIVES OF THE STUDY

Primary Objective:

¥ To identify the real opinion of L&T ECC Group officers and staffs regarding the

effectiveness of the present Performance Appraisal system in their organization.

Secondary Objectives:

¥ To examine the employee level of acceptance towards various factors necessary for

appraising the employees.

¥ To identify the satisfaction level of employees towards performance appraisal system.

¥ To suggest necessary modifications in the system of approach to improve and enhance the

current appraisal system.

3.2 NEED FOR THE STUDY

Performance appraisal is the important tool to assess the performance of the employees in the

organization starting from small scale to large scale organizations. Inefficient performance appraisal

system will directly or indirectly affect the functioning of the organization’s objectives. Hence this

project was carried out to study the performance appraisal system of L&T ECC Groups to find its

effectiveness which is considered to be very vital for the success or decline of any organizations.

3.3 SCOPE OF THE STUDY


The present study is limited to E&GP operations in L&T ECC. It can be extended to other

companies of the ECC operations.

The study on the performance appraisal system would help the company in making its

performance appraisal procedures more effective and efficient thereby making the employees more

productive.

3.4 LIMITATIONS OF THE STUDY

¶ On account of time constraints, many respondents couldn’t be reached.

¶ Respondents were not from all cadres, so the result of the research cannot be generalized to

the entire group.

¶ The research is subjected only to the study and analysis on the effectiveness of the existing

Performance Appraisal system, designing of Performance appraisal process is not dealt.

¶ The primary data was collected with the help of structured questionnaire technique.

Therefore the study is bounded by the limitation of this technique.

3.5 HR IN L&T ECC


ECC recognizes that people are the real source of competitive advantage. It is through

people that ECC delivers total customer satisfaction. These values are reflected in our Human

Resources practices which have earned national recognition several times.

ECC-ites go through a process of continuous learning, assisted by training programs. Apart

from on-the-job training and technical training, over 100 programs on general management and

behavioral topics are conducted each year. Interactive CD-ROM based programmes have enabled

employees learn at their pace.

ECC has always believed in experimentation with and implementation of new ideas. HR

practices such as collaborative performance appraisal, career & succession planning, team rewards

have been institutionalized.

ECC Division has an ongoing organization development programs, which is one of the

longest sustaining OD efforts in India.

Awards for L&T HR Practices

• Asia Pacific HR Conclave Award for the company with “Most Innovative HR practices”

• National award for “Best HRD Practices” from Indian Society for Training and Development

• National Award for Outstanding Work in Human Resource Management from National HRD

Network

• Award for Outstanding Human Resources Development from Confederation of Engineering

Industry

• Integration of Information Technology with HR in ECC Division has been recognized by the

National HRD Network

HR Policy

The basic principles of ECC's Human Resources policies include


• Recruitment based solely on merit by following well-defined and systematic selection

procedures without discrimination

• Sustain motivated and quality work force through appropriate and fair performance

evaluation, reward and recognition systems

• Identify training needs within the Organization and design and implement those need based

training programmes resulting in continuous up gradation of knowledge, skills and attitudes

of the employees

• Maintain a quality Human Resource Management System to meet the international standards

as per ISO 9001. Plan, design, train, equip and motivate the department staff to meet this

standard of expectation.

TRAINING

ECC's Human Resources Department believes that Quality is the hallmark of any successful

venture.

Quality Training and Development of Human Resources is realized through:

Identifying training needs within the Organization and designing and implementing those need

based training programs to bring about continuous up gradation of knowledge, skills and

employee attitudes

The following brief highlights ECC's training methodology for the comprehensive development of

its 7000-odd employees.

1. Training Plan

Companies succeed in today's free market economy, only because their employees perform to their

fullest potential. Alive to this home truth, ECC draws up an annual training calendar, highlighting

the training activities for the year. Inputs to formulate this training plan are taken from the

performance review form, by interacting with ECC's Regional Offices and the higher echelons of the


management on the present and future requirements of the construction industry. It also includes

detailed discussions with the faculty.

ECC's training plan includes civil, mechanical, electrical, finance related and behavioural programs,

covering a wide cross-section of employees, as follows:

• A week long Supervisory Development Program and a 10 day Executive Development

Program are designed to provide an exposure to functional management and behavioral skills

to the site based engineers.

• Development of managerial staff is through intensive two-week long programs providing

exposure to holistic understanding of the business, Strategic Planning, Customer

Relationship, Enhancing Shareholder Value, Financial Management.

• For middle management, there is an exclusive nine-day program, designed in collaboration

with Administrative Staff College of India, Hyderabad.

• For top level management, there is an arrangement with Management Development Institute,

Gurgaon to conduct development programs at Company's Management Development Center,

Lonavla

Sustained effort in training has led to creation of highly skilled and motivated employees ready to

take on higher roles and responsibilities in the company.

2. Employee involvement in Training

Line executives and managers involve themselves as faculty for most of the Inhouse Programs.

90% of in house program are conducted by them.

As line mangers have better understanding of the nature of business and the unique problem

associates with the company/industry, they are able to design and deliver effective training sessions

keeping the company's and participant's need in mind.

It has been experienced that the concept of "Learning Organization" is getting effectively rooted in

ECC through the above process.


