A PROJECT REPORT PERFORMANCE APPRASIAL Organization : National Thermal Power Corporation Submitted in the partial fulfillment of the requirement for the award of the degree MASTER OF BUSINESS ADMINISTRATION Session 2009-2011 SUBMITTED TO:- SUBMITTED BY:- Mrs. PRIYANKA SHRIVASTAV ANAMIKA
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A
PROJECT REPORT
PERFORMANCE APPRASIAL
Organization : National Thermal Power Corporation
Submitted in the partial fulfillment of the requirement for the award of
the degree MASTER OF BUSINESS ADMINISTRATION
Session 2009-2011
SUBMITTED TO:- SUBMITTED BY:-
Mrs. PRIYANKA SHRIVASTAV ANAMIKA
Faculty of MBA Dept. MBA –IIIrd Sem
Roll No. 0928670003
VIT
DEPARTMENT OF MANAGMENT VISHVESHWARYA
INSTITUTE OF TECHNOLOGY
(DADRI)
VISHVESHWARYA INSTITUTE OF TECHNOLOGY
CERTIFICATE
This is to certify that Miss Anamika, Roll No: 0928670003 is a bonafide student of MBA IIIrd
Semester during Session 2009-2011. The Summer Training Project Report entitled “ A Study of HR
Function at NTPC, Dadri Super Thermal Power Project and A detailed study of Training and
Development Activities and practices at NTPC with special Reference to NTPC Dadri ”. has been
prepared by him/her in partial fulfillment of the award of Master Degree in Business Administration of
5- Reinforcement of organizational development needs.
(iv) Documentation- Criteria for validation research
1- Documentation for HR decisions
2- Helping to meet legal requirements
Performance Appraisal and Competitive Advantage
The objective of performance appraisal, listed above, points out the purposes that such an exercise seeks
to meet. What needs emphasis is that performance evaluation contributes to firm’s competitive strength.
Besides encouraging high level of performance, the evaluation system helps identify employees with
potential, reward performance equitably and determine employee’s need for training.
Specifically, performance appraisal helps an organization gain competitive edge in the following way
\
Improving Performance–
Improving Performance Competitive Advantage
Minimizing Dissatisfaction and Turnover Strategy and Behaviour Values and Behaviour Making Correct
Decisions, Ensuring Legal Compliance
An effective appraisal system can contribute to competitive advantage by improving employee job
performance in two ways- by directing employee behavior towards organizational goal and by monitoring
that behavior to ensure that the goals are met.
Making Correct Decisions–
Appraisal is a critical input in making correct decisions on such issues as pay raise, promotion, transfer,
training, discharges and completion of probationary periods. Right decisions on each of these can
contribute to competitive strength of an organization. If promotion is made on performance, the promote
feels motivated to enhance his or her performance.
Ensuring Legal Compliance-
Promotion made on factors other than performance might land up a firm in a legal battle, thus diverting its
focus on non-productive areas. Organizations can minimize costly performance –related litigation by
using appraisal systems that give fair and accurate ratings.
Minimizing Job Dissatisfaction and Turnover –
Employees tend to become emotional and frustrated if they perceived that the ratings they get are unfair
and inaccurate. Such employees find that the efforts they had put in became futile and obviously get
demotivated.
Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction is increased turnover. Fair
and accurate appraisal results in high motivation and increased job satisfaction. An organization having
satisfied and motivated employees will have an edge over its competitors.
Consistency Between Organizational Strategy and Behavior – An organization needs a strategy consistent
with the behavior of its employees if it were to realize its goals. A truism of organizational life is that
people engage themselves in behaviors that they perceive will be rewarded. As employees want to be
rewarded, they tend to occupy themselves more with those activities on which the organization
emphasizes. The performance appraisal becomes not only a means of knowing if the employees behavior
is consistent with the overall strategic focus, but also a way of bringing to the fore any negative
consequence of the strategy-behavior fit. Thus, the performance appraisal is an important organizational
mechanism to elicit feedback on the strategy- behavior link. Organizational Strategy and Performance
Appraisal- The performance appraisal system serves many organizational objectives and goals.
Besides encouraging high level of performance, the evaluation system is useful in identifying employees
with potential, rewarding performance equitably, and determining the employees need for development.
These are all the activities that should support the organizations strategic orientation.
APPRAISAL PROCESS
Each step in the process is crucial and is arranged logically. The process as shown in figure is some what
idealized. Many organizations make every effort to approximate the ideal process, resulting in first-rate
appraisal systems. Unfortunately, many other fails to consider one or more of the steps and, therefore,
have less effective appraisal system.
The Performance Appraisal Process
1. Objectives of Appraisal – Objectives of appraisal includes effective
promotions and transfers, assessing training needs, awarding pay increases, and the like. The emphasis in
all these is to correct the problems. These objectives are appropriate as long as the approach in appraisal
is individual. Appraisal, in future, would assume system orientation. In the system approach, the objective
of appraisal stretch beyond the traditional ones.
In the system approach, appraisal aims at improving the performance, instead of merely assessing it.
Towards this end, appraisal system seeks to evaluate opportunity factors. Opportunity factors include the
physical environment such as noise, ventilation and lightings, available resources such as human and
computer assistance; and social
Establish Job Expectations
Design an Appraisal Program
Appraise Performance
Performance Interview
Use Appraisal Data For Appropriate Purpose
processes such as leadership effectiveness. These opportunity variables are more important than
individual abilities in determining work performance.
In the system approach, the emphasis is not on individual assessment and rewards or punishments. But it
is on how the work system affects an individual’s performance. In order to use a systems approach,
managers must learn to appreciate the impact that the system level factors have on individual
performance, and subordinates must adjust to the lack of competition among individuals. Thus, if a
systems approach is going to be successful, the employee must believe that by working towards shared
goals, everyone will benefit.
2. Establish Job Expectations – The second step in the appraisal process is to establish job expectations.
This includes forming the employees what is expected of him or her on the job. Normally, a discussion is
held with his or her superior to review the major duties contained in the job description. Individuals
should not be expected to begin the job until they understand what is expected from them.
3. Design Appraisal Programme – Designing an appraisal programme
poses several questiones, which need answers. They are, (i) Formal versus informal appraisal; (ii) Whose
performance is to be assessed? (iii) Who are the raters? (iv) What problem are encountered? (v) How to
solve the problems? (vi)What should be evaluated? (vii) When to evaluate? (viii) What methods of
appraisal are to be used?
4. Appraisal the performance – The next step in the appraisal is to measure the performance. We revert
to the moral of the story narrated in the beginning of this chapter. The moral taught us that we need to
measure the performance and not mere activities.
What then is performance? Performance is essentially what an employee does or does not do. Employee
performance common to most jobs include the following elements:
• Quantity of output
• Quality of output
• Timeliness of output
• Presence at work
• Cooperativeness.
In addition to these, other elements that deserve assessment, as told in the beginning of this chapter, are
job knowledge, leadership abilities, judgment; supervision, versatility and health assessment should also
include one’s potential to performance and not just actual performance.
Performance measurement needs to be based on the benchmarks listed above. These benchmarks vary
from job to job. The job of a professor needs to be assessed against parameters that are different to those
used to evaluate the performance of a sales representative.
5. Performance Interview -Performance interview is another step in the appraisal process. Once
appraisal has been made of employees, the raters should discuss and review the performance with the
ratees, so that they will receive feedback about where they stand in the eyes of superiors. Feedback is
necessary to effect improvement in performance, especially when it is inadequate. Specifically,
performance interview has three goals: (i) to change behavior of employees whose performance does not
meet organizational requirements or their own personal goals, (ii) To maintain the behavior of employees
who perform in an acceptable manner, and (iii) To recognize performance behaviors so that they will be
continued.
