PROJECT REPORT ON

Analyzing Performance Appraisal System

With Special Reference To

Maharashtra State Electricity Distribution Company Limited (MSEDCL)

By Vishal Shivasharan SUBMITTED IN PARTIAL FULFILLMENT OF THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION UNIVERSITY OF PUNE THROUGH

Pad. Dr. D. Y. Patil Institute of MCA, MBA

Akurdi, PUNE 44 2011-2012

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ACKNOWLEDGEMENT
Vital to every operation is co-operation. We really agree to this wonderful quotation put forth by Mr. Frank Tyger. This project was successful due to the co-operation extended by people who have truly contributed towards it. We gratefully acknowledge Prof. Sapma Ramani whos deep sharing and synergy has moved us many levels beyond our own thinking. We want to thank the management of various companies who gave us the permission to conduct research. We would also like to thank all the employees and HR executives who empowered us with valuable information. And finally to those whose lives and writings has come the wisdom of the ages. We have tried to learn from your legacy.

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ABSTRACT
Appraisal is a continuous process and done annually as a formal exercise before completion of the financial year. Appraisal has tremendous motivational impact on people through meaningful feedback and is a powerful tool for recognition. This project explains performance appraisal system and tries to find out how efficiently Performance Appraisal is conducted. And if performance appraisal doesnt meet its objective then, what are the factors causing failure.

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Serial No.

Name Of Chapter Introduction Company Profile Review of Literature Research Methodology Data Presentation, Analysis and Interpretation Conclusion

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INTRODUCTION
Understanding performance management What is Performance? How is Performance managed? Need of Performance Appraisal Statement of Problem Objective of Study

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INTRODUCTION
In the business world investment is made in machinery, equipment and services. Quite naturally time and money is spent ensuring that they provide what their suppliers claim. In other words the performance is constantly appraised against the results expected. When it comes to one of the most expensive resources companies invest in, namely people, the job appraising performance against results is often carried out with the same objectivity. Each individual has a role to play and management has to ensure that the individuals objectives translate into overall corporate objectives of the company. Performance Management includes the PERFORMANCE MANAGEMENT performance appraisal process which in turn helps identifying the training needs and provides a direction for career and succession planning.
CORPORATE GOALS

1.1 Understanding Performance Management

DETERMINE INDIVIDUAL OBJECTIVES LINKED TO CORPORATE GOALS ENSURE RESPONSIBILITY AND ACCOUNTABILITY

PERFORMANCE APPRAISAL

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PERFORMANCE LINKED INCREMENTS/ INCENTIVES/ REWARDS

1.2 What is Performance?

Performance is synonymous with behaviour; it is what people actually do. Performance includes those actions that are relevant to the organizational growth and can be measured in terms of each individuals proficiency (level of contribution). Effectiveness Performance refers to the evaluation of results of performance that is beyond the influence or control of the individual.

1.3 How is Performance managed?

Good performance by the employees creates a culture of excellence, which benefits the organization in the long run. The activity includes evaluation of jobs and people both, managing gender bias, career planning, and devising methods of employee satisfaction etc. the efforts are to make to generate the individuals aspirations with the objectives of the organization. Organization has to clear the way of career advancements for talented and hardworking people. Fear of any kind from the minds of the employees should be removed so that they give best to their organization. Allow free flow of information. Communication network should be designed in such a way no one should be allowed to become a hurdle. This enables the managers to take correct decisions and that too quickly.

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1.4 Need of Performance Appraisal?

Todays working climate demands a great deal of commitment and effort from employees, who in turn naturally expect a great deal more from their employers. Performance appraisal is designed to maximize effectiveness by bringing participation to more individual level in that it provides a forum for consultation about standards of work, potential, aspirations and concerns. It is an opportunity for employees to have significantly greater influence upon the quality of their working lives. In these times of emphasis on quality, there is a natural equation: better quality goods and services from employees who enjoy better quality goods and services from their employers. Performance appraisal must be seen as an intrinsic part of a managers responsibility and not an unwelcome and time-consuming addition to them. It is about improving performance and ultimate effectiveness. Performance appraisal is a systematic means of ensuring that managers and their staff meet regularly to discuss post and present performance issues and to agree what future is appropriate on both sides. This meeting should be based on clear and mutual understanding of the job in question and the standards and outcomes, which are a part of it. In normal circumstances, employees should be appraised by their immediate managers on one to one basis. Often the distinction between performance and appraising is not made. Assessment concerns itself only with the past and the present. The staff is being appraised when they are encouraged to look ahead to improve effectiveness, utilize strengths, redress weaknesses and examine how potentials and aspirations should match up. It should also be understood that pushing a previously prepared report across and desk cursorily inviting comments, and expecting it to be neatly signed by the employee is not appraisal - this is merely a form filling exercise which achieves little in terms of giving staff any positive guidance and motivation.