3.6 PERFORMANCE APPRAISAL IN L&T ECC (E&GP) OPERATIONS The process followed in L&T for performance appraisal is “review by immediate supervisor”. There are around 36 cadres and 40 business units in E&GP OC. CADRE & NO OF EMPLOYEES IN EACH CADRE

S.NO CADRE_

DESCRIPTION # EMP

S.NO CADRE_

DESCRIPTION # EMP

1 SR.VP 1 20 SR.EXEC.SECRETARY 1

2 M4-B 5 21 EX.SECR. 5

3 M4-A 4 22 SECR-A 1

4 M3-C 15 23 SECR-B 1

5 M3-B 25 24 SR.TO/CO-2 1

6 M3-A 31 25 SR.TO/CO-1 10

7 M2-C 48 26 TO/CO 33

8 M2-B 64 27 ST/SC 62

9 M2-A 80 28 TS/CS 58

10 M1-C 77 29 TA/CA 82

11 M1-B 146 30 DRIVER-II 1

12 M1-A 184 31 DRIVER-I 2

13 O-3 4 32 JR.TA/CA 56

14 O-2 295 33 SR.TECHN. 13

15 CA-1 2 34 TECHN. 15

16 A-1 1 35 CONTRACT 135

17 O-1 479 36 TRAINEE 29

18 S-2 193 37 DET 172


19 S-1 253 38 GET 129

BUSINESS UNIT DESCRIPTION AND JOB TYPE S.No

BUSINESS_UNIT_

DESCRIPTION

Technical

_Service

S.No

BUSINESS_UNIT_DESCR

IPTION

Technica

l

_Service

1 SR.VPs OF

FICE (E&GP) Technical

19

ELECTRICAL (QUALITY) Technical

2

GULF-COMMON Service

20 EDRC (TRANSMISSION

LINES) Technical

3 E&GP- HR Service 21 GULF- PROCUREMENT Technical

4 TRANS. LINES & RLY.

CONSTN. Technical

22

GULF - FAA Service

5 ELECTRICAL,INSTN.&C

OMM. Technical

23

GULF - QUALITY Technical

6 INDUSTRIAL

ELECTRIFICATION Technical

24 ELECTRICAL

(RESOURCES) Service

7 GULF-INFRA Technical 25 EDRC (SUB STATIONS) Technical

8 RAILWAY

CONSTRUCTION Technical

26 ELECTRICAL

(PROCUREMENT) Technical

9 GULF-RESOURCES Service 27 ELECTRICAL (P&M) Technical

10 SUB STATIONS Technical 28 ELECTRICAL (EHS) Service

11 ELECTRICAL (FAA) Service 29 GULF-RMCI-DUBAI Technical

12

TRANSMISSION LINES Technical

30 EDRC (INDUSTRIAL

ELEC.) Technical

13 GULF (B&UI) Technical 31 GULF - P&M Technical

14

GULF (PT&D) Technical

32 ELECTRICAL

(RISK.MGMT.) Service

15 INTERNATIONAL Service 33 GULF-HR Service


SERVICES

16 E&GP (IS) Service 34 GULF - IS Service

17 ELECTRICAL

(CIVIL.ENGG.) Technical

35 EDRC (RAILWAY

CONSTRUCTION)

Technical

18 EDRC

(ELECT,INST&COMM.) Technical

HIERARCHY HR DEPARTMENT IN E&GP – OC

Regional offices are at Factories are at

1. Hyderabad 1. Kanchipuram

2. Kolkata 2. Pondicherry

3. Ahmadabad

4. Chennai

5. Bangalore

6. Delhi

THREE LEVELS PERFORMANCE APPRAISAL

SKELETON OF PERFORMANCE APPRAISAL PROCESS APPRAISAL STAGE STAGE 1 Review by site / project manager

SELF- APPRAISAL

UNIT HEAD + HR

IMMEDIATE SUPERVISOR

Submission of Self-appraisal

Form

Recommendation

Discussion with Supervisor+

Business unit Head + HR

Review by Supervisor

VICE PRESIDENT HR

TRAINING & DEVELOPMENT AND

RECRUITMENT

EMPLOYEE CARE

SYSTEMS REGIONAL OPERATIONS

TRAINING & DEVELOPME

RECRUITMENT DOMESTI

C

OVERSEAS

FACTORY OPERATIONS


STAGE 2 Review by Region head – a Moderate View G meeting is conducted STAGE 3 Review by Business unit Head STAGE 4 Review with the core committee Note: Discussion and moderation are there in stages 2 to 4. ORGANIZATIONAL HIERARCHY OF L&T ECC (E&GP) OC

ENGINEERING & CONSTRUCTION

TRANSMISSION LINES &

INTERNATIONAL OPERATIONS

IE SUB

Regions 1…7

Regions 1…7

Sites 1…n

Sites 1…n

TL RC

Regions 1…7

Sites 1…n

QATAR

ABUDABI

OMAN

Regions 1…7

Sites 1...n

Regions 1…7

Sites 1…n

Regions 1…7

Sites 1…n

L&T ECC E&GP OC

IE - Industrial Electrification

SUB - Substations

TL - Transmission Lines

RC - Railway Construction

APPRAISAL PROCESS IN E&GP – OC Attributes

SELF APPRAISAL IMMEDIATE SUPERIOR

PROJECT MANAGER

REGIONAL PM / SECTOR PM

• Safety

• Leadership & Initiative

• Communication

• Innovation & Creativity

• Planning & Timely completion

• Customer Relations

• Professional competence & Qualification


BUSINESS UNIT HEAD

CORE COMMITTE

E

.

4. RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. It contains the study of the

various steps that are generally adopted by a researcher in studying his research problem along with

logic behind them.

