Union Bank

Performance Appraisal of Union Bank

CHAPTER I

Introduction to Banking Sector

Banking can be defined in various ways as the definition of the bank varies from country to

country and keeps on changing on the basis of the activities carried out by the banks. In

present dynamic business scenario, banking can be defined as the activities carried out with

the bank on individual or corporate level. We can understand the concept of the banking by

looking into the activities of the bank.

A bank is a well regularized and licensed financial institute to assist the individual and

corporate customer in their financial needs. Normally banks provide the following services to

its retail (individual) and corporate clients:

Transactional services,

Services related to monetary transaction through current and saving account,

Investment services,

Fixed deposit ,

Letter of credit ,

Treasury services ,

Bill of exchange ,

Foreign exchange ,

Assisting in trade through Letter of credit,

Letter of guarantee,

Performance bond ,

Project financing ,

Personal loan ,

Credit card ,

Home loan etc.

Banking sector In India

Banking in India originated in the last decades of the 18th century. The oldest bank in

existence in India is the ‘State Bank of India’, a government-owned bank that traces its

origins back to June 1806 and that is the largest commercial bank in the country. Central

banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over

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these responsibilities from the then Imperial Bank of India, relegating it to commercial

banking functions. After India's independence in 1947, the Reserve Bank was nationalized

and given broader powers. In 1969 the government nationalized the 14 largest commercial

banks; the government nationalized the six next largest in 1980.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is

with the Government of India holding a stake), 31 private banks (these do not have

government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign

banks. They have a combined network of over 53,000 branches and 17,000 ATMs.

According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75

percent of total assets of the banking industry, with the private and foreign banks holding

18.2% and 6.5% respectively.The banking industry in India seems to be unaffected from the

global financial crises which started from U.S in the last quarter of 2008. Despite the fallout

and nationalization of banks across developed economies, banks in India seems to be on the

strong fundamental base and seems to be well insulated from the financial turbulence

emerging from the western economies. The Indian banking industry is well placed as

compare to their banking industries western counterparts which are depending upon

government bailout and stimulus packages.The strong economic growth in the past, low

defaulter ratio, absence of complex financial products, regular intervention by central bank,

proactive adjustment of monetary policy and so called close banking culture has favored the

banking industry in India in recent global financial turmoil.Although there will be no impact

on the Indian banking system similar to that in west but the banks in India will adopt for more

of defensive approach in credit disbursal in coming period. In order to safe guard their

interest; banks will follow stringent norms for credit disbursal. There will be more focus on

analyzing borrower’s financial health rather than capability.

The report “Indian Banking Sector Forecast to 2012” contains comprehensive research and

rational analysis on various segments, like assets size, income level and number of

cardholders, in the Indian banking industry. It also analyzes the current performance and key

market trends, and helps clients to understand various products available in the market and

their future scope. The forecast given in this report is not based on a complex economic

model but is intended as a rough guide to the direction in which the market is likely to move.

The future projection is done on the basis of the current market scenario, past trends, and

rules and regulations laid by the regulator and supervisor of the financial

system, Reserve Bank of India (RBI).

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The Economic Liberalization process has increasingly exposed the Banking Sector to

international competition. The role of Banking in the process of financial intermediation has

been undergoing a profound transformation, owing to changes in the global financial system.

Consequently, the revolution in information technology has brought about sea changes in the

way banking transaction are carried outAlmost 80% of the businesses are still controlled by

Public Sector Banks (PSBs). PSBs are still dominating the commercial banking system.

Shares of the leading PSBs are already listed on the stock exchanges.The RBI has given

licenses to new private sector banks as part of the liberalization process. The RBI has also

been granting licensees to industrial houses. Many banks are successfully running in the retail

and consumer segments but are yet to deliver services to industrial finance, retail trade, small

business and agricultural finance.The PSBs will play an important role in the industry due to

its number of branches and foreign banks facing the constraint of limited number of branches.