THE APPRAISAL OF PERFORMANCE SHOULD BE GEARED TO: Improving the ability of the jobholder; 9|Page

 Identifying obstacles which are restricting performance Agreeing a plan of action, that will lead to improved performance. It is widely accepted that the most important factor in organization effectiveness is the effectiveness of the individuals who make up the organization. If every individual in the organization becomes more effective, then the organization itself will become more effective. The task of reviewing situations and improving individual performance must therefore be a key task for all managers. For appraisal to be effective, which means producing results for the company, each manager has to develop and apply the skills of appraisal

These are: Setting standards on the performance required, which will contribute to the achievement of specific objectives Monitoring performance in a cost effective manner, to ensure that previously agreed performance standards are actually being achieved on an ongoing basis Analyzing any differences between the actual performance and the required performance to establish the real cause of a shortfall rather than assume the fault to be in the jot holder. Interviewing having a discussion with the jobholder to verify the true cause of a shortfall, a developing a plan of action, which will provide the performance, required Appraisal can then become a way of life, not concerned simply with the regulation of rewards and the identification of potential, but concerned with improving the performance of the company. The benefits of appraisal in these terms are immediate and accrue to the appraising manager, the subordinate manager/employee, and to the company as a whole

1.5 Statement of the Problem

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

1.6 Objective of the Study

The various objectives of our research are as follows To examine why an appraisal system is important. To find the expectation of appraisee To determine the satisfaction level of the appraisee To reveal the various loopholes in the appraisal system if any

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COMPANY PROFILE
Company Introduction Vision/Mission of the Organization Major Achievements of Organization Ongoing Projects Structure of the Organization HRM Dept in Organization

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2.1 Company Introduction

Maharashtra State Electricity Distribution Company Limited (MSEDCL) came into existence on June 6, 2005 after unbundling the erstwhile Maharashtra State Electricity Board into four companies. MSEDCL is also known as Mahavitaran or Mahadiscom. Mahadiscom is one of the largest public sector company engaged in the business of electricity distribution with annual turnover of Rs. 21,278 Cores. It serves 156.96 Lakh consumers in Maharashtra State with a committed pool of over 75000 employees.

2.2 Mission statement

1. We, as professional company, rededicate ourselves to serve all our customers by extending reliable and quality power supply at reasonable and competitive tariffs so as to boost agricultural, industrial and overall economic development of Maharashtra. 2. We commit to Honesty, Integrity and Transparency in actions to achieve higher standards of Consumers Satisfaction. 3. We aim at achieving technological excellence and financial turnaround for the overall benefit of the customers. 4. We will strive hard for system improvement and stress upon preventive maintenance. 5. We will ruthlessly curb the theft of electricity. 13 | P a g e

6. We will encourage and support energy saving activities and Demand Side Management thereby optimizing the use of electricity. 7. We will fulfill our commitment to society by improving quality of life.

2.3 Major Achievements of Organization

Mahavitaran for the first time registered a profit of Rs. 117 crore during the year 2007-08.

The distribution loss in the system has been reduced by 3.16% in FY 2005-06 and 2.09% in FY 2006-07. It was reduced by whopping 5.41% in FY 07-08. The present loss level of MSEDCL is 24.09%.

The collection efficiency has improved to the level of 98% in FY 2007-08 from 89% three years back.

Six dedicated police stations have been established in Maharashtra to handle power theft cases only.

A special power theft drive was launched from April- 2007. During FY 2007-08 about 90,000 cases of power thefts amounting to Rs. 55.41 Crore have been detected. This is more than the thefts detected during FY 2006-07. More than 9000 FIRs have been registered against the power theft accused. Presently this drive is implemented consecutively for 15 days every alternate month. During April to September 2008 it resulted in 36383 cases and recovery of Rs. 25 crore as penalties and FIRs against 3559 persons.

A special programme for regularization of unauthorized Ag Load extension (Krishi Swabhiman Yojana 2007) was launched from 1st September 2007 to October 31, 2007. More than 3 Lakh HP load was regularized & Rs. 26.46 Crore collected. The scheme contributed to increase in connected load, reduction in distribution losses and increase in revenue.

Bhiwandi Circle with 44 % distribution losses and 68 % collection efficiency has been franchised out to M/S Torrent Power on 26.01.2007 for ten years. The experiment has been quite encouraging. It has reduced losses to 22.77%, improved collection efficiency to 77.00% & earned Rs.4.27 Crorer profit per month for Mahadiscom. 14 | P a g e

USAID/MOP, GOI aided Distribution, Reforms, Upgrade and Management (DRUM) project work at Aurangabad Urban I Division (Rs. 161 Crores) has been started where best practices in distribution will be introduced to showcase.

