Performance Appraisal

A

SUMMER TRAINING PROJECT REPORT

ON

“PERFORMANCE APPRAISAL”

AT

RUCHIRA PAPERS LTD.

Submitted in partial fulfillment of the requirement

For the award of the degree

Of

MASTERS OF BUSINESS ADMINISTRATION

SESSION ( 2009 - 2011)

SUBMITTED TO: SUBMITTED BY:

KURUKSHETRA UNIVERSITY,

KURUKSHETRA MBA-3RD SEM

E-max Business School Badhauli (Ambala), HARYANA

(Approved by AICTE, Affiliated to Kurukshetra university, kurukshetra)

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DECLARATION

I, Aastha Bhatia, student of MBA IIIrd Semester, studying in E-max Business

School, Badhauli, here by declare the summer training report on “Performance

Appraisal” submitted to Kurukshetra University, Kurukshetra in partial fulfillment of

Degree of Master’s of Business Administration is the original work conducted by

me.

The information and data given in the report is authentic to the best of my

knowledge.

This summer training report is not being submitted to any other University for

award of any other Degree,Diploma and Fellowship.

2

ACKNOWLEDGEMENT

3

CONTENTS TABLE OF CONTENT

S.NO. TITLE PAGE NO.

1. LITERATURE REVIEW

1.1MEANING

1.2CHARACTERISTICS

1.3ROLE

1.4PERFORMANCE MANAGEMENT CYCLE

1.5OBJECTIVES

1.6TYPES

1.7PERFORMANCE APPRAISAL CYCLE

1.8METHODS

1.9BENEFITS

COMPANY PROFILE

2.1 OVERVIEW OF THE SERUM

2.2 PRODUCT PROFILE OF SERUM

2.3 SWOT ANALYSIS

2.4 INFRASTUCTURE

2.5 PROCESS

2. RESEARCH METHODOLOGY

3.1OBJECTIVES OF STUDY

3.2COLLECTION OF DATA

3.3SELECTING THE METHODOLOGY FOR EMPLOYEE

3.4LIMITATION OF STUDY

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3. DATA ANALYSIS

4. FINDINGS

RECOMMENDATIONS AND RESULTS

ANNEXURE

BIBLIOGRAPHY

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CHAPTER-1

INTRODUCTION TO

PROJECT

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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 weaknesses and strengths as

well as opportunities for improvement and skills development. Performance

appraisal, also known as employee appraisal, is a method by which the job

performance of an employee is evaluated (generally in terms of quality, quantity,

cost and time). Performance appraisal is a part of career development.

Performance appraisals are regular reviews of employee performance within

organizations.

Generally, the aims of a performance appraisal are to:

Give feedback on performance to employees.

Identify employee training needs.

Document criteria used to allocate organizational rewards.

Form a basis for personnel decisions: salary increases, promotions,

disciplinary actions, etc.

Provide the opportunity for organizational diagnosis and development.

Facilitate communication between employee and administration

Validate selection techniques and human resource policies to meet federal Equal

Employment Opportunity requirements.

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Performance Appraisal Summary

Performance appraisal, while enabling a manager to identify the training needs of

employees, and evolving a training plan for them, also, serves to meet other

objectives. Performance appraisal satisfies the psychological needs individuals

have to know how they are performing their job and increases employees' job

satisfaction and morale by letting them know that the manager is interested in their

progress and development. Systematic performance appraisal also provides both

the firm and the employee a careful evaluation, rather than a snap judgement of an

employee's performance. Many firms use performance appraisals to plan

placements and transfers and to provide input into decisions regarding salary

increases, promotions, and transfers.  Finally, performance appraisals may be

used as a basis for the coaching and counselling of individual employees by their

superiors. To summarize the uses of performance appraisal:

Performance improvement

Compensation

Placement

Training & development needs assessment

Career planning

Job design error detection

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CHARACTERISTICS OF AN APPRAISAL SYSTEM

Performance appraisal cannot be implemented successfully unless it is accepted

by all concerned. There should be a common and clear understanding of the

distinction between evaluation and appraisal. As Patten (1982) argues, evaluation

aims at 'objective' measurement, while appraisal includes both objective and

subjective assessment of how well an employee has performed during the period

under review. Thus performance appraisal aims at 'feedback, development and

assessment.' The process of performance appraisal should concentrate on the job

of an employee, the environment of the organization, and the employee him- or

herself. These three factors are inter-related and inter-dependent. Therefore, in

order to be effective, the appraisal system should be individualized, subjective,

qualitative and oriented towards problem-solving. It should be based on clearly

specified and measurable standards and indicators of performance. Since what is

being appraised is performance and not personality, personality traits which are

not relevant to job performance should be excluded from the appraisal framework.

Some of the important considerations in designing a performance appraisal system

are:

Goal The job description and the performance goals should be structured,

mutually decided and accepted by both management and employees.

Reliable and consistent Appraisal should include both objective and subjective

ratings to produce reliable and consistent measurement of performance.

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Practical and simple format The appraisal format should be practical, simple

and aim at fulfilling its basic functions. Long and complicated formats are time

consuming, difficult to understand, and do not elicit much useful information.

Regular and routine While an appraisal system is expected to be formal in a

structured manner, informal contacts and interactions can also be used for

providing feedback to employees.

