PROJECT REPORT ON PERFORMANCE APPRAISAL

For

DABUR INDIA LIMITED (Sahibabad Unit)

A report submitted By NAVIKA SHARMA In partial fulfillment of the requirement of the MBA Course of GNA-INSTITUTE OF MANAGEMANT & TECHNOLOGY PHAGWARA, PUNJAB Under the guidance of: Mr.Pawan Ponia Senior Officer HR Dabur India Limited

ACKNOWLEDGEMENT

Words often fail to express inner feelings of gratitude and indebtedness to ones benefactors, but then it is the only readily available medium through which the undersigned can express her sincere thanks to all those who are associated with her work in one way of the other. I feel it my profound privilege to express my most sincere gratitude and indebtedness to my project guide Mr. Pawan Ponia, Senior Officer HR who was instrumental in providing my direction, constant encouragement and co-operation in my attempt to take this project to its logical conclusion. I also want to thank Mr.Pankaj Yadav, HR Manager for having granted my wonderful opportunity to pursue my summer project at DABUR. And to all the respondents who featured in my survey but remain as nameless entities, I present a deep bow of gratitude. And also to all those who have been of help directly or indirectly but have not featured here. I would like to thank all my teachers at GNA-IMT without whose support this summer training would not have been possible. In brevity, it was pleasure working in the organisation, which provided me the most congenial environment for learning.

Page 2 of 65

TABLE OF CONTENTS
Page nos Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 4.1 Chapter 4.2 Chapter 4.3 Chapter 4.4 Chapter 4.5 Chapter 4.6 Chapter 4.7 Chapter 4.8 Chapter 4.9 Chapter 4.10 Chapter 4.11 Chapter 4.12 Chapter 5 Chapter 6 Chapter 7 Chapter 7.1 Chapter 7.2 Chapter 7.3 Chapter 7.4 Chapter 7.5 EXECUTIVE SUMMARY Daburas FMCG Company Profile Company History Milestones to success Its Products Worldwide Corporate Governance IT initiatives Future Challenges Central Procurement & Planning Department Quality Objectives Organization Structure Dabur Products Vision and Mission Core Values Major Strategic Business Units Research and Methodology Human Resources at Dabur Introduction to Performance Appraisal Aims Objectives Appraisal Techniques28 Who are raters? What should be rated? 07 08 09 10 11-14 14 15 15 15 16 16 17 18-20 21 21 22 23-25 26 27 27 27 28 29 29

Chapter 7.6 Chapter 7.7 Chapter 7.8 Chapter 8 Chapter 8.1 Chapter 8.2 Chapter 8.3 Chapter8.4 Chapter8.5 Chapter8.6 Chapter8.7 Chapter8.8 Chapter 8.9

Factors determining Performance Appraisal Appraisal Methods Appraisal Process Performance Appraisal at Dabur Systems Mechanisms Contribution Enhancement Plan Objectives of CEP Applicability of CEP Business Building Objectives (BBOs) BBOs Identification & Review Processes Conduct the Interim Contribution Reviews Category of Contribution

30 31-34 34 35 35-37 37 38 39 39 39 40 40 41 41 42 42 42 44 45-55 56 59 60 61 62 63-65

Chapter8.10 Contribution Grid Chapter 8.11 Assessment of Managerial Effectiveness Chapter 8.12 Contribution Review Discussion Chapter 8.13 Contribution Enhancement Plan (B) Section 9 Section 10 Section 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Training and Development Analysis and Interpretation Summary of Findings Recommendations Conclusion Bibliography Exhibits

Chapter 10.1 Questionnaire

Page 4 of 65

Page 5 of 65

1.

EXECUTIVE SUMMARY

In todays scenario, Human capital is acknowledged as one of the most potent sources in contributing directly and significantly in the growth of any organization. This project attempts to explore the most effective HR policies and practices for smooth sailing of an organisation. It was a research conducted to get the feedback of the employees from different departments about the existing performance appraisal system followed in the organization. The main research objective was to understand the relevance of wide variety of methods and techniques that can be explored towards performance of the organizational goals. In todays competitive world every organization is geared towards maximum return with minimum investment. Human Resource Management plays a vital role towards planning & controlling cost effective manpower support. This is widely affected by planning and implementing Effective Performance Appraisal System which is the paramount part of this project Channelising human energies in a predetermined desirable direction are not possible unless harmonious relations are maintained among team members involved in business development. Concept of employee retention was also understood through the project study. The ways adopted by companies to manage grievances and stress and thereby motivating the employees and reducing employee turnover were studied through the project.

2.

DABUR AS AN FMCG COMPANY

Today, the FMCG is the fourth largest sector in the Indian economy and there are many FMCG companies like HUL, ITC, Britannia, Tata Tea, Nestle, Godrej Consumer, Dabur, Marico etc. Dabur India Limited is the fourth largest FMCG Company in India. Dabur has five other subsidiaries- Dabur Foods, Dabur Nepal, Dabur Egypt, Dabur Oncology and Dabur Pharma. Business Daburs product range encompasses health care, personal care, ayurvedic specialities and food segments. Brands Well-known brands include Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola, Dantmanjan, Nature Care, Pudin Hara and Real. Location Dabur has been marketing its products in more than 50 countries all over the world. The company has offices and representatives in Europe, America and Africa. Manufacturing facilities are spread across three overseas locations. Turnover Building on a legacy of quality and experience for over 100 years, today Dabur has a turnover of Rs.1899.57 with powerful brands.

Page 7 of 65

3.

COMPANY PROFILE

Page 8 of 65

4.

