A

SUMMER TRAINING PROJECT REPORT

ON

“PERFORMANCE APPRAISAL”

AT

RUCHIRA PAPERS LTD.

Submitted in partial fulfillment of the requirement

For the award of the degree

Of

MASTERS OF BUSINESS ADMINISTRATION

SESSION ( 2009 - 2011)

SUBMITTED TO: SUBMITTED BY:

KURUKSHETRA UNIVERSITY,

KURUKSHETRA MBA-3RD SEM

E-max Business School Badhauli (Ambala), HARYANA

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

1
 DECLARATION

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

School, Badhauli, here by declare the summer training report on “Performance
Appraisal” submitted to Kurukshetra University, Kurukshetra in partial fulfillment of
Degree of Master’s of Business Administration is the original work conducted by
me.

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

This summer training report is not being submitted to any other University for
award of any other Degree,Diploma and Fellowship.

2
ACKNOWLEDGEMENT

3
 CONTENTSTABLE OF CONTENT

S.NO. TITLE PAGE NO.

1. LITERATURE REVIEW
1.1MEANING

1.2CHARACTERISTICS
1.3ROLE

1.4PERFORMANCE MANAGEMENT CYCLE

1.5OBJECTIVES

1.6TYPES
1.7PERFORMANCE APPRAISAL CYCLE

1.8METHODS
1.9BENEFITS

COMPANY PROFILE
2.1 OVERVIEW OF THE SERUM

2.2 PRODUCT PROFILE OF SERUM

2.3 SWOT ANALYSIS
2.4 INFRASTUCTURE
2.5 PROCESS

2. RESEARCH METHODOLOGY
3.1OBJECTIVES OF STUDY

3.2COLLECTION OF DATA
3.3SELECTING THE METHODOLOGY FOR EMPLOYEE

3.4LIMITATION OF STUDY

3. DATA ANALYSIS

4
4. FINDINGS

RECOMMENDATIONS AND RESULTS

ANNEXURE

BIBLIOGRAPHY

5
 CHAPTER-1
INTRODUCTION TO
PROJECT

6
 PERFORMANCE APPRAISAL

Performance appraisal may be defined as a structured formal interaction between

a subordinate and supervisor, that usually takes the form of a periodic interview
(annual or semi-annual), in which the work performance of the subordinate is
examined and discussed, with a view to identifying weaknesses and strengths as
well as opportunities for improvement and skills development. Performance
appraisal, also known as employee appraisal, is a method by which the job
performance of an employee is evaluated (generally in terms of quality, quantity,
cost and time). Performance appraisal is a part of career development.

Performance appraisals are regular reviews of employee performance within

organizations.

Generally, the aims of a performance appraisal are to:

• Give feedback on performance to employees.

• Identify employee training needs.
• Document criteria used to allocate organizational rewards.
• Form a basis for personnel decisions: salary increases, promotions, disciplinary
actions, etc.
• Provide the opportunity for organizational diagnosis and development.
• Facilitate communication between employee and administration

Validate selection techniques and human resource policies to meet federal Equal
Employment Opportunity requirements.

7
 Performance Appraisal Summary

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

employees, and evolving a training plan for them, also, serves to meet other
objectives. Performance appraisal satisfies the psychological needs individuals
have to know how they are performing their job and increases employees' job
satisfaction and morale by letting them know that the manager is interested in their
progress and development. Systematic performance appraisal also provides both
the firm and the employee a careful evaluation, rather than a snap judgement of an
employee's performance. Many firms use performance appraisals to plan
placements and transfers and to provide input into decisions regarding salary
increases, promotions, and transfers. Finally, performance appraisals may be
used as a basis for the coaching and counselling of individual employees by their
superiors. To summarize the uses of performance appraisal:

• Performance improvement
• Compensation
• Placement
• Training & development needs assessment
• Career planning
• Job design error detection

8
CHARACTERISTICS OF AN APPRAISAL SYSTEM

Performance appraisal cannot be implemented successfully unless it is accepted

by all concerned. There should be a common and clear understanding of the
distinction between evaluation and appraisal. As Patten (1982) argues, evaluation
aims at 'objective' measurement, while appraisal includes both objective and
subjective assessment of how well an employee has performed during the period
under review. Thus performance appraisal aims at 'feedback, development and
assessment.' The process of performance appraisal should concentrate on the job
of an employee, the environment of the organization, and the employee him- or
herself. These three factors are inter-related and inter-dependent. Therefore, in
order to be effective, the appraisal system should be individualized, subjective,
qualitative and oriented towards problem-solving. It should be based on clearly
specified and measurable standards and indicators of performance. Since what is
being appraised is performance and not personality, personality traits which are
not relevant to job performance should be excluded from the appraisal framework.

