CHAPTER – 1

INTRODUCTION

TO THE TOPIC

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2
The Title of my project report is study of the affect of Performance appraisal in

Oil and gas industry.

INTRODUCTION

Performance Appraisal is a formal, structured system that compares employee performance

to established standards. Assessment of job performance is shared with employees being
appraised through one of several primary methods of performance appraisals. Elements in
performance appraisal methods are tailored to the organization's employees, jobs, and
structure.

 Performance appraisals, also known as employee appraisal are essential for the
effective management and evaluation of staff. Appraisals help develop
individuals, improve organizational performance, and feed into business planning.
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. Performance appraisal is a part of career
development and regular review of employee performance within organizations.
 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 appraisal should also be viewed as a system of highly interactive
processes which involve personnel at all levels in differing degrees in determining
job expectations, writing job descriptions, selecting relevant appraisal criteria,
developing assessment tools and procedures, and collecting interpreting, and
reporting results
 Performance appraisals are important for staff motivation, aligning individual and
organizational aims, and fostering positive relationships between management
and staff.
 Appraisals must address 'whole person' development - not just job skills or the
skills required for the next promotion. Appraisals must not discriminate agains
anyone on the grounds of age, gender, sexual orientation, race, religion, disability,
etc.
 Performance appraisals should be positive experiences. The appraisals process
provides the platform for development and motivation, so organizations should
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 foster a feeling that performance appraisals are positive opportunities, in order to
get the best out of the people and the process.

Requirements for effective performance management system:

1. Effective performance management requires a good deal of face-to-face

supervisor-employee interaction. By knowing the subordinates, a supervisor can
steer them onto a path of greater productivity and optimized output. Long-term
successful business owners view performance appraisal as a process of getting to
know the people who work for them. It is the most significant and indispensable
tool for an organization. It provides information, which helps in taking important
decisions for the development of an individual and the organization.

2. Thus, one phase of the annual performance management cycle is performance

appraisal, the process of reviewing employee performance vis-à-vis the set
expectations in a realistic manner, documenting the review, and delivering the
review verbally in a face-to-face meeting, to raise performance standards year
over year through honest and constructive feedback. In the process management
expects to reinforce the employee‟s strengths, identify improvement areas so that
one can work on them and also set stretched goals for the coming year.

An effective review process helps organizations in three areas:

1. Evaluation and improving personnel selection and training systems;

2. Preventing wrongful termination; and

3. Increasing real employee diversity

“Performance appraisal” has been identified as one of the most complex of man-
management activities. It is often a difficult and emotion laden process. Performance
appraisal has become part of organizational life. Every organization has some kind of
evaluating the performance of its personnel.

“Performance appraisal” or “Merit rating” is one of the oldest and universal practices of
management. This approach resulted in an appraisal system in which the employee‟s merits
like initiative, dependability, personality etc were compared with others and ranked or rated.

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HISTORY

During and after World War I, systematic performance appraisal was quite prominent.
Credit goes to Walter Dill Scot for systematic performance appraisal technique of “man-to-
man rating system” (merit rating). It was used for evaluating military officers. Industrial
concerns also used this system during 1920s and 1940s for evaluating hourly paid workers.
However, with the increase in training and management development programs from 1950s,
management started adopting performance appraisal for evaluating technical, skilled,
professional and managerial personnel as a part of training and executive development
programs. With this evolutionary process, the term merit rating had been changed into
employee appraisal or performance appraisal.

MEANING

Performance Appraisal is a method of evaluating the behavior of employees in the work spot,
normally including both the quantitative and qualitative aspects of job performance.
Performance here refers to the degree of accomplishment of the tasks the makeup an
individual‟s job. It indicates how well an individual is fulfilling the job demands. Often the
term is confused with effort, which means performance is always measured in terms of
results.

“Performance appraisal” is a systematic evaluation of present and potential

capabilities of personnel and employees by their superiors, superior‟s superior or a
professional from outside. “It is a process of estimating or judging the value, excellent
qualities or status of a person or thing.”

DEFINITION

1 According to „Flippo‟ (1998), “Performance appraisal is the systematic periodic

and an impartial rating of an employee‟s excellence in matters pertaining to his
present job and his potential for a better job”

2 According to „C. Higel‟ (1973), “The performance appraisal is the purpose of

evaluating the performance and qualification of the employees in terms of the
requirement of the job for which he is employed, for the purposes of administration
including placement, selection for promotion, providing financial rewards and other

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 actions which require differential treatment among the members of a group as
distinguished from action affecting all members equally”.

3 According to „N.K. Rowland‟ (1970), defines “performance appraisal is the

process of assessing the performance and progress of an employee or of a group of
employees on a given job and his potential for future development.”

METHODS OF PERFORMANCE APPRAISAL

There are several methods and techniques used for evaluating employee performance.
1. Traditional method

2. Modern methods.

TRADITIONAL METHODS

1. CONFIDENTIAL REPORT

A confidential report is a report prepared by the employee‟s immediate superior. It

covers the strength and weakness, main achievements and failure, personality and
behavior of the employee. It is descriptive appraisal used for promotions and
transfers of employees.

2. FREE FORM OR ESSAY METHOD

Under this method, the evaluator writes a short easy on the employee‟s performance on the
basis of overall impression. The description is expected to be a factual and as concrete as
possible. An essay can provide a good deal of information about the employee especially if
the evaluator gives examples of each one of his judgment.

3. STRAIGHT RANKING METHOD

In this technique, the evaluator assigns relative ranks to all the employees in the same work
unit doing the same job. Employees are ranked from the best to the poorest on the basis of
overall performance. The relative position of an employee is reflected in this numerical
bank.

4. PAIRED COMPARISON METHOD

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Each employee is compared with all the others, in pair one at a time. The number of times an
employee is judged better than the others determine his rank. Comparison is made based on
overall performance. The number of comparisons to be made can be decided based on the
following‟s (N-1)/2. Where N is the number of person to be compared.

MODERN METHODS

1. Appraisal by results MBO

This method has been evolved by “Peter Drucker”. MBO is potentially a powerful
philosophy of managing and an effective way for operationalising the evaluation process.

MBO can be described as a “Process whereby the supervisor and subordinate managers of an
organization jointly identifies its common goals, define each individuals major area of
responsibility in terms of results expected of him and use these measures as guides for
operating the unit and assessing the contributions of each of its members.

2. Assessment centre method

The assessment centre concept was initially applied to military situations by Simonies in the
German Army in the1930 and the war office selection board of the British Army in the year
1960s. The purpose of this method and is to test candidate in a social situation. Assessments
are made to determine employee potential for purpose of promotion.

3. 360 degree performance appraisal

The appraisal may be any person who thorough knowledge about the job has done by
contents to be appraised. Standards of contents and who observes the employee while
performing a job. The 360 degree feedback is understood as systematic collection of
performance data on an individual or group, derived from a number of stakeholders-the
stakeholders being the immediate supervisors, team members, customers, peers and self.

PROCESS OF PERFORMANCE APPRAISAL

1. Setting the Performance Standards:

The first step in the performance appraisal process is the setting of standards of performance
expected from the employees. The standards set should be the line with the objectives and the
mission of the organisation.

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Further the standard set must be realistic and attainable. If unrealistic and unattainable
standards are set, it will demotivate and demoralise the employee. Hence care should be
taken
while setting the standards.
2. Communicating the Performance Standard to the Employees:
It is not enough if just the standards are fixed. The expected level of performance should be
communicated to the employees so that they are all well aware of what is expected of them.

3. Measuring the Actual Performance:

This is a crucial step in the performance appraisal process. Here the actual performances are
measured. There are various methods of measuring the performance

4. Comparing the Actual With the Standard Performance:

Once the standard levels of performance are set and the actual performances are measured,
the next step will be the comparison of the actual with the standard performance. This
comparison will enable the determination of the gap between the actual and the expected
performance; such gaps can be bridged through training and development.