Raters offer feedback to the ratees through several methods – tell and sell, tell and listen, problem solving
and mixed. In tell and sell, also called directive interview, the interviewer lets assesses know how well
they are doing and sell them on the merits of setting specific goals for improvement, if needed. They tell
and listen interview provides the subordinates with chances to participate and establish a dialogue with
their superiors. Its purpose is to communicates the rater’s perceptions about the ratee’s strength and
weaknesses and let the subordinates respond to those perceptions. In the problem-solving or participative
interview, an active and open dialogue is established between the superior and the subordinate. Not only
are perceptions shared, but also solutions to problems are presented, discussed, and sought. Mixed
interview is a combination of tell and sell and problem-solving interviews.
Whatever be the approach followed, the emphasis in the interview should be on counseling and
development and not on critism, witch-hunting and buck passing. Because of the significance of appraisal
interview, every effort must be made to make it effective. Guidelines given in the table will help make the
interview successful.
Guidelines for Effective Appraisal Interview
• Select a good time
• Minimize interruptions
• Welcome, set at ease
• Start with something positive
• Ask open-ended questions to encourage discussion
• Listen
• Manage eye contact and body language
• Be specific
• Rate behavior, not personality
• Layout development plan
• Encourage subordinate participations
• Complete form
• Set mutually agreeable goals for improvement
• End in a positive, encouraging note
• Set time for any follow-up meetings
6. Use of Appraisal Data
The final step in the evaluation process is the use of evaluation data. The data and information generated
through performance evaluation must be used by the HR department.
It may be recollected that the most significant rewards employers offer to employees are:
1. Money to purchase goods and services required not only for current and future
survival, but also for the luxuries modern life has to offer.
2. Te opportunity to use innate and learned skills and talents in a productive manner that the individual
and his or her managers and co-workers recognize as valuable.
3. Opportunities to interact with other people in a favorable working environment.
4. Opportunities to learn, grow, and make full use of their potential.
5. A sense of performance and stability through the continuing existence of the
organization and the job.
6. The opportunity to perform work assignments within an environment that not
only protects, but promotes physiological, emotional and psychological health.
In one way or another, data and information outputs of a performance-appraisal programme can critically
influence these coveted employer-employee reward opportunities. Specifically, the data and information
will be useful in the following areas of HRM:
1. Remuneration administration
2. Validation of selection programmes
3. Employee training and development programmes
4. Promotion, transfer and lay-off decisions
5. Grievance and discipline programmes
6. HR planning.
Problem of criterion
Differentiating between individuals is easy provided one knows what aspects to take into account. A very
broad definition of criterion is “that refers to the evaluative standards which measures a person’s
performance, attitudes, etc.” At the lower levels of an organization, there are specific jobs, and certain
tangible and objective standards of performance can be identified. Further up in the hierarchy, jobs
become more complex and clear-cut, tangible standards of performance are difficult to specify.
Irrespective of the level, by and large, most companies use eleven performance measures : quantity of
work, quality of work, waste and breakage, money earned, job knowledge, job tenure, absenteeism, rate
of advancement, self-judgment by supervisors. These measures can be classified into three broad
categories:
1. Personal Data
2. Production Data
3. Judgmental Data
Personal Data: This includes personal history, number of times one has been absent,
number of grievances, accidents, breakage, etc., all of which are often used to differentiate between good
and bad performers, they studied what personal variables made them “good” or “bad” performers.
However, there is little evidence to suggest that personal data can predict job performance. It is extremely
risky to use personal data as an indicator of performance. In fact, several studies suggest that the
relationship between personal data measures and production measures is often very often very low. Thus,
if these factors are used to define job success they should be considered relevant criteria in their own
right, rather than simple substitutes for more direct measures of job productivity.
Production Data: Rate and quality of work, and money earned, are direct measures of performance. These
can range from units produced per hour to money earned or lost. Production data are useful for evaluating
the performance of people only in some jobs and at some levels. Staff jobs vis-à-vis line jobs, higher level
jobs vis-à-vis lower level ones, and performance in service organizations vis-à-vis production or
engineering
organizations are difficult to evaluate, if production is the only thing to be considered.
Despites the fact that clear-cut output measures are available for some jobs; production data are not the
most frequently used measure of performance. They have been used less extensively that can be expected.
Initial studies on production as a measure of performance suggest that the time period between measures
can make a substantial difference to the accuracy of the data. To get correct pictures of production and
output, several samples over a number of time periods should be taken.
Judgmental Data: These include self-judgment, judgment by peers and superiors, and
sometimes knowledge of the job. It is one of the most commonly used indicators of performance, and
probably the one most loaded with errors and problems. Most of the problems arise because it is based on
subjective assessment either by the individual, or by another individual for him. It is almost impossible to
objectify subjective judgments. Merely giving two persons an answer to an essay test, and examining the
reason for their evaluation can gauge the difficulty of using this indicator.
Performance Appraisal Methods:
1. Confidential Report: This is the traditional way of appraising employee
performance. A confidential report by the immediate supervisor is still a major determinant of the
subordinate’s promotion or transfer. The supervisor writes about a paragraph on his subordinate’s
strengths, weaknesses, intelligence, attitude to work, attendance, conduct and character, work efficiency,
etc. The format and pattern of the report varies with each supervisor. Form-1 and Form-2 gives examples
of both unstructured and structured confidential report simply asks supervisors to estimate personal
qualities and capabilities-particularly reliability, judgment, adaptability, etc. The superior is free to
combine them in assessing the performance of the employee. The sample in form-2 gives 15 traits and
characteristics and is so structured that the supervisor can give his comments on each one of them
specifically and separately. The latter type of confidential report generates more data and information, in
well-defined categories, then does the former variety.
2. Rating Scales: Merit rating or appraisal of the performance is an important tool in the hands of
superiors to assess their subordinates. It is a systematic evaluation of an employee by some other qualified
person who is familiar with the employee’s performance. These methods assess the degree of certain
qualities required for the job such as industriousness, reliability and dependability. The degree is usually
measured on a scale, which can vary from 3 points (good, average, and poor) to several points. This
appraisal form defines not only traits and characteristics, but also scales positions. To some extent, it
overcomes the abstractness of numerical scales.
Common limitations of improperly designed merit rating system are:
- it is just a record of opinion
- there are zones of uncertainty
- rating seldom tells the whole story
- rating depends on raters ability and personal bias.
3. Ranking System: One of the disadvantages of the rating system is that it permits similar total scores
for two or more individuals. The ranking system obviates this problem. The rater simply ranks employees
in order of merit, which determines the employee’s ratings. Ranking can be determined either by looking
at the total individual and then ranking him in relation to others; or by first identifying several relevant
traits, ranking employees separately on each of these traits, and then cumulating these trait rankings to
arrive at the final employee ranking. The ranking system is simple, natural and useful when the number of
employee evaluated by the same superior is small.
Two disadvantages of the ranking system are:
1.It is difficult to rank employees apart from and between the top and
bottom extremes; finer judgment has to be exercised here, which increases
chance of errors.
2.The task of ranking individuals is difficult when there are over 20 or 25
cases.
2. Paired comparison method: It is much simpler; requiring the rater to judge
which of the two workers is superior, instead of having to arrange members of a large group of workers in
order of excellence. It makes the rater compare one employee systematically with the others individually.
The supervisor is provided with a bunch of slips each containing a pair of names. The rater puts a tick
mark against the individual whom he considers the better of the two. The maximum number of pairs is
indicated by the formula N(N-1)/2 , where N=total number of this method is that in a permutations and
combinations increases, requiring more time from the evaluator. One disadvantage of this method is the
number of permutations and combinations increases, requiring more time from the evaluator.