Some of the important considerations in designing a performance appraisal system

are:

 Goal The job description and the performance goals should be structured,
mutually decided and accepted by both management and employees.

 Reliable and consistent Appraisal should include both objective and subjective
ratings to produce reliable and consistent measurement of performance.

9
 Practical and simple format The appraisal format should be practical, simple
and aim at fulfilling its basic functions. Long and complicated formats are time
consuming, difficult to understand, and do not elicit much useful information.

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

structured manner, informal contacts and interactions can also be used for
providing feedback to employees.

 Participatory and open An effective appraisal system should necessarily

involve the employee's participation, usually through an appraisal interview with
the supervisor, for feedback and future planning. During this interview, past
performance should be discussed frankly and future goals established. A strategy
for accomplishing these goals as well as for improving future performance should
be evolved jointly by the supervisor and the employee being appraised. Such
participation imparts a feeling of involvement and creates a sense of belonging.

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

performance appraisal system. Otherwise, the process lacks impact.

 Feedback should be timely Unless feedback is timely, it loses its utility and
may have only limited influence on performance.

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

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

 Feedback must be noticeable The staff member being appraised must be

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

 Relevance and responsiveness Planning and appraisal of performance and

consequent rewards or punishments should be oriented towards the objectives of
the programme in which the employee has been assigned a role. For example, if

10
the objectives of a programme are directed towards a particular client group, then
the appraisal system has to be designed with that orientation.

 Commitment Responsibility for the appraisal system should be located at a

senior level in the organization so as to ensure commitment and involvement
throughout the management hierarchy.

WHAT IS THE ROLE OF PERFORMANCE APPRAISAL?

We've seen from previous discussions, that people are one of a company's most
valuable assets. While most assets depreciate over time, people, viewed as
assets, may actually appreciate. One of the manager's major responsibilities is to
improve and update the knowledge and skills of employees -- appreciation of
assets. Performance appraisal plays a significant role as a tool and technique of
organizational development and growth. In essence, effective appraisal systems
provide both evaluation and feedback.

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

performance does not meet the organizational standards -- whereas feedback is
necessary to inform employee about those performance gaps.

From the employee's perspective, performance appraisal informs them about what
is required of them in order to do their jobs, it tells them how well they have

11
achieved those objectives and helps them take corrective action to improve their
performance, and, finally, it may reward them for meeting the required standards.

The firm, on the other hand, needs a performance appraisal system in order to
establish principles of managerial accountability. Clearly, where employees are
given responsibilities and duties, they need to be held accountable. One of the
functions of performance appraisals is to ensure that people are accountable for
their organizational responsibilities.

Perhaps the most significant benefit of performance appraisals is the opportunities

they provide supervisors and subordinates to have one-on-one discussions of
important work issues. During appraisals, subordinates and supervisors can focus
on work activities and goals, identify and correct existing problems, and encourage
better future performance.

Performance Appraisal and Motivation

Motivational research has recognized the power of recognition as an incentive

(see Maslow and the Expectancy Theory of Motivation). Performance appraisals
provide employees with recognition for their work efforts. The appraisal system
provides the supervisor with an opportunity to indicate to employees that the
organization is interested in their performance and development. This recognition
can have a positive motivational influence. on the individual's sense of worth,
commitment and belonging.

Performance Appraisal and Training and Development

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

excellent opportunity for a supervisor and subordinate to recognize and agree
upon individual training and development needs.

12
Performance appraisal discussion may identify the presence or absence of work
skills. Further, the need for training can be made more relevant if attaining the
requisite job skills is clearly linked to performance outcomes. Consolidated
appraisal data can also help form a picture of the overall organizational training
requirements.

Performance Appraisal and Recruitment

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

used to monitor the success of a firm's recruitment and selection practices. From
this data, the firm can determine how well employees who were hired in the past
are performing.

Performance Appraisal and Employee Evaluation

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

major functions of management -- planning, organizing, leading and controlling -- it
is clear that evaluations (controlling) need to be done.

At its most basic level, performance appraisal is the process of examining and
evaluating the performance of employees. However, the need to evaluate is also a
source of tension as evaluative and developmental priorities appear to clash.
Some management experts have argued that appraisal cannot serve the needs of
evaluation and development at the same time.

Performance Appraisal and Total Quality Management (TQM)

13
With the advent of TQM (Total Quality Management) and the extensive use of
teams, traditional performance appraisal systems have come under some criticism.
For example, rather than motivating employees, conflict may be created when
appraisals are tied to merit pay and when that merit pay is based on a forced
ranking.

W. Edwards Deming, the founder of total quality management (TQM) has long
been associated with the view that performance appraisals ought to be eliminated.
Many TQM proponents claim that performance appraisals are harmful.