Hence, in order to achieve an efficient banking system, the onus is on the Government to

encourage the PSBs to be run on professional lines.To promote banking sector in India, Govt.

has taken many steps and formed several committee to review the banking needs and the

prospect the current scenario along with the safeguarding the interest of the customers

Reserve bank of India

Economists and Planners consider monetary stability in an economy as the most important

function of a Central Bank. The Prime function of a Central Bank is to ensure and secure

monetary stability i.e. to ensure that the growth rate of money supply is consistent with the

growth rate of output of goods and services. In an open economy framework however the

Central Banks is additionally entrusted with the responsibility of managing the exchange rate.

Since the inception of the economic reforms when the Indian Economy embarked on a

programme of liberalization and exchange rate flexibility, the Reserve Bank of India is

managing its twin responsibilities of monetary stability and exchange rate stability. The

economy follows a managed float system with RBI intervening in the event of violent

fluctuations in exchange rate. In an open economy framework with lesser restrictions on

capital flows, managing the monetary stability and exchange rate stability pose a challenge

for the Central Bank. Managing the twin functions simultaneously is accompanied by trade-

offs and conflicts.

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The central bank of the country is the Reserve Bank of India (RBI). It was established in

April 1935 with a share capital of Rs. 5 crores on the basis of the recommendations of the

Hilton Young Commission. The share capital was divided into shares of Rs. 100 each fully

paid which was entirely owned by private shareholders in the beginning. The Government

held shares of nominal value of Rs. 2, 20,000.Reserve Bank of India was nationalized in the

year 1949. The general superintendence and direction of the Bank is entrusted to Central

Board of Directors of 20 members, the Governor and four Deputy Governors, one

Government official from the Ministry of Finance, ten nominated Directors by the

Government to give representation to important elements in the economic life of the country,

and four nominated Directors by the Central Government to represent the four local Boards

with the headquarters at Mumbai, Kolkata, Chennai and New Delhi. Local Boards consist of

five members each Central Government appointed for a term of four years to represent

territorial and economic interests and the interests of co-operative and indigenous banks.

The Reserve Bank of India Act, 1934 was commenced on April 1, 1935. The Act, 1934 (II of

1934) provides the statutory basis of the function of the bank.The Bank was constituted for

the need of following:

To regulate the issue of banknotes

To maintain reserves with a view to securing monetary stability and

To operate the credit and currency system of the country to its advantage.

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Human Resources Management Approach (H.R M Approach)

“Human resource management's objective is to maximize the return on investment from the

organization's human capital and minimize financial risk. It is the responsibility of human

resource managers in a corporate context to conduct these activities in an effective, legal, fair,

and consistent manner”The Human Resources (HR) function provides significant support and

advice to line management. The attraction, preservation and development of high caliber

people are a source of competitive advantage for our business, and are the responsibility of

HR.H.R can be well understood as a model of personnel management that focuses on the

individual rather than taking a collective approach. Responsibility for human resource

management is often devolved to line management. It is characterized by an emphasis on

strategic integration, employee commitment, workforce flexibility, and quality of goods and

services. Human resource is an increasingly prominent field that is taking shape throughout

industries and workplaces world wide. Recognizing the fact that people are a company’s

greatest asset, business leaders across the globe are coming to rely more and more upon an

effective management policy that applies specifically to the area of human resources.

With a rapid increase – a boom, in fact – of professionals, generalists and specialists in the

area of human relations, there has also been a major rise in the amount of knowledge and

innovation pertaining to the most efficient and productive methods of streamlining workforce

management policy. When applied, there are already a great number of proven techniques

which result in the actual increases of profit margins. But what, exactly, is the definition of

human resources? Essentially, HR applies to the workforce managed by any employer. A

business of any size needs employees in order for it to run. As an important – the most

important – asset for any business leader, employees need to be properly managed in order

for optimal efficacy to be achieved. Now, properly managing a workforce is a lot more

complicated than, say, the maintenance of a company’s material capital such as machinery,

computer systems, etc. Indeed, the mechanistic approach to employee relations has often

failed. Fortunately, this failure has prompted close study into how to effectively see that

human capital is treated right and is able to reach its full potential. That’s why the application

of human resources management focuses largely on a more sensitive and human analysis to

determine what really works with employees. One of the major aspects of HR maintenance

involves employee recruitment, training and development as a function of human capital

management.