3. Forced Choice Method: The forced choice rating forms contains a series of groups of statements and
the rater checks how effectively the statements describes each individual being evaluated. The rater is
required to choose from several sets of adjectives or phrases, which best characterize the officer and
which are most descriptive. This is also sometimes called a check list statement. The forced choice
method attempts to make performance evaluation more objective.
4. Critical Incident Method: This involves three steps: A list of noteworthy (good or bad) on-the-job
behavior, usually of specific instances, is first prepared. A group of experts then assign scale values to
them. A group of experts then assign scale values to them, depending upon the degree of desirability for
the job. The third step is constructing a checklist that includes incidents that define “good” and “bad”
workers. Subsequently, superiors use these list for evaluating the worker. This method has to identify key
areas in which employees are weak or strong. It emphases rating on objective evidence rather on the
subjective evolution of trades. Finally, the supervisor finds counseling easier since he knows his
subordinates weakness.
5. Forced distribution method: In this the rater is forced to distribute his
subordinates into performance categories such as outstanding, good, poor, etc. the rater distribute his
subordinate his subordinates on scale locations which can be top 10 percent to bottom 10 percent, or any
variation of percentages with values in between. The most often used distribution is 10, 20, 40, 20, 10
percent, which equates with a normal distribution. This method is useful for rating a large no.of
employee.
Problems in Performance Appraisal:
None of the methods for appraising performance is absolutely valid or reliable. Those appraisal methods
involve judgments of one kind or the other. The error of “central tendency” and the error of leniency are
inherent in the process. The central tendency error refers to the tendency of not using extreme scale scores
on the judgment scales; most of the rates are clustered in the middle. Errors of leniency are caused by the
tendency of the lenient rates to put most of the ratees on the higher sides of the scale, while the tough
rater places them on the lower side of the scale.
Another problem is the “halo effect” or the tendency to allow the assessment on one trait to influence
assessment on others. This arises when traits are unfamiliar, ill defined, and involves personal reaction.
Another source of errors in performance evaluation is criterion contamination and bias because of variety
of circumstances and functions beyond the control of the rater and the ratee. These are critical biases, and
must be taken into account to make appraisals as objective as possible. Blum and nylon discuss the source
of bias:
1.Opportunity bias: This results when the amount of output is influenced by factors
beyond the control of employees. Some employees have better working conditions, supportive
supervisors, more experienced co-workers, and hence their output may be greater than those others
working on identical tasks.
2.Group characteristics bias: The characteristics of an individual’s group make a dent in his
performance. Cohesive group with high morale can produce more than less cohesive groups. Since the
individual’s performance is greatly determined by the group’s definition of a fair day’s work, this factor
must be kept in mind while evaluating the individual employee’s performance.
3.Knowledge of predictor bias: A rater’s knowledge of the performance of an employee on predictors
can influence his appraisal rating. An employee who topped in the selection list might leave the
impression that he is the best among the employees, and hence may railroad the rater to better evaluation
despite a moderate performance. The rater should never be permitted to have access to the employee’s
solutions data.
4.Bias in rating: The rater’s own biases and competence in rating can influence the
objective of performance appraisals. The halo effect, rater’s training, central tendency errors, etc are
examples of this “contamination”.
Although all appraisal methods are subject to validity and reliability tests there is very little evidence on
these two counts. Since most appraisal methods involve personal judgment, it is difficult to ascertain their
reliability and validity. Group appraisal methods and rating by multiple judges are some techniques,
which can make evaluations reliable and valid. However there success is highly debatable.
Are Performance Appraisals Still Beneficial And Appropriate?
It is sometimes fashionable in the ‘modern age’ to dismiss traditional processes such as performance
appraisals being irrelevant or unhelpful. Be very wary however if considering removing appraisals from
your own organizational practices. It is likely that the critics of the appraisal process are the people who
can’t conduct them very well. It’s a common human response to want to jettison something that one finds
difficult. Appraisals – in whatever form, and there are various – have been a mainstay of management for
decades, for good reasons. Think about everything that performance appraisals can achieve and contribute
to when they are properly managed.
1- Performance measurement- transparent, short, medium and long term
2-Clarifying, defining, redefining priorities and objectives
3-Motivation through agreeing helpful aims and targets
4-Motivation through agreeing helpful aims and targets
5-Training needs and learning desires – assessment and agreement
6-Identification of personal strengths and direction – including unused hidden
strengths
7-Career and succession planning – personal and organizational
8-Team roles clarification and team building
9-Organisational training needs assessment and analysis
10-Appraisee and manager mutual awareness, understanding and relationship
11-Resolving confusions and misunderstandings
12-Reinforcing and cascading organizational philosophies, values, aims, strategies, priorities, etc
13-Delegation, additional responsibilities, employee growth and development
14-Counseling and feedback
15-Manager development – all good manager should be able to conduct appraisals
well – it’s a fundamental process
The list goes on…
People have less and less face-to-face time together these days. Performance appraisals offer a way to
protect and manage these valuable face-to-face opportunities. My advice is to hold on to and nurture these
situations, and if you are under pressure to replace
performance appraisals with some sort of (apparently) more efficient and cost effective method, be very
sure that you can safely cover all the aspects of performance and attitudinal development that a well-run
performance appraisals system is naturally designed to achieve.
There are various ways of conducting performance appraisals, and ideas change overtime as to what are
the most effective appraisals methods and systems. Some people advocate traditional appraisals and
forms; other prefer 360 degree type appraisals.
In fact performance appraisals of all types are effective if they are conducted properly, and better still if
the appraisal process is clearly explained to, agreed by, the people involved.
Purpose of Performance Appraisal 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. Staff members
are appraised 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 unable 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 also important for staff motivation, attitude and behavior 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 the 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 together for a meaningful one to one discussion. No wonders then that appraisal are
stressful- which then defeats the whole purpose. There lies the main problem and the remedy.
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,
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 the appraisee can investigate 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 the 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 communucate 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.
Challenges of Performance Appraisal
With the increase significance of performance appraisal, confronting the system is mounting. One serious
challenge facing the performance appraisal system relates to assessment of self managed teams. Popularly
called empowered teams, these self- managed teams create special challenges for performance appraisal-
empowered teams performs without supervisors. Historically, if one recalls, it is the supervisor who
assesses the performance of his or her subordinates. Another challenges is that both, individual and team
performance, need to be measured. A suitable device needs to be enhancing productivity. Other
challenges are:
• Creates a culture of excellence that inspires every employee to improve and lend himself or herself to be
assessed
• Align organizational objectives to individual aspirations
• Clear growth paths for talented individuals
• Provide new challenges to rejuvenate careers that have reached the plateau stage
• Forge a partnership with people for managing their careers
• Empower employees to make decisions without the fear of failing
• Embed teamwork in all operational processes
• Debureaucratise the organization structure for ease for flow of information.
Appraisals, Social Responsibility and the Whole Person Development
There is increasingly a need for performance appraisals of staff and especially managers, directors and the
CEO’s, to include accountabilities relating to corporate responsibility, represented by various converging
corporate responsibility concept including: the ‘Triple Bottom Line’ (‘profit people planet’); corporate
social responsibility (CSR);
Sustainability; corporate integrity and ethics; Fair Trade, etc. The organization must decide the extent to
which this accountability is reflected in job responsibilities; which would then naturally feature
accordingly in performance appraisals. More about this aspect of responsibility is in the director’s job
descriptions section. Significantly also, while this appraisal outline is necessarily a formal structure this
does not mean that the development discussed with the appraisee must be formal and constrained. In fact
the opposite applies. Appraisals must address ‘whole person’ development – not just job skills or the
skills required for the next promotion. Appraisals must not discriminate against anyone on the grounds of
age, gender, sexual orientation, race, religion, disability, etc.