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

adequate administrative support, comprehensive job analysis / description and
training for appraisers, conventional performance appraisal processes risk
becoming just another of the many bureaucratic rituals supervisors and
subordinates must endure.

14
THE PERFORMANCE
MANAGEMENT
CYCLE

15
T h e P e rfo r
M anagem
C y c le
16
 Objectives of appraisal

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

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

• To help the management in exercising organizational control.

• Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

• To indentify the need of training and development programs for the employees. To
review the performance of the employees over a given period of time.
• To judge the gap between the actual and the desired performance.
• To help the management in exercising organizational control.
• Helps to strengthen the relationship and communication between superior –
subordinates and management – employees.
• To diagnose the strengths and weaknesses of the individuals so as to identify the
training and development needs of the future.
• To provide feedback to the employees regarding their past performance.
• Provide information to assist in the other personal decisions in the organization.
• Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.
• To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development.
• To reduce the grievances of the employees.

Some specific positive objectives of performance appraisal are:

17
 To review past performances
 To assess training needs
 To help develop individuals
 To audit the skills within an organization
 To set targets for future performance
 To identify potential for promotion

Types of Appraisals
The following is a description of the types of performance appraisals:
 1. Probationary/Trial - End of probation or trial period.
 2. Extension of Probation Period - At time of request for extension.
 3. Annual - One year from date of last review.
 4. Special - Beginning at end of special probation or when performance
substantially dropped during a review period.
 5.Change in Classification Promotion/ demotion/ transfer, etc.
 6. Separation - Separation from County service, when it has been more than nine
(9) months since the affected employee's performance has been evaluated

DIFFERENCE BETWEEN PERFORMANCE APPRAISAL AND

18
 PERFORMANCE MANAGEMENT SYSTEM:

 Performance Appraisal Performance management

 No customer involvement
 Static format
 Activities Based
 Results Only
 Job Description Focus
 Annual Event
 Top down Evaluation
 Retrospective Evaluation
 Direct customer involvement
 Flexible Format
 Objective/ Competencies Based
 Result/ process Measurement
 Linked To Strategic Priorities
 Team Participation
 On Going Interaction
 Multiple Resources of feedback
 Retrospective and Prospective
 Performance Appraisal is related to the targets assigned to the employee.

PERFORMANCE APPRAISAL PREPARATION

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

dependable measures. Considering that progression along pay scales might be

19
 effected by appraisal outcomes, any such system must be perceived to be (and
actually be) fair and objective.

Some characteristics to look for in an appraisal process are:

• Objectivity / measurability
• Work relatedness of measures
• Measures are within the appraisee's control
• Measures are attainable
• Contains an appeal mechanism
• Management commitment to the entire process -- training provided where
necessary
• Be simple and not take appraisers nor appraisees unduly away from their core
tasks
• Be sophisticated enough to ensure appraisees' perceptions of fairness
• Measuring clear competencies only
• Provides a feedback mechanism with a link to training and development

PERFORMANCE STANDARDS

Performance standards are the benchmarks against which performance is

measured. These standards must be based on job analyses and be directly related
to the desired results of each job.

If pay increases are dependent upon the outcome of the performance appraisal,
there can be no room for subjective, nebulous performance indicators. Great
divisiveness, jealousy and demotivation can be caused by poor performance pay
systems using inadequate or inappropriate benchmarks.

THE PERFORMANCE APPRAISAL CYCLE

 Discussion
 Informal

20
 Review
 Preparation
The preparation section of the cycle covers the pre-meeting work of the appraisal
and the appraise who both review results in the light of previously agreed
objectives and decide on any matters they want to raise at the appraisal
discussion.
 The formal appraisal section of the cycle is concerned with:
 Conducting the appraisal discussion;
 Overcoming any problem emerging during the appraisal.
 Concluding the appraisal by recording the results, agreeing action plans and,
as necessary, obtaining another view from the appraiser’s manager to ensure
that a fair and thorough appraisal has taken place.
The information review section of the cycle consists of:
 Information discussions that take place as and when required and may involve
updating objectives or performance plans;
 The process of coaching and counseling, which help to implement the
development and performance improvement programme.
 When appraisal should take place?

Formal appraisal discussions are often held annually but some fast moving organizations
prefer to have them twice a year or even more frequently, say at quarterly intervals. When
employees are working on some projects, as in a consultancy firm, there may be an
appraisal after every assignment. Ensuring that appraisal is a continuing process. To ensure
that appraisal is not just seen as a one- a-year event to be got over as quickly as possible it
is necessary to emphasize the continuing nature of the process in briefing and training.
Appraiser & appraiser should understand that feedback & appraisal are in effect everyday
occurrences.