5. Providing Feedback:
The performance appraisal process does not end with mere evaluation of the performance. It
is essential to provide feedback to the employees on their performance. This will help the
employees to identify the weak areas and initiate actions to overcome them. Such feedback
motivates them to perform better in future by avoiding the repetition of the same mistakes.

6. Initiating Corrective Actions:

When a gap is found between the actual and the expected level of performance, corrective
actions should be undertaken. By analyzing the reason for a gap, proper action should be
taken so that the gap is bridged. When the actual and the standard performance match there is
no need for any corrective action.

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CHAPTER-2
INDUSTRY
PROFILE

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10
OIL AND GAS INDUSTRY

The oil and gas industry in India dates back to 1889 when the first oil deposits in the country
were discovered near the town of Digboi in the state of Assam. The natural gas industry in
India began in the 1960s with the discovery of gas fields in Assam and Gujarat. As on 31
March 2015, India had estimated crude oil reserves of 763.48 million tones and natural gas
reserves of 1488.49 billion cubic meters (BCM).

India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by replacing
it with local exploration, renewable energy and indigenous ethanol fuel (c. Jan 2018).India
was the fourth top net crude oil (including crude oil products) importer of 163 Mt in 2015.

The oil and gas industry developed over the last 200 years to meet an ever-increasing need
for fuel. The primary market for oil is transportation energy (fuel for cars, planes, and ships).
Natural gas is primarily used for heating, cooking, and increasingly for generating electricity.

Companies in the oil and gas industry discover reserves of these resources in the ground or at
sea; build, operate, and maintain the wells or rigs that extract these resources; refine them for
use; and then distribute or sell them to retailers, utility companies, or end users. According to
the U.S. Energy Information Administartion, in 2014 in the United States about 60 percent of
the petroleum consumed was used for transportation, including airplane, automobile, bus,
ship, and truck fuel. Industrial uses accounted for about 32 percent. Household and
commercial use accounted for about 7 percent, largely for heating. About 1 percent was used
in the production of electrical power.

The Energy Information Administration (EIA) estimates that the United States has
approximately 35.2 billion barrels of oil reserves, and 324.3 trillion cubic feet (Tcf) of
technically recoverable natural gas in the United States. Estimates for this have risen steadily
for several years since new technologies have enabled access to resources that remained out
of reach in the past.

At the same time, oil and natural gas companies have looked to previously unexplored
regions and locations of oil and gas reserves. As a result, the oil industry in recent years
began a more aggressive offshore drilling program and was able to locate and extract large
reserves of oil. Also, scientists developed a method for extracting oil and gas from rock
formations. Called fracturing, or fracking, this method injects water and a small percentage
of chemicals under very high pressure into the rock formations. The pressure of the water and
chemicals creates fissures in the rock, allowing the oil or gas to escape.

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Before consumers can pump the gas into their vehicles, it starts out as crude oil. Crude oil is
extracted from reserves located by scientists like geologists. Oil companies then construct
and operate large oil wells or offshore drills at these locations. Once the oil is extracted, it is
transported to a refinery for further processing.

Key players in oil and gas industry

 Gujarat state petroleum corporation.

 GAIL.
 Hindustan petroleum.
 Essar oil.

Gujarat state petroleum corporation

Gujarat State Petroleum Corporation Ltd (GSPC) Group is a group of oil and gas
exploration, production and distribution companies based in Gujarat, India. It is India's only
State Government-owned oil and gas company with the Government of Gujarat holding
approximately 95% equity stake. GSPC was incorporated in 1979 as a petrochemical
company.

HISTORY

Incorporated in 1979 as a petrochemical company, GSPC has a wide gamut of hydrocarbon

activities. In 1992, GSPC widened the scope of its activities and rechristened itself as Gujarat
State Petroleum Corporation in 1994. With the Government of India's decision to privatize
the hydrocarbon sector, GSPC acquired several discovered fields in the first and second
rounds of bidding process initiated by the Government of India during 1994 and 1995. The
company saw a great transformation from the year 2001, when DJ Pandian was appointed the
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managing director. The public sector company's activities have become controversial, with
the CAG indicting the company on many counts.

SUBSIDIARIES

Gujarat State Petronet Limited (GSPL) is a natural gas transmission company. It has 2239
km long gas pipeline network (Gujarat Gas Grid) in Gujarat. Gujarat (GGL) is natural gas
distribution company which is India's largest city gas distribution company. GSPL India
Gasnet Limited (GIGL) and GSPL India Transco Limited (GITL) are join ventures promoted
by GSPL along with Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation
Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) for the purpose of
implementation of 2100 km pipeline passing through Mehsana - Bhatinda - Jammu - Srinagar
and another 2042 km pipeline passing through Mallavarm - Bhopal - Bhilwara - Vijaipur
respectively. Sabarmati Gas Limited (27.47% holding) was incorporated in 2006 for
developing gas distribution network in 3 districts; Gandhinagar, Mehsana and Sabarkantha.
GSPL (27.47%), GSPC (11.25%) and BPCL holds another 25.0% and Institutional Investors
together hold rest of the company. GSPC LNG Limited (GLL) holds stake in the 5.0
MMTPA LNG terminal at Mundra commissioned in 2017.

GSPC GROUP

Type Public company

Industry Oil and gas

Founded 1979

Founder Government of Gujarat

Headquarters Gandhinagar, Gujarat, India

Area served India

 Dr. J.N. Singh, IAS (Chairman &

Key people
Managing director)
 SujitGulati, IAS(Director)
 Dr. T.Natarajan, IAS (Joint

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 Managing director)

Revenue  ₹10,724 crore (US$ 1.6 billion)

(2016)

Operating  -₹875 crore (US$ -134 million)

income (2016)

Net income  -₹804 crore (US$ -123 million)

(2016)

Owner  Government of Gujarat (95%)

Subsidiaries Gujarat Gas

Website www.gspcgroup.com

GAIL

Gail (India) Limited (GAIL) (formerly known as Gas Authority of India Limited) is the
largest state-owned natural gas processing and distribution company in India. It is
headquartered in New Delhi. It has the following business segments: natural gas, liquid
hydrocarbon, liquefied petroleum gas transmission, petrochemical, city gas distribution,
exploration and production, GAILTEL and electricity generation. GAIL was conferred with
the Maharatna status on 1 Feb 2013, by the Government of India. Only six other Public
Sector Enterprises (PSEs) enjoy this coveted status amongst all central CPSEs. GAIL was
listed in the 131st position among India's most trusted brands according to the Brand Trust
Report 2014, a study conducted by the Trust Research Advisory.

HISTORY

GAIL (India) Limited was incorporated in August 1984 as a Central Public Sector
Undertaking (PSU) under the Ministry of Petroleum & Natural Gas (MoP&NG). The

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company was formerly known as Gas Authority of India Limited. It is India's principal gas
transmission and marketing company. The company was initially given the responsibility of
construction, operation and maintenance of the Hazira – Vijaypur – Jagdishpur (HVJ)
pipeline project. It was one of the largest cross-country natural gas pipeline projects in the
world. This 1750-kilometre-long pipeline was built at a cost of ₹17 billion (US$260 million)
and it laid the foundation for development of market for natural gas in India. GAIL
commissioned the 1,750 kilometres (1,090 mi) Hazira-Vijaipur-Jagdishpur (HVJ) pipeline in
1991. Between 1991 and 1993, three liquefied petroleum gas (LPG) plants were constructed
and some regional pipelines acquired, enabling GAIL to begin its gas transportation in
various parts of India.

GAIL began its city gas distribution in New Delhi in 1997 by setting up nine compressed
natural gas (CNG) stations.