It is particularly important to avoid any comments, judgments, suggestions, questions or decisions that
might be perceived by the appraisee to be based on age. Age along with the other characteristics stated
above, is not a lawful basis for assessing and managing people, unless proper ‘objective justification’ can
be proven.
When designing or planning and conducting appraisals, seek to help the ‘whole-person’ to grow in
whatever direction they want, not just to identify obviously relevant work skills training. Increasingly, the
best employers recognize that growing the ‘whole person’ promotes positive attitudes, advancement,
motivation, and also develops lots of new skills that can be surprisingly relevant to working productively
and effectively in any sort of organization.
Developing the whole person is also an important aspect of modern corporate responsibility, and
separately, whole person development is a crucial advantage in the employment market, in which all
employers compete to attract the best recruits, and to retain the best staff.
Therefore in appraisals, be creative and imaginative in discussing, discovering and agreeing ‘whole
person’ development that people will respond to, beyond the usual job skill-set, and incorporate this sort
of development into the appraisal process.
What factors make Performance Appraisal legally defensible?
One reason companies use performance appraisals is to have some legally defensible
means of making employment and job decisions that will Discourage frivolous law suits in the first place,
or
(A) Ensure the company is likely to win a court decision if the law suits goes to court.
Performance appraisals can provide some protection provided they are done
properly. If they are not done properly, then they become weapons for the other
side in court cases, particularly in the areas of discrimination accusations and
EEOC complaints.
Keeping in mind that it is always the courts that decide, and they decide on the merits of a particular case,
and that this should not be construed as legal advice, what are the characteristics of performance appraisal
systems that are legally defensible?
• Employees are involved in establishing performance standards for their
position
• Standards used are relevant to the essential elements of the job, and are clearly documented in writing
• Employees are informed of, understand, and sign off on critical job
requirements and expectations before the appraisal
• The system should not be based on comparisons between employees
• The performance appraisal is done annually and documentation of
performance discussions is done properly
• Employees are allowed and encouraged to add their comments and responses any performance appraisal
documentation. Managers who do performance appraisals must be provided with training
• Employees are informed of any performance reviews, and given an opportunity to advance of the formal
performance reviews, and given an opportunity to rectify the problems.
Why Performance Appraisal fails is summarized as follows:
1. The supervisor plays the dual and conflicting role of both judge and helper.
2. Too many objectives often cause confusion.
3. The supervisor feels that subordinate appraisal is not personally rewarding.
4. A considerable time gap exists between two appraisal programs.
5. The skills required for daily administration and employee development are in
conflict.
6. Poor communication keeps employees unaware about what is expected from
them.
7. There is a difference of opinion between the expectations of a supervisor and a subordinate, reflecting
the latter’s performance.
Some other studies found:
1. Greater variation between raters than between ratees.
2. Feedback on appraisal is generally unpleasant for both supervisor and
subordinates.
3. Very few supervisors possess the tact and insight to tell employees constructively
how to improve their performance.
The observations imply that supervisors in appraising their subordinates, and that pay little attention is
paid by supervisors in appraising their subordinates, and that a gulf exists between decisions and their
actual execution.
Any appraisal program will involve time and money. The wise manager should plan a program with the
minimum cost to give the maximum benefit. The rationale for using any particular method should be
determined by the size, financial resources, and philosophy of the organization. Confidential report, peer
rating or self-appraisals, requires less time and resources compared to some other methods. Besides self-
appraisal generates self-growth. It is often said that supervisors avoid playing the role of judge.
They feel uneasy criticizing a subordinate’s performance and are anxious least their adverse appraisal
might hold up a promotion, salary increase or an unwanted transfer.
Appraisal Interview:
Evaluation whether positive or negative can be very useful if it is communicated to the employee. Many
organizations require their supervisors, managers, and other raters to have periodic discussions with
employees about their performance and particularly to communicate any negative evaluation so that the
employee gets a chance to “explain”.
Appraisal interview serves these broad purposes:
1. They provide feedback to the employee that helps him ensure appropriate
performance in future.
2. They help the organization to get some idea of its working. Often problems and issues raised by
employees, difficulties faced in the execution of their duties, and way and means to improve the
functioning, are brought to the surface.
3. The organization can ascertain the training needs of its employees, which is very important.
Given the socio economic conditions in India, employer has a social obligation to ensure continuity of
jobs for their employee. An appraisal interview gives an opportunity to the rater to access the abilities of
the employee and if necessary, suggest suitable remedial measures.
Management By Objectives:
Whatever may be the nature and strength of resistance to the performance appraisal, managements cannot
relinquish this practice. Without employee appraisal, salary increase, reassignments or promotions cannot
be administered rationally. Each of these areas has its specific problems and one of the solutions of
modern times has been offered by Peter Drunker’s concept of management by objectives (MBO).
MBO calls on the subordinate to set his short-term performance goals in consultation with his superior,
the subordinate appraises his own performance by evaluating it vis-à- vis the goals. Before establishing a
goal, the individual studies his job, assesses his
potentialities, and formulates some specific plans to reach the goals. The supervisor is not the evaluator,
but directs the goal setting process to ensure that it matches the objectives of the organization.
MBO differs significantly from the traditional approach, for it shifts the emphasis from “appraisal” to
“analysis”. The subordinate is no longer examined by his superior for his weaknesses, but examines
himself to ascertain his strength and potential. It assumed that the individual knows, or is capable of
learning, more than any one else about his own needs, strength and weaknesses.
Employees cannot bear criticism and discussion of their personality traits, mannerisms, etc. In MBO, the
accent is on performance – the actions related to the goals rather than to the individual’s personality. The
superior helps the subordinate reach his own goals by specifying the steps. One major problem that
companies face in implementing MBO is in defining objectives. In the same organization, the purpose of
the worker is different from that of management. Once this hurdle is overcome, implementing MBO
becomes easier.
PERFORMANCE APPRAISAL SYSTEM IN NTPC
Performance Planning and Appraisal System of NTPC
NTPC has its won performance Appraisal system “Participative Performance Appraisal System” this the
system where one’s performance is appraised through discussion with his or her superior where both take
active participation on deciding the actual performance by the degree of achieving prescribe objectives
and his/her key performance Area (KPAs).
The following objectives have been envisaged:
• To set clear Performance Goals for each employee.
• To ensure commitment to perform and
• To enable objective performance appraisal.
Activities Performance plans, which will form the basis for appraisal, will be prepared for each
appraisee in two parts
a) Main activities / objectives to be accomplished /accomplished during the year (KPAs-
Key Performance Areas, Key Result Areas, or Objectives).
b) Competencies required/possessed for accomplishing the objectives.
The activities are briefly described below:
Main activities, objectives to be accomplished during the year.
KPAs are the main functions or activities an employee is expected to perform during the
plan period in order to fulfill the company’s goals and objectives.
Individual (appraisee) will identify his/ her KPAs using the following steps:
• Listing the entire main activates in the job / role.
• Prioritizing the activities based on importance, time taken, dependence on the other value addition etc.
• Finalizing the main activities, KPAs in consultation with the superior (Appraiser).
• Dividing these KPAs further into KPAs for routine activities.
The appraisee in format given in appendix will make entries. There may be some activities, which are not
planned in the beginning of the year but are to be accomplished. These also should be included. Instead of
calling KPAs, these activities may be called “main activities”.
PERFORMANCE APPRAISAL:
Evaluation of performance, merit rating, or annual review... The idea of a merit rating is alluring. The
sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate
people to do their best, for their own good. The effect is exactly the opposite of what the words promise.