Participatory and open An effective appraisal system should necessarily

involve the employee's participation, usually through an appraisal interview with

the supervisor, for feedback and future planning. During this interview, past

performance should be discussed frankly and future goals established. A strategy

for accomplishing these goals as well as for improving future performance should

be evolved jointly by the supervisor and the employee being appraised. Such

participation imparts a feeling of involvement and creates a sense of belonging.

Rewards Rewards - both positive and negative - should be part of the

performance appraisal system. Otherwise, the process lacks impact.

Feedback should be timely Unless feedback is timely, it loses its utility and

may have only limited influence on performance.

Impersonal feedback Feedback must be impersonal if it is to have the desired

effect. Personal feedback is usually rejected with contempt, and eventually de-

motivates the employee.

Feedback must be noticeable The staff member being appraised must be

made aware of the information used in the appraisal process. An open appraisal

process creates credibility.

Relevance and responsiveness Planning and appraisal of performance and

consequent rewards or punishments should be oriented towards the objectives of

the programme in which the employee has been assigned a role. For example, if

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the objectives of a programme are directed towards a particular client group, then

the appraisal system has to be designed with that orientation.

Commitment Responsibility for the appraisal system should be located at a

senior level in the organization so as to ensure commitment and involvement

throughout the management hierarchy.

WHAT IS THE ROLE OF PERFORMANCE APPRAISAL?

We've seen from previous discussions, that people are one of a company's most

valuable assets. While most assets depreciate over time, people, viewed as

assets, may actually appreciate. One of the manager's major responsibilities is to

improve and update the knowledge and skills of employees -- appreciation of

assets. Performance appraisal plays a significant role as a tool and technique of

organizational development and growth. In essence, effective appraisal systems

provide both evaluation and feedback.

The main aim of the evaluation is to identify performance gaps -- when

performance does not meet the organizational standards -- whereas feedback is

necessary to inform employee about those performance gaps.

From the employee's perspective, performance appraisal informs them about what

is required of them in order to do their jobs, it tells them how well they have

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achieved those objectives and helps them take corrective action to improve their

performance, and, finally, it may reward them for meeting the required standards.

The firm, on the other hand, needs a performance appraisal system in order to

establish principles of managerial accountability. Clearly, where employees are

given responsibilities and duties, they need to be held accountable. One of the

functions of performance appraisals is to ensure that people are accountable for

their organizational responsibilities.

Perhaps the most significant benefit of performance appraisals is the opportunities

they provide supervisors and subordinates to have one-on-one discussions of

important work issues. During appraisals, subordinates and supervisors can focus

on work activities and goals, identify and correct existing problems, and encourage

better future performance.

Performance Appraisal and Motivation

Motivational research has recognized the power of  recognition as an incentive

(see Maslow and the Expectancy Theory of Motivation). Performance appraisals

provide employees with recognition for their work efforts.  The appraisal system

provides the supervisor with an opportunity to indicate to employees that the

organization is interested in their performance and development. This recognition

can have a positive motivational influence. on the individual's sense of worth,

commitment and belonging.

Performance Appraisal and Training and Development

Performance appraisals identify performance gaps. As such, they provide an

excellent opportunity for a supervisor and subordinate to recognize and agree

upon individual training and development needs.

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Performance appraisal discussion may identify the presence or absence of work

skills. Further, the need for training can be made more relevant if attaining the

requisite job skills is clearly linked to performance outcomes. Consolidated

appraisal data can also help form a picture of the overall organizational training

requirements.

Performance Appraisal and Recruitment

Recruitment and selection procedures need to be evaluated. Appraisal data can be

used to monitor the success of a firm's recruitment and selection practices. From

this data, the firm can determine how well employees who were hired in the past

are performing.

Performance Appraisal and Employee Evaluation

Employee evaluation is a major objective of performance appraisal. Given the

major functions of management -- planning, organizing, leading and controlling -- it

is clear that evaluations (controlling) need to be done.

At its most basic level, performance appraisal is the process of examining and

evaluating the performance of employees. However, the need to evaluate is also a

source of tension as evaluative and developmental priorities appear to clash. 

Some management experts have argued that appraisal cannot serve the needs of

evaluation and development at the same time.

Performance Appraisal and Total Quality Management (TQM)

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With the advent of TQM (Total Quality Management) and the extensive use of

teams, traditional performance appraisal systems have come under some criticism.

For example, rather than motivating employees, conflict may be created when

appraisals are tied to merit pay and when that merit pay is based on a forced

ranking.

W. Edwards Deming, the founder of total quality management (TQM) has long

been associated with the view that performance appraisals ought to be eliminated.

Many TQM proponents claim that performance appraisals are harmful.

However, there is  no doubt that, without safeguards such as appropriate design,

adequate administrative support, comprehensive job analysis / description and

training for appraisers, conventional performance appraisal processes risk

becoming just another of the many bureaucratic rituals supervisors and

subordinates must endure.

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THE PERFORMANCE

MANAGEMENT

CYCLE

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Objectives of appraisal

To review the performance of the employees over a given period of time.

To judge the gap between the actual and the desired performance.

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

To indentify the need of training and development programs for the

employees. To review the performance of the employees over a given period of

time.