PERFORMANCE APPRAISAL METHODS

21
 1. Graphic rating scale
2. Paired Comparison
3. Forced choice approach
4.Easy Appraisal
5. BARS
6. Checklist method
7. Critical incident method
8. 3600 appraisal
9.Mixed method

Methods
Graphic Rating Scale: A performance appraisal that rates the degree to which
the employee has achieved various characteristics.

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

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

degree of achievement.

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

performance.

4)Some forms allow for additional comments.

Paired-comparison Approach: A performance appraisal that measures the

relative performance of employees in a group.

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

employees to come up with a best employee.

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

group.

22
Forced-choice Approach: A performance appraisal that presents the
appraiser with sets of statements describing employee behavior; the appraiser
must choose which statement is most characteristic of the employee and which is
least characteristic.

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

employee’s performance. The easy appraisal is often used along with other types
of appraisals, notably graphic rating scales. They provide an opportunity for
supervisors to describe aspects of performance not thoroughly covered by an
appraisal questionnaire.

The dis-advantage of this method is that their quality

depends on the supervisor’s writing skills.

Behaviorally Anchored Rating Scales:

A performance appraisal in which the employee is rated on scales containing
statements describing performance in several areas.

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

positions with in that organization.

Some organizations pay behavioral scientists or organizational psychologists to

create behaviorally anchored rating scales.

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

supervisor.

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

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

The human resources department has a key for scoring the items resulting in a
rating of the employee’s performance.

23
Critical-incident Appraisal: A performance appraisal in which the supervisor
keeps a record of incidents that show positive and negative ways the employee
has acted; the supervisor uses this record to assess the employee’s performance.

Some of the important forms of ranking for performance appraisal are given below,
based on Oberg, 1972; and Monga, 1983:
(a) Alteration ranking method The individual with the best performance is chosen
as the ideal employee. Other employees are then ranked against this employee in
descending order of comparative performance on a scale of best to worst
performance. The alteration ranking method usually involves rating by more than
one assessor. The ranks assigned by each assessor are then averaged and a
relative ranking of each member in the group is determined. While this is a simple
method, it is impractical for large groups. In addition, there may be wide variations
in ability between ranks for different positions.

(b) Paired comparison The paired comparison method systematizes ranking and
enables better comparison among individuals to be rated. Every individual in the
group is compared with all others in the group. The evaluations received by each
person in the group are counted and turned into percentage scores. The scores
provide a fair idea as to how each individual in the group is judged by the
assessor.

(c) Person-to-person rating In the person-to-person rating scales, the names of the
actual individuals known to all the assessors are used as a series of standards.
These standards may be defined as lowest, low, middle, high and highest
performers. Individual employees in the group are then compared with the
individuals used as the standards, and rated for a standard where they match the
best. The advantage of this rating scale is that the standards are concrete and are
in terms of real individuals. The disadvantage is that the standards set by different
assessors may not be consistent. Each assessor constructs their own person-to-
person scale which makes comparison of different ratings difficult.

24
(d) Checklist method The assessor is furnished with a checklist of pre-scaled
descriptions of behaviour, which are then used to evaluate the personnel being
rated (Monga, 1983). The scale values of the behaviour items are unknown to the
assessor, who has to check as many items as she or he believes describe the
worker being assessed. A final rating is obtained by averaging the scale values of
the items that have been marked.

(e) Behaviourally anchored rating scales (BARS) This is a relatively new technique.
It consists of sets of behaviourial statements describing good or bad performance
with respect to important qualities. These qualities may refer to inter-personal
relationships, planning and organizing abilities, adaptability and reliability. These
statements are developed from critical incidents collected both from the assessor
and the subject.

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

employees were they to be promoted. The individual whose potential is to be
assessed has to work on individual as well as group assignments similar to those
they would be required to handle were they promoted. The judgment of observers
is pooled, and paired comparison or alteration ranking is sometimes used to arrive
at a final assessment. The final assessment helps in making an order-of-merit
ranking for each employee. It also involves subjective judgment by observers.

360-degree Performance Appraisal: Evaluating Employees From All Angles

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

and simplistic. At times, they can also be deemed to be "political". In an attempt to
improve this methodology, some companies have turned to 360-degree appraisals.
360 appraisals pool feedback from a department's internal and external customers
to ensure a broader, more accurate perspective of an employee's performance.

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

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

25
Using internal and external clients

360-degree performance appraisals offer an alternative by which organizations

may gain more useful performance information about employees. Because all
clients/customers an employee comes into contact with can conceivably have input
into the performance appraisal, this methodology can also makes them more
accountable to their customers.