In order to secure gas for its mainstream business, the Exploration and Production
department was created. Today GAIL is a partner in the Daewoo-OVL led consortium in two
offshore blocks in Myanmar which have made a gas discovery. The bulk of its blocks are
located in India in the prolific basins of Cambay, Assam-Arakan, Mahanadi, Krishna
Godavary deep water and onland, Cauvery onland and deep water and western offshore. It is
actively scouting for foreign blocks both exploratory or discovery.

GAIL today has reached new milestones with its strategic diversification into petrochemicals,
telecom and liquid hydrocarbons besides gas infrastructure. The company has also extended
its presence in power, liquefied natural gas re-gasification, city gas distribution and
exploration & production through participation in equity and joint ventures. Incorporating the
new-found energy into its corporate identity, Gas Authority of India was renamed GAIL
(India) Limited on 22 November 2002.

GAIL (India) Limited has shown organic growth in gas transmission through the years by
building large network of trunk pipelines covering length of around 10,700 kilometres (6,600
mi). Leveraging on the core competencies, GAIL played a key role as gas market developer
in India for decades catering to major industrial sectors like power, fertilizers, and city gas
distribution. GAIL transmits more than 160 mmscmd of gas through its dedicated pipelines
and have more than 70% market share in both gas transmission and marketing.

GAIL

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Type State-owned enterprise

Traded as BSE: 532155, NSE: GAIL, LSE:

GAID
BSE SENSEX Constituent

Industry Energy

Founded August 1984

Headquarters New Delhi India

Key people B. C. Tripathi

(Chairman & MD)

Products Natural gas, petrochemical, liquid

hydrocarbons, Liquefied
petroleum gas transmission, city
gas distribution, E&P, electricity
generation

Revenue ₹50,059.26 crore(US$7.7

billion) (2017)

Operating ₹5,410.82 crore(US$830

income million) (2017)

Net income ₹3,502.91 crore(US$540

million) (2017)

Total assets ₹56,269.99 crore(US$8.6

billion) (2017)

Owner Government of India

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 Number of 4,355 (2017)
employees

Website www.gailonline.com

HINDUSTAN PETROLEUM

Hindustan Petroleum Corporation Limited (HPCL) (BSE: 500104, NSE: HINDPETRO)

is an Indian state-owned oil and natural gas company with its headquarters at Mumbai,
Maharashtra. It has about 25% market-share in India among public-sector companies (PSUs)
and a strong marketing infrastructure. Government of India owns 51.11% shares in HPCL
and others are distributed amongst financial institutes, public and other investors. The
company is ranked 367th on the Fortune Global 500 list of the world's biggest corporations
as of 2016.

HISTORY

HPCL was incorporated in 1974 after the takeover and merger of erstwhile Esso Standard
and Lube India Limited by the Esso (Acquisition of Undertakings in India) Act 1974. Caltex
Oil Refining (India) Ltd. (CORIL) was taken over by the Government of India in 1976 and
merged with HPCL in 1978 by the CORIL-HPCL Amalgamation Order, 1978. Kosan Gas
Company was merged with HPCL in 1979 by the Kosangas Company Acquisition Act, 1979.

In 2003, following a petition by the Centre for Public Interest Litigation (CPIL), the Supreme
Court of India restrained the Central government from privatising Hindustan Petroleum and
Bharat Petroleum without the approval of Parliament. As counsel for the CPIL,

17
RajinderSachar and PrashantBhushan said that the only way to disinvest in the companies
would be to repeal or amend the Acts by which they were nationalized in the 1970s. As a
result, the government would need a majority in both houses to push through any
privatization.

HPCL has been steadily growing over the years. The refining capacity increased from 5.5
million metric tonnes (MMT) in 1984/85 to 14.80 million metric tonnes as of March 2013.
On the financial front, the net income form sales/operations grew from ₹2687 crores in
1984–1985 to ₹2,06,529crores in financial year 2012–2013. During FY 2013-14, its net
profit was ₹1740 crores.

On 19 July 2017, the Government of India announced the acquisition of Hindustan Petroleum
Corporation by Oil and Natural Gas Corporation. On 1 November 2017, the Union Cabinet
approved ONGC for acquiring majority 51.11% stake in HPCL (Hindustan Petroleum
Corporation Limited.

HP

Type Public

Traded as BSE: 500104, NSE: HINDPETRO

Industry Oil and Gas

Founded 1974

Headquarters Mumbai, Maharashtra, India

Key people M K Surana (CEO, Chairman, Managing Director)

Products Oil, natural gas, petroleum, lubricant, petrochemical

Revenue ₹212,300 crore(US$33 billion) (2015)

Operating income ₹4,697 crore (US$720 million) (2015)

Net income ₹1,488 crore (US$230 million) (2015)

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Total assets ₹67,550.64 crore(US$10 billion) (2015)[1]

Owner Oil and Natural Gas Corporation (51.11%)

Number of employees 11,226 (2012)

Website www.hindustanpetroleum.com

ESSAR OIL

Essar Oil is an India-based company engaged in the exploration and production of oil and
natural gas, refining of crude oil, and marketing of petroleum products. It is a part of the
Essar Group based in Mumbai. It operates a major refinery in Vadinar, Gujarat, India, which
made it the second largest non-state refiner in India in 2009.

In July 2009, Essar acquired a 50% stake in Kenya Petroleum Refineries Ltd. In July 2012,
following Gujarat High Court's directions Gujarat Government seized three bank accounts of
the company to recover its tax dues of Rs80 billion.

It was a publicly traded company (NSE: ESSAROIL & BSE: 500134),until it was taken
private in a leveraged buyout which closed on December 30, 2015. It delisted the company
valued at ₹380 billion (US$5.8 billion) by paying ₹37.45 billion (US$570 million).

In October 2016, Russia's state-owned oil company, Rosneft bought a 49% stake in Essar oil,
along with Russian investment fund United Capital Partners, in a deal worth $13 billion

Incorporated in 1989, Essar Oil Limited is a fully integrated oil company of international
scale with strong presence across the hydrocarbon value chain from refining to oil retail. In
August 2017, the company was acquired by international investors Rosneft (a leader of

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Russia‟s petroleum industry and the world‟s largest public oil and Gas Company by liquid
hydrocarbon production and reserves) and an investment consortium comprised of global
commodity trading firm Trafigura and UCP Investment Group.

Essar Oil owns India‟s second largest single site refinery at Vadinar, Gujarat with a current
capacity of 20MMTPA. It is one of the world‟s most modern and complex refineries with a
complexity of 11.8, which is amongst the highest globally. The refinery is capable of
processing some of the toughest crudes and yet produces high quality Euro IV and V grade
products. Essar Oil has become the fastest growing retail business chain in India with the
largest private sector fuel retail network. The company has over 4,300 operational outlets
spread across India and more than 2,700 outlets at various stages of completion.

HISTORY

1989
-Essar Oil Limited was incorporated as a Public Limited Company under the Companies Act, 1956 on
12th September, with the main objective to provide Development, Exploration, and Production and
related Services in the oil & gas sector.

- The main promoters of Essar Oil Limited are Essar Investments Limited, Essar Shipping Limited,
South India Shipping Company Limited, Essar Gujarat Limited and a foreign co-promoter, Prime
Finance Company Limited, and other NRI's associates and friends. - EOL was engaged in preliminary
activities relating to bidding for oil & gas fields as well as advising the Energy and Offshore divisions
of Essar Gujarat Limited on technical matters relatin to their operations.The Company is a member of
Essar group.

1990
- The Exploration and Production Division was set up for the purpose of Oil & Gas exploration
activities.

1992
- The company became a wholly owned subsidiary of Essar Gujarat Limited (hereinafter referred to
as `EGL') in March.The Company has obtained `No objection certificate from Gujarat Polution
Company Board vide letter N. PC/jmn - 105/02484 dated 19th November
The Chennai Investments (India) Limited, is a subsidiary of EOL.