To judge the gap between the actual and the desired performance.

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

To diagnose the strengths and weaknesses of the individuals so as to

identify the training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the

organization.

Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

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Some specific positive objectives of performance appraisal are:

To review past performances

To assess training needs

To help develop individuals

To audit the skills within an organization

To set targets for future performance

To identify potential for promotion

Types of Appraisals

The following is a description of the types of performance appraisals:

1. Probationary/Trial - End of probation or trial period.

2. Extension of Probation Period - At time of request for extension.

3. Annual - One year from date of last review.

4. Special - Beginning at end of special probation or when performance

substantially dropped during a review period.

5.Change in Classification Promotion/ demotion/ transfer, etc.

6. Separation - Separation from County service, when it has been more

than nine (9) months since the affected employee's performance has been

evaluated

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DIFFERENCE BETWEEN PERFORMANCE APPRAISAL AND

PERFORMANCE MANAGEMENT SYSTEM:

Performance Appraisal Performance management

No customer involvement

Static format

Activities Based

Results Only

Job Description Focus

Annual Event

Top down Evaluation

Retrospective Evaluation

Direct customer involvement

Flexible Format

Objective/ Competencies Based

Result/ process Measurement

Linked To Strategic Priorities

Team Participation

On Going Interaction

Multiple Resources of feedback

Retrospective and Prospective

Performance Appraisal is related to the targets assigned to the employee.

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PERFORMANCE APPRAISAL PREPARATION

Appraisal systems should be job-related, have standards, be practical, and use

dependable measures. Considering that progression along pay scales might be

effected by appraisal outcomes, any such system must be perceived to be (and

actually be) fair and objective.

Some characteristics to look for in an appraisal process are:

Objectivity / measurability

Work relatedness of measures

Measures are within the appraisee's control

Measures are attainable

Contains an appeal mechanism

Management commitment to the entire process -- training provided where

necessary

Be simple and not take appraisers nor appraisees unduly away from their

core tasks

Be sophisticated enough to ensure appraisees' perceptions of fairness

Measuring clear competencies only

Provides a feedback mechanism with a link to training and development

PERFORMANCE STANDARDS

Performance standards are the benchmarks against which performance is

measured. These standards must be based on job analyses and be directly related

to the desired results of each job.

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If pay increases are dependent upon the outcome of the performance appraisal,

there can be no room for subjective, nebulous performance indicators. Great

divisiveness, jealousy and demotivation can be caused by poor performance pay

systems using inadequate or inappropriate benchmarks.

THE PERFORMANCE APPRAISAL CYCLE

Discussion

Informal

Review

Preparation

The preparation section of the cycle covers the pre-meeting work of the appraisal

and the appraise who both review results in the light of previously agreed

objectives and decide on any matters they want to raise at the appraisal

discussion.

The formal appraisal section of the cycle is concerned with:

Conducting the appraisal discussion;

Overcoming any problem emerging during the appraisal.

Concluding the appraisal by recording the results, agreeing action plans and, as necessary,

obtaining another view from the appraiser’s manager to ensure that a fair and thorough appraisal

has taken place.

The information review section of the cycle consists of:

Information discussions that take place as and when required and may

involve updating objectives or performance plans;

The process of coaching and counseling, which help to implement the

development and performance improvement programme.

When appraisal should take place?

Formal appraisal discussions are often held annually but some fast moving organizations

prefer to have them twice a year or even more frequently, say at quarterly intervals. When

employees are working on some projects, as in a consultancy firm, there may be an

appraisal after every assignment. Ensuring that appraisal is a continuing process. To ensure

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that appraisal is not just seen as a one- a-year event to be got over as quickly as possible it

is necessary to emphasize the continuing nature of the process in briefing and training.

Appraiser & appraiser should understand that feedback & appraisal are in effect everyday

occurrences.

PERFORMANCE APPRAISAL METHODS

1. Graphic rating scale

2. Paired Comparison

3. Forced choice approach

4.Easy Appraisal

5. BARS

6. Checklist method

7. Critical incident method

8. 3600 appraisal

9.Mixed method

Methods

Graphic Rating Scale: A performance appraisal that rates the degree to which

the employee has achieved various characteristics.

1)The graphic rating scale is the most common type of appraisal used.

2)Various characteristics such as job knowledge or punctuality are rated by the

degree of achievement.

3)The rate usually receives a score of 1 to 5, with 5 representing excellent

performance.

4)Some forms allow for additional comments.

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Paired-comparison Approach: A performance appraisal that measures the

relative performance of employees in a group.

1)This is a method of performance evaluation that results in a rank ordering of

employees to come up with a best employee.

2)This type of approach measures the relative performance of employees in a

group.

Forced-choice Approach: A performance appraisal that presents the

appraiser with sets of statements describing employee behavior; the appraiser

must choose which statement is most characteristic of the employee and which is

least characteristic.

Easy Appraisal: Sometimes the supervisor must write a description of the

employee’s performance. The easy appraisal is often used along with other types

of appraisals, notably graphic rating scales. They provide an opportunity for

supervisors to describe aspects of performance not thoroughly covered by an

appraisal questionnaire.

The dis-advantage of this method is that their quality

depends on the supervisor’s writing skills.