For customer satisfaction 24X7 hour operating 15 Call Centers have been commissioned for redressing no power complaints of consumers.

50 Customer Facilitation Centers have been commissioned at sub-division level for redressing billing complaints of customers. The basic idea is to introduce single window clearance for customers at sub-division level.

Infrastructure distribution planning reports (DPRs) for 119 divisions are inprincipally approved by MERC. The cost of these DPRs is Rs.8918/- Crore out of which financial tie up for 97 projects of Rs. 7192/- crore has been made available. The work is in progress.

For load management, Single Phasing Scheme has already been completed due to which 12011 villages in the state have been benefited . These villages get 10 hours of single phase and 7 hours of 3 phase supply.

Gaothan Feeder Separation Scheme for 16231 villages has been planned and is under implementation. The work of separate agriculture feeder for 4300 villages have been completed at the end of September 2008. Balance work is in progress and will be completed by March 2009. In this scheme separate 11/22 KV feeders are being laid for Gaothan for assuring evening time supply for lighting in villages. The work is carried out on turnkey basis.

MSEDCL has called for long term power purchase bids for 2000 MW under case I, stage I, under which 1320 MW from M/s Adanis Project at Gondia (Maharashtra ) and 680 MW from M/S Lancos Chattisgarh project will be made available from 2012 onwards. In addition, a competitive bidding process for 2000 MW under stage II of case I and 1600 MW under case II as per Central Govt. directives is under progress. Recently a PPA for 250 MW from NTPCs Vindhyachal stage IV has also been signed.

All time payment machines for bill payment (24X7 hours) have been installed in major metros.

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A novel scheme of photo meter reading of all domestic & commercial consumers has been introduced. 1,01,41,575 consumers have been covered as on September-08.

AMR for over 8500 substation feeders has been planned on BOOT basis. To reduce AT&C loss, APDRP Scheme has been introduced for 30 cities where work is in progress.

Work in progress for Distribution SCADA for 12 cities. Project reports at the estimated cost of Rs. 716/- Corer have been submitted to REC for Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) covering 5554 villages in 34 districts. The main aim of the scheme is to provide supply to BPL families. Scheme for 4 districts is sanctioned by REC/GOI, where work is in progress

There are in all 256,793 Distribution Transformer Centers (DTCs) in operation. In a project estimated to cost Rs. 82 crore, 134,591 DTCs have already been metered and another 15000 DTCs will be metered during 2008-09. It has been decided to read all these DTC meters by the Photo Meter Reading method. This will complete the exercise of energy accounting at distribution transformer level.

Consumer indexing for 13 million customers is completed. In order to provide better consumer services outsourcing of meter reading, billing and collection for energy bill has been introduced.

Independent 11 Zonal Consumer Grievance Redressal Forums established for redressing consumer complaints.

Energy bills of all metered consumers are available on website along with previous 12 months consumption data.

Employees are being deputed for All India level training programs (over 2000 engineers deputed under DRUM Training Programme).

Aurangabad DRUM training center for Technicians has been recognized by USAID for linemen level (technicians) training (all India) center.

Centralized MIS system is being setup from subdivision to corporate office level for better information flow.

Revenue collection has gone up from Rs. 1100 to Rs. 1800 Crores per month.

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2.4 Ongoing Projects

Gaothan Feeder Separation Scheme

1)To provide uninterrupted power supply particularly to Rural/Semi urban consumers and thereby reducing the feeling of discrimination and discontent compared to urban consumers. 2) Flattening of load curve in a judicial way.Therefore reducing the cost on Power purchase and reducing the penalty for unscheduled interchanges. 3) Better energy accounting for Ag consumption. 4) Reduction of T&D losses. 5) System strengthening by improving the infrastructure.

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Gaothan Feeder Separation Scheme Phase-I Program : No. of feeders 11KV Line . Total DTCs No. of villages covered Load Management - 1504 Nos - 23011 Kms - 9785 Nos - 7437 Nos - 1976 MW

Programme of Commissioning :

March 2009.

Based at District :

Nanded, Beed, Osmanabad, Latur, Nasik, Dhule, Jalgaon, Ahmednagar, Solapur, Kolhapur, Satara, Sangli, Pune, Aurangabad, Jalna, Parbhani, Amravati, Akola, Yavatmal, Buldhana.

Estimated Cost : Finance :

Rs.943 Crores Loan Sanctioned from REC for Rs 714.55 Crores. No. of Feeder commissioned:1318 Nos 11KV line Charged: 19457 Kms DTCs Commissioned: 7238 Nos No. of villages benefited: 5185 Nos Load Management: 1592 MW

Progress as on 30th April 2009:

Gaothan Feeder Separation Scheme Phase II.