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Making sure that employees’ abilities are correctly and optimally nurtured is essential to

seeing a worthwhile return on investment come from their contribution to the company, once

their training period is over. Along with employee training, human resources departments

also delve into the area of applicant tracking. How to find the best talent available on the

global labor market place is often a problem that the human resources department will strive

to tackle. In addition, human resources departments take care of a variety of concerns such as

labor relations – the crucial and highly sensitive negotiations between employees and

management – the production of job descriptions, the monitoring of interplay between

workers in order to design a more efficient employee management system, the compilation of

benefits packages as well as a variety of other vital functions that relate directly to the

employee workforce Organizational Psychology holds that successful organizations do not

owe their success solely to market realities and sustainable competitive advantages. Actually,

there is a lot more. Successful companies are those that consider their human capital as their

most important asset. Facts and figures are the quantitative elements of successful

management, yet the qualitative, i.e. the cognitive aspects, are those that actually make or

break an organization.Human Resources Management (HRM) is the strategic management of

the employees, who individually and collectively contribute to the achievement of the

strategic objectives of the organization. Assuming that the employees of an organization are

individuals with own mental maps and perceptions, own goals and own personalities and as

such they cannot be perceived as a whole, HRM holds that the organization should be able to

employ both individual and group psychology in order to commit employees to the

achievement of organizational goals.Aiming to enable the organization to achieve its strategic

goals by attracting, retaining and developing employees, HRM functions as the link between

the organization and the employees. A company should first become aware of the needs of its

employees, and at a later stage, understand and evaluate these needs in order to make its

employees perceive their job as a part of their personal life, and not as a routine obligation.

To that end, HRM is very crucial for the whole function of an organization because it assists

the organization to create loyal employees, who are ready to offer their best.The HRM

activities in modern organizations are typically performed in communication with the

General Management in an effort to provide a variety of views when a decision must be

taken. In that way, decision making is not subject to the individual perceptions of the HR or

the General Manager, but it becomes the outcome of strategic consensus.

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The main goals / responsibilities of HRM are:

To achieve these goals, Human Resources Management trains and motivates the employees

by communicating ethical policies and socially responsible behavior to them. In doing so, it

plays a significant role in clarifying the organization's problems and providing solutions,

while making employees working more efficiently.On the other hand, challenges do not cease

for the HRM. Modern organizations can survive in the dynamic, competitive environment of

today only if they capitalize on the full potential of each employee. Unfortunately, many

companies have not understood the importance of the human capital in successful operations.

The recruitment and selection of the best employees is a very difficult obligation. Even

companies that are voted in the top-ten places to work at, often endure long periods of hard

work to realize that human element is all an organization should care about.New challenges

arise even now for the organization, and it is certain that new challenges will never cease to

emerge. Therefore, the use of proper Human Resources techniques is a really powerful way

for organizations to overcome these challenges, and to improve not only their quantitative

goals but also their organizational culture, and their qualitative, cognitive aspects.

Current trends in HR

Human resource management is a process of bringing people and organizations together so

that the goals of each other are met. The role of HR manager is shifting from that of a

protector and screener to the role of a planner and change agent. Personnel directors are the

new corporate heroes. The name of the game today in business is personnel. Nowadays it is

not possible to show a good financial or operating report unless your personnel relations are

in order.Over the years, highly skilled and knowledge based jobs are increasing while low

skilled jobs are decreasing. This calls for future skill mapping through proper HRM

initiatives.Indian organizations are also witnessing a change in systems, management cultures

and philosophy due to the global alignment of Indian organizations. There is a need for multi

skill development. Role of HRM is becoming all the more important.

Functions of H. R

1. Recruitment & Selection

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2. Training and Development (People & Organization)

3. Performance Evaluation and Management

4. Promotions

5. Redundancy

6. Industrial and Employee Relations

7. Record keeping of all personal data.

8. Compensation, pensions, bonuses etc in liaison with Payroll

9. Confidential advice to internal 'customers' in relation to problems at work

“Performance Appraisal” – A Systematic Approach

“Performance Appraisal”, also known as employee appraisal, is a method by which the

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

time).

“Performance Appraisal” is a part of career development.

“Performance Appraisal”s are regular reviews of employee performance within

organizations.