COMPANY HISTORY

1884 1896 Early 1900s 1919 1920 1936 1972 1979 1986 1992 1993 1994 1995 1996 1997 1998 2000 2003 2005 2006 2006

Birth of Dabur Setting up a manufacturing Plant Ayurvedic Medicines Establishment of Research Laboratories Expands further Dabur India (Dr. S.K Burman) Pvt. Ltd. Shift to Delhi Sahibabad fctory / Dabur Research Foundation Public Limited Company Joint Venture with Agrolimen of Spain Cancer treatment Public issues Joint ventures 3 separate divisions Food Division/Project STARS Professionals to manage the Company Turnover of Rs 1000 crores Dabur demerges Pharma Business Dabur acquires Balsara Dabur announces Bonus after 12 years Dabur crosses $2 Bin market cap, adopts US GAAP

Page 9 of 65

4.1 Milestones to Success

Dabur India Ltd. made its beginnings with a small pharmacy, but has continued to learn and grow to a commanding status in the industry. The Company has gone a long way in popularizing and making easily available a whole range of products based on the traditional science of Ayurveda. And it has very high standards in developing products and processes that meet stringent quality norms. o o o o 1884 - Established by Dr. S K Burman at Kolkata 1896 - First production unit established at Garhia 1919 - First R&D unit established Early 1900s- Production of Ayurvedic medicines

Dabur identifies nature-based Ayurvedic medicines as its area of specialization. It is the first company to provide health care through scientifically tested and automated production of formulation based on our traditional science. o 1930 Automation and Upgadation of Ayurvedic product manufacturing initiated o 1936 Dabur ( Dr. S.K Burman) Pvt. Ltd. Incorporated o 1940- Personal care through Ayurveda Dabur introduces consumers to personal care through Ayurveda, with the launch of Dabur Amla Hair Oil. The product was so popular that it became the largest selling hair oil brand in India. o 1949- Launched Dabur Chyawanprash in tin pack Widening the popularity and usage of traditional Ayurvedic products continues. The ancient restorative Chyawanprash is launched in packaged form, and becomes the first branded chyawanprash in India. o 1957- Computerizations of operations initiated

Page 10 of 65

1970- Entered Oral Care & Digestives Segment Addressing rural markets where homemade oral care is more popular than multinational brands, Dabur introduces Lal Dant Manjan. With this a conveniently packaged herbal toothpowder is made available at affordable costs to masses. o o 1972- Shifts base to Delhi from Calcutta 1978- Launches Hajmola tablet

Dabur continues to make innovative products based on traditional formulations that can provide holistic care in our daily life. An Ayurvedic medicine used as a digestive aid is branded and launched as the popular Hajmola tablet. o o o o 1979- Commercial production starts at Sahibabad, the most modern herbal medicines plant at that time 1984- Dabur completes 100 years 1988- Launches pharmaceutical medicines 1989- Care with fun

The Ayurvedic digestive formulation is converted into a childrens fun product with the launch of Hajmola Candy. In an innovative move, a curative product is converted to a confectionary item for wider usage. o o o 1994- Comes out with first Public issue 1994- Enters oncology segment 1994- Leadership in Health care

Dabur establishes its leadership in health care as one of only two companies worldwide to launch the anti-cancer drug Intaxel (Paclitaxel). Dabur Research Foundation develops an eco-friendly process to extract the drug from its plant source .

Page 11 of 65

o o

1996- Enters foods business with the launch of Real Fruit Juice 1996- Real blitzkrieg

Dabur captures the imagination of young Indian consumers with the launch of Real Fruit Juices- a new concept in the Indian foods market. The first local brand of 100% pure natural fruit juices made to International standards, Real becomes the fastest growing and largest selling brand in the country. o o 1998- Burman family hands over the management of the company to professionals 2000- The 1,000 crore mark

Dabur establishes its market leadership status by staging a turnover of Rs. 1,000 crores. Across a span of over 1000 years, Dabur has grown from a small beginning based on traditional health care. o 2001- Super specialty drugs

With the setting up of Dabur Oncologys sterile cytotoxic facility, the Company gains entry into the highly specialized area of cancer therapy. The state-of-the art plant and laboratory in the UK have approval from the MCA of UK. They follow FDA guidelines for production of drugs specifically for European and American markets. o o 2002- Dabur record sales of Rs. 1163.19 crore on a net profit of Rs 64.4 crore 2003- Dabur demerges Pharmaceutical business

Maintaining Global Standards As a reflection of its constant efforts at achieving superior quality standards, Dabur became the first Ayurvadic products company to get ISO 9002 certification.

Page 12 of 65

Science for Nature Reinforcing its commitment to nature and its conversation, Dabur Nepal, a subsidiary of Dabur India, has set up fully automated greenhouses in Nepal. This scientific landmark helps to produce saplings of rare medicinal plants that are under threat of extinction due to ecological degradation. Merger with Balsara Merger of 3 Balsara Companies- Besta cosmetics, Balsara hygiene Products and Balsara Home Products to be effective from April 1,2006. o o
o

2005- Dabur acquires Balsara 2006- Dabur announces Bonus after 12 years 2006- Dabur crosses $2 Bin market cap, adopts US GAAP

Dabur Worldwide Daburs mission of popularizing a natural lifestyle transcends national boundaries. Today there is global awareness of alternative medicines, nature based and holistic lifestyles and an interest in herbal products. Dabur has been in the forefront of popularizing this alternative way of life, marketing its products in more than 50 countries all over the world.

4.2

Its Products World Wide

o Africa o o A special herbal health care and personal care range successfully selling in markets of the Middle East, Far East and several European countries. Inroads into European and American markets that have good potential due to resurgence of the back-to-nature movement. Offices and representatives in Europe, America and

Page 13 of 65

4.3

Corporate Governance
In India, the Securities and Exchange of India (SEBI) stipulates corporate governance standards for listed companies through the Clause 49 of the listing agreement of the stock exchanges. Good corporate governance and transparency in actions of the management is key to a strong bond of trust with the Companys stakeholders. Dabur understands the importance of good governance and has constantly avoided an arbitrary decisionmaking process. In this pursuit, Dabur has already put in place systems and procedures and is fully compliant with the revised Clause 49 well before it becomes mandatory. Thus at Dabur, we believe good governance is key to strong bond of trust between the company and all its stakeholders.

4.4

IT Initiatives
In Dabur India Limited knowledge and technology are key and efficiency. Towards this overall goal of technology-driven performance, Dabur is utilizing the world. It will also cut down costs and increase profitability. Information Technology in a big way. Resources, which have helped the Company, achieve higher levels of excellence this will help in integrating a vast distribution system spread all over India and across.