The performance appraisal will be used as a tool to recognize and record the achievements, for rewards
and promotions and for the identification of training and development needs in NTPC
. The performance appraisal period will be April to March of the succeeding calendar year and the
increment will be released before April of the year concerned.
The appraisal forms should be sent to the respective heads of the department in February by the HR
Department for evaluation and recommendations. The completed forms will be received by the HR
department by First Week of March. The final consolidation of assessments will be put up to the Unit
Head for approval by the third week of March and the individual letters of Increments Promotions will be
issued on 1st April.
The form consists of the following parts
PART A: SELF-APPRAISAL – To be filled in by the appraisee
PART-B: PERFORMANCE APPRAISAL – To be filled in by the ReportingAuthority/Superior
PART C: PERFORMANCE COUNSELING – To be filled in by Reporting Authority and to be discussed
with the appraisee along with person in charge.
PART D: SUMMARY OF ASSESSMENT – To be filled in by Review
Committee/Authority.
PART E: POTENTIAL APPRAISAL – To be filled in by the HOD / Unit head in
consultation with the reporting Authority.
PART F:
DEVELOPMENT NEEDS -TO BE FIELD BY THE REVIEW AND EMPLOYEE I.E STRENGTHS,
AREA OF IMPROVEMENT, TRAINING AND DEVELOPMENT ,CAREER GROWTH
PERFORMANCE APPRAISAL FOR TRAINEES:
The trainees will be appraised at least on a six-monthly basis during their training period. On successful
completion of the training period the trainees will be placed on probation of 6 months.
Before the completion of the probation the candidates will be appraised for their job performance as well
as their grasp of Safety and Quality standards and procedures. For both the above processes the appraisal
form used is given as. The respective heads of the department and the HR department will do these
appraisals. Areas of strength of the trainees and the ability to understand the company’s objectives and
becoming a team player is given emphasis in deciding about the absorption of a trainee.
On successful completion of the probationary period the candidates will be confirmed in the respective
grades.
RESEARCH METHODOLGY
1. RESEARCH :Research is a common parlance refers to a search for knowledge. It is a scientific
and systematic search for pertinent information on a specific topic.
According to Clifford Woody – “research comprises defining and redefining problems, formulating
hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and
reaching conclusions.”
Research methodology is the way to systematically solve the research problem. Research methodology
just does not deal with research methods but also consider the logic behind the methods. It may be
understood as a science of studding how research is done scientifically and systematically. In it, we study
the various steps that are generally adopted by the researcher in study of his research problem along with
logic behind them. It is necessary for researcher to know the research method, technique He must also
clearly understand the producer would apply to problem given to him. All this means that it is necessary
for the researcher to design methodology from problem to problem.
Research methodology is a way to solve systematically the research problem. In it the researcher studies
the various steps that are generally adopted by researcher in studying his research problem along with the
logic behind them.
2. REVIEW OF RELATED LITRATURE
Review of related literature means researcher should undertake extensive literature survey connected with
the problem for this purpose, the abstracting and indexing journals and published or unpublished
bibliographies are the first place to go to. Academic journals, conference proceeding, government reports
books etc. must be tapped depending on the nature of the problem. In this process, it should be
remembered that one source would lead to another. The earlier studies, if any, which are similar to the
study in hand, should be carefully studied. A good library will be a great help to the researcher at this
stage.
3. PURPOSE OF STUDY
To study the performance appraisal system of NTPC.
4. OBJECTIVES OF STUDY
• To study the appraisal system in NTPC
• To analyze performance appraisal system.
• To identify the effectiveness of the appraisal process.
• To identify activeness of participation.
• To analyze the system in developing competency.
During the research, researcher has considered following things according to her
convenience.
5. UNIVERSE
Sum total of all the units that confirms to some designated part of specification is called universe.
Researcher while conducting research work has selected Bharat Aluminium Company as universe.
6. SAMPLE
The sample is the representative unit of population. The researcher has taken the employees as sample for
this research. Since in this research the researcher has collected the sample according to her own
convenience. So the sample is convenient sample and the sample size of the research is 300.
7. Size of the Sample
This refers to number of items to be selected from the universe to constitute a sample.
The size of the sample should neither be excessively large, nor too small. It should be optimum. An
optimum sample size is one, which fulfills the requirement of efficiency, representativeness, reliability,
and flexibility.
8. SAMPLE UNIT
Sample unit is the part of the universe taken from the universe for testing hypothesis.
Researcher has taken the 100 SBU Heads, 100 Executives and 100 workers as sample unit.
9. SAMPLING METHOD
The researcher adopted convenient Sampling Method. In this method the sample units are chosen
primarily on the basis of convenience to the investigator. In this type of sampling, the researcher selects
items for the sample deliberately; his choice concerning the items remains supreme. In other words, under
this sampling the organizers of the inquiry purposively choose the particulars unit of the universe for
constituting a sample on the basis that the small mass that they so select out of a huge one will be typical
or representative of the whole.
10. SOURCE OF DATA
The task of data collection begins after a research problem has defined. Researcher should keep in mind
two types of data, primary data and secondary data. The primary data are those, which are collected
afresh and for the first time, and thus happen to be original in character. The secondary data, on the other
hand, are those which have already been collected by someone else and which have already been passed
through the statistical process.
Researcher while conducting the research work has used primary source of data.
11.DATA COLLECTION TOOLS
These are the tools used for collecting data.
Researcher has gathered the data by administering questionnaire.
12. QUESTIONNAIRE
The term questionnaire refers to a self-administered process whereby the respondent himself/herself reads
the questions and records his/her answers without assistance of an interviewer. Although the instrument is
essentially question asking and data gathering tool. A questionnaire is more structured and standardized.
The questionnaire consists of a number of questions printed or typed in a definite order on a form or a set
of forms. This method of data collection is quite popular in case of big enquiries.
13.STATISTICAL TECHNIQUE
Percentage Method & Technique of Central Tendency was used by the researcher in the analysis of the
data in his research.
Percentage refers to a special kind of ratio. Percentages are used in making comparisons between two or
more series of data. Percentages are used to describe relationships. Percentages can also be used to
compare the relative terms, the distribution of two or more series of data.
Measures of Central Tendency tell us the point about which items have a tendency to cluster. Such a
measure is considered as the most representative figure for the entire mass of data. Measure of Central
Tendency is also known as ‘Statistical Average’.
Summary of the Performance Analysis System
Setting performance standards, observing and providing feedback, and condution appraisals enables the Team Leader to achieve the best results through managingemployee performance.
To begin the process, the Team Leader and the employee collaborates on thedevelopment of performance standards. The Team Leader then develops a performanceplan that directs the employee's efforts toward achieving specific results, to supportorganizational growth as well as the employee's professional growth. Discussion of goalsand objectives throughout the year provides a framework to ensure that employeesachieve results through One on One and mutual feedback. At the end of the rating period,the Team Leader appraises the employee's performance against existing standards, andestablishes new goals together for the next rating period.
As the immediate supervisor, the Team Leader plays an important role; his closestinteraction with the employee occurs at this level.
There are four key elements in the appraisal system:
1. Set objectives - Decide what the Team Leader wants from the employees andagree these objectives with them.
2. Manage performance - Give employees the tools, resources and training theyneed to perform well.
Performance Standards
3. Carry out the appraisal - monitor and assess the employees' performance,discuss those assessments with them and agree on future objectives.
4. Provide rewards/remedies - Consider pay awards and/or promotion based on theappraisal and decide how to tackle poor performance.
How does the Team Leader decide what's acceptable and what's unacceptableperformance? The answer to this question is the first step in establishing writtenstandards.