Generally, the aims of a “Performance Appraisal” are to:

1. Give feedback on performance to employees.

2. Identify employee training needs.

3. Document criteria used to allocate organizational rewards.

4. Form a basis for personnel decisions: salary increases, promotions, disciplinary actions,

etc.

5. Provide the opportunity for organizational diagnosis and development.

6. Facilitate communication between employee and administration

7. Validate selection techniques and human resource policies to meet federal Equal

Employment Opportunity requirements.

“Performance Appraisal” is a management tool which is helpful in motivating and effectively

utilizing human resources. Assessment of human potential is difficult, no matter how well

designed and appropriates the performance planning and appraisal system is, the

“Performance Appraisal” system should:

be correlated with the organizational mission, philosophies and value system;

cover assessment of performance as well as potential for development;

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http://en.wikipedia.org/wiki/Training

http://en.wikipedia.org/wiki/Organization

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take care of organizational as well as individual needs; and

help in creating a clean environment by

- Linking rewards with achievements,

- generating information for the growth of the employee as well as of the organization,

- suggesting appropriate person-task matching and career plans.

Feedback is an important component of “Performance Appraisal”. While positive feedback is

easily accepted, negative feedback often meets with resistance unless it is objective, based on

a credible source and given in a skilful manner.

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THE PROCESS OF PERFORMANCE APPRAISAL

(a) “Performance Appraisal” System: The Process

“Performance Appraisal” involves an evaluation of actual against desired performance. It also

helps in reviewing various factors which influence performance. Managers should plan

performance development strategies in a structured manner for each employee. In doing so,

they should keep the goals of the organization in mind and aim at optimal utilization of all

available resources, including financial. “Performance Appraisal” is a multistage process in

which communication plays an important role.

Craig, Beatty and Baird (1986) suggested an eight-stage “Performance Appraisal” process:

(i) Establishing Standards and Measures

The first step is to identify and establish measures which would differentiate between

successful and unsuccessful performances. These measures should be under the control of the

employees being appraised. The methods for assessing performance should be decided next.

Basically, management wants to:

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know the behavior and personal characteristics of each employee; and

assess their performance and achievement in the job.

There are various methods available for assessing results, behavior and personal

characteristics of an employee. These methods can be used according to the particular

circumstances and requirements.

(ii) Communicating Job Expectations

The second step in the appraisal process is communicating to employees the measures and

standards which will be used in the appraisal process. Such communication should clarify

expectations and create a feeling of involvement.

(iii) Planning

In this stage, the manager plans for the realization of performance expectations, arranging for

the resources to be available which are required for attaining the goals set. This is an enabling

role.

(iv) Monitoring Performance

“Performance Appraisal” is a continuous process, involving ongoing feedback. Even though

performance is appraised annually, it has to be managed 'each day, all year long.' Monitoring

is a key part of the “Performance Appraisal” process. It should involve providing assistance

as necessary and removing obstacles rather than interfering. The best way to effectively

monitor is to walk around, thus creating continuous contacts, providing first-hand

information, and identifying problems, which can then be solved promptly.

(v) Appraising

This stage involves documenting performance through observing, recalling, evaluating,

written communication, judgment and analysis of data. This is like putting together an

appraisal record.

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(vi) Feedback

After the formal appraisal stage, a feedback session is desirable. This session should involve

verbal communication, listening, problem solving, negotiating, compromising, conflict

resolution and reaching consensus.

(vii) Decision Making

On the basis of appraisal and feedback results, various decisions can be made about giving

rewards (e.g., promotion, incentives, etc.) and punishments (e.g., demotion). The outcome of

an appraisal system should also be used for career development.

(viii) Development of performance

The last stage of “Performance Appraisal” is 'development of performance,' or professional

development, by providing opportunities for upgrading skills and professional interactions.

This can be done by supporting participation in professional conferences or by providing

opportunities for further study. Such opportunities can also act as incentives or rewards to

employees.

The ESSENTIALS of an effective performance system are as follows:

Documentation – means continuous noting and documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings.

Standards / Goals – the standards set should be clear, easy to understand, achievable, motivating, time bound and measurable.