Using a courtroom metaphor, one could say that, rather than having a single
person play judge, a 360-degree appraisal acts more like a jury. People who
actually deal with the employee each day have an opportunity to create a pool of
information from which the appraisal is written. Internal clients may include
supervisors, subordinates, co-workers, and representatives from other
departments. External customers may include clients, suppliers, consultants and
customers.

Perceived fairness

Given the use of a wide variety of sources for information in the 360-appraisal
process, this method provides a broader view of the employee's performance.
Frequently, the employee on whom the appraisal is being done (the ratee) will feel
that the process is more fair.

Validity

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

employees cannot hide as easily in 360-degree appraisals.

26
Employee development

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

of their work performance with the perception of others. As such, the method
facilitates employee self-development. Feedback from one's peers is more likely to
lead to changed behaviors.

Accountability to customers

A 360-degree appraisal process provides a formalized communication link

between the employee being evaluated and their customers. These people now
have feedback into the employee's performance rating. As such, the process is
likely to make the employee more accountable to his or her various internal and
external customers. Furthermore, organizations can also use this feedback to
create more customer-oriented goals for the following year.

The raters: how many and who?

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

is determining how many raters should be involved. Next, the organization must
decide who should do the rating. Generally speaking, less than five raters limits the
perspective while more than ten raters is likely to make the appraisal system
complex and time consuming. A firm would be well advised to develop a workable
definition of what constitutes a peer, an internal customer, an external customer, a
supervisor, etc. For example, to be useful, the customer ought to be one who has
significant interactions with the ratee.

Some organizations permit the ratee to develop a list of key internal and external
customers that he or she interacts with. The ratee then recommends five to ten of
these individuals to serve as raters. In this process, the supervisor still retains the
ultimate responsibility for the appraisal and therefore ensures that appropriate

27
raters are selected. The ratee is thus prevented from stacking the deck with
supportive customers.

Another option has the raters selected at random from the ratee's team by a
computer-generated system. Those selected are then notified by E-mail to
participate in the appraisal.

Limitations on the use of external clients

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

mind that reviewing that organization's employees' performance is not the
customer's business. To ensure the customers' cooperation, the process should be
a mutually beneficial process.

Furthermore, the various external customers would ideally evaluate the ratee only
on the behaviors or work incidents that they have directly observed. This, of
course, also holds for internal raters.

Summarizing the data

Once all raters have supplied their appraisals, the employee's supervisor is
generally responsible for summarizing the data and determining the final
performance rating.

After summarizing the data, the supervisor conducts the formal appraisal interview
with the ratee.

Another variation of the summary process makes the ratee responsible for
summarizing the feedback data from the raters. The ratee then submits a summary
analysis to his or her supervisor. The ratee and the supervisor then meet to
determine the ratee's final performance rating and development plan.

28
Rater confidentiality

Organizations must decide whether the feedback from the various raters should be
kept anonymous or be identified to the employee. Sometimes raters give fuzzy
feedback because of the fear that the feedback might come back to them.

One rule rule might be that no rater can give negative feedback in the appraisal
unless that rater has previously given the feedback directly to the ratee. Most
organizations should start with a policy of confidentiality until sufficient
understanding, maturity and organizational trust is achieved.

29
 Benefits of Performance appraisal

For the organization:

The organization comes to know the true position of the employees working
capacities and the problems they face while working in the organization. This
performance appraisal system also acts as a motivating factor for the employees,
which helps the organization to get better results.

For the appraise:

The appraise fells themselves an important part of the organization, they get a
chance to express their views in front of their superiors; they get a platform to
express their ideas. The employee comes to know the truth about:
 To what extent they have achieved their objectives.
 In what respect their work has been most successful.
 Are there any aspects of their work, which they have not completed?

Are many other question, which make them

assess rightly. ..
Guidelines for effective performance evaluation interviews...

• emphasize positive aspects of employee performance

• tell employee that the purpose is to improve performance, not to discipline
• conduct the review in private
• review the performance formally at least annually (more frequently for those
performing poorly)
• make criticisms specific
• focus on performance, not personality
• stay calm; do not argue

30
• identify specific actions the employee can take to improve performance
• emphasize the evaluator’s willingness to assist the employee’s efforts to improve
performance
• end by stressing positive

Appraisal Process

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

been put together by The Corporation, the researcher has provided an overview of
the company’s performance appraisal process. The researcher felt that the
overview of the performance appraisal process would be necessary, since the
process provided a framework for the performance appraisal.

PRE-APPRASIAL STEPS

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

promotions, salary increases, administration or combination of these. It becomes
very necessary to begin by stating the objectives of evaluation programs very
clearly and precisely. The personal appraisal system should address the question
who, what, how of performance appraisal.

These questions are the components of these appraisal systems which are
discussed below individually.