Performance expectations are the basis for appraising employee performance. Writtenperformance standards let the Team Leader to compare the employee's performance withmutually understood expectations and minimize ambiguity in providing feedback.Having performance standards is not a new concept; standards exist whether or not theyare discussed or put in writing. When the Team Leader observes an employee'sperformance, he usually makes a judgment about whether that performance is acceptable.Standards identify a baseline for measuring performance. From performance standards,the Team Leader can provide specific feedback describing the gap between expected andactual performance.
Serve as an objective basis for communicating about performance. Enables the employee to differentiate between acceptable and unacceptable results. Increase job satisfaction because employees know when tasks are performed well. Inform new employees of your expectations about job performance.
Performance StandardsHow does the Team Leader decide what's acceptable and what's unacceptableperformance? The answer to this question is the first step in establishing writtenstandards.Performance expectations are the basis for appraising employee performance. Writtenperformance standards let the Team Leader to compare the employee's performance withmutually understood expectations and minimize ambiguity in providing feedback.Having performance standards is not a new concept; standards exist whether or not theyare discussed or put in writing. When the Team Leader observes an employee'sperformance, he usually makes a judgment about whether that performance is acceptable.Standards identify a baseline for measuring performance. From performance standards,the Team Leader can provide specific feedback describing the gap between expected andactual performance.
Guiding Principles Effective performance standards: Serve as an objective basis for communicating about performance. Enables the employee to differentiate between acceptable and unacceptable results. Increase job satisfaction because employees know when tasks are performed well. Inform new employees of your expectations about job performance.
Key Responsibility Areas (KRA)The Team Leaders in association with the Project Manager write performance standardsfor each key area of responsibility on the employee's job description. The employeeactively participates in its development. Standards are usually established when anassignment is made, and they are reviewed if the employee's job description is updated.The discussions of standards include the criteria for achieving satisfactory performanceand the proof of performance (methods the Team Leader will use to gather informationabout work performance).
Characteristics of Performance StandardsStandards describe the conditions that must exist before the performance can be ratedsatisfactory. A performance standard should:
Be realistic, in other words, attainable by any qualified, competent, and fully trained person who has the authority and resources to achieve the desired result Describe the conditions that exist when performance meets expectations Be expressed in terms of quantity, quality, time, cost, effect, manner of performance, or method of doing Be measurable, with specified method(s) of gathering performance data and measuring performance against standards
Expressing StandardsThe terms for expressing performance standards are outlined below:
Quantity: Specifies how much work must be completed within a certain period of time.
Quality: Describes how well the work must be accomplished. Specifies accuracy, precision, appearance, or effectiveness.
Timeliness: Answers the questions, by when? , How soon? , Or within what period?
Effective Use of Resources: Used when performance can be assessed in terms of utilization of resources: money saved, waste reduced.
Effects of Effort: Addresses the ultimate effect to be obtained; expands statements of effectiveness by using phrases such as: so that, in order to, or as shown by.
Manner of Performance: Describes conditions in which an individual's personal behavior has an effect on performance, e.g., assists other employees in the work
unit in accomplishing assignments.
Method of Performing Assignments: Describes requirements; used when only the officially prescribed policy, procedure, or rule for accomplishing the work is
acceptable.
Performance Measurements
Since one of the characteristics of a performance standard is that it can be measured, theTeam Leader identifies how and where evidence about the employee's performance willbe gathered. Specifying the performance measurements when the responsibility isassigned will help the employee keep track of his progress, as well as helping the TeamLeader in the future performance discussions.There are many effective ways to monitor and verify performance, the most common ofwhich are:
Direct observation Specific work results (tangible evidence that can be reviewed without the employee being present) Reports and records, such as attendance, safety, inventory, financial records, etc. Commendations or constructive or critical comments received about the employee's work.
Observation and Feedback (One on One)
Once performance objectives and standards are established, the Team Leader observesthe employees' performance and provides feedback. The Team Leader has aresponsibility to recognize and reinforce strong performance by an employee, andidentify and encourage improvement where it is needed. The Team Leader providesinformal feedback almost every day.By observing and providing detailed feedback, the Team Leader plays a critical role inthe employee's continued success and motivation to meet performance expectations.
One On One SessionsOne on One is a method of strengthening communication between the Team Leader andthe employee. It helps to shape performance and increase the likelihood that theemployee's results will meet expectations. One on One sessions provide the Team Leaderand the employee the opportunity to discuss her progress toward meeting mutuallyestablished standards and goals. A One on One session focuses on one or two aspects ofperformance, rather than the total review that takes place in a performance evaluation.
Guiding PrinciplesEffective One on One can:
Strengthen communication between the Team Leader and the employee Help the employee attain performance objectives Increase employee motivation and commitment Maintain and increase the employee's self-esteem Provide support
Key Elements of One on One
To make One on One sessions effective, the Team Leader keeps the following keyelements of One on One in mind while conducting such a session:
Observe the employee's work and solicit feedback from others. When performance is successful, take the time to understand why. Advise the employee ahead of time on issues to be discussed. Discuss alternative solutions. Agree on action to be taken. Schedule follow-up meeting(s) to measure results. Recognize successes and improvements. Document key elements of One on One session.
Questions to Consider during One on One
To provide effective feedback the Team Leader must understand the elements ofperformance and analyze marginal performance. These questions are kept in mind:
How is the employee expected to perform? Does the employee understand these expectations? If not, why not? Does the employee know what successful results look like? How does the Team Leader know? Does the employee know the performance is marginal? How does the Team Leader know? Are there obstacles beyond the employee's control? Can the Team Leader remove them? Has the employee ever performed this task satisfactorily? Is the employee willing and able to learn? Does satisfactory performance result in excessive work being assigned? Does unsatisfactory performance result in positive consequences such as an undesirable task being reassigned?
During the One on One SessionWhen the Team Leader conducts a One on One session to provide positive feedback tothe employee, he keeps the following points in mind:
Describe the positive performance result or work habit using specific details. Ask the employee's opinion of the same product or behavior. Ask the employee to identify elements that contributed to success (adequate time or resources, support from management or other employees, the employee's talent and interest in the project). Discuss ways in which the Team Leader and the employee can support continued positive results. Reinforce for the employee the value of the work and how it fits in with the goals of the work unit or department. Show your appreciation of the positive results and your confidence that the employee will continue to perform satisfactorily. If appropriate, document your discussion for the employee's file. When the Team Leader conducts a One on One session to improve performance, he uses the following format: Describe the issue or problem, referring to specific behaviors. Involve the employee in the problem-solving process. Discuss causes of the problem. Identify and write down possible solutions. Decide on specific actions to be taken by each of the Team Leader. Agree on a follow-up date. Document key elements of the session.
Follow-Up DiscussionDuring a follow-up discussion, the following steps are followed:
Review the previous discussion(s). Discuss insufficient improvement and ask for reasons why. Indicate consequence of continued lack of improvement. Agree on action to be taken and set a follow-up date, if appropriate. Convey confidence in the employee.
Document the discussion.
DATA ANALYSIS AND INTERPRETATIONS
Que.1 Are you aware of the performance appraisal system prevailing in ntpc?
Yes - 89%
NO - 8%
Confused - 3%
Yes
No
Confused
Awareness of Appraisal system
Interpretation:- (It has been concluded that at around 89% approx employees are aware
of the appraisal system in their organization and 3% among them are little confused about
the process and 8% of employees does not know about the process.)
Que.2 Does the appraisal system forms a two way participative process?
I) Agree - 91%
II) Partially Agree - 7%
III)Disagree - 2%
agree
partially agree
disagree
Interpretation(91% of the employees believe that the appraisal system is a two way
participative process and a ranking method but rest 7% partially agrees to it and 2%
totally disagrees.
Que.3 Are you satisfied with the current appraisal system?