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To provide un-interrupted power supply particularly to Rural / Semi urban consumers and thereby reducing the feeling of discrimination and discontent compared to urban consumers. 2) Flattening of load curve in a judicial way. Therefore reducing the cost on Power purchase and reducing the penalty for unscheduled interchanges. 3) Better energy accounting for Ag consumption. 4) Reduction of T&D losses. 5) System strengthening by improving the infrastructure.

Program :

No. of feeders 11KV Line Total DTCs No. of villages covered No. of wadies covered Load Management

- 1067 Nos - 27063 Kms -13722 Nos - 8491 Nos - 2020 Nos - 1646 MW

Programme of Commissioning :

June - 2009.

Based at District :

Nasik, Dhule, Jalgaon, Ahmednagar, Wardha, Bhandara, Chandrapur, Gadchiroli, Gondia, Nagpur, Solapur, Kolhapur, Satara, Sangli,, Pune Rural, Aurangabad, Jalna & Parbhani, Amravati, Akola, Buldhana, Yavatmal

Estimated Cost : Finance :

Rs. 1446.07 Crores

Loan sanctioned from REC for Rs 1301.48 Crores. No. of Feeder commissioned:165 Nos 11KV line Charged: 1857 Kms DTCs Commissioned: 732 Nos No. of villages benefited: 545 Nos Load Management: 119 MW 19 | P a g e

Progress as on 30th April 2009:

2.5 HRM Dept in Organization

In Maharashtra State Electricity Distribution Company the Human Resource Department role are vital and various rules and regulation were adopted out of them there are following three important service regulation will be applicable in HR Dept.

1) MSEDCL Employees Service Regulations 2005. 2) Classification and Recruitment Regulations 2005. 3) MSEDCL Employees Seniority Regulations 2005.

1) MSEDCL Employees Service Regulations 2005. In exercise of the power conferred by Government of Maharashtra Vide Notification No. 1005/CR/9061(2)/Energy -5 dt.04.06.05 Rule No.6 (9), (10) & Reform 1005/CR9061(4)/Energy -5 at. 28.06.5 Rule 1(3) under section 131,133 and 134 of the Electricity Act,2003 (36 of 2003) Maharashtra State Electricity Distribution Company Ltd. adopts the erstwhile MSEB Employees Service Regulations 1963, mutatis mutandis as follows:* These Regulations called The Maharashtra State Electricity Distribution Company Ltd. Employees Service Regulations, 2005 shall replace the Maharashtra State Electricity Board Employees Service Regulations 1963 by which the employees of the Maharashtra State Electricity Distribution Company Ltd. (hereafter referred to in these Regulations as Company) were hitherto governed .These Regulations came into effect from 06.06.2005 in the Maharashtra state.

The above Regulation following chapters are there. CHAPTER - I : GENERAL 20 | P a g e

CHAPTER - II : Definitions and interpretations. CHAPTER - III :- General Conditions of Service. CHAPTER - IV :- PAY ( Drawing of salary etc.) CHAPTER - V :- LEAVE. CHAPTER - VI :- TRAVELLLING ALLOWENCES. CHAPTER - VII :- CONDUCT, DESCIPLONE AND PAAEAL REGULATIONS. CHAPTER - VIII :- Regulation relating to work -charged staff & casual workers. CHAPTER- IX :- MISCELLANEOUS.

2) Classification and Recruitment Regulations 2005. In exercise of the power conferred by Government of Maharashtra Vide Notification No. 1005/CR/9061(2)/Energy -5 dt.04.06.05 Rule No.6 (9), (10) & Reform 1005/CR9061(4)/Engergy -5 dt. 28.06.5 Rule 1(3) under section 131,133 and 134 of the Electricity Act,2003 (36 of 2003) Mahrashtra State Electricity Distribution Company Ltd. adopts the erstwhile MSEB Classicificaion & Recruitment Regulations 1961,to regulate classification and recruitment ot posts in various categories in its service. In above regulation the following schedule are there. A - I : Technical (Dist) cadre. A 2 : Non Tech. Cadre. 1) General Administration Department (HR) 2) Account & Finance . 3) Legal Department. 4) Industrial Relations. A- 3 : Information Technology. A- 4 : Store Cadre. 21 | P a g e

A- 5 A- 6

: Security & Vigilance Cadre. : Public Relations Cadre.