Behaviorally Anchored Rating Scales:

A performance appraisal in which the employee is rated on scales containing

statements describing performance in several areas.

This is a method of performance appraisal that is tailored to the organization and

positions with in that organization.

Some organizations pay behavioral scientists or organizational psychologists to

create behaviorally anchored rating scales.

A checklist appraisal is a record of performance, not an evaluation by the

supervisor.

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It contains a series of questions about the employee’s performance.

The supervisor checks boxes to answer the questions yes or no.

The human resources department has a key for scoring the items resulting in a

rating of the employee’s performance.

Critical-incident Appraisal: A performance appraisal in which the supervisor

keeps a record of incidents that show positive and negative ways the employee

has acted; the supervisor uses this record to assess the employee’s performance.

Some of the important forms of ranking for performance appraisal are given below,

based on Oberg, 1972; and Monga, 1983:

(a) Alteration ranking method The individual with the best performance is chosen

as the ideal employee. Other employees are then ranked against this employee in

descending order of comparative performance on a scale of best to worst

performance. The alteration ranking method usually involves rating by more than

one assessor. The ranks assigned by each assessor are then averaged and a

relative ranking of each member in the group is determined. While this is a simple

method, it is impractical for large groups. In addition, there may be wide variations

in ability between ranks for different positions.

(b) Paired comparison The paired comparison method systematizes ranking and

enables better comparison among individuals to be rated. Every individual in the

group is compared with all others in the group. The evaluations received by each

person in the group are counted and turned into percentage scores. The scores

provide a fair idea as to how each individual in the group is judged by the

assessor.

(c) Person-to-person rating In the person-to-person rating scales, the names of the

actual individuals known to all the assessors are used as a series of standards.

These standards may be defined as lowest, low, middle, high and highest

performers. Individual employees in the group are then compared with the

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individuals used as the standards, and rated for a standard where they match the

best. The advantage of this rating scale is that the standards are concrete and are

in terms of real individuals. The disadvantage is that the standards set by different

assessors may not be consistent. Each assessor constructs their own person-to-

person scale which makes comparison of different ratings difficult.

(d) Checklist method The assessor is furnished with a checklist of pre-scaled

descriptions of behaviour, which are then used to evaluate the personnel being

rated (Monga, 1983). The scale values of the behaviour items are unknown to the

assessor, who has to check as many items as she or he believes describe the

worker being assessed. A final rating is obtained by averaging the scale values of

the items that have been marked.

(e) Behaviourally anchored rating scales (BARS) This is a relatively new technique.

It consists of sets of behaviourial statements describing good or bad performance

with respect to important qualities. These qualities may refer to inter-personal

relationships, planning and organizing abilities, adaptability and reliability. These

statements are developed from critical incidents collected both from the assessor

and the subject.

(f) Assessment centres This technique is used to predict future performance of

employees were they to be promoted. The individual whose potential is to be

assessed has to work on individual as well as group assignments similar to those

they would be required to handle were they promoted. The judgment of observers

is pooled, and paired comparison or alteration ranking is sometimes used to arrive

at a final assessment. The final assessment helps in making an order-of-merit

ranking for each employee. It also involves subjective judgment by observers.

360-degree Performance Appraisal : Evaluating Employees From All Angles

Traditional performance appraisals, as discussed above, can be both subjective

and simplistic. At times, they can also be deemed to be "political". In an attempt to

improve this methodology, some companies have turned to 360-degree appraisals.

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360 appraisals pool feedback from a department's internal and external customers

to ensure a broader, more accurate perspective of an employee's performance.

360-degree performance appraisal is an attempt to answer the question: "How can

a supervisor evaluate an employee he or she sees only a few hours each week?"

Using internal and external clients

360-degree performance appraisals offer an alternative by which organizations

may gain more useful performance information about employees. Because all

clients/customers an employee comes into contact with can conceivably have input

into the performance appraisal, this methodology can also makes them more

accountable to their customers.

Using a courtroom metaphor, one could say that, rather than having a single

person play judge, a 360-degree appraisal acts more like a jury. People who

actually deal with the employee each day have an opportunity to create a pool of

information from which the appraisal is written. Internal clients may include

supervisors, subordinates, co-workers, and representatives from other

departments. External customers may include clients, suppliers, consultants and

customers.

Perceived fairness

Given the use of a wide variety of sources for information in the 360-appraisal

process, this method provides a broader view of the employee's performance.

Frequently, the employee on whom the appraisal is being done (the ratee) will feel

that the process is more fair.

Validity

Very often, an employee's peers know their behaviors best. Consequently,

employees cannot hide as easily in 360-degree appraisals.

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Employee development

360-degree appraisal enables an employee to compare his or her own perceptions

of their work performance with the perception of others. As such, the method

facilitates employee self-development. Feedback from one's peers is more likely to

lead to changed behaviors.

Accountability to customers

A 360-degree appraisal process provides a formalized communication link

between the employee being evaluated and their customers. These people now

have feedback into the employee's performance rating. As such, the process is

likely to make the employee more accountable to his or her various internal and

external customers. Furthermore, organizations can also use this feedback to

create more customer-oriented goals for the following year.

The raters: how many and who?