Practical and simple format - The appraisal format should be simple, clear, fair and

objective. Long and complicated formats are time consuming, difficult to understand, and do

not elicit much useful information.

WHAT SHOULD A PERFORMANCE SYSTEM BE?

Correlated with the organization's philosophies and mission

Cover assessment of performance as well as potential for development

Look after the needs of both the individual and the organization

Help create a clean environment

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Rewards linked to achievements

Generate information for personnel development and career planning

suggesting appropriate person-task matching

HOW CAN THE “PERFORMANCE APPRAISAL” SYSTEM HELP?

Promote better understanding of an employee's role and clarity about his or her

functions

Give a better understanding of personal strengths and weaknesses in relation to

expected roles and functions

Identify development needs of an employee

Establish common ground between the employee and the supervisor

Increase communication

Provide an employee with the opportunity for self-reflection and individual goal

setting

Help an employee internalize the culture, norms and values of the organization. This

helps develop an identity with and commitment to the organization and prepares an

employee for higher-level positions in the hierarchy

Assist in a variety of personnel decisions

APPROACHES IN “PERFORMANCE APPRAISAL”

Intuitive

Self-appraisal

Group

Trait

Achievement of results

TECHNIQUES OF “PERFORMANCE APPRAISAL”

Easy appraisal method

Graphic rating scales

Field review method

Forced choice rating method

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Critical incident appraisal method

Management by objectives

Work standard approach

Ranking methods

“PERFORMANCE APPRAISAL” SYSTEMS

PROBLEMS

Measurement Judgement Policy Organization

Deciding what to

evaluate

Appraising

performance

Using the results of the

appraisal

Recognizing how

managers work and

the organization

culture

SYMPTOMS

Ambiguity in roles

and responsibilities

of each job

Job performance is

difficult to quantify

No clear statement

of overall objectives

of units or the

organization

Appraisal contains

only numerical

indices

Disagreement on

ratings

Official review

changes ratings

Appeals,

grievances,

accusations of bias,

discrimination

Top management

fails to reward

managers who are

excellent in staff

assessment and

development

Marginal performers

receive promotions or

salary increases

Appraisal forms

not completed

Managers com

plain about time

needed

System seen as

belonging to the

designers, not the

users

Personnel/HR

specialists take

enforcer not adviser

role

system revised

frequently

POTENTIAL CURES

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Job analysis and

credible job

description

Outcomes of each

job identified

Overall goals set

for units and the

organization

Train managers to

make documented

judgements

Observable,

behaviorally based

criteria

Performance

documented over

time

rater training and

practice

Effective

communication of

performance

expectations

Top management

actually uses

“Performance

Appraisal” itself

Polices for

“Performance

Appraisal” consistently

applied

performance-

contingent reward

system operates

Implement

“Performance

Appraisal” using the

Performance

Management (PM)

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CHAPTER II

Literature Review

Prashanta Athma (2000), in his Ph D research submitted at Usmania University

Hyderabad, “Performance of Public Sector Banks – A Case Study of State Bank of

Hyderabad, made an attempt to evaluate the performance of Public Sector

Commercial Banks with special emphasis on State Bank of Hyderabad. The period of

the study for evaluation of performance is from 1980 to 1993-94, a little more than a

decade. In this study, Athma outlined the Growth and Progress of Commercial

Banking in India and. analyzed the trends in deposits, various components of profits

of SBH, examined the trends in Asset structure, evaluated the level of customer

satisfaction and compared the performance of SBH with other PSBs, Associate Banks

of SBI and SBI. Statistical techniques like Ratios, Percentages, Compound Annual

rate of growth and averages are computed for the purpose of meaningful comparison

and analysis. The major findings of this study are that since nationalization, the

progress of banking in India has been very impressive. All three types of Deposits

have continuously grown during the study period, though the rate of growth was

highest in fixed deposits. A comparison of SBH performance in respect of resource

mobilization with other banks showed that the average growth of deposits of SBH is

higher than any other bank group. Profits of SBH showed an increasing trend

indicating a more than proportionate increase in spread than in burden. Finally,

majority of the customers have given a very positive opinion about the various

statements relating to counter service offered by SBH.