Satisfaction level of employees
Yes - 73%
No - 9%
To some extend - 18%
yes
no
to some extend
Interpretation:(( During the research it was concluded that satisfaction level of appraisal
system was considerable and 73% of the employees were satisfied but yet few employees were not
satisfied.)
Que.4 Is the appraisal system fair enough to judge a persons skills ?
Performance Appraisal System
To some extent - 17%
To large extent - 58%
To very large extent - 21%
Not at all - 4%
To some extent
To large extent
to very Large extent
Not at all
Interpretation: (In NTPC, ranking system is fair enough to judge a persons capability, but some of the
employees still thinks that some more transparency should be made in process.)
Que.5 What is the purpose or benefit of Appraisal Process?
Performance Appraisal System .
Identification of training needs. - 13%
Increase in pay scale - 52%
Promotion - 29%
Transfer - 4%
Termination - 2%
Identification of trainingneeds
Inccrease in pay scale
promotion
Transfer
Termination
Interpretation: ( Appraisal system assists an individual to have an increase in pay scale and also to
identify the training needs if any.
Que6. How many times performance appraisal does take place?
Appraisal Process
Once a year - 18%
Twice a year - 77%
Thrice a year - 3%
Not known - 2%
Once a year
Twice a year
Thrice a year
Not known
Interpretation: ( In NTPC appraisal process takes place after every 6 months for
executives and it happens early for officers.)
Que.7 Does performance appraisal assisted you in your personal growth?
Personal Growth through appraisal
To some extent - 29%
To large extent - 52%
To very large extent - 13%
Not at all - 6%
To some extent
To large extent
To very large exyent
Not at all
Interpretation: ( Employees believe that appraisal helps them to have their personal
growth but still some more should be changed.)
Que.8 Does performance appraisal helps to develop competency in your organization?
Personal Growth through PA
Yes - 62%
No - 8%
To some extent - 30%
Yes 62%
No
To some extent 30%
Interpretation: ( In NTPC appraisal helps to increase level of competency and hence they get a chance to
improve their working.)
Que.9 Does PA system helps you to clear your objectives and assist you with proper aid?
Performance Appraisal system
Yes - 77%
No - 5%
To some extent - 18%
Yes 62%
No
To some extent 30%
(Through ranking system employees got cleared of their roles and objectives. )
Que.10 Does the PA system motivates you in your work?
Motivation through Appraisal
Yes - 53%
No - 1%
To some extent - 46%
Yes 62%
No
To some extent 30%
Interpretation: The ranking system fair enough to motivate the employees
Que.11 Does Performance Appraisal system guides to realize potential of an individual?
Appraisal assisting in realizing potential
Yes - 93%
No - 7%
Yes
No
Interpretation: Appraisal process assists to realize the potential of the employees.
Que.12 Does your superior guide you about your performance?
Communication of appraisal results
Yes - 94%
No - 0%
To some extent - 6%
Yes
No
To some extent
Interpretation: In NTPC the appraisal process is a two way process and the results are communicated through one to one interviews.
Que.13 Does the self-assessment form assist you to realize your strength and weakness?
Self Appraisal Forms
Yes - 69%
No - 21%
To some extent - 10%
Yes
No
To some extent
Interpretation: Self appraisal forms has been proved to be beneficial to evaluate ones own developmental
areas.
Que.14 Does the reward system after appraisal satisfies you?
Reward System In Appraisal
Yes - 86%
No - 3%
To some extent - 11%
Yes
No
To some extent
Interpretation: The employees of NTPC are satisfied enough through the reward
FINDINGS, CONCLUSION AND SUGGESTIONS
The process of performance appraisal helps the employees and the management to know
the level of employee’s performance compared to the standard/predetermined level.
It was viewed that performance appraisal was useful to decide upon employees promotion/transfer, salary
determination and the like. It has become the basis of employee development.
Performance appraisal indicates the level of desired performance level, level of actual
performance and the gap between the two.
Organizations are likely to develop performance-oriented cultures, in which high performers are seen to
receive extra rewards and lower performers receive lower rewards. If an employee’s performance were
found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better
than the supervisor expected, a pay rise was in order.
Little consideration was given to the developmental possibilities of appraisal.
Findings through questionnaire:
• In NTPC the appraisal process is a two-way participative process and it happens
at every 6 months.
• Superior communicates their performance and the area of lacking.
• At about 73% of the employees are satisfied with the current appraisal system in
the organization.
• The communication level is very good in the organization and thus helps to
achieve the target easily.
• 94% employees believe that performance appraisal has contributed to their
personal growth.
• 62% employees believe that appraisals develop a high level of competency among
them.
• 77% believes that it help to clear their objectives and what their superior wants to
get from them.
• 53% of the employee believes that it has always motivated them.
• 96% believes that it helps to realize potential of an employee.
• Self-appraisal form also helps to realize the employees potential.
• 58% believes that current performance appraisal system is fair enough to evaluate
their potential and workings.
• 67% of the employees believe that implementing 360 degree performance
appraisal would be beneficial to the employees and the organization.
• During survey it was found that Employees were getting confused when asked
about the awareness related questions.
• Performance appraisal definitely set goals and objectives for employees work and get them promoted
and rewarded as per but it does not provide much opportunity to set employees future career planning and
recognizing the talents.
• No compulsory job rotation practice exists in NTPC.
• Employees are partially satisfied by their performance appraisal procedure. They are not very much
motivated by their ratings and cannot get their development through these.
• Almost all employees accept that the training and development program is very good of Balco but the
main problem is that training need assessment is not done properly and many times the same employees
are given training again and again ignoring the training needs of others.
• Every department head has to follow the performance bell and during every appraisal, the employees
would be classified in different tiers. The department head decided to classify the employees not on
Performance but just on quota system. The purpose of the performance appraisal and classification is not
at all achieved.
• For each employee Job description should be made in which duties and
responsibilities of the employee should be clearly mentioned. The Knowledge,
skills and abilities required to perform the work should be stated clearly. This will
bring more transparency in the job.
CONCLUSIONS:
Performance appraisals are an integral part of managing performance, and unmanaged performance
simply cannot be allowed to happen. The process of managing performance is essentially one of their
performances. It starts with the setting of performance expectations and ends with sanction-rewards and
penalties on appraised performance.
Relationship and mutual understanding develops more quickly with greater frequency of
meetings between manager and staff members.
SUGGESTIONS:
• 360-degree appraisal system can be introduced as a powerful developmental method and quite different
to traditional manager-superior appraisal and can stand alone as developmental method.
• Ensure that 360-degree appraisal method is introduced and applied from top-down
and not bottom up.
• Staff members can be better prepared for the formal appraisal, giving better
results, and saving management time.
• Training and development actions can be broken down into smaller programs,
increasing success rates and motivational effect as a result.
• Performance appraisal should be used not only for giving performance-based incentives but also to
identify average and below average employees and train and develop to make them good performers.
• Appraisal should be done twice a year for executives.
• Training need assessment should be done strictly and training should be given on
that basis because different employees have different training needs.
• Employees should be motivated regularly by their superiors and SBU heads to
come up with their training needs.
• Motivational training should be given to all employees at least in every quarter
and it should be made compulsory for each employee to attend it.
• Appraising talent which involves exploring the actual results achieved by employees within those areas
where they’re held accountable and to examine the level of skills or competencies deemed critical to
current and future jobs and organizational success. In relation to a talent management programme, certain
specific areas are important. For example, the appraisal will not only include an examination of
performance, but will also inevitably include a forecast of potential, which is a prediction of how many
job levels an employee can reach within the organization based on their past or current performance
approaches, training or development needs, career preferences and actual and projected competency
levels. Here, scales are often used in reporting potential to attain
managerial or leadership skills, as well as in the delivery of organizational
objectives
• 360° Appraisal system should be used in place of the current system in which in addition to the
superiors, colleagues and subordinate all around the employee will also appraise him. This will reduce the
personal biases occurring due to superior subordinate relationship. The details of appraisal report should
be kept confidential including the rating. Proper training should be provided to the appraisers regarding
the process and proper method of conducting performance appraisal.