One issue employers must solve in implementing a 360-degree appraisal program

is determining how many raters should be involved. Next, the organization must

decide who should do the rating. Generally speaking, less than five raters limits the

perspective while more than ten raters is likely to make the appraisal system

complex and time consuming. A firm would be well advised to develop a workable

definition of what constitutes a peer, an internal customer, an external customer, a

supervisor, etc. For example, to be useful, the customer ought to be one who has

significant interactions with the ratee.

Some organizations permit the ratee to develop a list of key internal and external

customers that he or she interacts with. The ratee then recommends five to ten of

these individuals to serve as raters. In this process, the supervisor still retains the

ultimate responsibility for the appraisal and therefore ensures that appropriate

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raters are selected. The ratee is thus prevented from stacking the deck with

supportive customers.

Another option has the raters selected at random from the ratee's team by a

computer-generated system. Those selected are then notified by E-mail to

participate in the appraisal.

Limitations on the use of external clients

An organization contemplating the use of the 360-degree process must keep in

mind that reviewing that organization's employees' performance is not the

customer's business. To ensure the customers' cooperation, the process should be

a mutually beneficial process.

Furthermore, the various external customers would ideally evaluate the ratee only

on the behaviors or work incidents that they have directly observed. This, of

course, also holds for internal raters.

Summarizing the data

Once all raters have supplied their appraisals, the employee's supervisor is

generally responsible for summarizing the data and determining the final

performance rating.

After summarizing the data, the supervisor conducts the formal appraisal interview

with the ratee.

Another variation of the summary process makes the ratee responsible for

summarizing the feedback data from the raters. The ratee then submits a summary

analysis to his or her supervisor. The ratee and the supervisor then meet to

determine the ratee's final performance rating and development plan.

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Rater confidentiality

Organizations must decide whether the feedback from the various raters should be

kept anonymous or be identified to the employee. Sometimes raters give fuzzy

feedback because of the fear that the feedback might come back to them.

One rule rule might be that no rater can give negative feedback in the appraisal

unless that rater has previously given the feedback directly to the ratee. Most

organizations should start with a policy of confidentiality until sufficient

understanding, maturity and organizational trust is achieved.

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Benefits of Performance appraisal

For the organization:

The organization comes to know the true position of the employees working

capacities and the problems they face while working in the organization. This

performance appraisal system also acts as a motivating factor for the employees,

which helps the organization to get better results.

For the appraise:

The appraise fells themselves an important part of the organization, they get a

chance to express their views in front of their superiors; they get a platform to

express their ideas. The employee comes to know the truth about:

To what extent they have achieved their objectives.

In what respect their work has been most successful.

Are there any aspects of their work, which they have not completed?

Are many other question, which make them assess rightly. ..

Guidelines for effective performance evaluation interviews...

emphasize positive aspects of employee performance

tell employee that the purpose is to improve performance, not to discipline

conduct the review in private

review the performance formally at least annually (more frequently for those

performing poorly)

make criticisms specific

focus on performance, not personality

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stay calm; do not argue

identify specific actions the employee can take to improve performance

emphasize the evaluator’s willingness to assist the employee’s efforts to

improve performance

end by stressing positive

Appraisal Process

In order to obtain a better understanding of how the performance appraisal has

been put together by The Corporation, the researcher has provided an overview of

the company’s performance appraisal process. The researcher felt that the

overview of the performance appraisal process would be necessary, since the

process provided a framework for the performance appraisal.

PRE-APPRASIAL STEPS

The performance evaluation can be made for variety of reasons counseling,

promotions, salary increases, administration or combination of these. It becomes

very necessary to begin by stating the objectives of evaluation programs very

clearly and precisely. The personal appraisal system should address the question

who, what, how of performance appraisal.

These questions are the components of these appraisal systems which are

discussed below individually.

“WHO “OF THE APPRAISAL OR ‘’WHO’’ IS TO RATE .

The immediate superior, the head of the department or any other can rate

the performance of an individual. In addition to this, sum organizations follow the

system of self appraisal and /or appraisal by peers. A group, consisting of his

senior, peers and subordinates, can do appraisal, whoever is rating; he should be

trained and impartial. In most of the organizations the ratings is done by his

immediate superior who is considered the best person to understand his

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subordinates strengths and weaknesses. Now a day some organizations are

following the method of self-appraisal.

THE “WHAT”OF APPRAISAL

It is considered with

Creating and maintaining a satisfactory level of performance of employees

in their present job.

Highlighting employee’s needs and opportunities of for personal growth and

development.

Aiding in decision making for promotions, transfers, layoff and discharges.

Promoting understanding between supervisors and his subordinates.

Providing a useful criterion for determining the validity of selections and

training methods for attracting individuals of higher caliber to the organization.

THE ‘WHEN’ OF APPRAISAL

The ‘when’ answers the query the frequency of appraisal? The informal counseling

should occur continuously but the manager should discuss an employee’s work as

soon as he gets an opportunity to provide positive reinforcement and use poor

work as basis of training. The time and period of appraisal differs according to the

need and nature of the organization.

THE ‘WHERE’ OF APPRAISAL

The where indicates the location where employee should be evaluated? It

is usually done at work place or office of the supervisor.