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1993
- EOL is the first drilling Company in India to secure international drilling contracts against
international competitive bidding.

- The Energy Division obtained the President's award for safety in onshore operations and a
Silver award for safety (accident prevention) in offshore operations, based on its performance
in 1992, from the International Association of Drilling Contractors which is an association of
leading international drilling contractors.

1994

- In June, the Board of Essar Gujarat Limited proposed to transfer the entire shareholding of
Essar Oil Limited to Essar Investments Limited (hereinafter referred to as `EIL') for various
business and strategic reasons.EOL proposes to import crude oil by Tankers and VLCCs of
capacities 240,000 - 300,000 DWT. EOL shall develop dedicated marine and shore facilities
at Vadinar port for receipt of crude oil, storage and transportation to Refinery site.EOL
proposes to install a marketing terminal in the Refinery complex with adequate facilities.

2005
-Essar Oil inks deal with Myanmar for exploration

2006
-Essar Oil joins hand with US firm for CBM exploration

2007
-Essar Oil mulls to raise $100mn via ECB

2009- Essar Oil inked a Product Sale, Purchase and Infrastructure Sharing MoU with Indian
Oil Corporation.

2010- Amalgamation of the 100% subsidiary, Essar Oil Vadinar Ltd. with Essar Oil ltd. -Essar
Oil declared winner of four Coal Bed Methane blocks. -Essar of India has for the first time
won a contract under the open tender system (OTS) to import crude oil for processing at its
Mombasa-based refinery.

2011-Essar Oil initiates gas production from CBM block

2012-Essar Oil commences production of VG grade bitumen by processing a judicious mix of

crudes and blending components. -Essar Oil - L&T sign MoU for bitumen supply

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2013

Essar Oil launches its new E&P office at Durgapur. -Essar Oil Ltd has won the prestigious
"SKOCH Renaissance Award" for Environment & HRD for its environment management
project at its state-of-the-art refining complex in Vadinar, Gujarat. -Essar Foundation joins
hands with CINI to launch Aanchala comprehensive project for empowering adolescent girls.

2014

-Rosneft and Essar signed key terms of oil and oil products supplies to Essar refineries in
India.

2015 -Essar oil has started the operations at its refinery at Vadinagar in Gujarat, after a period
of 1 month of shut down

ESSAR OIL

Type Public limited company

Industry Oil and gas

Headquarters Mumbai, India

Key people Ravi Ruia, Chairman

, CEO

Products Petroleum, fuels, natural gas and

other petrochemicals

Revenue ₹983.53 billion (US$15 billion)

(2014)

Net income ₹21.55 billion(US$330 million)

(2011)

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Total assets ₹210.84 billion(US$3.2 billion)
(2011)

Owner Rosneft

Parent Essar Energy plc

Website www.essaroil.co.in

23
24
CHAPTER-3

REVIEW

OF

LITERATURE

25
26
Human Resource Management Human Resource Management is an integral part of
management. It helps the management in taking a strategic view of a very important resource
i.e. Human Resource. It helps management in identifying key skill sets, knowledge, values
required in the employee and the rewards that are needed to be given to the employees so that
the organization goals are fulfilled. Also like other management functions, it has to ensure
that these resources are available at an optimal cost. It has to look into various training and
development activities to ensure this. This is a key area for Human Resource Management as
it shows their contribution in terms of money. The money here would be the opportunity cost
incurred due to appointing of new employees instead of developing current employees for the
task in hand.

Functions

From recruiting to orienting new employees, from writing job descriptions to tracking
vacation and sick leave, and from instituting and monitoring policies to monitoring benefits,
there has been a need for an HR generalist to assist senior management in both establishing a
"structure" to holding down costs of administration.

The Performance Review

Frequently when performance management is mentioned, people think of the properly

constructed appraisals should represent a summary of an ongoing, year-round dialogue.
Focusing only on an annual appraisal form leads to misunderstaemployee performance
appraisal or review. Performance management, however, involves so much more. Ending and
under appreciation of the benefits of performance management.

An effective performance management process enables managers to evaluate and measure

individual performance and optimize productivity by:

 Aligning individual employee's day-to-day actions with strategic business objectives

 Providing visibility and clarifying accountability related to performance expectations
 Documenting individual performance to support compensation and career planning
decisions
 Establishing focus for skill development and learning activity choices
 Creating documentation for legal purposes, to support decisions and reduce disputes.

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Some Basic Concepts:

 Performance refers to an employee‟s accomplishment of assigned tasks.

 Performance Appraisal is the systematic description of the job-relevant strengths and
weaknesses of an individual or a group.
 Appraisal period is the length of time during which an employee‟s job performance is
observed in order to make a formal report of it.
 Performance Management is the total process of observing an employee‟s
performance in relation to job requirements over a period of time (I.e. clarifying
expectations, setting goals, providing on-the-job coaching, storing and recalling
information about performance) and then making an appraisal of it. Information
gained from the process may be fed back via an appraisal interview to determine the
relevance of individual and work-group performance to organizational purposes,
improve the effectiveness of unit and improve work performance of employees.

Performance and Development Planning (PDP):

PDP is a process for managers that aligns individual performance with company goals and
ensures focus on the development of talent company-wide. PDP is an important step in their
corporate effort to engage and enable employees to deliver their contribution to their
business. Also, PDP serves to enable employees to identify and realize personal opportunities
for development that are aligned to current and future business challenges.

Objectives of Performance Appraisal:

 Let the employees know where they stand in so far as their performance is concerned
and to assist them with constructive criticism and guidance for the purpose of their
development.
 Assessment of skills within an organization.
 Set targets for future performance.
 Effect promotions based on competence and performance.
 Strengthen relationship between superior and subordinate.
 Assess the training and development needs of employees.
 Identify the strengths and weaknesses of employees.
 Decide upon a pay raise (increments).

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  Determine whether human resource programs such, as selection, training and
transfers have been effective or not.
 Form a basis for personnel decisions-salary (merit) increases, promotions,
disciplinary actions, etc.
 Provide the opportunity for organizational diagnosis and development.
 Facilitate communication between employee and administrator.
 Increase motivation to perform effectively.
 Better clarify and define job functions and responsibilities.
 Clarify organizational goals so they can be more readily accepted.

Performance Appraisal Process

• Prepare - prepare all materials, notes agreed tasks and records of performance,
achievements, incidents, reports etc - anything pertaining to performance and
achievement
• Inform - ensure the appraisee is informed of a suitable time and place and clarify
purpose and type of appraisal
• Venue - ensure a suitable venue is planned and available - private and free from
interruptions
• Introduction - relax the appraisee - open with a positive statement, smile, be
warm and friendly
• Review and measure - review the activities, tasks, objectives and achievements
one by one

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 • Agree an action plan - An overall plan should be agreed with the appraise, which
should take account of the job responsibilities, the appraisee's career aspirations,
the departmental and whole organization's priorities .
• Agree necessary support - This is the support required for the appraisee to
achieve the objectives, and can include training and anything relevant and helpful
that will help the person develop towards the standard and agreed task.
Also consider training and development that relates to 'whole-person development'
outside of job skills. Developing the whole person in this way will bring benefits
to their role, and will increase motivation and loyalty.
• Invite any other points or questions - make sure you capture any other concerns.
• Close positively- Thank the appraisee for their contribution to the meeting and
their effort through the year, and commit to helping in any way you can.
• Record main points, agreed actions and follow-up - Swiftly follow-up the
meeting with all necessary copies and confirmations, and ensure documents are
filed and copied to relevant departments.

Designing an appraisal program poses several questions, which need

answers. They are:

1. Whose performance is to be assessed?

2. Who are the appraisers?

3. What should be evaluated?

4. When to appraise?

5. What problems are encountered?

6. How to solve the problems?

7. What methods of appraisal are to be used?

Discussion points in the appraisal:

1. Has the past year been good/bad/satisfactory or otherwise for you, and why?

2. What do you consider to be your most important achievements of the past year?

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 3. What do you like and dislike about working for this organization?

