Summer Training Report

SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN MANAGEMENT

PERFORMANCE APPRAISAL SYSTEMWith special reference to

(DCM SHRIRAM FERTILIZERS & CHEMICALS LTD.)

SUBMITTED BY: Name- RITESH MEENA M.B.A.-(2009-11) Enrollment No-A30101909110 INDUSTRY GUIDE: FACULTY GUIDE

AMITY GLOBAL BUSINESS SCHOOL, NOIDA

AMITY UNIVERSITY-UTTAR PRADESH

ACKNOWLEDGEMENT The project title Performance Appraisal System has been conducted at DCM Shriram Fertilizers & Chemicals Ltd. I have completed this project, based on the primary research, under the guidance of Mr.Shashank Tyagi( Industry Guide). I owe enormous intellectual depth towards my guides Maam Aparajita Dasgupta Amist Faculty Guide; A.G.B.S. Noida has augmented my knowledge in the field of Performance Appraisal System. They have helped me learn about the process and gave me valuable insight into the subject matter. I am obliged to Mr. Shashank Tyagi(Asst. HR Manager, DCM Shriram Fertilizers & Chemicals Ltd.) for corporation during the project. My increased spectrum of knowledge in this field is the result of his constant supervision and direction that has helped me to absorb relevant and high quality information. I would like to thank all the respondents without whose cooperation my study/project would not have been completed. Last but not least I feel indebted to all those persons and organizations whose/which have provided help directly or indirectly in successful completion of this study.

Date: RITESH MEENA

MBA (3RD SEM) Enr ollment No- A30101909110

TABLE OF CONTENTS

CHAPTER NO. PAGE NO.1.0 2.0 Executive Summary Introductions

SUBJECT

a. Objectives( for gaining maximum experience and exposures in the company) 3.0 4.0 5.0 6.0 Company Profile Industry Profile

5.0

Data Collection Primary Data Secondary Data

6.0 7.0 8.0 9.0 10.0

Issues and challenges facing the organization Findings & Analysis Recommendations Bibliography Annexures a. Tables b. Graphs c. Forms

11.0 12.0

Case Study Synopsis of the project

CHAPTER

1

EXECUTIVE SUMMARYThis project is a seminal work to study the Performance Appraisal in a Manufacturing sector. DCM Shriram Fertilizers & Chemicals Ltd. Started its operation in 1882 and since it is marching towards glory and has many laurels to its name. My training period in this company has given me a lot of confidence and exposures to what corporate world is. The project given to me is Performance Appraisal System The aim of the project is to determine the effectiveness of Performance Appraisal Policy in DCM Shriram Fertilizers & Chemicals Ltd in comparative with other companies (BSNL, O.N.G.C., WIPRO, Maruti Udhyog, and TCS) We started the research by circulating questionnaires, fixing appointments and collecting secondary data through various sources like Internet (companys website), books etc. Filled questionnaires which we received from the organizations which gave a transparent view of how companies perform and do performance appraisal, what are the criteria for performance appraisal and what employees feel about the performance appraisal system

prevalent in the company. We took various steps to collect the feedback from employees and the management, like interviews and questionnaires. We talk about the performance appraisal system and how it is implemented. And it was learnt that the companies do performance appraisal of their employees based on their performance & the amount of hard work put in by them in their day to day work. It was also learnt that the feedback mechanism and Self-Assessment are very essential and fruitful for the organization but the only constraint is that the appraisal cycle is yearly and the appraisal done is for a very few employees. Having good performance appraisal system is just the key to success; it helps in reducing the attrition rate and motivates the employees to work hard and give their best. It is found that company DCM SFC is doing very well by following Self-Assessment performance appraisal system.

CHAPTER

2

INTRODUCTIONHuman Resource (or personnel) management, in the sense of getting things done through people, is an essential part of every managers responsibility, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently. People are our most valuable assets , is a clich, which no member of any senior management team would disagree with. Yet, the reality for many organizations is that their people remain under utilized. Performance Appraisal is the process of assessing the performance and progress of an employee on a given job and his/ their potentials for future development .It consists of all formal procedures used in the working organizations to evaluate personalities, contribution and potential of employees.

PERFORMANCE APPRAISAL:History:The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession! There is"... a basic human tendency to make judgments about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the

Judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only

required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time.

DEFINATION AND CONCEPT:

Performance Appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the

performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. According to Flippo, a prominent personality in the field of Human resources, performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the managements interest in the progress of the employees.

PROJECT TITLE- Analysis and review of Performance Appraisal system atSFC, Kota

PROJECT OBJECTIVE- To identify & review in detail the Performance Appraisal Process and all the others specific tools used in this regard at SFC Kota

The project aims analysing and reviewing of Performance Appraisal Process System at SFC Kota. The objective of this training is to provide a chance to the student to have an insight in the practical working environment in the industry.

OBJECTIVE1. To know the various types of performance appraisal methods being used at SFC Kota 2. To know which appraisal system is being mostly used in SFC Kota 3. To know whether the performance appraisal system of SFC Kota. Increase the productivity of employee or not. 4. To provide feedback to the employees regarding their past performance. 5. Provide information to assist in the other personal decisions in the organization. 6. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. 7. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development8.

To reduce the grievances of the employees

DELIVERABLES OF THE PROJECT

1. To identify and map the process used for Performance Appraisal of employee at SFC Kota 2. To identify the role of individual in the Performance Appraisal System. 3. To identify the information performance of a employee. which is used to measure the

4. To recognize the variables which are used to appraise the performance of a employee 5. To measure the methods which is used to be in Performance Appraisal System

METHODOLOGY/ APPROACH TO THE PROJECT1. To map & identify the process of performance appraisal at SFC Kota2. To analyze in detail the sub-processes of tools used for the purpose of

appraisals. a. The appraisal forms b. The process of filling up the appraisal form. c. The process of giving feedback.3. To analyze the role of the appraiser, appraise and the HR in the

process.

4. To benchmark the existing process with the industry standards & best practices. 5. To suggest improvement in the existing system & the tools used in the appraisal process.

CHAPTER

3

INDUSTRY PROFILEManufacturing sector is the backbone of any economy. It fuels growth, productivity, employment, and strengthens agriculture and service sectors. Astronomical growth in worldwide distribution systems and IT, coupled with opening of trade barriers, has led to stupendous growth of global manufacturing networks, designed to take advantage of low-waged yet efficient work force of India. ' Indian Manufacturing ' sector is broadly divided into - Capital Goods &Engineering, Chemicals, Petroleum, Chemicals & Fertilizers, Packaging, Consumer non-Durables, Electronics, IT Hardware & peripherals, Gems & Jewelry, Leather & Leather Products, Mining, Steel & non-Ferrous Metals, Textiles & Apparels and Water Equipment. The overall manufacturing growth rate is projected to rise to 9.5% in 200809, after declining to 8.8% in the 2007-08 from a high of 12.3% attained in the previous year (2006-07). Over the past year or two there has been mounting confidence about the new found strength of India's manufacturing sector and its long-term potential. The recently approved 11th Five Year Plan expects manufacturing to grow at 10-11 per cent a year during the period 2007-12.Of the 100 sectors surveyed, as many as 67 sectors are poised to achieve excellent to high growth rates ranging 10 to 20 per cent or more. While 12 sectors project excellent growth of more then 20 per cent or more,