A 7 : Selection Posts and Non-Selection Posts. 3) MSEDCL Employees Seniority Regulations 2005. In exercise of the power conferred by Government of Maharashtra Vide Notification No. 1005/CR/9061(2)/Energy -5 dt.04.06.05 Rule No.6 (9), (10) & Reform 1005/CR9061(4)/Energy -5 dt. 28.06.5 Rule 1(3) under section 131,133 and 134 of the Electricity Act,2003 (36 of 2003) Mahrashtra State Electricity Distribution Company Ltd. adopts the erstwhile MSEB Employees Seniority Regulations 1961, to regulate the seniority of the employees in its service . Seniority shall be based on the length of continuous service in the particular category. For the purposes of fixing seniority, length of shall be counted from the date of the order of appointment or of promotion and not the date of joining the post.

2.6 Structure of Organization

The organization structure of MSEDCL is very wide through Maharashtra and deeply rooted so as to serve the clients and to fulfill the set targets by the management. If we go through the organizational chart of MSEDCL, we can understand the structure, components and way of administration. For the benefit of study, one has to see the organizational chart with meticulous thinking.

2.7 Man power

Pay Group

Tech Section

GAD ( HR)Section 01 05 51 48 105

Account Section 02 09 165 01 177

Informaion Technology Section 02 05 0 01 08

Vigilance Department 0 01 03 0 04 22 | P a g e

Pay GR-I Pay GR-II Pay GR-III Pay GR-IV Total

21 173 164 923 1281

Operators Pay Gr- III APPRENTICS

Dy.Operators 35 50

Assistant Operator 67

Junior Operator 95

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M.S.E.D.C.L ORGANISATION STRUCTURE

M.D.

EX.DIR (OPERATION) CHIEF ENGINEER

EX.DIR (PROJECT)

EX.DIR (FINANCE)

EX.DIR (HR) EX.DIR (COMM) CGM (P)

AMRAVATI

AURANGAB AD KOLHAPUR

BHANDOOP GENERAL MANAGER (P)

KOKAN

LATUR

NAGPUR

NASHIK

PUNE

KALYAN

NANDED

BARAMATI

MANAGER (P)

SUPRITENDING ENGINEER CIRCLE OFFICE SOLAPUR

ASSITANT MANAGER (P)

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REVIEW OF LITERATURE

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Introduction:
Appraising the performance of individuals, groups and organisations is a common practice of all societies. While in some instance these appraisal processes are structures and formally sanctioned, in other instances they are an informal and integral part of daily activities. Thus, teachers evaluate the behavior of their children, and all of us, consciously or unconsciously evaluate our own actions from time to time. In social interactions, performance is conducted in a systematic and planned manner to achieve widespread popularity in recent years.

Meaning:
Performance appraisal is a method of evaluating the behavior of employees in the work spot, normally including both the quantitative aspects of job performance.1 Performance here refers to the degree of accomplishment of the tasks that make up an individuals job. It indicates how well an individual is fulfilling the job demands. Often the term is confused with effort, but performance is always measured in terms of results and not efforts. A student, for example, may exert a great deal of effort while preparing for the examination but may manage to get a poor grade. In this case the effort expended is high but performance is low. In order to find out whether an employee is worthy of continued employment or not, and if so, whether he should receive a bonus, a pay rise or promotion, his performance needs to be evaluated from time to time.2 When properly conducted performance appraisal not only let the employee know how well he is performing but should also influence the employees future level of effort, activities, results and task direction.3 Under performance appraisal we evaluate not only the performance of a worker but also his potentials for development. For some of the important features of performance appraisal may be captured thus.

Need for Performance Appraisal

Performance appraisal is need in order to:
1)

Provide information about the performance ranks basing on which decision regarding

salary fixation, confirmation, promotion, transfer and demotion are taken.

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2)

Provide feedback information about the level of achievement and behavior of

subordinate. This information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work, if necessary.

3)

Provide information which helps to counsel the subordinate.

4)

Provide information to diagnose deficiency in employee regarding skill, knowledge,

determine training and developmental needs and to prescribe the means for employee growth provides information for correcting placement.

5)

To prevent grievances and in disciplinary activities.

Purpose
Performance appraisal aims to attaining the different purposes. They are:1) 2) To create and maintain a satisfactory level of performance. To contribute to the employee growth and development through training, self and

management development programmers. 3) 4) 5) 6) To help the superiors to have a proper understanding about their subordinates. To guide the job changes with the help to continuous ranking. To facilitate fair and equitable compensation based on performance. To facilitate for testing and validating selection tests, interview techniques through

comparing their scores with performance appraisal ranks. 7) 8) To provide information for making decisions regarding lay off, retrenchment etc. To ensure organizational effectiveness through correcting employee for standard and

improved performance, and suggesting the change in employee behavior.

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Content of Performance Appraisal:

Every organization has to decide upon the content to be appraised before the programmed is approved. Generally content to be appraised is determined on the basis of job analysis. Content to be appraised may be in the form of contribution to organizational objectives (measure) like production, cost saving, return on capital, etc. other measures are based on: 1) 2) 3) Behavior which measure observable physical actions, movements. Objectives which measure job related results like amount of deposits mobilized. Traits which are measured in terms of personal characteristics observable in

employees job activities. Content to be appraised may vary with the purpose of appraisal and type and level of employees.