4.1 RESEARCH DESIGN:


A research design is purely and simply the framework or plan of a study that guides the

collection and analysis of data. Generally a research design is a blue print of the research that is to be

followed in completing the study.

Research design type: Descriptive Research – It is the research design that describes the

characteristics of any individual or relevant groups.

4.2 SAMPLING DESIGN:

Population: One Operating Company – E&GP in L&T ECC Ltd.

Sampling Unit: Individual Employees in the organization.

Sample Size: Sample size was restricted to 50 respondents.

Sampling Method: Stratified proportionate random sampling.

Nature Of Data: Primary data as well as secondary data

Method Of Data Collection: Primary data was collected by the Questionnaire survey, Interview with

the personnel of the company. Secondary data was collected with the help of the company records,

annual reports, magazines, company websites etc.

4.3 TOOLS USED FOR ANALYSIS:

The analysis is done using SPSS Inc Statistical Package.

The tools for the statistical analysis consisted of:

∂ Cross Tabulation: Cross tabulation results in tables that reflect the joint distribution of

two or more variables with a limited number of categories or distinct values. It is a merging

of the frequency distribution of two or more variables in a single table.


∂ Mean: The mean or average value is the most commonly used measure of central tendency.

It is used to estimate the mean when data have been collected using an interval or ratio scale.

The data should display some central tendency, with most of the responses distributed around

the mean.

∂ Percentage Analysis: The percentage analysis is to obtain the number of responses or a

relative occurrence associated with the different values of the variable and is expressed in

percentages.

5. ANALYSIS AND INTERPRETATION

5.1 CROSS TABULATIONS:

Table 1 showing the cross tabulated values between the Designation & the level of

satisfaction towards the present PAS.

Bar cha

INFEREN

Am

5.3% of t

66.7% of

Count

Cadre

Total

art 1

NCE:

mong the M

them are dis

them are sat

02468

1012

Hsa

ManagOfficer Secreta

Managers abo

ssatisfied wi

tisfied, 20%

Highly atisfied

Sa

Cadre * Sati

er

ary

out 63.15% o

ith the curre

of them are

tisfied Nei

Cadre * S

sfaction to pr

4 3 1

1

8

HighlySatisfied S

60

TABLE

of them are

ent performa

e highly satis

ther Dissati

Satisfaction

resent PAS Cr

12

10 8

30

Satisfied S D

Satisfaction to

1

satisfied, 21

ance apprais

sfied and 6.7

isfied

rosstabulation

2 1 4

7

Neitheratisfied nor

Dissatisfied

o present PAS

SRM Sc

1% of them

sal system.

7% of them a

n

1 1 3

5

Dissatisfied

chool of Manag

are highly s

Among the

are dissatisfi

Manager

Officer

Secretary

19 15 16

50

Total

satisfied,

Officer

fied with

agement


the current PAS. Among the Secretary level employees 50% of them are satisfied, 6.25% are highly

satisfied and 18.7% are dissatisfied with the current PAS.

Thus with regard to the satisfaction towards the current Performance appraisal system,

majority of the respondents (i.e) about 60% of them are satisfied, 16% of them are highly satisfied,

14% of them are neither satisfied nor dissatisfied, 10% of them are dissatisfied.

Table 2 showing the cross tabulated values between the Experience & the level of

Satisfaction towards the present PAS.

TABLE 2

Experience * Satisfaction to present PAS Crosstabulation Count

2 9 1 128 1 9

6 13 6 4 298 30 7 5 50

Less than 3 years6 - 10 years11 years and above

Experience

Total

HighlySatisfied Satisfied

Neithersatisfied nordissatisfied Dissatisfied

Satisfaction to present PAS

Total

Bar chart 2

INFEREN

Am

highly sat

system. A

and 11.1

responden

are satisfi

dissatisfie

Th

appraisal

Table 3

developm

0

2

4

6

8

10

12

14

NCE:

mong the re

tisfied, 75%

Among the re

% of them

nts whose ex

fied and 13.

ed with the c

his implies th

systems are

3 showing

mental nee

highly satisfied

espondents w

of them are

espondents w

m are neithe

xperience is

.8% of them

urrent perfo

hat majority

with the exp

g the cro

eds are met

d satisfied

whose exper

e satisfied, 8

whose experi

er satisfied n

above 11 ye

m are dissa

rmance appr

y of the respo

perience of 1

oss tabulat

t in the pre

neithe

Experience *

62

rience is les

8.3% of them

ience is 6 –

nor dissatisf

ears, 20.7% o

atisfied and

raisal system

ondents who

11 years and

ted values

esent PAS.

r dissati

* Satisfaction

ss than 3 ye

m are dissati

10 years, ab

fied with th

of them are

20.7% of

m.

o are satisfie

d above.

s between

sfied

n

SRM Sc

ears, about 1

isfied with th

out 88.9 % o

he current s

highly satisf

them are n

ed with the c

n the Cad

Less tha

6-10 yea

11 years

chool of Manag

16.7 % of th

he current a

of them are s

system. Am

fied, 44.8%

neither satisf

current Perfo

dres & w

n 3 years

rs

and above

hem are

appraisal

satisfied

mong the

of them

fied nor

ormance

whether

agement

Bar cha

INFEREN

Ab

their deve

% of the

developm

Managers

expressibl

11

Count

Cadre

Total

rt 3

NCE:

bout 23.9% o

elopmental n

e Managers

mental needs

s, 10.5% of

le in the curr

02468

1012

Strongagre

Cadr


of the Mana

needs are ex

, 63.15% o

are express

f the Office

rent PAS.