Zacharias Thomas(1997)Ph D Thesis, ‘Performance effectiveness of Nationalised

Bank- A Case Study of Syndicate Bank’, submitted to Kochin University (1997),

Thesis studied the performance effectiveness of Nationalized Bank by taking

Syndicate Bank as case study in his Ph.D thesis. Thomas has examined various

aspects like growth and development of banking industry, achievements of Syndicate

Bank in relation to capital adequacy, quality of assets, Profitability, Social Banking,

Growth, Productivity, Customer Service and also made a comparative analysis of 'the

performance effectiveness of Syndicate Bank in relation to Nationalized bank. A

period of ten years from 1984 to 1993-94 is taken for the study. This study is

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undertaken to review and analyze the performance effectiveness of Syndicate Bank

and other Nationalized banks in India using an Economic Managerial-Efficiency

Evaluation Model (EMEE Model) developed by researcher. Thomas in this study

found that Syndicate Bank got 5th Position in Capital adequacy and quality of assets,

15th in Profitability, 14th Position in Social Banking, 8th in Growth, 7th in

Productivity and 15th position in Customer Service among the nationalized banks.

Further, he found that five nationalized banks showed low health performance, seven

low priority performance and eleven low efficiency performance in comparison with

Syndicate Bank.

Singh R (2003), in his paper Profitability management in banks under deregulate

environment, IBA bulletin, No25, has analyzed profitability management of banks

under the deregulated environment with some financial parameters of the major four

bank groups i.e. public sector banks, old private sector banks, new private sector

banks and foreign banks, profitability has declined in the deregulated environment.

He emphasized to make the banking sector competitive in the deregulated

environment. They should prefer non-interest income sources.

Singla HK (2008), in his paper,’ financial performance of banks in India,’in

ICFAI Journal of Bank Management No 7, has examined that how financial

management plays a crucial role in the growth of banking. It is concerned with

examining the profitability position of the selected sixteen banks of banker index for a

period of six years (2001-06). The study reveals that the profitability position was

reasonable during the period of study when compared with the previous years. Strong

capital position and balance sheet place, Banks in better position to deal with and

absorb the economic constant over a period of time.

Das and Udaykumar Lal (2002), in his book Banking Reforms in Lead Bank

Scheme, (Deep and Deep Publication, new Delhi) was the critical evaluation of the

lead bank scheme in the light of banking sector reforms. Das in this book observed

that high level of NPAs, large number of un-remunerative branches, low productivity,

overstaff and archaic methods of operations have affected the profitability of public

sector banks. Das sincerely felt that the whole banking sector in India is to be

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revolutionized to cope with the changing dimensions of the satellite one world.

Further, he felt that the backward areas should be given more funds for investment in

priority sectors and more and more people should be brought under its coverage and

the procedures of extending credit should be simplified and there should be least

hassle cost.

Subramanian and Swami (1994) in their paper, Comparative performance of

publc sector banks in india” Prjanan, Vol. XXII, have analyzed and compared the

efficiency in six public sector banks, four private sector and three foreign banks for

the year 1996-97. Operational efficiency is calculatedin terms of total business and

salary expenditure per employee. The analysis revealed that higher per employee

salary level need not result in poor efficiency and business per employee efficiency

co-efficient was also calculated. Among the PSBs, Bank of Baroda registered the high

efficiency and operating profit per employee. Among the private sector banks Indus

Bank followed by Citibank Registered highest and second highest operating profit per

employee respectively. However, among the Nationalized Banks there existed wide

variations in efficiency. Frequent changes are order of the day for the topics of this

nature. Therefore, one should rely on latest information. Some organizations like,

RBI, IBA, SBI and ICRA have carried out several research studies on various issues

relating to banking and exclusive banking journals/periodicals like Bank Quest, The

Bankers, RBI occasional papers, RBI bulletins and general magazines like Business

Today, Business India, Finance India, have been publishing papers on various aspects

like NPAs, capital adequacy, branch expansion, credit dispensation, deposit

mobilization, service quality, technology, performance evaluation, etc. Same studies

and papers suitable to this study are being reviewed here.