Who Will Appraise? 360 Performance Appraisal

The appraiser may be any person who has through knowledge about the job content, contents to be appraised, standards of contents, and who observes the employee while performing a job. The appraiser should be capable of determining what is more important and what is relatively less important. He should prepare reports and make judgments without bias. Typical appraisers are: supervisors, peers, subordinates, employees themselves, users of service and consultants. Performance appraisal by all these parties is called 360 Performance appraisals.

Supervisors:
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Supervisors include superiors of the employee, other superiors having knowledge about the work of the employee and department head or a manager. General practice is that immediate superiors appraise the performance which in turn is reviewed by the departmental head/manager. This because supervisors are responsible for managing their subordinates and they have the opportunity to observe, direct and control the subordinate continuously. Moreover, they are accountable for the successful performance of their subordinates. Sometimes other supervisors, who have close contact with employee work also appraise with a view to provide additional information. On the negative side, immediate supervisors , any emphasis certain aspects of employee performance to the neglect of others. Also, managers, have been known to manipulate evaluations to justify their decisions on pay increases and promotions. However, the immediate supervisors will continue to evaluate employee performance till a better alternatives is available. Organizations, no doubt, will seek alternatives because of the weaknesses mentioned above and a desire to broaden the perspective of the appraisal.

Peers:
Peers appraisal may be reliable if the work group is stable over a reasonably long period of time and performs tasks that require interaction. However, little research has been conducted to determine how peers establish standards for evaluating others or the overall effect of peer appraisal on the groups attitude. Whatever research was done on is topic was mostly done on military personnel at the management level( officers or officers candidates ) rather that on employees in business organizations . more often than not in business organizations if employees were to be evaluated by their peers, the whole exercise may degenerate into a popularity contest, paving the way for the improvement of work relationship.

Subordinates:
The concept of having supervisors rated by subordinates is being used in most organizations today, especially in developed countries. Such a novel method can be useful in other organizationally settings too provided the relationships between superiors and subordinates are cordial. Subordinates rating in such cases can be quite useful in identifying competent superiors . the rating of leaders by combat soldiers is an example. However, the fear of reprisal often compels a subordinate to be dishonest in his ratings. Though useful in 29 | P a g e

universities and research institutions, this approach may not gain acceptance in traditional organizations where subordinates practically do not enjoy much discretion.

Self Appraisal:
If individuals understand the objectives they are expected to achieve and the standards by which they are to be evaluated, they are to a great extent in the best position to appraise their own performance. Also, since employee development means self development, employees who appraise their own performance may become highly motivated.

Performance Evaluation To Performance Analysis And Development:

Performance appraisal was formerly used for the purpose of evaluating the employee performance and controlling the performance against the set standards. This technique was used to control the employee ignoring the human aspect. But, with the emergence of human resource concept, organisations are using this technique to analyses employee performance and to further improve or develop it. Thus, this technique is now used as an enabling and motivating to improve the performance. The performance analysis and development helps the oraganisation to meet the following challenges. Create a culture of excellence that inspires every employee. Match organisational objectives to individual aspirations. Equip people with the skills necessary to perform their duties. Clear growth paths for specially talented individuals. Provide new challenges to rejuvenate plateauing careers. Forge partnerships with people for managing their careers. Empowers employees to take decisions without fear of failing. 30 | P a g e

 Embed teamwork in all operational processes. Allow the voices of workers closet to the customer to be heard. Debureaucratise the structure for free flows of information.

System of Performance Appraisal:

Performance appraisal is a seven-stege process. At the first stage, performance standards are established based on job description and job specification. The standards should be clear, objectives and incorporate all the factors. The second stage is to inform this standard to all the employee including apprises. The third stage is following the instruction given for appraisal measurement of employee performance by the appraises through observation, interview, records and reports. Fourth stage is finding out the influence of various internal and external factors on actual performance. The influence of these factors may be either inducing or hindering the employee performance. The measured performance may be adjusted according to the influence of external and internal factors. The performance derived at this stage may be taken a actual performance. Fifth stage is comparing the actual performance with that of other employees and previous performance of the employee and others. This gives an idea where the employee stands. If performance of all the employees is ranked either too high or too low, there may be something wrong with the standards and job analysis.

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 Sixth stage is comparing the actual performance with the standards and finding out deviations. Deviations may be positive or negative. If employees performance is more than the standards, it is positive deviation and vice versa is negative deviation. Seventh stage is communicating, the actual performance of the employee and other employee doing the same job and discuss with him about the reasons for positive or negative deviations from the pre-set standards as the case may be.