• The company has recently started Global leadership program in which key employees are exchanged in
different companies of the group for a term of 1 or more year which provide them international exposure
and experience.
• Individual development report of these key employees are made by the management and SBU head
based on his past performance and according to his/her KRA future track record for the employee is
planned.
• For special achievements and extra effort CEO kitty (cash reward) is given to the
employees in order to motivate them further.
• Key employees are sent abroad for training to enhance their skill and knowledge
on written bond of 1-3 years.
• Rotate employees to provide them new challenges and new assignments. Companies practicing off
shoring need to provide new challenges and opportunities for skills development through training or job
rotation. It may become the only reason your best employees stay with you.
• For each employee Job description should be made in which duties and responsibilities of the employee
should be clearly mentioned. The Knowledge, skills and abilities required to perform the work should be
stated clearly.
• Provide your best employees with challenging work, show consequences to those employees who are
underperforming and respond to employees' work-family balance and other needs.
• Reward Managers who help good employees grow within the company.
• Conducting the performance appraisal in a timely fashion, as close as possible, or
even before the employee's scheduled review date.
• Offering a balanced evaluation of both the employee's strengths and of their
weakness
• Including a review of key performance areas or projects where an employee has performed well. A bit
of praise can go a long way to lifting an employee's morale and feelings of success on the job.
• Natural interaction during the performance appraisal process - give the employee a chance to speak their
mind as well as help come up with future goals, as well as steer areas of improvement.
• Set goals for the next appraisal period that is quantifiable and achievable. If you have specific projects in
mind use those as a measure of the performance. If you made a list of goals from the last review period,
go over these with the employee as well and talk about how the employee achieved or failed to achieve
the goals and why.
• Don't tie the employee’s performance to a salary increase. It is normal for the employee to expect that a
review will also include an increase as this is traditional, but you should clearly state that the review is
about performance and not about salary.
• To implement Executive Management Development Programme .
• In order to improving the employee career planning in BALCO management should develop a
programme named above. The criterion for selection must be certain standard.
LIMITATIONS:
• Due to some strict rules of the company, all documents cannot be accessed.
• Due to the busy schedules of SBU Heads and employees, they are unable to
impart time to us.
• Sometimes respondents were roaming from one plant to another so they are not
available to guide us.
• Due to low awareness of worker they are unable to give proper view.
• Due to poor communication level between employees and workers accurate
results cannot be founded.
APPENDIX
GOOD MORNING/AFTERNOON/EVENING sir/madams I am ANAMIKA from VISHVESHWARYA
INSTITUTE OF TECHNOLOGY. Currently doing my summer internship here in NTPC for the period of
2 months in the HR department and working on project named Performance Appraisal System and its role
in enhancing employee performance at NTPC under the guidance of Mr Anil Kumar (Associate Manager-
HR), for this I would like to know your views on certain things.
• Are you aware of the appraisal system in your organization?
• When does appraisal process takes place in your organization?
• Are you satisfied with the appraisal system in your organization?
• Does appraisal system benefit you? If yes then how?
• Does it assist you in your personal growth?
• Does it help to develop certain level of competency in your organization?
• Does it help you to clear your objectives| and job roles?
• Does it acts as a motivating agent in your work?
• Is the process effective enough to realize your potential?
• Is the process fair enough to communicate your performance rating?
• Does the self assessment form assist you to realize your potential?
• Does the reward system helps you to get satisfaction through your performance?
• What is the performance level that you expect from your employees? Does the
employee perform according to your expectation?
•Do you feel that if employee career planning and development is done properly then it will result in
improving the performance of employee? If yes give suggestion in this regard.
• Do you think that employee working under you understand their goals and duties
properly? What is being done to ensure this?
• How frequently job movements take place in your division? Do frequent internal job movement’s helps
in increasing the productivity of the job or the person development? What are the programs and processes
that facilitate the internal job movements? Do you have any suggestion in this regard?
• Is the HR department supporting the employee career development efforts? Why do
you feel so? Give suggestion how can this be done effectively?
• Do you think that tools and training provide employees with opportunities to grow in their current job?
Why do you feel so? What are the tools and training require for providing employees with opportunities
to grow in their current job as well as in their career?
• Do you feel that you are adequately planning for developing high performers? What
kind of recognition you want for this?
• Do you think that employee require some more development programs for their
career growth? Any suggestion in this regards?
• Do you satisfied with the current employee appraisal strategies and policy made
HR department?
• Do you think that employee assessment program is implemented properly? Give
suggestion how can this be done effectively?
• Do you feel that job rotation and job enrichment is the best tool for individual
career assessment and development? If yes then it should be encouraged more?
• How do you help your staff develop their career competency in your company? By
courseware, by training, or teaching? Or?
• Do you feel that training programme helps in increasing the performance? Do you
feel that training programme helps in career growth for an employee?
• What can you do to help your employees achieve best performance?
Thank you, sir/ma’am for sparing time out of your busy schedule and improving me with
your valuable inputs.
BIBLIOGRAPHY
Arun Monappa & Mirza S Saiysdain : Personnel Management, Tata Mc
Graw Hill Publishing Company Limited, New Delhi, 11th edition, 1991.
Arun Monappa & Mirza S Saiysdain : Personnel Management, Tata Mc
Graw Hill Publishing Company Limited, New Delhi, 2nd edition.
Rudrabasavaraj. M.N : Dynamic Personnel Administration- management of
human resource, Himalaya Publishing House.
Lakshmipathy. V : Performance Appraisal In Public Enterprises, Himalaya
Publishing House, 1st edition, 1985.
Jucius. J. Michael : Personnel Management, D.B. Taraporevala Sons & Co.
Private Ltd.
Chatterjee .N.N : Performance Appraisal Systems- in public enterprise,
Scope Publications.
Questionnaire
Que.1 Are you aware of the performance appraisal system prevailing in ntpc?
1. Yes -
2. NO -
3 Confused -
Que.2 Does the appraisal system forms a two way participative process?
1. Agree -
2. Partially Agree -
3.Disagree -
Que.3 Are you satisfied with the current appraisal system?
Satisfaction level of employees
1.Yes -
2. No -
3. To some extend -
Que.4 Is the appraisal system fair enough to judge a persons skills ?
Performance Appraisal System
1. To some extent -
2. To large extent -
3. To very large extent -
4. Not at all -
Que.5 What is the purpose or benefit of Appraisal Process?
Performance Appraisal System .
1. Identification of training needs. -
2. Increase in pay scale -
3. Promotion -
4. Transfer -
5. Termination -
Que6. How many times performance appraisal does take place?
Appraisal Process
1. Once a year -
2. Twice a year -
3. Thrice a year -
4. Not known -
Que.7 Does the self-assessment form assist you to realize your strength and weakness?
Self Appraisal Forms
1. Yes -
2. No -
3. To some extent -
Que.8 Does performance appraisal helps to develop competency in your organization?
Personal Growth through PA
1. Yes -
2. No -
3. To some extent -
Que.9.Does performance appraisal assisted you in your personal growth?
Personal Growth through appraisal
1. To some extent -
2. To large extent -
3. To very large extent -
4. Not at all -
Que.10. Does your superior guide you about your performance?
Communication of appraisal results
1.Yes -
2 No -
3. To some extent -
Que.11 Does Performance Appraisal system guides to realize potential of an individual?