4. What elements of your job do you find most difficult?

5. What elements of your job interest you the most, and least?

6. What do you consider to be your most important tasks in the next year?

Benefits:

The following are the benefits of a successful appraisal system:

1. For the Organization:
 Improved performance throughout the organization due to:
- Effective communication of organization‟s objectives and values
- Increased sense of cohesiveness and loyalty.
- Managers are better equipped to use their leadership skills and to develop their
staff.
 Improved overview of tasks performed by each member of a group.
 Identification of ideas for improvement.
 Communication to people that they are valued.
2. For the Appraiser:
 Opportunity to develop an overview of individual jobs.
 Opportunity to identify strengths and weaknesses of appraisees.
 Increased job satisfaction.
 Opportunity to link team and individual objectives with department & organizational
objectives.
 Opportunity to clarify expectations that the manager has from teams and individuals.
 Opportunity to re-prioritize targets
 Means of forming a more productive relationship with staff based on mutual trust and
understanding.
 Due to all above Increased sense of personal value
3. For the Appraisee:
 Increased motivation and job satisfaction.
 Clear understanding of what is expected and what needs to be done to meet
expectations.
 Opportunity to discuss aspirations and any guidance, support or training needed to
fulfill these aspirations.
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  Improved working relationships with the superior.
 Opportunity to overcome the weaknesses by way of counseling and guidance from
the superior
Performance appraisal drawbacks:

 Performance appraisal program demands and depends too much on supervisors.

 Sometimes certain standard ratings tend to vary widely and unfairly.
 Some raters can be tough, and some lenient. Some departments have highly
competent people whereas others have less competent people.
 Personal bias can replace organizational standards. Because of the bias, some non
competent employees may get a favored treatment.
 Sometimes there tends to be lack of communication. The employees may not even
know they are being judged. No performance appraisal system can be effective if the
appraised do not know the criteria under which they have been appraised and judged.

Performance Appraisal Techniques:

Traditional Methods of Appraisals:

1. Ranking

In this, the superior ranks his/her subordinates in order of their merit, from best to worst.

- It is done in a competitive group.

- It is done by placing the appraisee on numerical scales I.e. 1st, 2nd, 3rd etc. in the total
group.

- Ranking of an appraisee on his job performance/traits against that of another member.

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2. Person-to-Person/Paired Comparison

Under this method the appraiser compares each employee with every other employee, one at
a time.

- Certain key performance areas/traits are developed. E.g.: Leadership, Creativity, Initiative
etc.

- A scale for each factor is designed.

- A scale of people is also created for each factor.

- Each Appraisee is compared to every other person on the scale.

- Certain scores for each factor are awarded to the appraisee.

3. Grading

- Certain categories of traits/performance criteria, which are worth of appraising, are

established. E.g. cooperativeness, self-expression, dependability, job knowledge etc.

- The actual performance (Key performance area) of an employee is then compared to the
predetermined grade definitions.

- Appraisee is allotted with the grade, which describes his performance in the best possible
manner.

- Any grade that is selected should be well defined.

4. Graphic Scales

- A printed form, one for each person to be rated is used.

- The factors included in the form are Employee characteristics such as leadership,
cooperativeness, enthusiasm, loyalty etc. or Employee contribution which includes quantity
and quality of work, specific goals achieved, regularity of attendance, responsibility assumed
etc.

- The traits can be evaluated on continuous scale – the appraiser places a mark along a
continuum (range).

5. Checklist

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- A series of questions are presented concerning an appraisee‟s behavior.

- The appraiser has to reply to the questions in either negative or positive tone- (Yes/No).

- The value of each question may be weighted I.e. one can have predetermined scale and
scoring to those questions.

6. Essay

- A blank form is given to the appraiser.

- The form contains main heading such as employees‟ characteristics, attitudes, job
knowledge, potential etc.

- The appraiser is asked to put in words his impressions about the employee..

- It gives specific information about the employee.

7. Confidential Reporting

- It is the most traditional way of appraising employee‟s performance. The basic assumption
here is that since the superior is in direct contact he knows his subordinates better than any
other and hence his appraisal would be more appropriate.

- The superior writes a paragraph or so about his subordinate‟s strengths, weaknesses,

intelligence, attitude to work, attendance, conduct and character, work efficiency, etc.

8. Critical Incident Method

- Initially a set of noteworthy (good or bad) on-the-job behaviours is prepared. This is usually
in the form of incidents.

- These incidents are given to a group of experts who assign scale values depending upon the
degree of desirability for the job.

- This checklist is used by superiors for evaluating the employees.

- This method helps in identifying the key areas where the employees are weak or strong.

- It emphasizes rating on objective evidence and helps in counseling.

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9. Forced Choice Technique

- In forced choice system the appraiser is forced to choose one from among a group of 4
statements that best fits the individual being rated and one which least fits him.

- Each statement is given a value or a score.

- The evaluator does not know the score value of statements; hence he cannot show any favor
towards the appraisee.

- The method of arranging the traits involves a long process from getting the description of
“good” or “bad” employees to establishing their validity and reliability.

Modern Methods of Appraisal:

Behaviorally Anchored Rating Scales:

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines
the graphic rating scale and critical incidents method. It consists of predetermined critical
areas of job performance or sets of behavioral statements describing important job
performance qualities as good or bad (for eg. the qualities like inter-personal relationships,
adaptability and reliability, job knowledge etc). In this method, an employee‟s actual job
behaviour is judged against the desired behaviour by recording and comparing the behaviour
with BARS. Developing and practicing BARS requires expert knowledge.

Human Resource Accounting Method

Human resources are valuable assets for every organization. Human resource accounting
method tries to find the relative worth of these assets in the terms of money. In this method
the performance of the employees is judged in terms of cost and contribution of the
employees. The cost of employees include all the expenses incurred on them like their
compensation, recruitment and selection costs, induction and training costs etc whereas their
contribution includes the total value added (in monetary terms). The difference between the
cost and the contribution will be the performance of the employees. Ideally, the contribution
of the employees should be greater than the cost incurred on them.

Assessment Centers

An assessment centre typically involves the use of methods like social/informal events, tests
and exercises, assignments being given to a group of employees to assess their competencies
35
to take higher responsibilities in the future. Generally, employees are given an assignment
similar to the job they would be expected to perform if promoted. The trained evaluators
observe and evaluate employees as they perform the assigned jobs and are evaluated on job
related characteristics.

The major competencies that are judged in assessment centers are interpersonal skills,
intellectual capability, planning and organizing capabilities, motivation, career orientation
etc. assessment centres are also an effective way to determine the training and development
needs of the targeted employees.

Management by Objectives

The concept of „Management by Objectives‟ (MBO) was first given by Peter Drucker

in 1954.

Management by Objectives is basically a process whereby the superior and the subordinate
managers of an enterprise jointly identify its common goals, define each individual‟s major
areas of responsibility in terms of the results expected of him and use these measures as
guides for operating the unit and assessing the contribution of each of its members.
Management by Objectives is primarily to change the behaviour and attitude towards getting
an activity or assignment completed in a manner that it is beneficial for the organization.
Management by objectives is a result-oriented process, wherein emphasis is on results and
goals rather than a prescribed method. A number of companies have had significant success
in broadening individual responsibility and involvement in work planning at the lowest
organizational levels.

Management by Objectives is a process having following basic steps:

I-Set Organizational Goals

II-Joint Goal Setting

I-Performance Reviews

II-Set check posts

III-Feedback

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5.360º Feedback

The 360º Feedback process is called multi-source assessment, taps the collective wisdom of
those who work most closely with the employee, superiors, colleagues (peers), direct reports
and possibly internal and often external customers. The collective intelligence these people
provide on critical competencies or specific behaviours and skills gives the employee a clear
understanding of personal strengths and areas ripe for development. Employees also view
this performance information from multiple perspectives as fair, accurate, credible, and
motivating.