Essential Characteristics Of An Effective Appraisal System:

Performance appraisal system should be effective as a number of crucial decisions are made on the basis of score or rating given by the appraiser, which in turn is heavily based on the appraisal system. Appraisal system, to be effective, should possess the following essential characteristics: 1. Reliability and Validity: Appraisal system should provide consists, reliable and valid information and data, which can be used to defend the organization-even in legal challenges. If two appraisers are equally qualifies and competent to appraise an employee with the help of same appraisal technique satisfies the conditions of inter-rater reliability. Appraisals must also satisfy the condition of validly be measuring what they are supposed to measure. For example, if appraisal is made for potentials of an employee for promotion, it should supply the information and data relating to potentialities of the employee to take up higher responsibilities and carry on activities at higher level. 32 | P a g e

2.

Job Relatedness: The appraisal techniques should

measure the performance and provide information in job related activities/areas.

3.

Standardization: Appraisal forms, procedures,

administration of techniques, rating etc. should be standardized as appraisal decisions affect all employees of the group.

4. Practical Viability: The techniques should be practically viable to administer, possible to implement and economical regarding cost aspect.

5. Legal sanction: It should have compliance with the legal provisions concerned of the country.

6. Training and Appraisers: Because appraisal is important and something difficult, it would be useful to provide training to appraises viz., some insights and ideas on rating, documenting appraisals, and conducting appraisal interview. Familiarity with rating errors can improve rater errors can improves rater performance and this may inject the needed confidence in appraisers to look into performance ratings more objectively.

7. Open Communications: Moist employees want to know how well they are performing on the job. A good appraisal system provides the needed feedback on a continuing basis. The appraisal interviews should permit both parties to learn about the gaps and prepare 33 | P a g e

themselves for further. To this end, managers should clearly explain their performance expectations to their subordinates in advance of the appraisals period. Once this is known it becomes easy for employees to learn about the yardsticks and, if possible, try to improve their performance in future.

8. Employee Assess to Results: Employees should know the rules of the game. They should receive adequate feedback on their performance. If performance appraisals are meant for improving employees performance, then withholding appraisal results would not serve any purpose. Employees simply could not perform better without having access to this information. Permitting employees to review the results of their appraisal allows them to detect any errors that may have been made. If they degrees with the evaluation, they can even challenges the same through formal channels. 9. Due Process: It follows then that formal procedures should be developed to enable employees who disagree with appraisal results (which are considered to be inaccurate or unfair). They must have the means for pursuing their grievances and having them addressed objectively. Performance appraisal should be used primarily to develop employees as valuable resource. Only then it would show promising results. When management uses it as a whip or fails to understand its limitations, it fails. The key is not which from or which method is used.

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Use of Performance Appraisal:

1. The use of performance appraisal is that it enables the management to make effective decision and/or correct or modify their earlier decisions relating to the following issues of HRM. a) Organizational planning based on potentialities of its human resources. b) Human Resource Planning based on weakness, strengths and potentialities of human resources. c) Organizational effectiveness through performance improvement. d) Fixation and refixation of salary, allowances, incentives and benefits. e) Original placement or placement adjustment decisions. f) Identifying training and development needs and toi evaluate effectiveness of training and development programmers. g) Career planning and development and movement of employees. 2. The another use of performance appraisal is that it helps to evaluate the existing plans, information system, job analysis, internal and external environmental factors influencing employee performance like relations with supervisors, working conditions, personal problems of the worker like family, financial and health. This evaluation suggests and results in improvement in plans, information system, job analysis, creating the conductive work environment and controlling the controllable environmental variables. 3. It helps the employee to improve his performance and for his self-development. 4. Further it improves superior-subordinates relations through close interaction and proper understanding. 5. Performance Improvement: Performance feedback allows the employee, manager, and personnel specialists to intervene with appropriate actions to improve performance. 35 | P a g e

6. Compensation Adjustments 7. Performs Evaluations help decisions makers determine who should receive pay raises. Many firms grant part or all of their pay increases and bonuses based upon merit, which is determined mostly through performance appraisals. 8. Placement decisions: Promotions, transfers, and demotions are usually based on past or anticipated performance. Often promotions are a reward for past performance. 9. Training and Development Needs: Poor performance may indicate the need for retraining. Likewise , good performance may indicate untapped potential that should be developed 10. 11. 12. Career Planning and Development: Performance feedback guides career decisions Staffing Process Deficiencies: Good or bad performance implies strengths or Informational Inaccuracies: Poor performance may indicate errors in job analysis about specific career paths one should investigate. weakness in the personnel departments staffing procedures. information, human resources plans, or other parts of the personnel management information system. Reliance or inaccurate information may have led to inappropriate hiring, training, or counseling decisions. 13. 14. Job Design Errors: Poor performance may be symptoms of ill-conceived job designs. Equal Employment Opportunity: Accurate performance appraisals that actually Appraisals help diagnose these errors. measure job-related performance ensure that internal placement decisions are not discriminatory. 15. External Challenges Sometimes performance is influenced by factors outside the work environment, such as family, financial, health, or other personal matters. If uncovered through appraisals, the human resource department may be able to provide assistance. 16. Feedback to Human Resources: Good/Bad performance throughout the organization indicates how well the human resource function is performing.