4.5

Future Challenges

Forward Integration of SAP with Distributors and Stockists. Backward Integration of SAP with Suppliers. Implementation of new POS system at Stockist point and integration with SAP-ERP. Implementation of SAP HR and payroll.

Page 14 of 65

SAP Roll-out to DNPL and other new businesses

4.6

Central Procurement & Planning Department

Dabur has established a Central Procurement & Planning Department (CPPD) to take care of all high value purchases across the company. The CPPD is housed at the Kaushambi Corporate Office (KCO) and is headed by the head- CPPD. Low value purchases are de-centralized at he manufacturing units. A Unit Purchase Heads the Purchase Department at the manufacturing units. Dabur India Limited has also set up a cross-functional Purchase Committee to guide and oversee the purchasing function at the KCO. The purchase committee comprises of the following: Head CPPD Head Marketing Deputy General Manager Operations Chief Financial Officer

4.7

Quality Objectives
To focus on customer and successfully meet their needs and requirements. To manufacture effective personal care, ayurvedic and food products at competitive prices and improve the quality of life of common masses. To implement system to ensure prevention of errors rather than detection of errors. To ensure global competitiveness by striving to achieve Current and Good Manufacturing Practices (CGMP)

Page 15 of 65

4.8

Organization structure

Daburndia Ltd India . I Corporate Office

Chairman (Vivek Burman C )

Executive Director (Operations)

Chief Executive Officer Sunil Duggal

Unit Heads

Heads (Marketing) Head Head (Finance & Commercial) (Human Resources) Regional Managers) Branch Manager Marketing Executives Customer Support Officers Assistants Head (Quality Control) Head (Mfg. & Shop Maintenance)

Manager (Accounts) Asst. Manager ( ) Comm Accounts Officer Sr. Executive (Stores)

HR Manager HR Executive HR Sup.

Assistant Manager Assistant Manager Senior Officers Senior Officers Officers / Supervisors Officers / Supervisors

Page 16 of 65

4.9 Dabur Products

Dabur Health Care Product Range

Health Supplements Digestives Hajmola Yumstick Hajmola Mast Masala Anardana Hajmola Hajmola Candy Pudina hara Dabur Hingoli Dabur Chyawanprash Dabur Chyawanshakti Glucose-D

Natural Cures Shilajit Gold Nature Care Ring Ring Itch Care Back-aid Shankha Pushpi Dabur Balm Sarbyna Strong

Page 17 of 65

Page 18 of 65

Dabur Baby Care Product Range Baby Care

Dabur Lal Tail Dabur baby Olive oil Dabur Janma Ghutti

Dabur Personal Care Product Range Hair Care-Oil

Amla Hair Oil Amla Lite Hair Oil Vatika Hair Oil Anmol Sarson Amla Hair Care- Shampoo Anmol Silky Black Shampoo Vatika Henna conditioning Shampoo Vatika Anti-Dandruff Shampoo

Skin Care

Gulabari Vatika Fairness Face Pack Uveda face pack & fairness cream

Dabur Oral Care Product Range Oral Care

Page 19 of 65

Dabur Red Gel Babool Toothpaste Dabur Red Toothpaste Dabur Lal Dant Manjan Dabur Binaca Toothbrush

Dabur Foods Product Range Real Real Fruit Juice Real Active

Homemade Lemoneez Natural Lemon Juice

Honey Pure Natural Honey

Capsico A fiery red-pepper sauce

Dabur Ayurveda Product Range Dashmularishtha Ashokarishtha Lauhasava Mahanarayan Tail

Page 20 of 65

Juritap Madhuvani Lavan Bhasker

Page 21 of 65

4.10 Vision and Mission

Founding Thought: What is that life worth which cannot bring comfort to others. Vision: Dedicated to the health and well being of every household. Mission: To become a leading nature-based health and family care Products Company.

4.11 Core Values

Ownership: Accept personal responsibility, and accountability to meet business needs. Passion for Winning: Leaders in the area of responsibility, with a deep commitment to deliver results. Determined to be the best at doing what matters most. People Development: People are the most important asset. Add value through result driven training, and we encourage & reward excellence. Customer Focus: Superior understanding of consumer needs and develop products to fulfill them better. Team Work: Work together on the principle of mutual trust & transparency in a boundary-less organisation. Intellectually honest in advocating proposals, including recognizing risks.

Page 22 of 65

4.12 Major Strategic Business Units

In India, the Companys business is carried out by three Strategic Business Units (SBUs) namely:

Consumer Care Division, with a share of 82% in its total sales. Consumer Healthcare Division, with a share of 8% in its total sales.

Dabur Foods Limited as a wholly owned subsidiary with a share of 10% in its total sales.

% share in Domestic Revenues

Food 10% CHD 8% Food CHD CCD

CCD 82%

Page 23 of 65

5.

RESEARCH AND METHODOLOGY

Research is an organized inquiry designed and carried out to provide information to solve the problem. The fact, search is an art of scientific investigation of a certain problem. Research is the process of systematically obtaining accurate answers to significant and pertinent questions by the use of the scientific methods gathering and interpreting information. a. Sample size: Sample size is 30. Data was analyzed by surveying employees from different departments. b. Sample design: This part is done through discussing and analyzing with my project guide and referring to the subject regarding this topic. It was a random sampling. c.

Page 24 of 65

Title of the study The title of the study is Performance Appraisal at Dabur India Limited, Ghaziabad (U.P) Objective of the study 1) 2) 3) 4) 5) To study the performance appraisal system in the organization. To find out how the performance of employees is assessed. To review how the performance appraisal system helps in placement, selection, promotion and transfer of the employees. To find out the problems faced by the staff in preparing their BBOs (Business Building Objective). To offer suggestions and recommendation regarding the existing performance appraisal system in the company. Limitations of Performance Appraisal 1) 2) 3) 4) 5) The opinion of staff and manager are often in opposition, causing de-motivation. The process is usually manager driven and the staff member is expected to be compliant in the interview. The process usually involves manager giving their opinion and the staff member having to defend the position, rather than a positive discussion. There is no room for remedial action during the year. The process is usually done in a rushed manner to meet the budget development process and therefore loses its relevance to performance.