As the 360º Feedback process better serves the needs of employees, it serves the changing
needs of their organizations too. Organizations are reducing hierarchy by removing layers of
management and putting more emphasis on empowerment, teamwork, continuous learning,
individual development, and self-responsibility. The 360º Feedback Model aligns with these
organizational goals to create opportunities for personal and career development.

360 degree appraisal has four integral components:

1. Self appraisal
2. Superior‟s appraisal
3. Subordinate‟s appraisal
4. Peer appraisal.

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Electronic Appraisal System (eAPPRAISAL)

eAppraisal is a recently introduced method of performance appraisal that eliminates paper

work. eAppraisal simplifies and enhances the employee performance appraisal process. It
provides an organization with a powerful tool to help develop organization‟s critical talent
all year round. It is easier to conduct eAppraisals by automating the time-consuming
process of administrating employee performance reviews. It is flexible and can be
customized to suit an organization‟s needs. The comprehensive workflow makes it easy for
human resource professionals to manage the process by approving appraisal forms,
monitoring the status and sending automatic email notifications to managers..

I. Features:

 intranet-based
 Ease of use
 Sophisticated workflow
 Centralized
 User customizable performance appraisal forms
 Automated email notification and reminder notice
 Comprehensive status and action view for HR manager
 Competency-based text answers and/or range scale

 Self-rating capabilities
II. Benefits:
 Appraisals are processed more quickly and efficiently.
 Appraisal data is received by concerned superior/manager in virtual real-time
when the appraisal is uploaded into eAppraisal system..
 Appraisals cannot be misplaced or lost, as is possible with hardcopies. Appraisals
can be stored electronically and available online.

FACTORS AFFECTING PERFORMANCE APPRAISAL

According to Chakraborthy (1978) performance appraisal should be done with caution. It is
always advisable to make a preliminary survey of the following constraints within which the
employees of an organization are working.

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1. Environmental constraints.

These are several environmental constraints, which may outside the control of worker and
to ignore this fact in judging his performance would be unjust. For example. The quality
of raw material in an organization may deteriorate over a period or the machinery may
break down unexpectedly. As a result, both productivity and quality may suffer. But if
selection of materials and maintenance of machinery are done at higher levels in the
organization the performance appraisal of the worker should not be affected.

2. Organizational leadership
The style of the top leadership of an organization should also be looked into. It is nature of
leadership at the top, which determines largely the loyalty and commitment of employees
to the goals of an organization for better performance. Employees at every level become
highly performance conscious. Performance appraisal under such conditions is liked by
everybody but in opposite conditions it is considered as an imposition.

3. Interdependence of sub-systems
Since every organization is a big system composed of a number of

Interdependent sub-systems, the success or failure of any one sub-system has got to be
interpreted in the context of all other sub-systems to which it is related. For example, the
sub-standard output of the production department may be due to the poor quality of
purchases made by the purchasing Department or the trouble may be at some higher level
sub-systems where planning for the production and purchase departments has been done.

It is precisely because of this interdependence of sub-systems that suggestion is often made

to start performance appraisal from the apex. This leads to more systematic and logical
cause-and-effect tracing of performance at all levels within the organization.

4. Organizational structure
Initiative, drive and innovation thrive best in a flexible structure. These qualities do not
receive encouragement in a rigid structure. This is because in this type of structure the
authority to approve innovation is often place several levels above the people who
innovate. This makes the proposal pass from person to person and robs the information
reaching the ultimate decision-makers of much of its logic and understanding. What is
needed is a direct relationship between the doer and approver. No matter how strategically
wise or strong a boxer is if he has to call New Delhi to clear each punch during his fight in
Udaipur, he is doomed. In rigid structures, ponderous planning and controls make people
39
give up innovating and become resigned and bitter. Rather than beg for the acceptance of
their innovative ideas they take their ideas and creativity home and become dead wood at
work

Managers commit mistakes while evaluating employees and their performance. Biases and
judgment errors of various kinds may spoil the performance appraisal process. Bias here
refers to inaccurate distortion of a measurement. These are:

First Impression (primacy effect): Raters form an overall impression about the ratee on
the basis of some particluar characteristics of the ratee identified by them. The identified
qualities and features may not provide adequate base for appraisal.

1. Halo Effect: The individual‟s performance is completely appraised on the basis of a

perceived positive quality, feature or trait. In other words this is the tendency to rate a man
uniformly high or low in other traits if he is extraordinarily high or low in one particular
trait. If a worker has few absences, his supervisor might give him a high rating in all other
areas of work.
2. Excessive Stiffness or Lenience: Depending upon the raters own standards, values and
physical and mental makeup at the time of appraisal, ratees may be rated very strictly or
leniently. Some of the managers are likely to take the line of least resistance and rate
people high, whereas others, by nature, believe in the tyranny of exact assessment,
considering more particularly the drawbacks of the individual and thus making the
assessment excessively severe. The leniency error can render a system ineffective. If
everyone is to be rated high, the system has not done anything to differentiate among the
employees.

3. Central Tendency: Appraisers rate all employees as average performers. That is, it is an
attitude to rate people as neither high nor low and follow the middle path. For example, a
professor, with a view to play it safe, might give a class grade near the equal to B,
regardless of the differences in individual performances

4. Personal Biases: The way a supervisor feels about each of the individuals working
under him - whether he likes or dislikes them - as a tremendous effect on the rating of their
performances. Personal Bias can stem from various sources as a result of information
obtained from colleagues, considerations of faith and thinking, social and family
background and so on.

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Spillover Effect: The present performance is evaluated much on the basis of past
performance. “The person who was a good performer in distant past is assured to be okay
at present also”.

 Recency Effect: Rating is influenced by the most recent behaviour ignoring the
commonly demonstrated behaviours during the entire appraisal period.

Therefore while appraising performances, all the above biases should be avoided.

PERFROMANCE APPRAISAL IN OIL AND GAS COMPANY

Performance Appraisal is not an important or easy management task and it should be an once
a easy management task and it should be an once a year event. The reason they conduct
Performance Appraisal in the first place in that they believe in accomplishing two things.

1. Help employees to understand the quality of their current performance and identify
what they must to do to improve it.
2. Motivate employees to improve their performance.

Effective performance Appraisal has 3 basic components.

1 Planning (performance)
2 Managing (performance)
3 Appraising (performance)

1. PERFORMANCE PLANNING

It is the process of identifying desired performance and gaining employees commitments to

perform the organization expectations.

Performance planning clearly identifies the expected results as well as the behavior and skills
which are expected to demonstrate performance planning clearly identifies the expected
results as well as the behaviour and skill which are expected to demonstrate, provide a
specific action plan and aimed at a clear target.

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2.PERFORMANCE MANAGING

This is daily process of working towards the performance expectations established in the
planning phase together manager and employee review the employee‟s performance on a
periodic basis.

3.PERFORMANCE APPRAISAL

It is both the beginning and the end point of performance management. The analysis of past
performance provides the basis for planning next years expectations and at the same time it
“close the loop” of the current cycle.

During this, employees come to know where they stand and what is expected of them and
what they need to achieve in the next performace period. The design also come to know
what results it can expect from their employees and what resource like training and
development, and counseling are needed to help than to achieve the goal.

Main features
A performance appraisal is a systematic general and periodic process that assesses an
individual employee's job performance and productivity in relation to certain pre-established
criteria and organizational objectives. Other aspects of individual employees are considered
as well, such as organizational citizenship behavior, accomplishments, potential for future
improvement, strengths and weaknesses, etc.