THE ‘HOW’ OF APPRAISAL

Under this, the organization must decide what different kinds of methods are

available and which of these may be used for performance appraisal. On the basis

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of comparative advantages and disadvantages, the nature and philosophy of

management and the needs of an organization; the method of appraisal is

decided.

The performance appraisal process at the companies has been stated by The

Corporation as consisting of four inter-related steps. The first step was to establish

a common understanding between the manager (evaluator) and employee

(evaluatee) regarding work expectations; mainly, the work to be accomplished and

how that work was to be evaluated. The second step was an ongoing assessment

of performance and the progress against work expectation. Provisions were made

for the regular feedback of information to clarify and modify the goals and

expectations, to correct unacceptable performance before it was too late, and to

reward superior performance with proper praise and recognition. Step three was

the formal documentation of performance through the completion of a performance

and development appraisal form appropriate to the job family.

The final step being the formal performance and development appraisal

discussion, based on the completed appraisal form and ending in the construction

of a Development Plan. Also noted was that The Corporation considered the

performance appraisal process to have been within the larger content of the other

performance related processes of work planning and salary action.

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Reasons for Performance Appraisal Failures

Where performance appraisal fails to work as well as it should, lack of support from

the top levels of management is often cited as a major contributing reason.

Opposition may be based on political motives, or more simply, on ignorance or

disbelief in the effectiveness of the appraisal process.

It is crucial that top management believe in the value of appraisal and express their

visible commitment to it. Top managers are powerful role models for other

managers and employees.

Those attempting to introduce performance appraisal, or even to reform an existing

system, must be acutely aware of the importance of political issues and symbolism

in the success of such projects.

Employee Participation

Employees should participate with their supervisors in the creation of their own

performance goals and development plans. Mutual agreement is a key to success.

A plan wherein the employee feels some degree of ownership is more likely to be

accepted than one that is imposed. This does not mean that employees do not

desire guidance from their supervisor; indeed they very much do.

Performance Management

34

One of the most common mistakes in the practice of performance appraisal is to

perceive appraisal as an isolated event rather than an ongoing process.

Employees generally require more feedback, and more frequently, than can be

provided in an annual appraisal. While it may not be necessary to conduct full

appraisal sessions more than once or twice a year, performance management

should be viewed as an ongoing process.

Frequent mini-appraisals and feedback sessions will help ensure that employees

receive the ongoing guidance, support and encouragement they need.

Of course many supervisors complain they don't have the time to provide this sort

of ongoing feedback. This is hardly likely.What supervisors really mean when they

say this is that the supervision and development of subordinates is not as high a

priority as certain other tasks.

In this case, the organization may need to review the priorities and values that it

has instilled in its supervisory ranks. After all, supervisors who haven't got time to

monitor and facilitate the performance of their subordinates are like chefs who

haven't got time to cook, or dentists who are too busy to look at teeth. It just

doesn't make sense.

If appraisal is viewed as an isolated event, it is only natural that supervisors will

come to view their responsibilities in the same way. Just as worrying, employees

may come to see their own effort and commitment levels as something that needs

a bit of a polish up in the month or two preceding appraisals.

Performance appraisals purpose - and how to make it easier

Performance appraisals are essential for the effective management and evaluation

of staff. Appraisals help develop individuals, improve organizational performance,

and feed into business planning. Formal performance appraisals are generally

conducted annually for all staff in the organization. Each staff member is appraised

35

by their line manager. Directors are appraised by the CEO, who is appraised by

the chairman or company owners, depending on the size and structure of the

organization.

Annual performance appraisals enable management and monitoring of standards,

agreeing expectations and objectives, and delegation of responsibilities and tasks.

Staff performance appraisals also establish individual training needs and enable

organizational training needs analysis and planning.

Performance appraisals also typically feed into organizational annual pay and

grading reviews, which commonly also coincides with the business planning for the

next trading year.

Performance appraisals generally review each individual's performance against

objectives and standards for the trading year, agreed at the previous appraisal

meeting.

Performance appraisals are also essential for career and succession planning -

for individuals, crucial jobs, and for the organization as a whole.

Performance appraisals are important for staff motivation, attitude and behaviour

development, communicating and aligning individual and organizational aims, and

fostering positive relationships between management and staff.

Performance appraisals provide a formal, recorded, regular review of an

individual's performance, and a plan for future development.

Job performance appraisals - in whatever form they take - are therefore vital for

managing the performance of people and organizations.

Managers and appraisees commonly dislike appraisals and try to avoid them. To

these people the appraisal is daunting and time-consuming. The process is seen

as a difficult administrative chore and emotionally challenging. The annual

appraisal is maybe the only time since last year that the two people have sat down

36

together for a meaningful one-to-one discussion. No wonder then that appraisals

are stressful - which then defeats the whole purpose.

Appraisals are much easier, and especially more relaxed, if the boss meets

each of the team members individually and regularly for one-to-one

discussion throughout the year.

Meaningful regular discussion about work, career, aims, progress, development,

hopes and dreams, life, the universe, the TV, common interests, etc., whatever,

makes appraisals so much easier because people then know and trust each other

- which reduces all the stress and the uncertainty.

Put off discussions and of course they loom very large.

So don't wait for the annual appraisal to sit down and talk.

The boss or or the appraisee can instigate this.