Page 25 of 65

SOURCES OF DATA Data Collection is the collection of necessary detail to gain further information. This requires both primary and secondary data. A. Secondary data: My HR guide, Mr. Pawan Ponia in Dabur India Limited, helped me in secondary data collection. ]

Page 26 of 65

6.

HUMAN RESOURCE AT DABUR

Dabur places great deal of confidence on its excellent pool of human resources, which it realizes is the key to its further growth strategy. The company continued its efforts to further align its HR policies, processes and initiatives to meet the business needs. In line with its focus on international operations, Dabur implemented a uniform HR structure across all the groups companys operations. This will enable seamless transaction s between domestic and overseas position. Also the integration of the personnel of the erstwhile Family Products Division (F.P.D) & Healthcare Products Division (H.C.P.D) was implemented efficiently to suit the requirements well within time. Major initiatives taken were: Dabur implements performance metrics for all key positions based on two aspects of the Balanced Score Card Approach- Financial and Internal Business Process. This approach clearly outlines the expectation from each position and will be upgraded to include two more aspects for any key managerial positions in future. The Company institutionalized the Assessment and Development Center(A.D.C) approach to all positions from staff to officer cadre and also at the senior levelsto objectively identify, develop and promote the talent from within, and to provide individual feedback for development of the participating employees. To encourage learning, the Company is planning to set-up a learning center, which will be equipped with a library, I.T & Web based sources of knowledge. It is also in the process of setting up a knowledge management portal and a leadership and capability development cell Dabur is committed to attract fresh talents. Towards this end, the company required over 20 candidates from leading management and engineering institutes in the country, who will be inducted.

Page 27 of 65

7.

INTRODUCTION TO PERFORMANCE APPRAISAL

This is a technique, not universally accepted, of assessing the performance of employees against agreed targets. The personnel practitioners would be most likely to be involved in designing the procedures, leaving the line managers normally to administer the process. Performance Appraisal is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development. 7.1 Aims of Performance Appraisal The following aims might be considered when examining a performance appraisal system: 7.2 Use reliable, fair and objective measures of performance, compare actual with planned performance, and provide feedback to the appraisee. Make provision for the allocation of both extrinsic rewards (performance related pay) and intrinsic rewards (opportunity to enhance ones skills) following the assessment process. Recognize that performance management is the heart of the general management process. Objectives of Performance Appraisal Data relating to performance assessment of employees are recorded, stored and used for several purposes. The main purposes of employee assessment are: To effect promotions based on competence and performance. To confirm the services of probationary employees upon their completing the probationary period satisfactorily. To assess the training and development needs of employees. To decide upon a pay raise where regular pay scales have not been fixed.

Page 28 of 65

7.3 Appraisal Techniques

Certain techniques are available to evaluate the performance of the employee.

Written report: The appraiser writes about the strengths, weaknesses,

previous performance and potential of the appraisee, with suggestions for improvement. It is important that the appraiser is perceptive with reasonable writing skill.

Critical incidents: The appraiser highlights incidents or key events that

show the appraisees behavior as exceptionally good or bad in relation to particular outcomes at work. This exercise would depict desirable behaviors as well as behavior that signal a need for improvement.

Graphic Rating Scale: This is a popular appraisal technique and it lends

itself to quantitative analysis and comparison of data. A set of performance factors id identified, including such characteristics as quality of work, technical knowledge, cooperative spirit, integrity, punctuality and initiative. The appraiser would go through the set of factors rating them, for e.g., on a scale 1 to 5 where the highest number would denote the best rating.

Multi-person Comparison: This technique is relative rather than an

absolute measure, is used to assess one persons performance against one or more other individuals.

Multi-rater Comparative Evaluation: The total appraisal process

consists of interviews, psychometric testing, simulations of relevant work activities, peer appraisals and appraisals by trained assessors.

Self-appraisal: Self-appraisal has introduced as a mean for empowering

employees, enhancing teamwork and raising awareness of quality. The employees are given appraisal forms on which they evaluate themselves against criteria such as attendance, productivity, quality, safety, teamwork and commitment.

Page 29 of 65

7.4

Who are Raters? Raters can be immediate supervisors, specialists from the HR department, subordinates, peers, committees, clients, self-appraisals, or combinations of several. Immediate supervisor is the most fit candidate to appraise the performance of his or her subordinates as no one is more familiar with the subordinates performance than his or her superior. Subordinates can assess the performance of their superiors. This helps in assessing an employees ability to communicate, delegate work, allocate resources, disseminate information and resolve intra-personal conflict. Peers are in a better position to evaluate certain facts of job performance, which the subordinates or superiors cannot do. Where superiors, subordinates and clients, make the appraisal it is called 360degree system of appraisal.

7.5

What should be Rated? Quality: The degree to which the process or result of carrying out an activity approaches in terms of fulfilling the activitys intended purpose. Quantity: The amount produced, expressed in monetary terms, number of units or number of completed activity cycles. Timeliness: The degree to which an activity is completed or a result produced at the earliest time desirable Cost Effectiveness: The degree to which the use of organizations resources is maximized in the sense of getting the highest gain by minimizing the losses. Need for Supervision: The degree to which a job performer can carry out a job function. Interpersonal Impact: The degree to which a performer promotes feeling of self-esteem, goodwill and cooperation among co-workers and subordinates.