To collect PA data, there are three main methods: objective production, personnel, and
judgmental evaluation. Judgmental evaluations are the most commonly used with a large
variety of evaluation methods. Historically, PA has been conducted annually (long-cycle
appraisals); however, many companies are moving towards shorter cycles (every six months,
every quarter), and some have been moving into short-cycle (weekly, bi-weekly) PA. The
interview could function as "providing feedback to employees, counseling and developing
employees, and conveying and discussing compensation, job status, or disciplinary
decisions". PA is often included in performance management systems. PA helps the
subordinate answer two key questions: first, "What are your expectations of me?" second,
"How am I doing to meet your expectations?

Performance management systems are employed "to manage and align" all of an
organization's resources in order to achieve highest possible performance "How performance
is managed in an organization determines to a large extent the success or failure of the
42
organization. Therefore, improving PA for everyone should be among the highest priorities
of contemporary organizations"

Some applications of PA are compensation, performance improvement, promotions,

termination, test validation, and more. While there are many potential benefits of PA, there
are also some potential drawbacks. For example, PA can help facilitate management-
employee communication; however, PA may result in legal issues if not executed
appropriately, as many employees tend to be unsatisfied with the PA process. PAs created in
and determined as useful in the United States are not necessarily able to be transferable
cross-culturally.

Applications of results
A central reason for the utilization of performance appraisals (PAs) is performance
improvement ("initially at the level of the individual employee, and ultimately at the level of
the organization"). Other fundamental reasons include "as a basis for employment decisions
(e.g. promotions, terminations, transfers), as criteria in research (e.g. test validation), to aid
with communication (e.g. allowing employees to know how they are doing and
organizational expectations), to establish personal objectives for training" programs, for
transmission of objective feedback for personal development, "as a means of documentation
to aid in keeping track of decisions and legal requirements" and in wage and salary
administration. Additionally, PAs can aid in the formulation of job criteria and selection of
individuals "who are best suited to perform the required organizational tasks". A PA can be
part of guiding and monitoring employee career development. PAs can also be used to aid in
work motivation through the use of reward systems

Potential benefits

There are a number of potential benefits of organizational performance management

conducting formal performance appraisals (PAs). There has been a general consensus in the
belief that PAs lead to positive implications of organizations.] Furthermore, PAs can benefit
an organization‟s effectiveness. One way is PAs can often lead to giving individual workers
feedback about their job performance From this may spawn several potential benefits such as
the individual workers becoming more productive.

Other potential benefits include:

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 Facilitation of communication: communication in organizations is considered an
essential function of worker motivation. It has been proposed that feedback from PAs aid
in

minimizing employees‟ perceptions of uncertainty. Fundamentally, feedback and

management-employee communication can serve as a guide in job performance.

 Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or

issues may distract employees from their work, and trust issues may be among these
distracting factors. Such factors that consume psychological energy can lower job
performance and cause workers to lose sight of organizational goals. Properly
constructed and utilized PAs have the ability to lower distracting factors and encourage
trust within the organization.
 Goal setting and desired performance reinforcement: organizations find it efficient to
match individual worker‟s goals and performance with organizational goals. PAs
 Provide room for discussion in the collaboration of these individual and organizational
goals. Collaboration can also be advantageous by resulting in employee acceptance and
satisfaction of appraisal results.
 Performance improvement: well constructed PAs can be valuable tools for
communication with employees as pertaining to how their job performance stands with
organizational expectations. "At the organizational level, numerous studies have reported
positive relationships between human resource management (HRM) practices" and
performance improvement at both the individual and organizational levels.
 Determination of training needs: “Employee training and development are crucial
components in helping an organization achieve strategic initiatives” It has been argued
that for PAs to truly be effective, post-appraisal opportunities for training and
development in problem areas, as determined by the appraisal, must be offered. PAs can
especially be instrumental for identifying training needs of new employees. Finally, PAs
can help in the establishment and supervision of employees‟ career goals.

Potential complications

Despite all the potential advantages of formal performance appraisals (PAs), there are also
potential drawbacks. It has been noted that determining the relationship between individual
job performance and organizational performance can be a difficult task. Generally, there are

44
two overarching problems from which several complications spawn. One of the problems
with formal PAs is there can be detrimental effects to the organization(s) involved if the
appraisals are not used appropriately. The second problem with formal PAs is they can be
ineffective if the PA system does not correspond with the organizational culture and system.

45
46
 CHAPTER- 4
RESEARCH

METHODOLOGY

47
48
49
 Aim of the Research

To ascertain the effectiveness of Performance Appraisal methodology used by the

Organization.

Objectives of the study

The following are the objectives of the study –

1. To compare the modern techniques used in performance appraisal in Gspc and Hp

company.
2. To receive increment in salary to employees after performance appraisal in Gspc
and Hp company.
3. To set goals and objectives of performance appraisal in gspc and hp company.
4. To improve the performance of employees in gspc and hp company.
5. To performance appraisal helps to provide an atmosphere all are
encourages to share one another burden in gspc and hp company.

Research Design

A research design is a type of blueprint prepared on various types of blueprints available

for the collection, measurement and analysis of data. A research design calls for
developing the most efficient plan of gathering the needed information. The design of a
research study is based on the purpose of the study.

A research design is the specification of methods and procedures for acquiring the
information needed. It is the overall pattern or framework of the project that stipulates
what information is to be collected from which source and by what procedures.

Sampling

An integral component of a research design is the sampling plan. Specifically, it addresses

three questions

Whom to survey (The Sample Unit)

How many to Survey (The Sample Size) &

How to select them (The Sampling Procedure)

50
 Making a census study of the whole universe will be impossible on the account of
limitations of time. Hence sampling becomes inevitable. A sample is only a portion of
the total employee strength. According to Yule, a famous statistician, the object of
sampling is to get maximum information about the parent population with minimum
effort.

Methods of Sampling

Probability Sampling is also known as random sampling or chance sampling

. Under this sampling design every individual in the organization has an equal
chance, or probability, of being chosen as a sample. This implies that the section
of sample items is independent of he persons making the study that is, the
sampling operation is controlled objectively so that the items will be chosen
strictly at random.

Non Probability Sampling is also known as deliberate sampling , purposeful and

judgmental sampling. Non-Probability Sampling is that which does not provide every
individual in the Organization with a known chance of being included in the sample.

Data collection method

Collection of data is the first step in statistics. The data collection process follows the
formulation for research design including the sample plan. The data can be secondary or
primary.

Collection of Primary Data during the course of the study or research can be through
observations or through direct communication with respondents on one form or another or
through personal interviews. I have collected primary data by the means of a Questionnaire.
The Questionnaire was formulated keeping in mind the objectives of the research study.

Secondary data means data that is already available i.e., they refer to data, which has
already been collected and analyzed by someone else. When a secondary data is used, the
researcher has to look into various sources from where he can obtain data. This includes
information from various books, periodicals, magazines etc.

Research Methodology Adopted

Research Design : Descriptive research

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Research Instrument : Structured Questionnaire

Sampling Plan

i) Sample Method : Non-Probability Sampling

(Convenience Sampling)

50 of the gspc and hp company

ii) Sample Size : respectively.

iii) Sample Unit : Employees who do not hold a

supervisory position

Sampling Design

Convenience Sampling, as the name implies, is based on the convenience of the

researcher who is to select a sample. Respondents in the sample are included in it merely
on account of their being available on the spot where the survey was in progress.

LIMITATIONS OF THE STUDY

 The respondent attitude did not allow me to get their true feelings.

 Most of the employees feared to give their name.

 Most of the employees were busy with their tight work and they don‟t want to be
disturbed.
 Employees are very limited and duration is limited

52
 CHAPTER –5

DATA ANALYSIS

AND

INTERPRETATION

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54
DATA ANALYSIS

The term analysis means the computation of certain measures or indices along with
searching for patterns of relationship that exists among data group. Merely collection of data
cannot be the aim of any research activity but with the help of collected data a researcher
tries to draw the conclusions made generalization, establishes relationship between two or
more variable, test the hypothesis. Under the processes of analysis of data some statistical
methods are used to make data meaningful and self explanatory. The process of analysis of
data made the data to speak about themselves. By analysis, mean the determination of certain
indices or measures along with searching for pattern of relationship that exists among the data
group.