If you are an employee with a shy boss, then take the lead.

If you are a boss who rarely sits down and talks with people - or whose people are

not used to talking with their boss - then set about relaxing the atmosphere and

improving relationships. Appraisals (and work) all tend to be easier when people

communicate well and know each other.

So sit down together and talk as often as you can, and then when the actual formal

appraisals are due everyone will find the whole process to be far more natural,

quick, and easy - and a lot more productive too.

37

Chapter-2

Company Profile

38

Chapter -3

Research methodology

39

RESEARCH DESIGN

The present research is exploratory; therefore the research design adopted is Flexible,

flexible enough to include any information that can give new insight into the subject or

change the scope of the study. Also termed Formulative Research studies, it involves

formulating a problem for a more precise investigation or of developing the working

hypothesis from an operational point of view. This research have inbuilt flexibility. The

problem, initially defined broadly, is transformed into one with more precise meaning

in exploratory studies.

So the methods adopted to collect the data are Questionnaire, and relevant

secondary data was also consulted.

The place chosen to gather data is offices, where everyone would be an Investor.

Any other place would not have been that efficient as time and money effort required

would have been substantially high.

40

OBJECTIVES

1.To apply my theoretical knowledge in real working situations.

2. To know about the role of HR department an organization.

3. To study the real performance appraisal process.

4. To develop my abilities like communication skills, decision making and problem

solving power.

5. If employees understand their roles well, they are likely to be more effective on

the job.

To achieve the objectives of the research the data collected is of two

types:

1.Primary data is collected by questionnaire, interview and observations

2.Secondary data is collected from the company records.

Selection of samples is based on RANDOM REPRESENTATIVE SAMPLING from

all the departments and categories of employees

41

The sample size is 100 EMPLOYEES

Most of the questions are objective type except a few on comment and

suggestions regarding training

A few respondents were interviewed to counter check their response in the

questionnaire to assess the clarity of questions and validity of answers.

Limitations

1. Some employees were not ready to fill the self appraisal part of the form.

2. Making of KRA’s for me was not easy because it was first attempt of my self.

3. Some of the employees had not enough time for filling my forms due their

business.

4. My theoretical knowledge of first & second semester was not enough for this

project.

42

CHAPTER-4

DATA ANALYSIS

43

Analysis and Interpretation

In order to covert collected data to meaningful information, the collected must be

coded in graphical and in some general formats. One important use of coding and

graphical is to easily understand the relationships with different variables.

44

1)Analysis of appraisal of workers

1. Attendance-:

After appraising the employees I found that 95% of workers attains above 95%

attendance. The left 5%are job hoppers.

2. Job Knowledge-:

All the employees have good job knowledge and meets expectations.

3. Behavior-:

Behavior of 98% employees is excellent & good.

4. Behavior-:

- I am taking these performance standards both because these are interrelated as

the target is for a team not of an individual. So a good team player is a good

achiever. In these two categories 90% employees are good team players and 90%

employees are target achievers.

45

2)Analysis of staff employee’s appraisal

I had taken five rating scales i.e.

OVERALL RATING

O =Outstanding = 100-91

A = Good = 90-76

B= Average = 75-51

C =Below Average = 50-35

D = Poor = Below 35

1. In outstanding category there is 5% employee

2. In category A i. e. good 60% employees falls

3. Most of the employees are under category of average and the % is 25.

4. Employees having below average are 10%.

5. In the poor category no employee I found.

46

47

Learning

1. Function of HR department in a manufacturing firm.

2. Solving hurdles in the process of appraisal

3. Paper manufacturing process.

4. Manpower required for the company.

5. Solving employees’ problems.

6. Organizational structure

47

CHAPTER-5

FINDINGS & SUGGESTIONS

48

Findings

• Include supervisors and managers responsible for conducting performance

appraisals and the executive to whom they report.

• Meeting should be led by experienced facilitator, such as organization’s head of

HR, internal HR person trained as a facilitator or an external consultant

• Core of the meeting:

• Discussion of each employee’s performance rating and the supervisor’s

reasons for that rating.

• Start with the outliers (extreme lows or highs)

• ID high performers and why

• Should be done before all performance ratings and compensation decisions are

finalized.

49

Suggestions

1. To improve attendance there should be rewards for those employees who

attains above 95% attendance.

2. There should be training sessions to improve team building.

3. There should be proper training for appraisal to the employees.

4. In the beginning of the year employee must know the performance standards on

which his/her performance will be judged in end of year.

50

Conclusion

Finding job responsibilities of employees is easy but making of KRA’s is quite

challenging.

Performance appraisal is a vehicle to validate and refine organizational

actions (e.g. selection, training);

Performance appraisal provides feedback to employees with an eye on

improving future performance.

Performance of almost all employees is good.

Environment of the company is very good.

51

Annexure

1. Appraisal form for workers

2. Appraisal form for staff

(These are attached with this report)

52

Bibliography

Aswathappa K, Human Resource & Personnel Management, Tata McGraw-

Hill Publishing Co. Ltd., New Delhi, Sixth edition 2001

Kothari C.R., Research methodology methods & techniques, Wishwa

Prakasan ublishing Co. Ltd., New Delhi, Sixth edition 2001.