55 sectors foresee high growth of 10 to 20 per cent, 32 sectors expect moderate growth of up to 10 per cent and 1 sector has projected a negative growth during 2008-09. FERTILIZER SECTOR The production of fertilizers during 2007-08 including urea and phosphatic, both by public as well as private sector, is around 6.2 million metric tons. The installed capacity of urea is 4.2 million tons and DAP is 0.650 million tons per annum. The demand of DAP in the country is around 1.3-1.5 million tons per annum, whereas, the consumption of Urea is around 5.2 million tons as against production of around 4.8 million tons. Fauji Fertilizer Bin Qasim Limited is the only fertilizer plant which is producing DAP in the country. The national average retail price of Urea and DAP is Rs. 761.00 and Rs. 3084 per 50 Kg bag respectively. All fertilizers are importable at zero rate of duty. The local production of fertilizer is not sufficient to meet the local demand; therefore, substantive quantity of fertilizer has to be imported every year. The Government has also provided various incentives under Fertilizer Policy, 2001 to encourage the fertilizer production in the country including following: -The Government is providing feed stock gas at concessionary rates to the fertilizer plants for production of Urea. Rock Phosphate and Phosphoric Acid imported by manufacturers of fertilizer are importable free of customs duty. CHEMICAL SECTOR The chemical industry comprises the companies that produce industrial chemicals. It is central to modern world economy, converting raw materials (oil, natural gas, air, water, metals, and minerals) into more than 70,000 different products. The chemical industry is a key contributor to the world economy. It is a knowledge based industry with significant investment in R&D. The industry supplies to virtually all sectors of the economy and produce more than 70,000 products. In terms of consumptions, the chemical industry is its own largest customer and accounts for approximately 33 percent of the consumption. In most cases, Basic chemical undergo several processing

stages to be converted into downstream chemicals. These in turn are used for industrial applications, agriculture, or directly for consumer markets.

CHAPTER

4

COMPANY PROFILEDSCL- An OverviewFounded by Sir Shriram in 1889 (as DCM limited), today DCM Shriram Consolidated Limited (DSCL) is a large scale industry with turnover of Rs. 3523 crores. DSCL has manufacturing facilities at Kota (Rajasthan), Bharuch (Gujarat), and Ajbapur, Rupapur, Hariawan and Loni (UP).The hybrid seed operations are at Hyderabad (India), Vietnam, Philippines and Thailand. The Company also has its window fabrication units at Bhiwadi, Bangalore, Mumbai, Hyderabad and Chennai. DSCL has strong brand equity reflective of credibility, ethical values and consistent high quality product image. With over 30 years of experience in managing large scale process industries with sustained high level of performance, DSCL meets the needs of a wide range of customers from farmers to industrial users, from house

builders to business owners. Fostering enduring relationships is at the core of DSCL's business philosophy - with vendors, business partners, and customers and within the organization between employees. The company operates in a range of energy intensive businesses in the Chloro-Vinyl and agri-sectors. The company is always seeking to produce multiple downstream products in a manner that it derives the maximum earnings accrual from every unit of power that it generates in a sustainable way and in varied market conditions. It follows this model across its manufacturing operations at different locations with an endeavor to add value while it curtails operating costs. Such an approach allows it to direct resources and inputs to various downstream businesses in the most efficient manner and also become a cost competitive producer in our chosen area.

In a major IT initiative the company has networked all its locations on a Wide Area Network (WAN) and implemented SAP R/3 Enterprise Resource Package (ERP) across the Company. The key IT enabling initiatives are Customer Relationship Management (CRM) and Business Information Warehousing (BIW). The Hariyali division of the company was awarded ACE-Best Customer Award for successful implementation of the SAP IS retail package. All its main line locations/products have ISO 9000, 14000 certification and OHSAS 18001: 1999 system of Occupational Health and Safety certifications. The Kota complex of the company was given 5 Star rating for last 4 years & instituted in 2006

& 2008 with the prestigious Sword of Honor by British Safety Council for implementing and practicing the best safety standards. In an increasingly global business environment, DSCL's vision is to strengthen its agri and energy intensive business while ramping up "Value Added" & "Knowledge based" products & services in the areas of its operations. Accordingly, DSCL is expanding its rural retail initiative Hariyali Kisan Bazaar to create a rural hub that makes agri and consumer products (of all manufacturers) and agri services available to farmers in a fair, transparent and convenient format. The company had launched value added UPVC window system business under the Fenesta TM brand in India. This product has very attractive design and insulation attributes that makes it strong business proposition as the concept is gaining acceptability. DSCL strongly believes in socially responsible business activity. DSCL has made significant contribution to the society in the fields of Environment, Health Care, Family Planning, Education, Cultural Heritage, Rural Development and in promoting. For its social contributions DSCL's Chlor-Alkali facility at Bharuch has been recognized with a SA 8000:2001 certification by RINA (Registro Italiano Navale), making it amongst the few companies in India to get this recognition.

Core Values & BeliefsDSCL's core values and beliefs are a reflection of its commitment to build a world class, learning organization, striving for excellence in all its endeavors.

Customer Focus: Be sensitive to the needs of the customer; develop superior customer insight Commitment to surpass expectations and deliver superior value Innovation and Excellence: Strive to think differently and promote creativity Make continuous improvement a way of life; drive excellence People Development: Continuously improve and upgrade the skills and competencies of our people Support people to realize their potential Team work: Work closely as a cohesive, well-knit team Inculcate a spirit of openness and collaboration Relationships and Human Dignity: Value people and partnerships Nurture understanding, compassion, trust and respect in all relationships

Social Responsibility and Ethics:

Be a socially responsible corporate, addressing the needs of the community and environment Conduct business ethically Maintain highest standards of personal integrity The main business units of DSCL now comprise of: Energy Intensive Businesses: Chemicals Calcium Carbide & PVC Resin Cement Value Added Businesses: Fenesta Building Systems PVC Compounds Energy Services(ESCO)

Agri Businesses: Sugar Urea Agri Inputs Shriram Bio seeds Hariyali Kissan Bazaar

Other Businesses Textiles

CHAPTER 5

QUESTIONNAIRES TO VICE PRESIDENT R.C.MODI RELATED TO PERFORMANCE APPRAISAL PROCESS IN DCM SRIRAM FERTILIZERS & CHEMICALS LTD.1. What is the purpose of performance appraisal? Answer- Performance Appraisal is being practiced in 90% of the organizations worldwide. Self-appraisal and potential appraisal also form a part of the performance appraisal processes. Performance Appraisal is aimed at: 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. To diagnose the training and development needs of the future. Provide information to assist in the HR decisions like promotions, transfers etc. 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. Helps to strengthen the relationship and communication between superior subordinates and management employees.

According to a recent survey, the percentage of organizations (out of the total organizations surveyed i.e. 50) using performance appraisal for the various purposes are as shown in the diagram below:

The most significant reasons of using Performance appraisal are:

Making payroll and compensation decisions 80% Training and development needs 71% Identifying the gaps in desired and actual performance and its cause 76% Deciding future goals and course of action 42% Promotions, demotions and transfers 49% Other purposes 6% (including job analysis and providing superior support, assistance and counseling)

2. How you analyze the performance of an individual in the organizations ? Answer- By Essay evaluation, under this method the rater is asked to express the strong a well as weak points of the employees behavior. This technique is normally used with a combination of the graphic rating scale because the rater can elaborately present the scale by substantiating an explanation for his rating .While preparing the essay on the employee, the rater considers the following factors;(1) Job knowledge and the potential of the employee; (2) Employee understands of the companys programmes, policies, objectives, etc. (3) The employees relations with co-workers and supervisors; (4) The employees general planning, organising and controlling ability; (5) The attitudes and perceptions of the employee, in general.3. What are the parameters used in performance appraisal

process? Answer- The parameters which is used for Performance Appraisal process is Competency Factors are following as:1. Professionals Knowledge and its Application 2. Analytical ability and conceptual skill 3. Managerial Skills 4. Inter-personal skills 5 Quality, safety, and environmental awareness 6. Innovativeness and creativity

7. Leadership 8. Emotional Stability 9. Achievement Orientation 10. Team Work 11. Commitment 12. Personal Integrity

13. Attitude-Exhibits enthusiasm and cooperativeness on the job. 14. Dependability-Conscientious, Thorough, reliable, accurate, with respect to attendance, reliefs, etc.