gly e

Agre

Cad

re * Developm

er ary

agers,15.8 %

xpressible in

of the Offic

sible in the

ers are in t

ee Neith

dre * Develo

mental needs a

5 3 3

11

Strongly agree

Deve

63

TABLE 3

% of the Offic

the current

cers , 70%

current per

the opinion

her Disag

pment need

are expressib

912

7

28

Agree Nn

elopmental nee

cers, 30% of

performanc

of the Se

rformance a

n that their

gree

s

le Crosstabula

4 2

6

Neither agreenor disagree

eds are expres

SRM Sc

f Secretaries

ce appraisal

ecretaries ju

appraisal sys

developmen

Man

Offic

Sec

ation

3 2

5

Disagree

ssible

chool of Manag

, strongly ag

system. Abo

ust agree th

stem. 14.3%

ntal needs

nager

cer

retary

21 19 10

50

Total

gree that

out 42.8

hat their

% of the

are not

agement


With regard to the criteria that, whether the developmental needs of the respondents are

expressible in the performance appraisal system, about 22% of them strongly agree,56% of them

agree, 12% of them neither agree nor disagree, and 10% of them disagree. This implies that

approximately one half of the respondents agree that their developmental needs are expressible.

Table 4 showing the cross tabulated values between the Cadres & Whether the current

PAS provides a frank discussion between the appraiser and the appraise.

Cadre * Frank Discussion Crosstabulation

Count

4 9 2 2 17 4 10 1 15

9 3 18

6

14 28 6 2 50

Manager Officer Secretary

Cadre

Total

Strongly agree Agree

Neither agreenor disagree Disagree

Frank Discussion

Total

TABLE 4

Bar chart 4

INFEREN

Ab

that a fran

Managers

11.8% of

Th

is carried

system, m

appraisal p

Table 5

appraisa

NCE:

bout 23.5% o

nk discussio

s, 66.7% of t

the Manager

his implies th

d out betwee

majority of

process.

5 showing

l process s

02468

10

Stronagre

of the Mana

on exits dur

the Officers,

rs totally dis

hat although

en the appr

the Officers

the cross

should be d

ngly ee

Agr

C

gers, 26.7%

ring the curr

, 50% of the

sagree to this

h large perce

raiser and th

s disagree.

tabulated

done.

ree Ne

Cadre * Fran

65

of the Offic

rent perform

e Secretaries

s context.

entage of the

he appraise

They expec

d values be

ither Dis

nk discussio

cers ,33.3% o

mance apprai

s, agree that

e respondent

during the

ct a better

etween the

sagree

on

SRM Sc

of the Secret

isal system.

a frank disc

ts agrees tha

current per

exchange o

e Cadres

M

O

S

chool of Manag

taries strong

About 53%

cussion exits

at a frank dis

rformance a

f views dur

& by who

Manager

Officer

Secretary

gly agree

% of the

s. About

scussion

appraisal

ring the

om the

agement

Bar cha

Officers, 4

the Manag

60% of th

superior, H

prefer tha

them prefe

Count

Cadre

Total

rt 5

45.5% of th

gers, 15% of

he Engineers

HOD, Projec

This implie

at the apprai

fer their Imm


02468

1012

Immsu

he Secretarie

f the Officer

s, 54.5% of

ct manager,

s that about

isal process

mediate super

Cadre *

er

ary

mediate perior

es, prefer the

rs, prefer the

the Senior O

Team Leade

t 48% of the

is carried o

riors to appr

Appraiser Cro

7 5 5

17

Immediate Superior

HOD A

Cadre * App

66

TABLE 5

eir immediat

eir HOD’s to

Officers, pre

er).

e responden

out by all to

raise them.

osstabulation

6 3

9

Head Of theDepartment

Appraiser

All above

praiser

te superiors

o be their app

efer that app

ts,(i.e) appro

whom they

1

2

et All the abo

SRM Sc

to be their

praiser. 31.5

praisal is don

oximately o

y are accoun

6 112 26 1

24 5

ove Total

Manage

Officer

Secreta

chool of Manag

INFER

E:

About

of

Mana

% o

appraiser. 3

5% of the Ma

ne by all(Im

ne half of th

ntable. Also

9 0 1 0

er

ary

RENC

t 37%

the

agers,25

of the

1.5% of

anagers,

mmediate

he them

34% of

agement

Table 6

practiced

showing t

d to identif

the cross t

fy the emp

tabulated v

loyee’s po

values of E

tential in n

Experience

new areas.

& Whethher job rotaation is

Bar Cha

INFEREN

Co

– 10 years

that there

05

10152025

art 6

NCE:

onsidering th

s, and 17.2 %

potentials in

Yes

E

TAB

he job rotatio

% of the res

n new areas

No

Experience

BLE 6

on factor, ab

spondents w

are identifie

o

* job rotatio

67

bout 66.7% o

with an exper

ed. But 100%

on

Less th

6 - 10 y

11 year

an 3 years

years

rs and above

of the respon

rience of 11

% of the res

ndents with a

years and a

spondents wi

an experienc

above are of

ith an exper

ce of 6

opinion

rience of



less than 3 years, 33.3% of the respondents with an experience of 6 – 10 years, and 82.8% of the

respondents with an experience of 11 years and above feel that job rotation is not practiced to

identify their potentials in new areas.