7.6

Factors Determining Performance Evaluation

Page 30 of 65

Halo Error: A halo error takes place when one aspect of an individuals performance influences the evaluation of the entire performance of the individual. Rating employees separately on each of a number of performance measures and encouraging raters to guard against the halo effect are the two ways to reduce the halo effect. Leniency: Every evaluator has his own value system, which acts as a standard against which he makes his appraisals. Relative to the true or actual performance an individual exhibits, some supervisors have a tendency to be liberal in their ratings. Central Tendency: This occurs when the evaluator assigns average or middle ratings to the employees. The attitude of the rater is to play safe. This safeplaying attitude stems from certain anxieties and doubts about the behavior of employee. Such tendency distorts the evaluation. Rater Effect: This includes favoritism, stereotyping and hostility. Excessively high or low scores are given only to certain individuals or groups based on the raters attitude towards the rate. Age, sex, race and friendship biases are examples of this type of error. Perceptual Set: This occurs when the raters assessment is influenced by previously held beliefs. If supervisor, for example, has a belief that employees hailing from one particular region are hard working, his subsequent rating of an employee hailing from that region tends to be favorably high. Spillover Effect: This refers to allowing past performance appraisal ratings to unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating for the current period although the demonstrated behavior does not deserve the rating good or bad. Status Effect: It refers to overrating of employees in higher level job or jobs held in high esteem, and underrating employees in lower level job or jobs held in low esteem.

7.7

Performance Appraisal Methods

Page 31 of 65

The last to be addressed in the process of designing an appraisal program is to determine methods of evaluation. Numerous methods have been devised to measure the quantity and quality of employees job performance. Broadly, all the approaches of appraisal can be classified into: Past oriented Methods, and Future oriented Methods Past Oriented Methods

Rating Scale: This is the simplest and most popular technique for appraising employee performance. The typical rating scale consist of several numerical scales, each representing a job related performance criterion such as dependability, initiative, output, attendance, attitude, co-operation, and the like. Each scale ranges from excellent to poor. The rater checks the appropriate performance level on each criterion, and then computes the employees total numerical score. The number of points scored may be linked to salary increase. The disadvantages of this method are several. The raters biases are likely to influence evaluation. Checklist: Under this method, a checklist of statements on the traits of the employee and his or her job is prepared in two columns i.e., a Yes and a No column. All that the rater should do is tick the Yes column if the answer to the statement is positive and in column No if the answer is negative. After ticking off against each item, the rater forwards the list to the HR department where the actual assessment of the employee takes place. The advantages of a checklist are economy, ease of administration, limited training of rater and standardization.

Page 32 of 65

Essay Method: In the essay method, the rater must describe the employee within a number of broad categories, such as: i) The raters overall impression of the employees performance, ii) The promotability of the employee, iii) The jobs thats the employee is now able or qualified to perform, iv) The strengths and weaknesses of the employee, v) The training and the development assistance required by the employee The strength of the Essay method depends on the writing skills and analytical ability of the rater. A problem with this method is that the ratees may be rated on the quality of the appraisals that they give.

Ranking Method: In this, superior ranks his or her subordinates in the order of their merit, starting from the best to the worst. The HR department knows that A is better than B. The how and why are neither questioned nor answered. This method is subject to the halo effects. Its advantage includes ease of administration and explanation. Forced Distribution Method: One of the errors in rating is leniencyclustering a large number of employees around a high point on a rating scale. This method seeks to overcome the problem by compelling the rater to distribute the ratees on all points on the rating scale. The method operates under an assumption that the employee performance level conforms to a normal statistical distribution. The major weakness of the forced distribution method lies in assumption that employee performance levels always conform to a normal distribution.

Page 33 of 65

Future Oriented Appraisal

Management by objective: I t was Peter Drucker who gave first the concept of MBO to the world way back in 1954.. Application of MBO in the field of performance appraisal is a recent thinking. One comment made against the approach is that it is not applicable to all jobs an all organization. Objectives are agreed and formulated at the beginning of the period under review, and the appraisee is given the necessary assistance and training to facilitate the achievement of those objectives. Psychological Appraisal: Large organization employs full-time industrial psychologists. When psychologists are used for evaluations, they assess an individuals future, potential and past performance. The appraisal normally consists of in-depth interviews, psychological tests, discussions with supervisors and a review of other evaluations. The psychologist then writes an evaluation of the employees intellectual, emotional, motivational and other related characteristics that suggest individual potential and may predict future performance. From these evaluations, placements and development decisions may be made to shape the persons career. Assessment Centers: Mainly used for executive hiring. Assessment centers are now being used for evaluating executive or supervisory potential. An assessment center is a central location where managers may come together to have their participation in job-related exercises evaluated by trained observers. Assesses are requested to participate in in-basket exercises, work groups, computer simulations, role playing and other similar activities. After recording their observations of ratee's behaviors, the raters meet to discuss these observations. Self-appraisal and peer evaluation are also thrown in for final rating. 360-Degree Feedback: Where multiple raters are involved in evaluating performance, the technique is called 360-degree appraisal. The 360-degree technique 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. The 360-degree appraisal provides a broader perspective about an employees performance. However, there are drawbacks

Page 34 of 65

associated with the 360-degree feedback. Receiving feedback on performance from multiple sources can be unapproachable. It is essential that the organization create a nonthreatening environment by emphasizing positive impact of the technique on an employees performance and development. More and more number of firms are using 360-degree appraisal technique to assess the performance of their employees.
7.8

Performance Appraisal Process The figure outlines the performance appraisal process. Each step in the process is crucial and is arranged logically.

Per

8.

PERFORMANCE APPRAISAL AT DABUR

Page 35 of 65

8.1

The System Performance Appraisal of Grade VI and below in Dabur is carried out through RATING METHOD. Their immediate superior does performance appraisal and HR department reviews it. Performance Evaluation is done by Contribution Enhancement Plan (CEP) at the end of the year. CEP forms the core of Performance Appraisal system of employees (Grade VI and below in Dabur) The performance appraisal of executives in Dabur is carried out through rating system of performance appraisal by their immediate supervisor and then reviewed by latters boss. The performance appraisal system followed at Dabur is Rating Method and Action by Objectives Method.

The broad structure of the system can be laid down as:

Page 36 of 65

Eval Ass

The performance appraisal of executives in Dabur is carried out through rating system of

Assessment 5

performance appraisal by their immediate supervisor and then reviewed by latters boss. The performance appraisal system followed at Dabur is Rating Method and Action by Objectives Method.