4. How you identify the area of improvement of employee which

is help to increase the skills in the performance appraisal process?

Answer- The area of improvement is basically depends on feedback. The employee gets useful feedback information about how effectively and efficiently he is able to discharge the assigned duties. It also gives the opportunity to the employee to explain his views about the ratings, standards, rating methods, internal and external causes for low level of performance. The appraiser gets a chance to explain the employee his ratings, the traits and the behaviors he has to taken into account for appraisal, etc. He can utilize this opportunity to offer constructive suggestions, and help, guide and coach the employee for his

advancement. The post appraisal interview helps both parties to review standards, and set new standards based on the experience gained.

5. What is the role of demonstrated performance in Performance

appraisal process of an employee?

Answer- In the demonstrated performance we have to cover day to day performance. Such as efficiency & cost norms, quality, time management, projects, report handled in addition to his routine function etc. After measure some major competency factors of an individual we have to measure some other factors in demonstrated performance .By this we have to judge the appraise level of performance. From this method we have to analyze A to Z performance of an appraiser. To measure performance of an employee it is required to measure all the hidden factors of an employee.

6. How do you visualize actual performance in the company?

Answer- After the performance standards are set and accepted, the next step is to measure actual performance .This requires the use of

dependable performance measure, the ratings used to evaluate performance. Performance measures to be helpful must be easy to use reliable, and report on the critical behaviors that determine performance .For common sources of information which are generally used by managers regarding how to measure actual performance and personal observation , statistical reports, oral reports and written reports.

7. What is the various methods used in Performance Appraisal

System at DCM SFC? Answer- The various methods are following as:-

1. Essay evaluation: Under this method, the rater is asked toexpress the strong as well as weak points of the employees behavior. This technique is normally used with a combination of the graphic rating scale because the rater can elaborately present the scale by substantiating an explanation for his rating. While preparing the essay on the employee, the rater considers the following factors: (i) Job knowledge and potential of the employee; (ii) Employees understanding of the companys programmes, policies, objectives, etc.; (iii) The employees relations with co-workers and superiors; (iv) The employees general planning, organizing and controlling ability; (v) The attitudes and perceptions of the employee, in general.

Essay evaluation is a non-quantitative technique. This method is advantageous in at least one sense, i.e., the essay provides a good deal of information about the employee and also reveals

More about the evaluator. The essay evaluation method however, suffers from the following limitations: It is highly subjective; the supervisor may write a biased essay. The employees who are sycophants will be evaluated more favorably then other employees. Some evaluators may be poor in writing essays on employee performance. Others may be superficial in explanation and use flowery language which may not reflect the actual performance of the employee. It is very difficult to find effective writers nowadays. The appraiser is required to find time to prepare the essay. A busy appraiser may write the essay hurriedly without properly assessing the actual performance of the worker. On the other hand, appraiser takes a long time, this becomes uneconomical from the view point of the firm, because the time of the evaluator (supervisor) is costly.

2. Graphic rating scale: Perhaps the most commonly usedmethod of performance evaluation is the graphic rating scale. Of course, it is also one of the oldest methods of evaluation in use. Under this method, a printed form, as shown below, is used to evaluate the performance of an employee. A variety of traits may be used in these types of rating devices, the most common being the quantity and quality of work. The rating scales can also be adapted by including traits that the company considers important for effectiveness on the job. A model of a graphic rating scale is given below.

Table: Typical Graphic Rating ScaleEmployee Name................... Job title ................. Department ......................... Rate ............... Data..................................

Quantity of work: Volume of work under normal working conditions Quality of work: Neatness, thoroughness and accuracy of work Knowledge of job A clear understanding of the factors connected with the job Attitude: Exhibits enthusiasm and cooperativeness on the job Dependability: Conscientious, thorough, reliable, accurate, with respect to attendance, reliefs, lunch breaks, etc. Cooperation: Willingness and ability to work with others to produce desired goals.

Unsatisfact ory

Fair

Satisfact ory

Goo d

Outstandi ng

From the graphic rating scales, excerpts can be obtained about the performance standards of employees. For instance, if the employee has

serious gaps in technical-professional knowledge (knows only rudimentary phases of job); lacks the knowledge to bring about an increase in productivity; is reluctant to make decisions on his own (on even when he makes decisions they are unreliable and substandard); declines to accept responsibility; fails to plan ahead

Effectively; wastes and misuses resources; etc., then it can safely be inferred that the standards of the performance of the employee are dismal and disappointing.

The rating scale is the most common method of evaluation of an employees performance today. One positive point in favor of the rating scale is that it is easy to understand, easy to use and permits a statistical tabulation of scores of employees. When ratings are objective in nature they can be effectively used as evaluators. The graphic rating scale may however suffer from a long standing disadvantage, i.e., it may be arbitrary and the rating may be subjective. Another pitfall is that each characteristic is equally important in evaluation of the employees performance and so on.

3. Behaviorally anchored rating scales: Also known as thebehavioral expectations scale, this method represents the latest innovation in performance appraisal. It is a combination of the rating scale and critical incident techniques of employee performance evaluation. The critical incidents serve as anchor statements on a scale and the rating form usually contains six to eight specifically defined performance dimensions. The following chart represents an example of a sales trainees competence and a behaviorally anchored rating scale. Table: An Example of Behaviorally Anchored Rating Scale (BARS)

Performance Extremely good

Point s 7

Behavior Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country. Can expect to initiate creative ideas for improved sales. Can expect to keep in touch customers throughout the year. with the

Good Above average Average Below average

6 5 4 3

Can manage, with difficulty, to deliver the goods in time. Can expect to unload the trucks when asked by the supervisor.

Poor

2

Can expect to inform only a part of the customers.

Extremely poor

1

Can expect to take extended coffee breaks and roam around purposelessly.

How to construct BARS? Developing BARS follows a general formatwhich combines techniques employed in the critical incident method and weighted checklist ratings scales. Emphasis is pinpointed on pooling the thinking of people who will use the scales as both evaluators and evaluees.

Step 1: Collect critical incidents: People with knowledge of the jobto be probed, such as job holders and supervisors, describe specific examples of effective and ineffective behavior related to job performance.

Step 2: Identify performance dimensions: The people assignedthe task of developing the instrument cluster the incidents into a small set of key performance dimensions. Generally between five and ten dimensions account for most of the performance. Examples of performance dimensions include technical competence, relationships with customers, handling of paper work and meeting day-to-day deadlines. While developing varying levels of performance for each dimension (anchors), specific examples of behavior should be used, which could later be scaled in terms of good, average or below average performance?

Step 3: Reclassification of incidents: Another group of participantswho are knowledgeable about the job is instructed to retranslate or reclassify the critical incidents generated (in Step II) previously. They are given the definition of job dimension and told to assign each critical incident to the

dimension that it best describes. At this stage, incidents for which there is not 75 per cent agreement are discarded as being too subjective.

Step 4: Assigning scale values to the incidents: Each incidentis then rated on a one-to-seven or one-to-nine scale with respect of how well it represents performance on the appropriate dimension. A rating of one represents ineffective performance; the top scale value indicates very effective performance. The second group of participants usually assigns the scale values. Means and standard deviations are then calculated for the scale values assigned to each incident. Typically incidents that have standard deviations of 1.50 or less (on a 7-point scale) are retained.