This implies that majority of the respondents with the experience of 6 – 10 years are given

the opportunity to bring out their knowledge, skills, and ability through job rotation, while majority

of the respondents with an experience of less than 3 years, and greater than 11 years are not provided

with the job rotation facilities.

Table 7 showing the cross tabulated values of Cadres & Percentage of biasing in the

current performance appraisal process.

TABLE 7

Cadre * Percentage of biasing Crosstabulation Count

12 4 16 4 11 1 16

8 18 4

8 31 11 50

Manager Officer Secretary

Cadre

Total

0 % 1 % - 50 % 51 % - 99 %Percentage of biasing

Total

6

Bar chart 7

INFEREN

Ab

the curren

44.5% of

Managers

current pe

Th

are of opin

that favori

5.2 DES

02468

1012

NCE:

bout 25% of

nt performan

f the Secreta

s, 6.25% of

erformance a

his implies th

nion that som

itism is obvi

SCRIPTIV

0%

f the Officers

nce appraisa

aries, feel th

the Officers

appraisal sys

hat majority

me degree o

ious in the cu

VES - MEA

1% -

Cadre * P

s, 22.3% of

al system. W

hat there ar

s, 33.4% of

stem.

of the Mana

f biasing is p

urrent perfor

AN

- 50% 5

Percentage

69

the Secretar

While 75%

re traces of

the Secretar

agers feel th

prevalent, an

rmance appr

51% - 99%

of Biasing

Manager

Officer

Secretary

ries are of op

of the Man

biasing(< 5

ries feel bia

pinion that th

nagers, 68.7

50% ). And

asing is obvi

here is no bi

7% of the O

d about 25%

ious (> 50%

iasing in

Officers,

% of the

%) in the

here is nil bia

nd majority o

raisal system

asing, while

of the Secret

m.

majority of

taries strong

f officers

gly agree



5.3 PERCENTAGE ANALYSIS:

Frequency Table

Table 8 showing the descriptive statistics of the factors that are necessary for

appraising the employees.

TABLE 8

From the Mean values exhibited in the above table, we can infer that the respondents are in

the opinion that the above criteria are necessary for appraising the employees. The order of their

preference is as given below:

Bar chart 8

Order of Preference

Quality of work

Qualification

Plan of work

Initiative

Communication

Leadership

Innovation

Speed

Customer Relations

1 Quality of work 94%

2 Qualification 82%

3 Plan of the work 66%

4 Initiative 64%

5 Communication 56%

6 Leadership Qualities 46%

7 Innovation 42%

8 Speed 38%

9 Customer relations 38%

Descriptive Statistics

50 1.00 3.00 1.2200 .5066950 1.00 3.00 1.4200 .6091150 1.00 2.00 1.0600 .2399050 1.00 3.00 1.3600 .5252850 1.00 3.00 1.6600 .62629

50 1.00 3.00 1.7800 .70826

50 1.00 3.00 1.7400 .6642550 1.00 3.00 1.6400 .6627150 1.00 3.00 1.5800 .7309550

Qualification Initiative Quality of workPlan of WorkInnovationRelation with Customers& subordinatesSpeedLeadership Qualities CommunicationValid N (listwise)

N Minimum Maximum Mean Std. Deviation

Table 9 showing thhe percentage of respponse for thhe Descripption of thee present joob:

Bar cha

present j

D

D

Perc

ent

50

40

30

20

10

0

INFEREN

art 9 repr

ob:

Description

Description of the

Challenging

NCE:

resenting t

of the prese

e present job

Interesting

TABLE 9 the percen

ent job

Normal

of the ntage of reesponses ffor the Deescription

71


W

is interest

responden

Table 1

performa

Bar cha

performa

P

Pe

Perc

ent

70

60

50

40

30

20

10

0

With regard to

ting, 34% of

nts feel that t

10 showin

ance level

art 10 repr

ance level

Performance

erformance level

Good

o the descrip

f them feel it

their job is q

ng the pe

in the com

resenting th

in the com

e level

NeeFair

ption of the p

t is normal,

quite interest

ercentage

mpany:

he percent

mpany:

eds Improvement

72

present job 4

and 18% of

ting.

of respon

TABLE 10 tage of res

48% of the r

f them feel it

nse for th

ponses for

SRM Sc

respondents

t is challeng

he self-de

r the self-d

chool of Manag

feel their job

ging. Majorit

scription

b nature

ty of the

of the

descriptionn of the

agement

INFERENNCE:

Ab

is fair, and

wish to re

bout 66% of

d 22% of the

ender even be

f the respond

em feel they

etter perform

dents feel tha

y need some

mance than w

at their level

improveme

what they giv

of performa

nt. This imp

ve-in presen

ance is good

plies that few

ntly.

d,12% of them

w of the resp

m feel it

pondents

Table 1

present P

11 showing

Performanc

g the perc

ce appraisa

centage of

al system:

f response for the leevel of saatisfaction to the

Bar cha

the prese

art 11 repr

ent Perform

BAR C

S

Sa

Percent

70

60 50

40 30

20 10

0

resenting th

mance appr

CHART 11

atisfactio

TABLE 1he percent

raisal syste

atisfaction t

Highly Satisfie

on to pres

to present P

Neith

Satisfied ed

11 age of resp

em:

73

sent PAS

ponses for

PAS

Diher satisfied no

r the level

ssatisfiedo

SRM Sc

of satisfacction to

chool of Managagement

INFERENNCE:

W

responden

them are

PAS.