Discuss

The broad structure of the system can be laid down as:

Computatio Use
Page 37 of 65

Fixing of Business Building Objectives (BBOs) at the beginning of the year

Assessment of actual results at the end of The year

Performance evaluation and finalizing of Rating through the use of Contribution Enhancement Plan (A)

Rewarding executives on the basis of Performance through CEP (A) & CEP (B)

8.2

Mechanism The evaluation under CEP consist of following steps: i. ii. iii. iv. v. Appraiser does the rating after considering individual assessment parameters of every employee. Scores are given against each assessment parameter of an individual in the rating column on the basis of 5-point rating. Rating is reviewed with the reviewer. Total score is computed by adding all the scores. The rating category corresponding to the appropriate range of total scores is selected as overall final performance rating of employees from rating scale table. vi. The individual development form is filled by the Appraisee, which is further utilized for training and development needs of employees, besides giving a direction to his/her career growth in the organization.

Page 38 of 65

vii.

After completing the appraisal, a constructive feedback should be given to the Appraisee by the Appraiser in presence of reviewer. Finally, Contribution Enhancement Plan discusses rating for deciding upon the performance rewards in the form of: Annual Rewards Promotions

8.3

Contribution Enhancement Plan Contribution Enhancement Plan or CEP is a process, which will enable Dabur to improve organizational contribution through enhanced contribution of individual. It aims to establish formal individual objectives and to review subsequent contribution in order to reinforce successful behaviors, to correct shortfalls and to plan training and development activities. The system will ensure that all management staff employees are aware as to what is expected from them. This is a developmental plan for the improvement in contribution of executives towards organizations or SBUS achievement of objectives and its development. It is categorized into 2 parts: Contribution Enhancement Plan {(CEP)A} Contribution Enhancement Plan {(CEP)B}

Contribution Enhancement Plan (A) evaluates the contribution of an individual and decides revision in fixed pay and Contribution Enhancement Plan (B) is concerned with variable pay.

8.4 i)

Objectives of CEP To establish formal contribution standards.

Page 39 of 65

ii) iii) iv)

To establish a system that is fact based and minimizes subjectivity in the assessment of an individuals contribution. It should provide constructive feedback for development of an employee. Enable the individual to evaluate his/her own areas of strengths and areas of improvement for being a better manager. 8.5 Applicability of CEP The system is applicable to Grade V and above employees of the company. Setting of 3 to 5 BBOs, which are measurable Related to area/position in which employees operates. Evaluation of contribution and focus on employee development.

i)

ii)

iii) iv)

8.6

Business Building Objective (BBOs) Process Business Building Objectives (BBOs) are mutually agreed objectives between an employee and his/her superior. These are tangible business targets, which are measurable. The first stage is for the people initiating the review cycleto understand the business plan so that there is clarity about the direction and priorities of the organization. This will help ensure that individual BBOs support the overall business plan.

8.7

BBOs Identification and Review Processes BBOs needed to be established the light of the annual business plan. The set objectives must be relevant in context with each individual role. The employees must prepare in advance his/her draft objectives for the next year and contribution against objectives set for the past year. The same need to be

Page 40 of 65

carried by the appraisee for discussion with the appraiser. The appraiser will also come prepared with BBOs (both past and future) for the employee. At the meeting they will discuss the year ahead and seek agreement on various objectives. During the same meeting they will also discuss the contribution against the past years BBOs. Once the objectives for the next year are set and agreed upon the same need to be communicated to the employee in writing. The employee shall be evaluated against BBO during mid-year at the end of assessment year. BBOs identification, assessment and review of contribution, assessment of traits and skills, training and development needs and plans will be joint responsibility if the appraisee and the appraiser. The reviewer needs to be satisfied that the key elements of the process have done correctly. 8.8 Conduct the Interim Contribution Review/s In the mid of the assessment year the appraiser and the appraisee should meet to review the progress against the set BBOs. This should include a discussion of an assessment of whether any BBOs should be amended, deleted or introduced. The Interim Contribution Review is a formal opportunity to reinforce effective behaviors, identify and correct any problems, give general feedback/advice, and to ensure the annual assessment will be fair. This should be recorded in writing and a copy is given to the individual.

8.9

Category of Contribution

Page 41 of 65

The Contribution rating is to be done on a 5-point scale for each set BBO. Their ratings are as follows: Rating Qualitative Description Consistently exceed job expectations and standards. Employee contribution has been exemplary and has displayed good grasp of the job and handles additional responsibilities with confidence and ease, while overcoming exceptional challenges or applying unique solutions. Very good contribution and often exceeds job expectations. A good learner who can handle the job with minimum supervision. Meet expectation on most of the set objectives. Requires occasional supervision and has adequate knowledge of the job. Inconsistent in meeting the set objectives. Needs regular guidance. Has knowledge about the job however the same needs to be brushed up Contribution is much below the set targets. Constantly needs supervision and guidance. Processes low level of job knowledge and skills Score

Outstanding (OS)

Strong (ST) Good (GD)

4 3

Satisfactory (ST)

Below Expectations (BE) 8.10 Contribution Grid

The contribution grid for arriving at final rating is as follows: Final Rating Outstanding Strong Good Satisfactory Below Expectation 8.11 Assessment of Managerial Effectiveness CEP forms pertain to evaluation of managerial competencies. Performing each job requires application of certain behavior traits/skills. Therefore, it is desirable Total Score Range 4.26-5.00 3.51-4.25 2.51-3.50 1.51-2.50 <1.50

Page 42 of 65

to assess the appraise on traits/skills. The appraiser will pick the relevant traits/skills applicable to the job/function. Minimum of 6 and maximum of 8 traits/skills must be chosen after careful thought and thereafter rated on 5-point scale as mentioned below: Skills/Traits Strongly Demonstrated Fairly Demonstrated Present but not constantly demonstrated Require significant development Not up to the expectation 8.12 Contribution Review Discussion The Contribution Review Discussion is intended to be an enriching process both for Appraise and Appraiser. This is a critical and final stage of the entire CEP and therefore has to be handled with utmost sensitivity, so that maximum value addition is derived from this interaction between Appraise and Appraiser. 8.13 Contribution Enhancement Plan B (CEP B) After evaluation under Contribution Enhancement Plan (B), variable for each executive is compared through (CEP B). Variable pay is a lump sum amount to be paid to appraise once a year on the basis of the performance. Ratings 5 4 3 2 1

Page 43 of 65

The assessment of variable pay is done using the following table: Criterion Companys performance Unit/SBUs performance Individual performance % of fixed amount if criterion is 100 fulfilled 33% 33% 34%

If the companys performance meets the targeted performance then it will be calculated as: (companys actual performance/companys targeted performance)* 100%.