Step 5: Producing the final instrument: About six or sevenincidents for each performance dimension all having met both the retranslating and standard deviation criteria will be used as behavioral anchors. The final BARS instrument consists of a series of vertical scales (one for each dimension) anchored (or measured) by the final incidents. Each incident is positioned on the scale according to its mean value.

Because the above process typically requires considerable employee participation, its acceptance by both supervisors and their subordinates may be greater. Proponents of BARS also claim that such a system differentiates

among behavior, performance and results and consequently is able to provide a basis for setting developmental goals for the employee. Because it is job-specific and identifies observable and measurable behavior, it is a more reliable and valid method for performance appraisal.

Researchers, after surveying several studies on BARS, concluded that despite the intuitive appeal of BARS, findings from research have not been encouraging. It has not proved to be superior to other methods in overcoming rater errors or in achieving psychometric soundness. A specific deficiency is that the behaviors used are activity oriented rather than results oriented. This creates a potential problem for supervisors doing the evaluation, who may be forced to deal with employees who are performing the activity but not accomplishing the desired goals. Further, it is time consuming and expensive to create BARS. They also demand several appraisal forms to accommodate different types of jobs in an organization. In a college, lecturers, office clerks, library staff, technical staff and gardening staff all have different jobs; separate BARS forms would need to be developed for each. In view of the lack of compelling evidence demonstrating the superiority of BARS over traditional techniques such as graphic rating scales. Decotis concluded that: It may be time to quit hedging about the efficacy of behavioral scaling strategies and conclude that this method has no clear-cut advantages over more traditional and easier methods of performance evaluation.

4. Management by Objectives (MBO): MBO represents a modernmethod of evaluating the performance of personnel. Thoughtful managers have become increasingly aware that the traditional performance evaluation systems are characterized by somewhat antagonistic judgments on the part of the rater. There is a growing feeling nowadays that it is better to make the superior work with subordinates in fixing goals. This would inevitably enable subordinates to exercise self-control over their performance behaviors. The concept of management by objectives is actually the outcome of the pioneering works of Drucker, McGregor and Odiorne in management science.

Management by objectives can be described as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its members. MBO thus represents more than an evaluation programme and process. Practicing management scientists and pedagogues view it as a philosophy of managerial practice; it is a method by which managers and subordinates plan, organize, control, communicate and debate.

Features MBO emphasizes participatively set goals that are tangible, verifiable and measurable. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods). MBO, by concentrating on key result areas translates the abstract philosophy of management into concrete phraseology. The technique can be put to general use (non-specialist technique). Further it is a dynamic system which seeks to integrate the companys need to clarify and achieve its profit and growth targets with the managers need to contribute and develop himself. MBO is a systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable goals. It allows the subordinate plenty of room to make creative decisions on his own.

5. Critical incident technique: Under this method, themanager prepares lists of statements of very effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers

Performance. An example of a good critical incident of a sales assistant is the following.

July 20 The sales clerk patiently attended to the customers complaint. He is polite, prompt, and enthusiastic in solving the customers problem.

On the other hand the bad critical incident may appear as under: July 20 The sales assistant stayed 45 minutes over on his break during the busiest part of the day. He failed to answer the store managers call thrice. He is lazy, negligent, stubborn and uninterested in work.

This method provides an objective basis for conducting a thorough discussion of an employees performance. This method avoids recency bias (most recent incidents get too much emphasis). This method suffers however from the following limitations: Negative incidents may be more noticeable than positive incidents. The supervisors have a tendency to unload a series of complaints about incidents during an annual performance review session. It results in very close supervision which may not be liked by the employee. The recording of incidents may be a chore for the manager concerned, who may be too busy or forget to do it. Most frequently, the critical incidents technique of evaluation is applied to evaluate the performance of superiors rather than of peers of subordinates.

8. What would be the steps followed while introducing a good

potential appraisal system ? Answer- The following are some of the steps required to be followed while introducing a potential appraisal system.1. Role Descriptions- Organizational roles and functions must be

defined clearly. To this end, job descriptions must be prepared for each job.2. Qualities need to perform the roles- Based on job descriptions; the

roles to be played by people must be prepared (i.e. technical, managerial jobs and behavioral dimensions. 3. Rating mechanism- Besides listing the functions and qualities, the potential appraisal system must list mechanisms of judging the qualities of employees such as:(a) Rating by others- The potential of a candidate could be rated by

the immediate supervisors who is acquainted with the candidates work in the past especially his technical capabilities.(b) Tests: - Managerial and behavioral dimensions can be measured

through a battery of psychological tests.(c) Records:- Performance records and ratings of a candidate his

previous jobs could be examined carefully on various dimensions such as initiative, creativity, risk taking ability, etc., which might play a key role in discharging his duties in a new job.

4. Organizing the systems- After covering the above preliminaries, the

HR Manager set up a system that will allow the introduction of the scheme smoothly incorporating answers to some complex questions such as ;

(a) How much weightage to accord to merit in place of seniority in

promotions?(b) How much weightage to accord to each of the performance

dimensions technical, managerial, behavioral qualities?(c) What is the mechanism of assessing the individual on different

indicators of his potential, and with what degree of reliability?

5. Feedback- The system must provide an opportunity for every

employee to know the results of his assessment . He should be helped to understand the qualities actually required for performing the role for which he thinks he has the potential, the mechanisms used by the organizations to appraise his potential and results of such an appraisal.

PERFORMANCE APPRAISAL

9. In your point of view what is the essential characteristics of an

effective appraisal system?

Answer- Performance appraisal system should be effective as a number of crucial decisions are made on the basis of score or rating given by the appraiser, which in turn, is heavily based on the appraisal systems. Appraisal systems, to be effective, should possess the following essential characteristics:

A.Reliability and validity- Appraisal system should provideconsistent, reliable and valid information and data, which can be

used to defend the organizations-even in legal challenges. If two appraise are equally qualified and.

Competent to appraise an employee with the help of the same appraisal technique, their ratings should agree with each other

B.Job relatedness- The appraisal technique should measurethe performance and provide information in job related activities.

C.Standardization- Appraisal forms, procedures,administration of techniques, ratings, etc, should be standardized as appraisal decisions affect all employees of the group.

D.Practical viability:- The techniques should be practicallyviable to administer; possible to implement and economical to undertake continuously.

E.Legal Sanction- Appraisals must meet the laws of the land.They must comply with provisions of various statues relating to labour.

F.Training to appraisers: - Because appraisals are importantand sometime difficult, it would be useful to provide training to appraisers viz, some insights and ideas on rating, documenting appraisals and conducting appraisal interviews. Familiarity with rating errors can improves rater performance and this may inject the needed confidence in appraisers to look into performance ratings more objectively.

G.Open communication:- Most employees want to know howwell they are performing the job. A good appraisal system provides the needed feedback on a continuing basis. The appraisal interviews should permit both parties to learn about the gaps and prepare themselves for future. To this end , managers should clearly explain their performance expectations to their subordinates in advance of the appraisal period.

H.Employee access to results;- Employees should know therules of the game. They should receive adequate feedback on their performance. If performance appraisal is meant for improving employee performance, then withholding appraisal result would not serve any purpose. Employees simply cannot perform better without having access to this information. Permitting employees to review the results of their appraisals allows them to detect any errors that may have been made. If they disagree with the evaluation, they can even challenge the same through formal channels.

I.Due Process It follows then that formal procedures should bedeveloped to enable employees who disagree with appraisal results. They must have the means for pursuing their grievances and having them addressed objectively.