Human Resources Management by P.Subarao

Search engines

1. www.google .com

2. citehr.com

3.www.msn.com

4.www.wikipaedi.com

53

APPRAISAL FORM

HR Department (For Workers ) (Confidetial )

Name of employee-: Department-: HOD-:

Designation-: Reports to-:

Decision by the committee-:

Rating-:

Increment Amount-:

Recommendations-:

Comments

HOD HR ED

Give ratings based on the following criteria O-

outstanding---Above 90% A-Good---

75-90% B-Average---51-74% C-BelowAverage---31-

50% D-Poor---below 30% Guidelines-:

1. Appraiser would be the HOD 2.

Performance appraisal should be done in arelation to the job/objevtives targets set

for him during the appraisal period. 3.Appraisal on factor should be objective and

should not be influenced by single incident.

54

1. Attendance-: Coming to work daily and conforming to work hours.

a) Always regular and punctual (above 95%) ( )

b) Usually regular and punctual (85-94%) ( )

c) Regular but not punctual ( )

d) Lax in attendance and punctuality ( )

e) Often absent and frequently late ( )

22. Target Achievement-:

a) Achieves targets before time (above 95%) ( )

b) Achieves target before time (80-94%) ( )

c) Meets expectations ( )

d) Sometime achieves targets ( )

e) Never achieve target ( )

3. Behavior-: Disciplined, interaction with other employees in a mannered way,

alertness.

a) Always disciplined, cultured, alert ( )

b) Usually Disciplined, cultured ( )

c) Disciplined, not alert ( )

d) Cultured but Neither disciplined nor alert ( )

e) Uncultured ( )

4. Job knowledge-: The practical/technical skills and information used on the

job.

a) Job knowledge is exceptional and always gives high quality of work ( )

b) Meets expectations ( )

c) Sometime lake of high quality work ( )

d) Job knowledge is deficient in certain area ( )

e) Unacceptable ( )

55

5. Team Player-: Develops a team work climate conducive to productivity by

communicating, sharing information

a) Ability to work in a team is exceptional

( )

b) Ability to work in a team is good

( )

c) Meets Expectations

( )

d) Normally does not act as a team player

( )

e) Never act as a team player

( )

Maximum Rating= 25 Score gained= Percentage =

Signature of HOD

___________________________________________________

_______________________________

56

APPRAISAL FORM

__________________________________________________________________

________________ HR DEPARTMENT FOR

STAFF &EXECUTIVE (Confidential)

1. PERSONAL DETAILS

To be filled by the Personal/HR Department and to counter checked by the

Appraiser & Appraise

Name

Date of birth Date of joining

Qualification Designation

Department

HOD Reports To

Amount & Date of last increment

Amount & Date of last salary correction/special increment

Date of last promotion

Total Emoluments (Basic +HRA) Other benefits

Decision by the Moderating Committee

Rating Increment Amount

Recommendations- Salary Correction/Promotion/Redesignation

57

Comments

HR ED Supervisory

Board

Guidelines

1. Appraiser would be the HOD.

2. Performance Appraisal should be done in relation to the job/objectives/targets

set for him during the appraisal period.

3. Appraisal on factor should be objective &should not be influenced by any single

incident or occurrence. Appraisal on one factor should not influence the rating on

the other.

1. Self Appraisal (optional)

A. Please briefly mention what you consider your major achievement in the

previous Appraisal Period

A. Contribution to improve quality of work, quantity work atmosphere or

initiative taken.

B. Suggestions for improving the effectiveness of your department.

58

C. Specify factors which you were/were not able to perform to your

optimum expectation.

NAME OF APPRAISE SIGNATURE OF APPRAISE

DATE

EVALUATION BY HOD

Rating on Performance &Potential has to done on a scale of 1-5, where

1. Stands for Unsatisfactory.

2. Stands for less than expected

3. Stands for satisfactory.

4. Stands for good

5.Stands for Excellent

59

A. Performance Appraisal KEY RESULT AREA

List the critical tasks performed by the appraise during

the Appraisal Period 2008-2009 and rate on each KRA

RATINGS

Scores on KRA’s(X) = (Rating on each KRA) X =

B. Potential Appraisal

Rate the candidate on scale of 1-5 on the following competencies

RATING

Knowledge/Technical Skills (job related knowledge)

Personality (Presentable disposition, adaptability, maturity, dynamism)

Values ( Integrity, honesty, character, ethics, discipline reliability)

Attitude ( Positive , confident, persistent, self motivated)

Interpersonal skills (Open, direct & precise in written & oral communication, good

listener)

Leadership/Team Building/Team Working

60

( Selfless, entrepreneurial drive, develops team and ability to work in team)

Score on competencies/potentials(Y) =Sum of ratings on all competencies=

X Y

Final score = ---------------- × 60 + -------------------× 40 =

n×5 30

1. Comments on his/her performance in 2008-09

Recommendations

A. Support (Training) he/she requires from the company to grow and maximize his/her

potential

B Give rating based on the following criteria.

OVERALL RATING

O =Outstanding = 100-91

A = Good = 90-76

B = Average = 75-51

C=Below Average = 50-35

D = Poor = Below 35

61

FINAL RATING

Final Recommendations

Promotion Redesignation

Special increment

Name of HOD Signature

Date

62