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

The immediate superior, the head of the department or any other can rate
the performance of an individual. In addition to this, sum organizations follow the
system of self appraisal and /or appraisal by peers. A group, consisting of his
senior, peers and subordinates, can do appraisal, whoever is rating; he should be
trained and impartial. In most of the organizations the ratings is done by his
immediate superior who is considered the best person to understand his
subordinates strengths and weaknesses. Now a day some organizations are
following the method of self-appraisal.

31
THE “WHAT”OF APPRAISAL

It is considered with

 Creating and maintaining a satisfactory level of performance of employees

in their present job.
 Highlighting employee’s needs and opportunities of for personal growth and
development.
 Aiding in decision making for promotions, transfers, layoff and discharges.
 Promoting understanding between supervisors and his subordinates.
 Providing a useful criterion for determining the validity of selections and
training methods for attracting individuals of higher caliber to the organization.

THE ‘WHEN’ OF APPRAISAL

The ‘when’ answers the query the frequency of appraisal? The informal counseling
should occur continuously but the manager should discuss an employee’s work as
soon as he gets an opportunity to provide positive reinforcement and use poor
work as basis of training. The time and period of appraisal differs according to the
need and nature of the organization.

THE ‘WHERE’ OF APPRAISAL

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

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

THE ‘HOW’ OF APPRAISAL

Under this, the organization must decide what different kinds of methods are
available and which of these may be used for performance appraisal. On the basis
of comparative advantages and disadvantages, the nature and philosophy of

32
management and the needs of an organization; the method of appraisal is
decided.

The performance appraisal process at the companies has been stated by The
Corporation as consisting of four inter-related steps. The first step was to establish
a common understanding between the manager (evaluator) and employee
(evaluatee) regarding work expectations; mainly, the work to be accomplished and
how that work was to be evaluated. The second step was an ongoing assessment
of performance and the progress against work expectation. Provisions were made
for the regular feedback of information to clarify and modify the goals and
expectations, to correct unacceptable performance before it was too late, and to
reward superior performance with proper praise and recognition. Step three was
the formal documentation of performance through the completion of a performance
and development appraisal form appropriate to the job family.

The final step being the formal performance and development appraisal

discussion, based on the completed appraisal form and ending in the construction
of a Development Plan. Also noted was that The Corporation considered the
performance appraisal process to have been within the larger content of the other
performance related processes of work planning and salary action.

33
Reasons for Performance Appraisal Failures

Where performance appraisal fails to work as well as it should, lack of support from
the top levels of management is often cited as a major contributing reason.

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

disbelief in the effectiveness of the appraisal process.

It is crucial that top management believe in the value of appraisal and express their
visible commitment to it. Top managers are powerful role models for other
managers and employees.

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

system, must be acutely aware of the importance of political issues and symbolism
in the success of such projects.

Employee Participation

Employees should participate with their supervisors in the creation of their own
performance goals and development plans. Mutual agreement is a key to success.
A plan wherein the employee feels some degree of ownership is more likely to be
accepted than one that is imposed. This does not mean that employees do not
desire guidance from their supervisor; indeed they very much do.

Performance Management

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

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

34
Employees generally require more feedback, and more frequently, than can be
provided in an annual appraisal. While it may not be necessary to conduct full
appraisal sessions more than once or twice a year, performance management
should be viewed as an ongoing process.

Frequent mini-appraisals and feedback sessions will help ensure that employees
receive the ongoing guidance, support and encouragement they need.

Of course many supervisors complain they don't have the time to provide this sort
of ongoing feedback. This is hardly likely.What supervisors really mean when they
say this is that the supervision and development of subordinates is not as high a
priority as certain other tasks.

In this case, the organization may need to review the priorities and values that it
has instilled in its supervisory ranks. After all, supervisors who haven't got time to
monitor and facilitate the performance of their subordinates are like chefs who
haven't got time to cook, or dentists who are too busy to look at teeth. It just
doesn't make sense.

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

come to view their responsibilities in the same way. Just as worrying, employees
may come to see their own effort and commitment levels as something that needs
a bit of a polish up in the month or two preceding appraisals.

Performance appraisals purpose - and how to make it easier

Performance appraisals are essential for the effective management and evaluation
of staff. Appraisals help develop individuals, improve organizational performance,
and feed into business planning. Formal performance appraisals are generally
conducted annually for all staff in the organization. Each staff member is appraised
by their line manager. Directors are appraised by the CEO, who is appraised by
the chairman or company owners, depending on the size and structure of the
organization.

35
Annual performance appraisals enable management and monitoring of standards,
agreeing expectations and objectives, and delegation of responsibilities and tasks.
Staff performance appraisals also establish individual training needs and enable
organizational training needs analysis and planning.