Page 44 of 65

9.

TRAINING AND DEVELOPMENT

Dabur should hire professionals from outside to head key positions to become a player of repute. In 1998, business was not big and being a family-owned company, there were issues in hiring. Dabur was hiring literally at the rate of 20-30%. They started hiring from campuses only in 1996-97. They went to the campuses and carried out serious brand building exercise. Today their lateral hiring has come down to around 10-15%. Dabur expanded their business and went to IIM for hiring. They also evolved new strategies and a more structured hiring process. This was a huge success and they hired close 100 people in the last two years. The attrition rate at management level is 10% while at the field staff level its 16%. Dabur has also introduced Esops for freshers to address the retention issue right at the entry level. Currently, the annual training spend is around Rs 1.5 crore. Training and Development plays a vital role in CEP, which pertains to identification of training needs through a joint process of discussion between Appraise and Appraiser. The employee himself does this through guidance, feedback counseling and task force assignment including self-development initiatives.

Page 45 of 65

10. ANALYSES AND INTERPRETATION

Q1.

Do you think that Performance Appraisal is essential for the employees of the company? a) Fully b) Partially c) Not at all

Graph1. Performance Appraisal is essential

Partially 20%

Not at all 0%

Fully Partially Not at all

Fully 80%

Page 46 of 65

Analysis and Interpretation: It shows 80% of the employees agree that performance appraisal is essential for the employees of the company and 20% of the employees partially agree. Currently annual appraisal system in Dabur India Limited is carried out for the employees at executive levels and above only. The target set may be reviewed quarterly so that strengths and weaknesses, if any, can be assesses and remedial measures suggested accordingly. Q2: Performance appraisal has been described as the responsibility, which is not liked by the superiors. Do you think so? a) Yes b) Partially c) Not at all

Graph2: Perfromance Appraisal is described as responsibility

Not at all 27%

Yes 27% Yes Partially Not at all

Partially 46%

Page 47 of 65

Analysis and Interpretation: 46% executives say that they consider performance appraisal as the responsibility they liked the least. 27% executives agree that it is a responsibility not liked by them and remaining 27% denies about any such probability. Considerable amount of time is spent for getting the appraisals done as per the existing system. The company should improve the existing system by designing and implementing departmental performance review system on a quarterly basis. Q3: Do you agree that self-appraisal prior to performance appraisal facilitates you to get high ratings? a) Completely b) Partially c) Not at all
Graph3: Self appraisal prior to perfromance appraisal facilitates to get high ratings.

Not at all 27%

Completely 27%

Completely Partially Not at all

Partially 46%

Page 48 of 65

Analysis and Interpretation: 45.5% of the employees say partially self-appraisal facilitates to get high ratings, 27.3% employees agree completely and other 27.2% say self-appraisal does not help in high ratings in performance appraisal. Many FMCG companies (eg. Britannia) have implemented the self-appraisal system. This has proved helpful in identifying the needs for in-house group discussions/counseling methods/training and development programs. Q4: a) b) c) Does your supervisor give you effective feedback on a regular basis? Yes Depends on the employees Not at all

Graph4: Does superior gives effective feedback on regular basis

100 90 80 70 60 Percentage 50 40 30 20 10 0 Yes Depends on the employees Not at all

Yes Depends on the employees Not at all

Page 49 of 65

Analysis and Interpretation: It is clear in the graph that 100% of the employees say that the superior gives them effective feedback on a regular basis. Any company should give feedback to the employees periodically. They can also extend proper diagnostic tips/ counseling methods at the required level. Q5: a) b) c) Do you think that performance appraisal is the tool that improves employees performance level? To a great extent To some extent Not at all

Graph5: Performance appraisal improves employees perfromance level

Not at all 8%

To some extent 18%

To some extent To a great extent Not at all To a great extent 74%

Page 50 of 65

Analysis and Interpretation: The graph shows 74% employees agree that up to a great extent, 18% say that to some extent and 8% of the employees believe performance appraisal not at all improves performance appraisal. Currently the companys existing appraisal system is on annual basis. This may be reviewed on a quarterly basis, which will help in assessing the strengths and weaknesses of executives and role modifications can be suggested accordingly. Q6: Are you capable of achieving goals set for you? a) b) c) Consistently Occasionally Never
Graph6: Capability of attaining the set goals

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consistently Occassionally Opinion of employees Never Consistently Occassionally Never

Page 51 of 65

Analysis and Interpretation: The graph shows 100% of the employees are consistently capable of attaining their set goals. The target achieved by the employees may be vis--vis the target achieved last year. The company should endorse proper diagnostic mapping for role modifications/ training and development needs. Q7: a) b) c) To what extent is the Dabur India Limited making progress towards its mission and goals? To a great extent To some extent No opinion Graph7: Dabur India Limited making progress towards its mission and goals

No opinion To some extent 0% 18% To some extent To a great extent No opinion

To a great extent 82%

Page 52 of 65

Analysis and Interpretation: In this graph 82% of the employees say that Dabur India Limited is making progress towards its mission and goals to a great extent and 18% employees say that only to some extent company is making progress towards mission and goals. For the further progress of companys mission and goals organizational planning and development department should be involved for quarterly analysis of the feedback received. Q8: Do you get merit raise when the performance evaluation indicates that you are meeting the set standard on the job? a) To a great extent b) To some extent c) Not at all Graph8. Merit raise when the employees meet the standard

Not at all 10% To some extent 20% To a great extent To some extent To a great extent 70% Not at all

Analysis and Interpretation:

Page 53 of 65

70% of the employees say up to a great extent they get merit raise, 20% employees say that up to some extent they get merit raise and minority of 10% employees agree they do not get any merit raise. Apart from the merits awarded based on the performance indicators, HR should introduce system for proper recognition rewards to such employees.