SBI Research Department in 2000, through its paper “Performance analysis of

27 Public sector banks” published in SBI monthly review performance, Vol

XXXIX, was prepared by Economic Research Department of State Bank of India,

is to analyze the Performance of the 27 Public Sector Banks for the year 1999-2000

vis-a-vis the preceding year. Selecting four different categories of indicators-Business

Performance, Efficiency, Vulnerability and labor productivity indicators, carried out

the analysis. Altogether, 39 indicators were selected for this purpose. For the purpose

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of analysis, 27 PSBs disaggregated into four groups, namely, the SBI, ABs (7), the

SBGs (8), the NBs (19). During 1999-2000, the PSBs exhibited better show in terms

of several parameters studied above. Nevertheless, the problems of NPAs and capital

adequacy remain to be taken care of. Researchers in this paper opinioned that greater

operational flexibility and functional autonomy should be given to PSBs especially to

strengthen their capital base. Further, they felt that since net interest margin will

continue to remain compressed in a deregulated interest rate regime, a lot of effect

would have to be made to mitigate this through generation of non-interest income. As

far as NPAs are concerned, they believe' that, the outdated laws and regulations that

pose hindrance to banks in getting back their dues need to be suitably amended.

In a paper published in the Financial Express in 2004, titled “India’s Best

Banks” has been doing for several years through its annual exercise to evaluate and

rate Indian banks. They claim that this survey is a comprehensive one, which

evaluates the performance of private, public, Indian, and foreign Banks operating in

India. With the objective of making the comparison more meaningful, Banks were

categorized into Public Sector Banks, New Private Sector Banks and Foreign Banks.

Financial information for the year ending March 31st, 2002 and March 31, 2003

relating to each of the banks falling into the aforesaid categories was collected from

the data available from RBI. Five major criteria were identified against which the

banks were ranked. 'These criteria are (1) Strength and soundness (ii) Growth, (iii)

Profitability, (iv) Efficiency/Productivity, and (v) Credit quality. Considering the

current banking, industrial and over-all economic scenario, pertinent weights were

assigned to each of the major criteria. In the first category of "State-Run" or Public

Sector Banks, State Bank of Patiala and Andhra Bank is the top two. In the category

of best old private sector banks, the magazine ranks the Jammu and Kashmir Bank

and Karur Vysya Bank as the first best and second best. In the category of 'New'

Private Banks, HDFC as number one and ICICI Bank at number two. Finally, in the

category of Foreign Banks, the magazine ranks Standard Chartered Bank and Citi

Bank at the top two slots.

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CHAPTER III

Data Analysis

1. Are you aware of the objective of the performance appraisal system?

OPTIONSNO OF

RESPONDENT(SAMPLE SIZE 50)

PERCENTAGE

VERY MUCH42 84%

SOME WHAT7 14%

DON’T KNOW1 2%

very much some what don't know0

10

20

30

40

50

60

70

80

90

INTERPRITATION- 84% Employees are aware of the object of the performance appraisal system.

Page 21


2. Performance appraisal helps the organization in achieving goal.

OPTIONSNOS OF RESPONDENT(Sample size 50)

PERCENTAGE

YES 38 76%

NO 10 20%

DON’T KNOW 2 4%

yes no don't know0

10

20

30

40

50

60

70

80

INTERPRITATION - 76% Employees say yes that performance

appraisal helps the organization in achieving goal.

Page 22


3. Hold meeting in the beginning of the year to explain & clarify activity task & goals to be achieved.


PERCENTAGE

YES 39 78%

NO 11 22%

yes no0

10

20

30

40

50

60

70

80

90

INTERPRITATION-: 78% Employees say that yes organized meetings helps goal and task. While the other 22% employees that is not very much helpful.

Page 23


4. Organization has to make a fixed duration for performance appraisal.

OPTIONSNOS OF RESPONDENT (Sample size 50)

PERCENTAGE

YES 40 80%

NO 10 20%

yes no0

10

20

30

40

50

60

70

80

90

INTERPRITATION -: 80% Employees agree with that is organization should have

to make a fixed duration for performance appraisal. While the other 20% employees

do not agree with this statement.