Performance appraisals also typically feed into organizational annual pay and
grading reviews, which commonly also coincides with the business planning for the
next trading year.

Performance appraisals generally review each individual's performance against

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

Performance appraisals are also essential for career and succession planning -
for individuals, crucial jobs, and for the organization as a whole.

Performance appraisals are important for staff motivation, attitude and behaviour
development, communicating and aligning individual and organizational aims, and
fostering positive relationships between management and staff.

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

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

Job performance appraisals - in whatever form they take - are therefore vital for
managing the performance of people and organizations.

Managers and appraisees commonly dislike appraisals and try to avoid them. To
these people the appraisal is daunting and time-consuming. The process is seen
as a difficult administrative chore and emotionally challenging. The annual
appraisal is maybe the only time since last year that the two people have sat down
together for a meaningful one-to-one discussion. No wonder then that appraisals
are stressful - which then defeats the whole purpose.

36
Appraisals are much easier, and especially more relaxed, if the boss meets
each of the team members individually and regularly for one-to-one
discussion throughout the year.

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

hopes and dreams, life, the universe, the TV, common interests, etc., whatever,
makes appraisals so much easier because people then know and trust each other
- which reduces all the stress and the uncertainty.

Put off discussions and of course they loom very large.

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

The boss or or the appraisee can instigate this.

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

If you are a boss who rarely sits down and talks with people - or whose people are
not used to talking with their boss - then set about relaxing the atmosphere and
improving relationships. Appraisals (and work) all tend to be easier when people
communicate well and know each other.

So sit down together and talk as often as you can, and then when the actual formal
appraisals are due everyone will find the whole process to be far more natural,
quick, and easy - and a lot more productive too.

37
 Chapter-2

Company Profile

38
 Chapter -3
Research methodology

39
 RESEARCH DESIGN

The present research is exploratory; therefore the research design adopted is Flexible,
flexible enough to include any information that can give new insight into the subject or
change the scope of the study. Also termed Formulative Research studies, it involves
formulating a problem for a more precise investigation or of developing the working
hypothesis from an operational point of view. This research have inbuilt flexibility. The
problem, initially defined broadly, is transformed into one with more precise meaning
in exploratory studies.

So the methods adopted to collect the data are Questionnaire, and relevant
secondary data was also consulted.

The place chosen to gather data is offices, where everyone would be an Investor.
Any other place would not have been that efficient as time and money effort required
would have been substantially high.

40
 OBJECTIVES

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

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

3. To study the real performance appraisal process.

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

solving power.

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

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

types:
 1.Primary data is collected by questionnaire, interview and observations
 2.Secondary data is collected from the company records.
 Selection of samples is based on RANDOM REPRESENTATIVE SAMPLING from
all the departments and categories of employees
 The sample size is 100 EMPLOYEES
 Most of the questions are objective type except a few on comment and
suggestions regarding training
 A few respondents were interviewed to counter check their response in the
questionnaire to assess the clarity of questions and validity of answers.

41
 Limitations

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

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

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

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

42
 CHAPTER-4
DATA ANALYSIS

43
Analysis and Interpretation

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

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

graphical is to easily understand the relationships with different variables.

44
1)Analysis of appraisal of workers

1. Attendance-:

After appraising the employees I found that 95% of workers attains above 95%
attendance. The left 5%are job hoppers.

2. Job Knowledge-:

All the employees have good job knowledge and meets expectations.

3. Behavior-:

Behavior of 98% employees is excellent & good.

4. Behavior-:

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

the target is for a team not of an individual. So a good team player is a good
achiever. In these two categories 90% employees are good team players and 90%
employees are target achievers.

45
 100
98
96
Attendance
94
Behavior
92 Job Knowledge
90 Team Player
Target Achievement
88
86
84

2)Analysis of staff employee’s appraisal

I had taken five rating scales i.e.

OVERALL RATING
O =Outstanding = 100-91
A = Good = 90-76
B= Average = 75-51
C =Below Average = 50-35
D = Poor = Below 35

1. In outstanding category there is 5% employee

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

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

4. Employees having below average are 10%.

5. In the poor category no employee I found.

46
47

Learning

1. Function of HR department in a manufacturing firm.

2. Solving hurdles in the process of appraisal

3. Paper manufacturing process.

4. Manpower required for the company.

5. Solving employees’ problems.

6. Organizational structure

47
 CHAPTER-5

FINDINGS & SUGGESTIONS

48
 Findings

• Include supervisors and managers responsible for conducting performance

appraisals and the executive to whom they report.

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

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

• Core of the meeting:

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

reasons for that rating.

• Start with the outliers (extreme lows or highs)

• ID high performers and why

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

49
 Suggestions

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

attains above 95% attendance.