2.RESEARCH AND SURVEY:

Statement of the Problem:Performance appraisal is a process of assessing, summarizing and developing the work performance of an employee. In order to be effective and constructive, the performance manager should make every effort to obtain as much objective information about the employee's performance as possible. Low performance can push the organization back in todays tough competition scenario. The project is aimed at analyzing the performance appraisal in companies.

Objective:

The various objectives of our research are as follows: To examine why an appraisal system is important. To study existing appraisal system in various organizations across sectors like BPO, IT & Telecom. To find the expectation of appraiser and appraisee To determine the satisfaction level of the appraisee To reveal the various loopholes in the appraisal system if any To find the consequences of an inappropriately conducted appraisal system

Research Methodology:The data source: Primary as well as Secondary. The research approach: Survey Method. The research instrument: Questionnaire. The respondents: The Managers & Employees of various organizations. The primary data was collected with the help of survey information. A concise questionnaire was prepared keeping in mind the information specifications.

3.RESULTSFindings from Appraisee Survey

1. Expectations from Appraisal System :

Respondents were asked to rank the various options according to their preference. (Rank 1 being most preferred and rank 6 being least preferred). Then scoring was given on the basis of ranks. 1 mark was allotted to rank 1, 2 marks for rank 2 and so on.

Particular Salary Administration and Benefits Determination of promotion or transfer Assistance in goal Guideline for training plan An insight into your strengths and weakness Decision to layoff

Score 87 109

Overall Rank 1 2

228 254 312

3 4 5

354

6

From the above table it can be seen that employees expect Salary Administration and Benefits to be the main reason for conducting a Performance Appraisal. Decision to layoff is of least importance as per the appraisee.

2. Awareness about Responsibilities :

From the graph it can be seen that majority of employees are aware about their responsibilities, which implies that the appraisers have efficiently communicated to the appraisees all the parameters that will be taken into account during appraisal.

3. Satisfaction Level among appraise regarding Appraisal System :

From graph it can be seen that majority of the respondents are satisfied with the appraisal system. Only a meager 30% were dissatisfied with the Performance Appraisal programs.

4. Awareness about performance ratings :

This clearly shows that majority of the employees are not aware about the performance ratings that are taken into account while conducting a performance appraisal.

5. Alowing Self ratings :

From graph it can be seen that majority of respondents want self rating to be a method of conducting the appraisals .

6. Chance to rate your own performance

From the graph we can see that majority of the employees are not given a chance to rate their own performance in the organization.

7. Timing of Appraisals

This shows that most of the organisations conduct their Performance Appraisal programs annually. A very small percentage of the organisations conduct Performance Appraisals on a half yearly basis. The share of the quarterly and monthly appraisals are extremely minimal.

8. Credibility of Appraiser

This shows that according to the employees/appraisees the credibility of the appraiser is extremely important and it has an effect on the overall Performance appraisal program.

9. Complaint channel for employees

This shows that there is no proper complaint channel existing in the organisations for the employees who are dissatisfied with the performance appraisal system

.

10.

Standards communicated to employees

From this it can be seen that there is a clear majority among the employees who say that the standards on the basis of which the performance appraisal is carried out is not communicated to the employees before hand.

11.

Performance Appraisal

Almost all the Performance Appraisals are carried our by the Immediate Supervisor in these organisations. In very few organisations, Rating committees carry out the performance appraisals. None of the organisations use Peer Appraisals, Appraisals by subordinates and Self rating as a method of Performance Appraisal.

12.

Clear understanding of Appraisees job

This shows that the performance Appraisal programs are successful in giving a clear understanding of the appraisees job to both appraiser and appraisee.

13.

Objectives of Appraisal System

From the figure we can derive that the objective for conducting the Appraisal system is clear only to half of the employees. The remaining half are not clear about the objective for which the Performance Appraisal is carried out.

14. goals

Good communication between top management and business

This shows that the appraisal systems do not provide a good communication flow of the top-management plans and business goals to the staff below.

15.

Comments and suggestions to be considered

Almost all the employees expect that their comments and suggestions should be taken into consideration while conducting the Performance Appraisal.

16.

Post Appraisal interview

As per the response from the employees we can see that there is no interview conducted after the appraisal program for majority of the employees.

FINDINGS FROM APPRAISER SURVEY

1. Purpose of Appraisal

Respondents were asked to rank the various options according to their preference. (Rank 1 being most preferred and rank 6 being least preferred). Then scoring was done on basis of these

ranks. 1 mark was allotted to rank 1, 2 marks for rank 2 and so on. Then the total score for each purpose was calculated and overall ranking was given. Particular Score Overall Rank Determination of promotion or transfer Salary Administration and Benefits Decision to layoff Guideline for training plan Assistance in goal An insight into your strengths and weakness 27 42 69 72 81 2 3 4 5 6 24 1

From table it can be seen that appraiser considers Determination of promotion or transfer & Salary administration and Benefits as two important factors for conducting an Appraisal.

2. Appraisal System

In this question appraiser was asked to rate how helpful the appraisal system is, from the graph it can be seen that majority of appraisers have rated 5,4 & 3 which implies that Performance Appraisal system is very helpful in Planning their work. Also most of the appraisers are satisfied with the appraisal system.

3. Support from subordinate

This question was asked to find out how helpful appraisal system is in communicating the support that apprasier needs from appraisee. From results it is seen that the performance appraisal system is very helpful in communicating the support and help needed by appraisee. the appraiser from the

4. Type of Appraisal System

From results its clear that majority of companies prefer to use 360 degree feedback system for Performance Appraisal. As 360 degree feedback gives feedback of appraisee from everyone interacting with him, it is more reliable and hence most preferred.

5. Performance Appraisal criteria

From results we can see that Qualitative Process is considered as the most important criteria for which the Performance appraisal programs are carried out, which shows that companies consider Qualitiy of product & service and Customer satisfaction as most important factors.

6. Timing of Appraisals

From graphs we can see that most of companies conduct appraisals on annual basis. Some companies conduct quaterly also.

7. Effect of poor Appraisal System

It can be seen from results that most of the employees get De-motivated because of a poorly conducted appraisal. To some extent employees dont coordinate with their team members. Thus resulting in reduction of output.

8. Communication between top management and staff

All

appraisers

totally

agree

that

performance

appraisal

helps

in

communicating the top management plans and business goals to staff at lower level.

9. Insight to Apprasiees strength and weakness

It is evident from the results that performance appraisal system doesnt help the appraiser in understanding strength and weakness of apraisee.

10.

Appraisees comment and suggestion

From the results it can be seen that appraisees comments and suggestion are not taken into consideration before Performance Appraisal. Performance Appraisal system is designed by appraiser without consulting appraisee.

11.

Performance Appraisal

It is evident from the results that performance appraisal is conducted by the Immediate Supervisor in all the companies.

12.

Understanding of Apprasiees Job

From this it is clearly seen that according to appraiser there is a clear and joint understanding of the appraisees job.

13.

Standards for Performance Appraisal

From results it is evident that Performance appraisal standards are very well communicated to Appraisee before the Appraisal is carried out.

14.

Self rating in Performance Appraisal

From results it can be clearly seen that the Appraisee is not given a chance to rate his own performance.

15.

Action after Performance Appraisal

This shows that most of the companies act upon the results of their Performance Appraisal program.

COMPARATIVE STUDY OF 5 COMPANIES IN PERFORMANCE APPRAISAL SYSTEM WITH DCM SHRIRAM FERTILIZERS & CHEMICALS.