Q9: a) b) c)

Do your co-workers and superiors help you to cope up with your poor performance?

To a great extent To some extent Not at all

Graph 9: Support of co-workers and superiors

Not at all 0%

To some extent 47% To a great extent 53%

To some extent To a great extent Not at all

Analysis and Interpretation:

Page 54 of 65

The graph shows 53% of the employees say up to great extent their co-workers and superiors help them to cope up with their poor performance and 47% say to some extent. Dabur India Limited can also concentrate on designing and implementing proper inhouse counseling program through group discussions/ personal interaction. Q10: In your opinion to what extent are the superiors responsible for the progress of Dabur India Limited? a) b) c) To a great extent To some extent Not at all
Graph10: Superiors responsible for the progress of Dabur India Limited

Not at all 35%

To some extent 28% To some extent To a great extent Not at all

To a great extent 37%

Analysis and Interpretation: The graph shows 37% of the employees believe to a great extent superiors are responsible for the progress, 28% are responsible to some extent and 35% say the superiors are not at all responsible for the progress of the company.

Page 55 of 65

For the progress of the company the performance appraisal of the top-level management are also to be carried on a quarterly basis. Competency skills are to be assessed and effective role modification areas are to be suggested.

Page 56 of 65

10.1

QUESTIONNAIRE ON PERFORMANCE APPRAISAL Name: Age: Gender: Qualification: Experience: Department:

QUESTIONAIRE

Q.1) Do you think that performance appraisal is essential for the employees of the company? a) fully b) partially c) not at all.

Q.2) Does your supervisor give you effective feedback on a regular basis? a) yes b) depend on employees c) not at all.

Q.3) Do you think appraisal system provides an opportunity for self review? a) fully b) partially c) not at all.

Page 57 of 65

Q.4) The appraisal requires an opportunity for both appraiser and appraise to review Expectation and improvement respectively. Do you think so?

a) Yes b) to a great extent c) to some extent

Q.5) Do you think that performance appraisal is the tool that improve employees performance level? a) to a great extent b) some extent c) Not at all

Q.6) Does Dabur India Limited ever conducted the Periodic Orientations programs ? a) Yes b) No c) Dont Know

Q.7) Periodic Orientation programs are helpful to explain the objectives and other details of appraisal system?

Page 58 of 65

a) to a great extent b) some extent c) Not at all

Q.8) Performance review discussions are conducted with a view to maintain quality of work and care for the employee. Do you think so? a) Yes b) to a great extent c) to some extent

Q.9) To what extent is the Dabur India Limited making progress towards its mission and goal towards employee commitment towards work? a) to a great extent

b) some extent

c) Not it all

Q.10) Do your co-workers and superiors help you to cope up with your weak performance? a) to a great extent

Page 59 of 65

b) some extent c) Not it all

Q.11) Do you think superiors supports the subordinates to improve their performance in Dabur India Limited? a) To a great extent b) To some extent c) Not at all

Q.12) Do you think that just giving a letter of appreciation is a right way to appreciate the performance of employees? a) Yes b) No c) The opportunity should be given to be part of the team. d) The opportunity should be given to work closely with managers and management.

Q.13) Do you think that performance appraisal is a good technique to develop positive Relations and reduce grievances? a) to a great extent b) to some extent. c) Not at all.

Q.14) Do you think that appraisal should be quarterly/ yearly or on the completion of the Target?

Page 60 of 65

a)Yes b) No c) Cant say

Q.15) Are you capable of achieving goals set for you? a) Consistently b) Occasionally c) Never

11.

SUMMARY OF FINDING

Presently, Dabur India Limited is following annual appraisal system for employees at the executive and the above level only. The target may be reviewed on a quarterly basis. Time is a crucial factor. Company can delegate the responsibility to employees by designing and implementing performance review system on a quarterly basis. The self-appraisal system is widely adopted by other FMCG companies, which is helpful in identifying need for in-house group discussions/ counseling methods.

Page 61 of 65

Superiors should give feedback to employees periodically. They can also provide proper diagnostic tips/ counseling methods at required level. Dabur has an existing system on annual basis. They can review on quarterly basis. Dabur India Limited can endorse proper diagnostic mapping for role modifications/ training and development needs. Company can also involve organizational planning and development department to achieve its mission and goals. For the merit raise, HR should introduce system for proper recognition rewards to such employees. Company should mainly concentrate on in-house counseling program through group discussions/ personal interaction for the better performance of employees. Competency skills should be assessed and effective role modification areas can be suggested for the better progress of the company.

Page 62 of 65

12.

RECOMMENDATION

In order to have a better liaison within the co-workers and their superiors the company should have a well-planned communication system and employees views should be taken into consideration.

While working under pressure the employees performance is affected so it becomes necessary that the management should try to analyze the strengths and weaknesses of the employees.

Teamwork should be assigned to employees, which will be helpful in establishing leadership qualities and also becoming aware of others problems.

Employees should be given proper training and development programs to learn new concepts and technologies as to expand their capabilities, knowledge, skills etc.

Page 63 of 65

13.

CONCLUSION

In the new millennium when the corporate world is designing newer techniques for developing employees and retaining them, Dabur India Limited is no way behind and the organizational structure is such that people works hand in hand to align the organizational goals with the individuals goals. Evaluation of employees performance is helpful as to strengthen the employees productivity, their promotion, transfer, training and development needs etc. The organization has implemented the evaluation process not only to evaluate the performance of employees but also for their increment and promotion. The company follows a transparent performance appraisal system with no personal bias because it is wholly based on individuals contribution towards the organization. But there are some loopholes in the system that should be analyzed and corrective measures should be taken. To sum it up, this project has provided me with opportunities to learn different areas of the HR function and has given me stepping-stones to climb up to reach the summit of HR at the end of my career.

Page 64 of 65

14.

BIBLIOGRAPHY

Page 65 of 65