Table 12

the curre

Bar cha

satisfacti

Jo

Jo

Percent

120

100

80

60

40

20

0

With regard

nts are highl

dissatisfied.

2 showing

ent apprais

art 12 re

ion, which

ob Satisfa

ob Satisfact

Yes

t

to the leve

ly satisfied,

. This impli

the percen

al system p

TAB

epresenting

h the curren

action

tion

No

el of satisfa

60% of the

ies that majo

ntage of res

provides:

BLE 12

g the perc

nt appraisa

74

action to th

m are satisf

ority of the

sponse for

centage o

al system p

he present a

fied, 14% of

respondent

r the additio

f response

rovides :

SRM Sc

appraisal sy

f them are n

s are satisfi

ystem, 16%

neutral, and

ed with the

of the

10% of

current

onal job saatisfaction,, which

es for thee additionnal job


INFERENNCE:

Ab

of additio

fact. From

job satisfa

bove table sh

onal job satis

m this we can

action to the

hows that m

sfaction from

n infer that t

employees.

majority of th

m the curren

the current a

he responden

nt appraisal

appraisal sys

nts (i.e) abou

system. On

stem is effec

ut 96% of the

nly 4% of th

ctive in prov

em get some

hem disagree

viding the ad

e degree

e to this

dditional

Table 13

system f

3 showing

facilitates s

g the perce

self develo

entage of r

pment:

response ffor the factt that the current apppraisal

Bar cha

appraisa

art 13 rep

l system fa

TA

resenting

acilitates se

ABLE 13

the percen

elf develop

ntage of re

pment:

esponse foor the factt that the ccurrent

75


INFEREN

W

appraisal

that the cu

Table 14

improve

S

S

Per

cent

100

80

60

40

20

0

P

P

Per

cent

0

70

60

50

40

30

20

10

NCE:

With regard to

system assis

urrent apprai

4 showing

the low pe

Self Deve

Self Developm

Yes

Performan

Performance

By advic

o the self d

sts in their d

isal system i

the percen

erformance

elopment

ment

nce level

level Improve

By Trainince

development,

developmen

is appreciabl

ntage of res

e level of t

No

Improvem

ement

By Rules & Reng

76

, about 86%

t. Only 14%

ly effective a

sponse for

the employ

B

p

o

ment

egulatio

% of the resp

% of them di

and facilitate

the organi

yees.

Bar char

ercentage

rganization

SRM Sc

pondents ag

isagree to th

es the self de

izational in

TABLE rt 14 re

of resp

nal initia

chool of Manag

gree that the

his fact. Thi

evelopment.

nitiatives ta

14

current

s shows

aken to

epresenting

ponse fo

atives tak

g the

or the

ken to

agement

improve the low peerformancee level of tthe employyees.

INFERENNCE:

To

training p

feel that t

8% of the

performan

Table 1

rotation

Bar cha

job rotat

o improve t

programs wh

the organizat

em feel that n

nce level.

15 showing

is practice

art 15 repr

tion is prac

the low per

hich the maj

tion gives c

necessary ru

g the perc

d to identi

TABLresenting th

cticed to id

rformance o

ority of the

ounseling or

ules and regu

centage of

fy their po

LE 15 he percent

dentify thei

77

of the empl

respondents

r some advi

ulations are

f response

otential in n

tage of res

r potential

loyees, the

s(i.e) 64% h

ces to impro

framed to he

e from the

new areas.

sponse from

in new are

SRM Sc

organizatio

have opted. A

ove the perf

elp the empl

n provides

About 28%

formance lev

loyees devel

various

of them

vel. And

lop their

e respondeents whethher job

m the resp

eas.

pondents wwhether


INFEREN

Jo

Jo

Per

cent

100

80

60

40

20

0

Ab

them agre

majority o

their versa

Table 1

appraisa

Bar cha

current a

NCE:

ob Rotatio

bout 78% of

ee that job r

of the respon

atile potentia

6 showing

l system.

art 16 repr

appraisal sy

ob Rotation

Yes

on

No

f the respond

otation is pr

ndents are de

als.

g the perce

resenting t

ystem.

dents are of

racticed to i

evoid of job

entage of r

opinion that

dentify their

b rotation pra

t job rotation

r potentials

actices, there

n is not prac

in new area

eby they are

cticed. Only

as. This imp

e unable to b

y 22% of

lies that

bring out

response fofor the leveel of biasinng in the ccurrent

the percent

78

TABLE 16

tage of ressponse for the level of biasingg in the


INFEREN

W

biasing(<

level of b

system. Fr

exits in th

Table 17

Back

Bar chaFeedback

P

Pe

Per

cent

70

60

50

40

30

20

10

0

NCE:

With regard to

50%) is pre

biasing( > 5

rom this we

he current app

7 showing

art 17 repk:

Percentage

ercentage of b

0 %

o the biasing

valent in the

0%), and 1

can infer th

praisal syste

the percen

presenting

e of biasin

biasing

51 % - 50 %

g factor, abo

e current app

6% of them

hat majority

em.

ntage of res

the perce

ng

51 % - 99 %

79

out 62% of

praisal system

m feel that th

of the respo

sponse for

TABLE 17

entage of

the respond

m, while 22%

here is no b

ondents agre

the effect

response

SRM Sc

dents feel th

% of them fe

biasing in th

ee that favori

of negativ

for the ef

chool of Manag

at certain de

eel that there

he current a

itism or subj

ve feed

egree of

e is high

appraisal

jectivity

ffect of neegative

agement

INFEREN

Ab

34% of th

them feel

feedback w

Table 18

Bar cha appraiser

E

E

Percen

70

60

50

40

30

20

10

0

NCE:

bout 62% of

hem feel tha

it leads to

with a positi

8 showing

rt 18 repre

r:

Effect of N

ffect of Neg

TFrustration

t

f the respon

at negative fe

frustration.

ive outlook,

the percen

esenting th

Negative

gative feed

HeTriggers to workn

ndents feel th

feedback trig

This implie

and they con

ntage of res

he percenta

feed bac

back

elps to correct yk hard

80

hat the nega

ggers them t

s that on the

nsider them

sponse for

TABLE 18 age of respo

ck

you

ative feedba

o work even

e whole the

as an opport

choosing t

onse for ch

SRM Sc

ack helps to

n more effic

respondent

tunity to imp

the apprais

hoosing the

chool of Manag

correct them

ciently, whil

s view the n

prove and de

ser:

mselves,

e 4% of

negative

evelop.

e

agement

A

A

Per

cent

50

40

30

20

10

0

Appraiser

INFEREN

Ab

Of the De

48% of th

superior,

appraisers

Table 19

HRD’s T

NCE:

bout 14% of

epartment, w

hem prefer t

peers etc. T

s than confin

9 showing

Training an

Appraiser

HImmediate S

r

uperior

f the respond

while 34% of

that the appr

This implies

ning to a sing

the percen

nd Develop

Head Of the DeAll the above

dents prefer

f them prefe

raisal proces

s that majo

gle person.

ntage of re

pment activ

epartmee

81

r that the app

er their imm

ss is carried

ority of the

esponse for

vities:

TABLE 19

praisal proce

mediate super

d out by all

respondents

ess is carried

riors to be th

including th

s are intere

d out by the

heir appraise

he HOD, Im

sted to hav

eir Head

ers. And

mmediate

ve many

r the level of satisfacction towaards the


Bar cha

towards

INFEREN

Co

66% of th

neutral an

is doing w

Table 2

performa

Per

cent

70

60

50

40

30

20

10

0

art 19 rep

the HRD’s

NCE:

onsidering th

he responde

nd 8% of the

well regardin

20 showing

ance appra

HRD's T&

HRD's T&D A

Highly Satisfi

presenting

s Training

he Human R

ents are sati

em are dissa

ng the Trainin

g the perc

aisal system

&D Activitie

Activities

NeithSatisfied

ed

the percen

and Devel

Resource De

sfied, 16%

atisfied. This

ng & Develo

centage of

m:

es

Dissaer satisfied no

82

ntage of re

lopment ac

epartment’s

of them are

s implies tha

opment activ

f response

atisfied

esponse fo

ctivities:

Training &

e highly sat

at majority o

vities.

for the s

SRM Sc

or the leve

& Developme

tisfied, while

of the respon

significanc

chool of Manag

el of satis

ent activitie

e 10% of th

ndents feel th

ce of the c

faction

s, about

hem are

he HRD

current

agement


TABLE 20

Bar chart 20 representing the percentage of response for the significance of the

current performance appraisal system:

INFERENCE:

Identification of Employee potential

Significance of PAS

Significance of PAS

All the above Identification of Training needs Promotion

Percent

40

30

20

10

0

About 34% of the respondents feel that the current appraisal system is carried out to identify

the employee’s potential, 32% of them feel that it is to identify the training needs, 12% of them feel

that it is to provide promotions, and 22% of them feel that it is to serve all the above purposes.


6. FINDINGS AND INFERENCES

The current appraisal system is effective to a high degree, and majority of the employees are

satisfied with the appraisal system.

Identification of training and development needs through appraisal process is found to be

good.

HR department’s activities towards the performance enhancement of the employees are

appreciably great.

During the appraisal process a frank discussion is carried out between the appraiser and the

apraisee.

Majority of the employees prefer the appraisal system to be carried out by the group

consisting of immediate superiors, HOD/Manager, peers etc.

Almost all the respondents prefer the criteria like Quality of work, qualification and plan of

work etc are found to be effective in the appraisal system process to evaluate their

performance.

The company takes initiative to improve the low performance of the employees mainly

through training programs.

Job rotation is not emphasized well in the current performance appraisal process.

Majority of the employees insist to adapt 360 degree appraisal system.

The current performance appraisal system does not provide scope for communicating overall

business goals.

No periodic orientation of programs on performance appraisal is conducted.


7. RECOMMENDATIONS AND SUGGESTIONS

» Individual Performance objectives can be set during the beginning of every year.

» There can be a monthly review of individual/team objectives.

» Online Appraisal system can be adapted to make the process faster and more effective.

» Appraisal process can be carried out by obtaining the performance feedback of the

employees from all including immediate superiors, HOD and peers.

» Performance Appraisal system should be made more transparent.

» The company can gradually adapt to 360 degree feedback for the appraisal process to be

even more effective.

» Constant attention, continuous effort to take corrective measures can be emphasized in the

appraisal system.

» HRM/HRD/personnel department can consider the results of Performance Appraisal System

for career planning and development of the employees.

» Orientation programs can be organized before conducting Performance Appraisal System.

» Time limit can be scheduled for each and every step involved in the performance appraisal

process.

» There should be a performance feedback session, so that the employees can be more effective

in their future work.

» Superiors can be even more unbiased, employees can work thoroughly on self appraisal and

these can be continued in future for the continuous improvement of the organization.