Performance Appraisal System in B.S.N.L

The foregoing list of major program pitfalls represents a formidable challenge, even considering the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing away with appraisals themselves is like trying to solve the problems of life by committing suicide. The more logical task is to identify those appraisal practices that a (a) Most likely to achieve a particular objective and (b) Least vulnerable to the obstacles already discussed.

Before relating the specific techniques to the goals of performance appraisal stated at the outset of the article, I shall briefly review each, taking them more or less in an order of increasing complexity. The best-known techniques will be treated most briefly. ESSAY APPRAISAL In its simplest form, this technique asks the rater to write a paragraph or more covering an individual's strengths, weaknesses, potential, and so on. In most selection situations,

Particularly those involving professional, sales, or managerial positions, essay appraisals from former employers, teachers, or associates carry significant weight.

GRAPHIC RATING SCALE This technique may not yield the depth of an essay appraisal, but it is more consistent and reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work (is he outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that vary with the job but usually include personal traits like reliability and cooperation. It may also include specific performance items like oral and written communication. FIELD REVIEW

The field review is one of several techniques for doing this. A member of the personnel or central administrative staff meets with small groups of raters from each supervisory unit and goes over each employee's rating with them to (a) identify areas of inter-rater disagreement, (b) help the group arrive at a consensus, and (c) determine that each rater conceives the standards similarly. . FORCED-CHOICE RATING Like the field review, this technique was developed to reduce bias and establish objective standards of comparison between individuals, but it does not involve the intervention of a third party.

MANAGEMENT BY OBJECTIVES To avoid, or to deal with, the feeling that they are being judged by unfairly high standards, employees in some organizations are being asked to set - or help set - their own performance goals. Within the past five or six years, MBO has become something of a fad and is so familiar to most managers that I will not dwell on it here. RANKING METHODS For comparative purposes, particularly when it is necessary to compare people who work for different supervisors, individual statements, ratings, or appraisal forms are not particularly useful. Instead, it is necessary to recognize that comparisons involve an overall subjective judgment to which a

host of additional facts and impressions must somehow be added. There is no single form or way to do this. The best approach appears to be a ranking technique involving pooled judgment. The two most effective methods are alternation ranking and paired comparison ranking. 1. Alternation ranking:

Ranking of employees from best to worst on a trait or traits is another method for evaluating employees. Since it is usually easier to distinguish between the worst and the best employees than to rank them, an alternation ranking method is most popular. Here subordinates to be rated are listed and the names of those not well enough to rank are crossed. Then on a form as shown below, the employee who is highest on the characteristic being measured and the one who is the lowest are indicated. Then chose the next highest and the next lowest, alternating between highest and lowest until all the employees to be rated have been ranked.

2.

Paired-comparison ranking:

This technique is probably just as accurate as alternation ranking and might be more so. But with large numbers of employees it becomes extremely time consuming and cumbersome.

Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or more people are asked to make independent rankings of the same work group and their lists are averaged), are among the best available for generating valid order-of-merit rankings for salary administration purposes. ASSESSMENT CENTERS So far, we have been talking about assessing past performance. What about the assessment of future performance or potential? In any placement decision and even more so in promotion decisions, some prediction of future performance is necessary. How can this kind of prediction be made most validly and most fairly? 360 DEGREE FEEDBACKS Many firms have expanded the idea of upward feedback into what the call 360-degree feedback. The feedback is generally used for training and development, rather than for pay increases. Most 360 Degree Feedback system contains several common features. Appropriate parties peers, supervisors, subordinates and customers, for instance complete survey, questionnaires on an individual. 360 degree feedback is also known as the multi-rater feedback, whereby ratings are not given just by the next manager up in the organizational hierarchy, but also by peers and subordinates. Appropriates customer ratings are also included, along with the

element of self appraisal. Once gathered in, the assessment from the various quarters are compared with one another and the results communicated to the manager concerned. Another technique that is useful for coaching purposes is, of course, MBO. Like the critical incident method, it focuses on actual behavior and actual results, which can be discussed objectively and constructively, with little or no need for a supervisor to "play God."

PERFORMANCE APPRAISAL SYSTEM AT O.N.G.C

PERFORMANCE APPRAISAL METHODS 1. Management by objective or goal setting. 2. Graphic rating scale.

3. Work standard approach. 4. Essay appraisal.

5. Critical incidence method. 6. Forced choice rating method. 7. Point allocation method. 8. Ranking method. 9. Check list. 10. 11. 12. 13. Behavioral anchored rating scale.(BARS) 360 degree performance appraisal. Team appraisal. Balanced scorecard method.

MANAGEMENT BY OBJECTIVE (MBO) The main aspect of MBO is clear & well defined goals, a definite time span to achieve the goals, action plan & finally, timely & constructive feedback. It is also called a goal setting approach; MBO is more commonly used for managers & professionals.

GRAPHIC RATING SCALE

This method of appraisal requires the rater to rate the employee on factors like quantity & quality of work, job knowledge, dependability, punctuality, attendance etc. This method is also used for performance appraisal of employees. They check their employees daily by using this method.

WORK STANDARD APPROACH This method of appraisal is more suitable in a manufacturing scenario, where the goals are pre determined work standard. These work standards can be set based on the average output of a typical employee in the organization or by bench marking against the work standard of a competitor in a similar business.

ESSAY APPRAISAL In the essay appraisal method, the appraiser prepares a document describing the performance of the employees. Questions or guidelines are provider to the appraiser based on which analyses & describes the employees performance.

CRITICAL INCIDENT METHOD In this method of performance appraisal, the appraiser makes a note of all the critical incident that reflect the performance & behavior of the employee during the appraisal period. These are recoded as & when they occur & can demonstrate either positive or negative traits or performance.

FORCED CHOICE RATING METHOD In this method the appraiser is required to assign ranks to different attributes are all seemingly positive, but have different weights which are unknown to the appraiser. Once the employees

Attributes are ranked the human resource department applies the weights & arrives at a score which is the final appraisal score.

POINT ALLOCATION MATHOD In this method of appraisal, the appraiser has to allocate points to different members in his team. He has at disposal, a specific number of points which he has to distribute among his team members, based on their performance during the appraisal period.

RANKINNG METHOD There are three commonly used methods of ranking namely alternation, paired comparison & forced distribution. The first two methods are used when there are only a few employees to be ranked, whereas forced distribution method is used in large companies which have thousands of employees.

CHECKLIST In this method the rater has to respond yes or no to a set of questions which assess the employees performance & behavior. Normally weights are attached to each of these questions based on which the final appraisal score of the employee is calculated.

BEHAVIOR ANCHORED RATING SYSTEM (BARS) BARS concentrates on the behavioral traits demonstrated by the employees instead of his actual performance. Some of the other methods like graphic rating scale & checklist also measure the behavior based on the assumption that desirable behavior result in effective performance.

360 DEGREE PERFORMANCE APPRAISALS A 360 degree appraisal system aims at a comprehensive & objective appraisal of employee performance. In a 360 degree appraisal system the employees performance is evaluated by his supervisor, his peers, his internal external customers, his internal external suppliers & his subordinates. This system reduces the subjectivity of a traditional supervisor appraisal.

TEAM APPRAISAL In the new economy era, where team work is essential for any venture to succeed, team appraisal has emerged as one of the best tool for the performance management. In the team appraisal methods the individual team members evaluates their colleagues in the team & provide feedback.

BALANCED SCORECARD The balanced scorecard as a method of measuring performance channelizes the efforts of people to achieve organizational goals. The implementation of balanced scorecard involves formulating a strategy & deciding what each employee needs to do to achieve the objectives based on strategy.