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

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

4. In the beginning of the year employee must know the performance standards on
which his/her performance will be judged in end of year.

50
 Conclusion

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

challenging.

• Performance appraisal is a vehicle to validate and refine organizational

actions (e.g. selection, training);
• Performance appraisal provides feedback to employees with an eye on
improving future performance.

• Performance of almost all employees is good.

• Environment of the company is very good.

51
 Annexure

1. Appraisal form for workers

2. Appraisal form for staff

(These are attached with this report)

52
Bibliography

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

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

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

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

Human Resources Management by P.Subarao

Search engines

1. www.google .com

2. citehr.com

3.www.msn.com

4.www.wikipaedi.com

53
APPRAISAL FORM

HR Department (For Workers ) (Confidetial )

Name of employee-: Department-: HOD-:
Designation-: Reports to-:

Decision by the committee-:

Rating-:
Increment Amount-:
Recommendations-:

Comments

HOD HR ED

Give ratings based on the following criteria O-

outstanding---Above 90% A-Good---
75-90% B-Average---51-74% C-BelowAverage---31-
50% D-Poor---below 30% Guidelines-:
1. Appraiser would be the HOD 2.
Performance appraisal should be done in arelation to the job/objevtives targets set
for him during the appraisal period. 3.Appraisal on factor should be objective and
should not be influenced by single incident.

54
 1. Attendance-: Coming to work daily and conforming to work hours.

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

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

c) Regular but not punctual ( )

d) Lax in attendance and punctuality ( )

e) Often absent and frequently late ( )

22. Target Achievement-:

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

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

c) Meets expectations ( )

d) Sometime achieves targets ( )

e) Never achieve target ( )

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

alertness.

a) Always disciplined, cultured, alert ( )

b) Usually Disciplined, cultured ( )

c) Disciplined, not alert ( )

d) Cultured but Neither disciplined nor alert ( )

e) Uncultured ( )

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

job.

55
a) Job knowledge is exceptional and always gives high quality of work ( )

b) Meets expectations ( )

c) Sometime lake of high quality work ( )

d) Job knowledge is deficient in certain area ( )

e) Unacceptable ( )

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

communicating, sharing information
a) Ability to work in a team is exceptional
( )

b) Ability to work in a team is good

( )
c) Meets Expectations
( )
d) Normally does not act as a team player
( )

e) Never act as a team player

( )

Maximum Rating= 25 Score gained= Percentage =

Signature of HOD

___________________________________________________
_______________________________

56
APPRAISAL FORM

__________________________________________________________________
________________ HR DEPARTMENT
FOR STAFF &EXECUTIVE (Confidential)
1. PERSONAL DETAILS

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

Appraiser & Appraise
Name
Date of birth Date of joining

Qualification Designation
Department

HOD Reports To

Amount & Date of last increment

Amount & Date of last salary correction/special increment
Date of last promotion
Total Emoluments (Basic +HRA) Other benefits

57
Decision by the Moderating Committee
Rating Increment Amount
Recommendations- Salary Correction/Promotion/Redesignation

Comments

HR ED Supervisory
Board
Guidelines
1. Appraiser would be the HOD.
2. Performance Appraisal should be done in relation to the job/objectives/targets
set for him during the appraisal period.
3. Appraisal on factor should be objective &should not be influenced by any single
incident or occurrence. Appraisal on one factor should not influence the rating on
the other.

1. Self Appraisal (optional)

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

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

initiative taken.

58
B. Suggestions for improving the effectiveness of your department.

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

optimum expectation.

NAME OF APPRAISE SIGNATURE OF APPRAISE

DATE

EVALUATION BY HOD
Rating on Performance &Potential has to done on a scale of 1-5, where
1. Stands for Unsatisfactory.
2. Stands for less than expected
3. Stands for satisfactory.
4. Stands for good
5.Stands for Excellent

59
A. Performance Appraisal KEY RESULT AREA
List the critical tasks performed by the appraise during
the Appraisal Period 2008-2009 and rate on each KRA
RATINGS

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

B. Potential Appraisal
Rate the candidate on scale of 1-5 on the following competencies
RATING

Knowledge/Technical Skills (job related knowledge)

Personality (Presentable disposition, adaptability, maturity, dynamism)

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

Attitude ( Positive , confident, persistent, self motivated)

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

60
listener)

Leadership/Team Building/Team Working

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

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

X Y

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

n×5 30

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

Recommendations

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

B Give rating based on the following criteria.

OVERALL RATING
O =Outstanding = 100-91
A = Good = 90-76
B = Average = 75-51
C=Below Average = 50-35

61
D = Poor = Below 35

FINAL RATING

Final Recommendations

Promotion Redesignation
Special increment

Name of HOD Signature

Date

62