8. CONCLUSION

A Larsen and Tubro group company is well diversified at many locations. They are

succeeding from their existence because of the efforts and contribution of the management and the

employees towards the organization.

ECC strongly believes that to be in business, up gradation of employees' knowledge and

skills are essential. Hence investment in Human Resources is one of the top priorities of the

Management.

From this study it is concluded that the effectiveness of the current performance Appraisal

system in the organization is high. The organization feels that appraisal system is a motivating tool

to the employees and follows it in order to get the maximum output from the employees. Though

there is a very small amount of dissatisfaction shown towards the appraisal system, it can be

completely eradicated by making some innovative modifications.

All these efforts and hard work of the management as well as each an every employee is the

secret behind the success of the enterprise.


A STUDY ON PERFORMANCE APPRAISAL SYSTEM OF L&T ECC

E&GP.

QUESTIONNAIRE Dear Respondents,

Your sincere feedback through this questionnaire will be beneficial to improve the Performance Appraisal System at L&T ECC. And your kind Cooperation will help me complete my project in time. I – GENERAL INFORMATION 1. Name (optional): 2. Gender : a) Male [ ] b) Female [ ] 3. Age : a) Below 25 years [ ] b) 26 – 35 years [ ] c) 36 -45 years [ ] d) 46 – 55 years [ ] e) Above 55 years [ ] 4. Cadre: a) Managerial level [ ] b) Officer level [ ] c) Secretary level [ ] 5. Designation: ----------------------------------- 6. Experience : a) Less than 3 years [ ] b) 3- 5 years [ ] c) 6 – 10 years [ ] d) 11 years and above [ ]


II – STUDY RELATED INFORMATION 1. How do you describe your present job? a) Challenging [ ] b) Interesting [ ] c) Normal [ ] 2. Describe your performance level in your company: a) Good [ ] b) Fair [ ] c) Needs improvement [ ] 3. a) Are you satisfied with the present appraisal system followed in your organization? a) Highly Satisfied [ ] b) Satisfied [ ] c) Neither satisfied nor dissatisfied [ ] d) Dissatisfied [ ] e) Highly Dissatisfied [ ]

b) Give Reason

4. a) What in your opinion should be the time period of conducting continuous Appraisal?

a) Quarterly [ ] b) Half Yearly [ ] c) Yearly [ ]

b) Any specific reason

5. a) Does the performance appraisal gives an additional job satisfaction to you? a) Yes [ ] b) No [ ] b) If yes, at what level it gives an additional job satisfaction:- a) Very high level [ ] b) High level [ ] c) Moderate [ ] d) Low level [ ] e) Very low level [ ] 6. a) Does the performance appraisal system facilitate to increase your self development? a) Yes [ ] b) No [ ] b) If yes, at what level the performance system is helpful for your self-development? a) Very high level [ ] b) High level [ ] c) Moderate level [ ] d) Low level [ ] e) Very Low level [ ]


7. a) What is your opinion on being rated in the following attributes for your performance appraisal?

Attributes

Strongly Agree

Agree

Neither

Disagree

Strongly Disagree

a. b. c. d. e. f. g. h. i.

Professional competence & Qualification Customer relations Planning monitoring & timely completion Innovation & Creativity Leadership Initiative Communication Speed Quality of work

[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]

[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]

[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]

[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]

[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]

b) What other Attributes do you think are necessary for evaluating Performance appraisal?


8.” Current Appraisal system provides a frank discussion between you and the appraiser” a) Strongly Agree [ ] b) Agree [ ] c) Neither Agree nor Disagree [ ] d) Disagree [ ] e) Strongly Disagree [ ] 9.” Current Appraisal system allows you to express your developmental needs”

a) Strongly Agree [ ] b) Agree [ ] c) Neither Agree nor Disagree [ ] d) Disagree [ ] e) Strongly Disagree [ ]

10. At low performance level, how does your organization improve the performance level of the employee?

a) By advice [ ] b) By training [ ] c) By de-promotion [ ] d) by rules & regulations [ ]

11. Is Job Rotation practiced in order to identify your potential in new areas of the job? a) Yes [ ] b) No [ ]

12. What percentage of biasing is there in the current performance appraisal system? a) 0% [ ] b) 1% - 50% [ ] c) 51% - 99% [ ] d) 100% [ ] 13.a) What is the effect of Negative feedback on your performance? a) Frustration [ ] b) Triggers to work hard [ ] c) Helps you to correct yourself [ ] b) If any other, Specify 14. Appraisal should be done by;

a) Immediate Superior[ ] b)Team Leader[ ] c) Project manager [ ] d) Head of the Department [ ] e) All the above [ ]


15. According to you, Performance Appraisal in your organization is for; a) Promotion [ ] b) Identification of the employee’s potential [ ] c) Transfer [ ] d) Identification of Training needs [ ] e) All the above [ ]

16. What would be your key objectives for the next 6 months? a. b. c. 17. Explain the Agenda (your plan) for meeting your desired objectives.

18. Training and Development activities by HRD is

a) Highly satisfied [ ] b) Satisfied [ ] c) Neither satisfied nor dissatisfied [ ] d) Dissatisfied [ ] e) Highly Dissatisfied [ ] 19. What is your opinion, if the organization adapts 360 degree appraisal?

20. Give your suggestions to improve the performance appraisal system of your organization.


THANK YOU!!!

L&T

Documents

vario ous sectors

economic developmen nt

srm sc chool

substan ntial part

im mmediate superior

low pe erformance

highly sat tisfied

urban infrastructure sector