PERFORMANCE APPRAISAL SYSTEM AT WIPRO

TRADITIONAL METHOD:

1. ESSAY APPRAISAL METHOD: This traditional form of appraisal, also known as Free Form method involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator. 2. STRAIGHT RANKING METHOD: This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation.

3. PAIRED COMPARISON: A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. 4. CRITICAL INCIDENTS METHODS: In this method of Performance Appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behavior as and when they occur.

5. FIELD REVIEW: In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors personal bias.

6. CHECKLIST METHOD: The rater is given a checklist of the descriptions of the behavior of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.

7. GRAPHIC RATING SCALE: In this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on-the-job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.

8. FORCED DISTRIBUTION: To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.

MODERN APPRAISAL: 360 DEGREE PERFORMANCE APPRAISAL: 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the on-

the-job performance of the employee. 360 degree appraisal has four integral components:

1. Self appraisal 2. Superiors appraisal 3. Subordinates appraisal 4. Peer appraisal.

Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superiors appraisal forms the traditional part of the 360 degree appraisal where the employees responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superiors ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees abilities to work in a team, co-operation and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree performance appraisals has high employee involvement and also has the strongest impact on behavior and performance. It provides a "360-degree review" of the employees performance and is considered to be one of the most credible performance appraisal methods. 360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance

Appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc.

PERFORMANCE APPRAISAL SYSTEM AT TCS

1. BEHAVIOURLY ANCHORED RATING SCALES Combines graphic rating scales with critical incidents method. Descriptions of various degrees of behavior relating to specific performance dimensions. The rater records observable job behavior of an employee and compares these observations with BARS.2. CRITICAL INCIDENT METHOD

The supervisor keeps a written record of critical (either good or bad) events and how different employees behaved during such events. The rating of an employee depends on his positive / negative behavior during these events. This method helps to avoid vague impressions and general marks as the rating is based on actual records of behavior / performance.

3. GRAPHIC RATING SCALE It is a numerical scale indicating different degrees of a particular trait. The rater is given a printed form for each employee to be rated. The form contains several characteristics relating to the personality and performance of employees. The rater records his judgment on the employee's trait on the scale. The numerical points given to an employee are added up to find out his overall performance.

4. RANKING METHOD The evaluator assigns relative ranks to all the employees in the same work unit doing the same job. Employees are ranked from the best to the poorest on the basis of overall performance. The relative position of an employee is reflected in his numerical rank. It is time saving and a comparative evaluation technique of appraisal.

5. MANAGEMENT BY OBJECTIVE A process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its members.

PERFORMANCE APPRAISAL SYSTEM AT MARUTI UDHYOG1. GRAPHIC RATING SCALE Uses a printed form to evaluate Uses variety of traits Most commonly quality and quantity of work. 2. ESSAY APPRAISAL Rater is asked to express the strong as well as weak points of the employees behavior Used with a combination of the graphic rating scale Factors: (i) Job knowledge and potential of the employee;

(ii) Employees understanding of the companys programmes, policies, objectives, etc.; (iii) The employees relations with co-workers and superiors; (iv) The employees general planning, organizing and controlling ability; (v) The attitudes and perceptions of the employee, in general

3. CHECKLISTS A set of objectives or descriptive statements about the employee and his behavior The value of each question may be weighted equally or certain questions may be weighted more heavily than others in the weighted checklist.

4. CRITICAL INCIDENT TECHNIQUE-

a. Manager prepares lists of statements of very effective and

ineffective behavior of an employee b. Manager maintains logs on each employee c. Recorded critical incidents are used in the evaluation of the workers performance .

5. 360 DEGREE FEEDBACK 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the "on-the-job" performance of the employee.

6. BEHAVIOURAL ANCHORED RATING SCALES Identify critical incidents Select performance dimensions Retranslate the incidents Assign scale to incidents Develop final instrumentMAR I UT UD YOG H a a a a a a a a D CL S , K ota a a a a a a -

S .No.

Perform nce Appra l Pa eters B .N.L O.N.G.C a isa ram .S

T CS

WIPR O

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Essay Appaisal Graphic Rating Scale Field Review Forced Choice Rating Management By Objective Rankings Method Assessment Centres 360 Degree Feedback Work Standard Approach Critical Incident Method Point Allocation Method Check List Behavioral Anchored Rating Scale Team Appraisal Balanced Scorecard Method Straight Ranking Method Paired Comparison

a a a a a a a a -

a a a a a a a a a a a a -

a a a a a a -

a a a a a a a a a a

CHAPTER 6

ISSUES AND CHALLENGES FACING THE ORGANISATION

CHAPTER 7

FINDINGS AND ANALYSIS

Performance Appraisal System in DCM Shriram Fertilizers & Chemicals

is not transparent. Appraisers are usually unbiased. Employees are not able to know their actual position after the appraisal. The management is serious about the appraisal process. The appraisal process provides them an opportunity for development and growth. Relations with the superior affect the evaluation. Greater weightage is given to the recent performances.

There are fixed standards to evaluate the performance but those are not clear due to the subjectivity of the topic. Raters know how to conduct the appraisal. Raters are not that much concerned about the varied needs of people at levels of experience and background. Superior-subordinate relations are good. Superior helps them set and achieve meaningful goals. This makes the environment amiable and congenial. Performance appraisal sheet is lucid and easy to understand and fill. The parameters used to appraise the potential are ample. The system being not so transparent, employees are unable to identify the performance gaps in order to prepare for the future. Individual feedback is not provided.

The management helps provide an atmosphere where all are encouraged for comradeship and teamwork. Appreciation is provided for the good job done. The appraisers are generally aware about their subordinates and their talents and potential. Most of the raters have the ability to give constructive criticism in a friendly, firm and positive manner. Employees dont have the opportunity to respond to the appraisal result. Employees are being rated on their knowledge and skills.

Majority of people want that there should be some incentives based on performance. Employees are not provided with the genuine feedback. Appraisal counseling is considered beneficial for future developments. Management doesnt bother much about the training requirements mentioned in the appraisal sheet. Most of the employees want that 360o feedback system should be

introduced.

CHAPTER

8

RECOMMENDATIONSThe performance appraisal system of DCM Shriram Fertilizers & Chemicals Ltd is of good quality. On the basis of the analysis of responses and findings I have reached to some conclusions. So taking them into consideration few steps may be considered to strengthen the performance appraisal system.

The system should be made more transparent. This can be achieved by creating awareness among the employees regarding each and every aspect of the appraisal process. They should be made aware about the standards and the criterions for evaluation. Further they should be shown the appraisal result. The appraiser and appraisee should sit together and then the appraiser should rate the appraisee for his performance and should state the reason for the same. This will increase the level of transparency and the employee will feel satisfied as he will have an opportunity to respond at that very moment itself. The genuine feedback should be provided to the employees. So that they may be in a position to know where they stand exactly. So that they can identify their performance gaps and prepare accordingly for the future.

The general belief among employees is that the relations with the superior affect the evaluation process. This is not good as this creates a sense of favoritism in the organization. No doubt one should be in pleasing terms with the superior but that should not affect the

evaluation at all. For this the raters should always consider the performance as the only measure for the evaluation. The raters should take note of the critical performance incidents of an individual so that at the end of the year it should not be that only the recent performances are given more weightage. Raters should consider the specific requirements of the people to do the job. They should help them out by providing necessary skill set to do the job more efficiently. They should set the goals as per the potential and caliber of the individual. Employees should have the opportunity to respond to the appraisal result. For this individual feedback should be provided. Management should take serious note of the training requirements shown by the individual in the appraisal sheet. Training plays a vital role in the development of an individual and helps improve the performance. Some incentives should be introduced on the performances basis. This thing creates a sense of healthy competition among employees which boost up the growth of the individual as well as the organization.