55
Ques1. Which companies of oil and gas industries uses the 360 degree methods of
performance appraisal?

TABLE 1.1

COMPANY YES NO PERCENTAGE

GSPC 35 15 50

HP 40 10 50

DIAGRAM 1.1

45

40

35

30

25
YES
20 NO

15

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis employees says that GSPC i.e. 35%, HP i.e. 40 % industries
uses the 360 degree methods of performance appraisal and where 15%, 10%, respectively
employees responded for NO.

56
Ques.2 Do you receive any increment in your salary after performance appraisal?

TABLE 1.2

COMPANY YES NO PERCENTAGE

GSPC 30 20 50

HP 15 35 50

DIAGRAM 1.2

40

35

30

25

20 YES
NO
15

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis employees says that GSPC i.e. 30%, HP i.e. 15% receive
increment in salary after performance appraisal and where 20%, 35%, respectively employees
responded for NO.

57
Ques3. Do you think performance appraisal helps people set and achieve meaningful
goals?

TABLE 1.3

COMPANY YES NO PERCENTAGE

GSPC 45 5 50

HP 43 7 50

DIAGRAM 1.3

50

45

40

35

30

25 YES
NO
20

15

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis employees says that GSPC i.e. 45%, HP i.e.43%
performance appraisal helps people set and achieve meaningful goals and where 5%, 7%,
respectively employees responded for NO.

58
Ques4. Do you think that performance improve after process of performance appraisal?

TABLE 1.4

COMPANY YES NO PERCENTAGE

GSPC 36 14 50

HP 39 11 50

DIAGRAM 1.4

45

40

35

30

25
YES
20 NO

15

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis employees says that GSPC i.e. 36%, HP i.e.39%
performance improve after process of performance appraisal and where 14%,11%,
respectively employees responded for NO.

59
Ques5. Do you think that performance appraisal help to provide an atmosphere where
all are encourage to share one another burden?

TABLE 1.5

COMPANY YES NO PERCENTAGE

GSPC 26 24 50

HP 28 22 50

DIAGRAM 1.5

30

25

20

15 YES
NO

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis employees says that GSPC i.e. 26%, HP i.e.28%
performance appraisal help to provide an atmosphere where all are encourage to share one
another burden and where 24%, 22%, respectively employees responded for NO.

60
Ques6. Do you think performance appraisal give constructive criticism in a friendly and
positive manner?

TABLE 1.6

COMPANY YES NO PERCENTAGE

GSPC 30 20 50

HP 29 21 50

DIAGRAM 1.6

35

30

25

20
YES
15 NO

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis employees says that GSPC i.e. 30%, HP i.e. 29% and
performance appraisal give constructive criticism in a friendly and positive manner and
where 20%, 21%, respectively employees responded for NO.

61
Ques7. Do you think performance appraisal improves motivation and job satisfaction?

TABLE 1.7

COMPANY YES NO PERCENTAGE

GSPC 38 12 50

HP 33 17 50

DIAGRAM 1.7

40

35

30

25

20 YES
NO
15

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis respondent says that GSPC i.e. 39%, HP i.e. 33%
performance appraisal improves motivation and job satisfaction and where 12%, 40%, 48%,
44% respectively people responded for NO.

62
Ques8. Is the top level management portal in performance appraisal?

TABLE 1.8

COMPANY YES NO PERCENTAGE

GSPC 32 18 50

HP 34 14 50

DIAGRAM 1.8

40

35

30

25

20 YES
NO
15

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis respondent says that GSPC i.e. 32%, HP i.e. 34% the top
level management portal in performance appraisal and where 18%, 14%, respectively
employees responded for NO.

63
Ques9. Do you think performance appraisal helps to change behavior of employees?

TABLE 1.9

COMPANY YES NO PERCENTAGE

GSPC 37 13 50

HP 38 12 50

DIAGRAM 1.9

40

35

30

25

20 YES
NO
15

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis employees says that GSPC i.e. 37%, HP i.e. 38%
performance appraisal helps to change behavior of employees and where 13%, 12%,
respectively employees responded for NO.

64
Ques10. Do you think performance appraisal helps for the future growth?

TABLE 1.10

COMPANY YES NO PERCENTAGE

GSPC 29 21 50

HP 30 20 50

DIAGRAM 1.10

35

30

25

20
YES
15 NO

10

0
GSPC HP

DATA ANALYSIS & INTERPRETATION: -

According to the above analysis respondent says that GSPC i.e. 29%, HP i.e. 30%
performance appraisal helps for the future growth and where 21%, 20%, respectively
employees responded for NO.

65
66
 CHAPTER-6

CONCLUSIONS

AND

SUGGESTIONS

67
68
 CONCLUSION

1. HP company is using more method of performance appraisal than the gspc company.
2. GSPC company is receiving more increment in salary to employees than the hp
company.
3. GSPC company is achieving more goals and objectives to employees than the hp
company.
4. HP company is more improving the performance of employees after the process of
performance appraisal than gspc company.
5. HP company is to more performance appraisal helping to provide an atmosphere all
are encorage to share one another burden than the gspc company.
6. Gspc company is more giving constructive criticism in a friendly and positive
manner in performance appraisal than HP company.
7. Employees of gspc is more improving motivation and job satisfaction than hp
company.
8. Employees of hp company is more top management portal level in performance
appraisal than gspc company.
9. Employees of hp company is more changing behaviour in performance appraisal
than gspc company.
10. Employees of hp company is more future growth in performance apppraisal than
gspc company.

SUGGESTIONS

 In order to improve the performance level of employees the organization should

create more awareness and to provide feedback regularly to the employees about
performance appraisal system.
 Proper training should be given to the employees, in order to increase their knowledge
about the usefulness of the appraisal system.
 Top management shall continually review the appraisal conducted, which shall be
seen as positive support to the system by the appraiser as well as appraises, and their
interest will be maintained.
 After appraisal program if there is any improvement, the employees should be
motivated by Promotion, Increments etc.

69
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CHAPTER-7

ANNEXURE

71
72
 BIBLIOGRAPHY

BOOKS

Human Resource Management : Gary Desler

Appraising and Developing Managerial Performance : T.V.Rao

Research methodology : C.R. Kothari

Statistics : R.S.N. Pillai

Human Resource Management : John M Ivancevich

websites

 www.gailonline.com
 www.hindustanpetroleum.com
 www.essaeoil.com
 www.gspcgroup.com
 www.wikipedia.com
 www.linkedln.com

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74
 QUESTIONNAIRE

Ques1 which companies of oil and gas industries uses the 360 degree methods of
performance appraisal?

A.YES
B. YES

Ques.2 Do you receive any increment in your salary after performance appraisal?
A.YES
B. NO

Ques3.Do you think performance appraisal helps people set and achieve meaningful goals?
A.YES
B. NO

Ques4.Do you think that performance improve after process of performance appraisal?

A.YES
B. NO

Ques5. Do you think that performance appraisal help to provide an atmosphere where all are
encourage to share one another burden?

A.YES
B. NO

Ques.6 Do you think performance appraisal give constructive criticism in a friendly and
positive manner?
A.YES
B. NO

Ques7. Do you think performance appraisal improves motivation and job satisfaction?

A.YES

75
B. NO

Ques8. Is the top level management portial in performance appraisal?

A.YES
B. NO

Ques9. Do you think performance appraisal helps to change behavior of employees?

A.YES
B. NO

Ques10. Do you think performance appraisal helps for the future growth?

A.YES
B. NO

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