Page 24


5. Satisfied for point allocation on the basis of KRA’s & managerial dimension.


PERCENTAGE

FULLY SATISFIED 20 40%

SATISFIED 26 52%

DISSATISFIED 2 4%

UNCERTAIN 2 4%

fully satisfied satisfied dissatisfied uncertain0

10

20

30

40

50

60

INTERPRITATION-: 40% Employees are fully satisfied for point allocation on the

basis of KRA’s and managerial dimension.

Page 25


6. Performance appraisal affects the working efficiency of employees.


PERCENTAGE

YES 42 84%

NO 8 16%

yes no0

10

20

30

40

50

60

70

80

90

INTERPRITATION-: 84% Employees say that yes performance appraisal system affect the working efficiency of employee. While the other 16% employees do not agree with this statement.

Page 26


7. Appraisal system is able to develop high result orientation approach.


PERCENTAGE

YES 47 94%

NO 3 6%

yes no0

10

20

30

40

50

60

70

80

90

100

INTERPRITATION-: 94% Employees say that yes the appraisal system is able to

develop high result orientation approach. While the other 6% employees do not agree

with us.

Page 27


8. The systems will also contribution in potential appraisal.


PERCENTAGE

YES36 72%

NO10 20%

DON’T KNOW4 8%

yes no don't know0

10

20

30

40

50

60

70

80

INTERPRITATION-: 72% employees think that the systems will also Contribution

in potential appraisal.

Page 28


9. Promotion process in the organization is based on –


PERCENTAGE

PERFORMANCE 2 4%

EXPERIENCE 6 12%

BOTH 42 84%

Performance experience both0

10

20

30

40

50

60

70

80

90

INTERPRITATION-: 4% employees say that promotion says that process in the organization is based on performance, 12% employees say that based on experience and 84% say both.

Page 29


10 .The present performance appraisal system is transparent & Free from bias.


PERCENTAGE

YES 42 84%

NO 8 16%

YES NO0

10

20

30

40

50

60

70

80

90

INTERPRITATION-: 84% Employees agree with this statement that the

present performance appraisal system is transparent and free from bias.

Page 30


11 .Satisfied with the current performance appraisal system.

OPTIONSNOS OF

RESPONDENT(Sample size 50)

PERCENTAGE

HIGHLY SATISFIED 27 54%

SATISFIED 18 36%

DISSATISFIED 1 2%

JUST SATISFIED 4 8%

Highly satisfied Satisfied Dissatisfied Just satisfied0

10

20

30

40

50

60

INTERPRITATION-: 54% Employees are highly satisfied with the current Performance

appraisal system. While 36% employees are satisfied with the current performance appraisal

system.

Page 31


Page 32


Bibliography

www.infoindia.com

www.proindia.co.in

www.sipnsurf.com

www.7506259405.com

Page 33

http://www.7506259405.com/

http://www.sipnsurf.com/

http://www.proindia.co.in/

http://www.infoindia.com/


Annexure

QUESTIONNAIRE

(PERFORMANCE APPRAISAL SYSTEM AT AXIS BANK.)

1) Are you aware of the objective of the performance appraisal system?

a) Very much

b) Some what

c) Don’t know

2) Performance appraisal helps the organization in achieving goal?

a) Yes

b) No

c) Can’t say

3) Do you hold meeting in the beginning of the explain & clarify activity task & goals to be

achieved?

a) Yes

b) No

4) Should organization have to make a fixed duration for performance appraisal?

a) Yes

b) No

5) To what extent are you satisfied for point allocation on the basis of KRA’s & managerial

dimension?

a) Fully satisfied

b) Satisfied

c) Dissatisfied

d) Uncertain

Page 34


6) Do performance appraisal affect the working efficiency of employee?

a) Yes

b) No

7) Whether the appraisal system is able to able to develop high result

a) Yes

b) No

8) Do you think that the system wills also contribution in potential appraisal?

a) Yes

b) No

c) Can’t say

9) Promotion process in the organization is based on-

a) Performance

b) Experience

c) Both

10) Do you think that the present that the present performance appraisal system is transparent &

free bias?

a) Yes

b) No

11) Are you satisfied with the current performance appraisal system?

a) Highly satisfied

b) Satisfied

c) Just satisfied

d) Dissatisfied

Page 35

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