CHAPTER

9

BIBLIOGRAPHYWEBSITES

www.dscl.com www.wikipedia.org

Business.mapsofindia.com www.performance-appraisal.com/intro.html

JOURNALS A New Framework for Selection of the Best Performance Appraisal Method Function of performance appraisal in career development Innovative human resource management and corporate performance in the context of economic liberalization in India. The Effects of Human Resource Management Practices on Productivity.

CHAPTER 10

ANNEXURES Performance Appraisal Forms

CHAPTER 11

CASE STUDYDCM SHRIRAM CONSOLIDATED LIMITEDOverview

DCM Shriram Consolidated Limited (DSCL), a company with interests mainly in chemicals and agribusiness, operates in western and northern India. The western state of Rajasthan is home to the company's main manufacturing plant, in Kota, which has also been the site of its HIV and AIDS program. The program is uniquely local, drawing on local culture and adapting information, education, and communication material to appeal to local sensibilities. Committed to providing a safe and healthy working environment, the company holds regular group sessions to build HIV and AIDS awareness among its employees. DSCL's occupational health doctor speaks on the basics of HIV and AIDS awareness and prevention. But then follows a song or poem in the local dialect to convey messages more light-heartedly. The company also uses cultural performances at festivals or other important events at the Kota plant to generate mass awareness. Communicating messages in ways that fit the local culture and local sensibilities has helped the program capture the attention of the target audience. It has also helped the program gain acceptance among the local population.

Business background DSCL has diverse business interests ranging from agribusiness (sugar, fertilizers, agri-retail) to chemicals (chlorine, caustic soda), plastics (PVC resins, polymer compounds), and others (cement, textiles, energy services, real estate development). The corporate office is in New Delhi, and the main manufacturing plant in Kota, in the western state of Rajasthan. The Kota plant, the site of the company's HIV and AIDS intervention, houses manufacturing facilities for fertilizers, plastics, chlor alkali, and cement as well as a captive power plant. This site has 1,600 full-time employees, 1,500 daily contract workers, and 500 staff for security, manual labor, and the like. The company's annual sales are Rs 23 billion (around US$500 million). DSCL's main supply chain partner public enterprises and small and mediumsize suppliers provide raw materials such as coal, salt, naphtha, and limestone.

Why do something about HIV and AIDS? DSCL's decision to initiate an HIV and AIDS program was motivated largely by its belief that AIDS is a public health challenge that could affect its workforce, its supply chain, its value chain partners, and the broader community. Looking at the experience of other countries, the company recognized that the business community, particularly in manufacturing needed to contribute to the fight against HIV and AIDS. Thus while no HIVpositive cases have yet been reported at the company's sites, advocacy

efforts by industry associations in India convinced senior management that DSCL, as a responsible corporate citizen, needed to take part. The company has adopted an HIV and AIDS policy out of a belief that the policy could serve as a key driver in initiating intervention program.

The program DSCL identified two potential target groups for its program: Its own steadily growing employee base, a large captive audience that could be informed about HIV and AIDS at the workplace and the large number of truckers who came to its factories (particularly in the sugar division, where many truckers offloaded sugarcane). At an initial meeting to allocate responsibility for the program, DSCL decided to assign the program to an official who volunteered his efforts. The human resources unit normally would have led the program. But the official's demonstrated eagerness to be involved in an HIV program made him a promising choice.

The program began in January 2005 by gathering information about the issue, identifying resources such as organizations providing technical services, and developing information, education, and communication material. As many programs have done, DSCL's has created pamphlets containing information about HIV and AIDS, but much of its material shows unusual innovation. Cassettes intersperse HIV and AIDS messages with popular Hindi film songs. And songs are written in the local dialect to appeal to the diverse community working in the plant and living around it. Awareness and prevention activities at the workplace The company's awareness activities at the workplace center on group meetings where the occupational health team shares information about HIV and AIDS with DSCL employees. Sessions take place on the shop floor or near the factory entrance. Meetings usually consist of a talk by the company's medical officer, messages on HIV and AIDS conveyed through poems, songs, or jokes in the local dialect, and a quiz to see whether participants have grasped the information. Sessions end with distribution of free condoms. To encourage its contract employees to participate, the company sought the cooperation of the contractors in conducting the awareness sessions. Contract employees are more willing to spend time at these sessions if their employers are agreeable. Outside the meetings, the occupational health team disseminates information about HIV and AIDS to employees and workers through pamphlets, posters, and billboards created in-house. Some posters call out to the target audience to join the fight against HIV and AIDS. Others quote a powerful speech by Nelson Mandela portraying HIV and AIDS as everyone's responsibility. Awareness material is placed in prominent locations at the plant, such as in the visitors' lobby and on the notice board.

DSCL has made good use of the company's own resources in communicating information. For example, employees skilled in music, drama, writing, and poetry use their arts to convey messages about HIV and AIDS. One such employee, a talented singer and poet as well as a brilliant orator in the local dialect, accompanies DSCL's chief medical officer to awareness sessions. These artists also convey messages during performances at interdepartmental cultural competitions, plant days, and other festive occasions.

The company disseminates information in other innovative ways as well. Its visitors passes now include HIV and AIDS message. Films plays and cultural performances impart HIV and AIDS awareness at public functions held to commemorate important company days or religious festivals. Films are screened occasionally in the canteens while the workers gather to eat. Films on HIV and AIDS are also shown to officers trained at the company's training institute.

For more informal communication with employees about HIV and AIDS, DSCL relies on its welfare officers. These officers, each responsible for the well-being of a certain number of employees, act as conduits between management and workers and as support systems and confidants for employees and their families. Their deep engagement with employees makes them well placed to spread awareness about HIV and AIDS and to provide individual counseling. The medical doctors in the plant and trained polyclinic staff also provide counseling. DSCL does not have its own medical facilities for HIV and AIDS. But the city of Kota has a government-established blood testing and detection center. And DSCLs medical staff has on HIV and AIDS, on such issues as primary care, visual diagnosis and management of opportunistic infections, lab diagnosis, and antiretrovi-ral therapy. The staff conducts regular medical checkups on employees and is trained to notice symptomatic indicators of HIV and AIDS.

While DSCL reports having no HIV-positive employees, it can arrange for antiretroviral therapy at the Kota government hospital. The company now covers the cost of treatment for some AIDS patient in the city of Kota even though they are not DSCL employees.

Interventions for the community DSCL also conducts awareness sessions beyond the shop floor, for truckers who transport material to and from the company. The method is the same as that for employees: in a group session the company doctor shares information on HIV and AIDS, and then free condoms are distributed. The sessions for the truckers take place while their goods are being loaded or unloaded. DSCL has sometimes faced challenges in implementing its HIV and AIDS program while managing the varying expectations of the local community. But the company plans to reach out to the wider community through similar programs for local slum dwellers and drug addicts and through programs in commercial areas.

Partnerships The DSCL program has relied on partnerships from the outset. In designing the initial strategy, the official taking responsibility for the program consulted with area organizations that deal with HIV and AIDS, including industry associations and government entities. And those in the company who have implemented the program have often benefited from inputs from partners. These partners include The Rajasthan State AIDS Control Society, the government organization responsible for the state AIDS program in Rajasthan. The Confederation of Indian Industry and its Social Development Council in the northern region. The council interacts with companies that are confederation members on issues of corporate social responsibility. The Energy and Resource Institute.

Funding The program is funded entirely through internal resources of DSCL. Management allocates Rs 500, 000 (around US$ 11, 000) a year for the program through the annual b