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Problems of Performance Appraisal:

The major problem in performance appraisal is1. Rating Biases: The problem with subjective measures (is that rating which is not verifiable by others) has the opportunity for bias. The rater biases include hale effect, the error of central tendency, the leniency and stretchiness biases, personal prejudice, and the regency effect. a) Halo Effect: It is the tendency of the raters to defend excessively on the rating of one trait or behavioral consideration in rating all other or behavioral considerations. One way of minimizing the halo effect is appraising all the job and person he is rating or least interest in his job. b) The Leniency and Strictness: The leniency bias crops when some raters have a tendency to be liberal in their rating by assigning higher rates consistently. Such ratings do not serve any purpose. Equally damaging one is assigning consistently low rates. c) Personal Prejudice: If the rater dislikes any employee or any group, he may rate them at the lower end, which may distort the rating purpose and affect the career of these employees. d) The Regency Effect: The raters generally remembers the recent actions of the employees at the time of rating and rate on the basis of these recent actionfavorable or unfavorable rather than on the whole activities. 2) Failure of the superiors in conducting performance appraisal and post performance appraisal interviews. 3) Most part of the appraisal is based on subjectivity. 4) Less reliability and validly of the performance appraisal techniques. 37 | P a g e

5) Negative rating effect interpersonal relations and industrial relations systems. 6) Influence of external environment factors and uncontrollable internal factors. 7) Feedback and post appraisal interview \may have a setback on production. 8) Management emphasis open punishment rather than development of an employee in performance appraisal. 9) Some rating particularly about the potential appraisal is purely based on guess work. The other problems of performance appraisal reported by various studies are: Relationships between appraisal rates and performance after promotions were not significant. Some superiors completed appraisal reports within a few minutes. Absence of inter-rater reliability. The situation was unpleasant in feedback interview. Superiors lack that tact of offering the suggestions constructively to subordinates. Supervisors were often confused due to too many objectives of performance appraisal. However, some of these problems of performance appraisal can be averted by appraising performance through computers.

Advantages of Performances Appraisal through Computers:

1) There will be an objective analysis of traits of both the superior and sub-ordinate. 2) There will be chance to subordinate to express his views even after performance appraisal. 3) An employee shall express his emotional needs and his value systems which is considered taboo till today. 4) It overcomes the communication barrier. 5) It will remove the inherent weakness of the appraisal system i.e., subjective assessment of vague and abstract performance targets, unclear guidelines for appraisal etc, 38 | P a g e

RESEARCH METHODOLOGY

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Research Methodology :
Research methodology refers to the scientific procedure for the acquisition of knowledge based on the empirical observations and logical reasoning scientific method consist of systematic observation, classifications and interpretation of data. Research methodology consists of procedure for obtaining the knowledge on imperial observation and logical reasoning. Method of research 1. Case study method 2. Survey method. 3. Other method. A case study refers to the studying a phenomenon through an intensive study of the case. The survey research method is a technique of investigation by direct observation of the phenomenon or by systematic gathering of data from population. Other methods may include historical and experimental method. Following are the necessary steps involved in research. 1. Statement of problem. 2. Setting up objectives. 3. Review of literature. 4. Formulation of hypothesis. 5. Preparation of research design. 40 | P a g e

6. Determining sample design. 7. Data collection. 8. Analysis and interpretation of data. 9. Report writing

Sampling design :It deals with the method of sampling and the size of sample. There are different methods used for sampling like random sampling, judgment sampling, stratified random sampling, systematic sampling, and convenience sampling etc. For this project work is the Random sampling method is used.

Sample size :This means number of respondents considering for collecting data. Size of sample should not be too small which will be insufficient as well it should not be too large which may create complication. The size of sample decided for these 50 unit respondents.

Data collection :The collection of data means a purposive gathering of the information .Relevant to the subject for the units of population. There are two types of data 1] Primary data:If the researchers collect the data originally from the investigation, the data is called as primary data. Primary data can be collected with the help of interview, questionnaire and observation. In this questionnaire is used to collect the primary data. 2] Secondary data:If the researcher do not collect the data originally but uses data collected by others, already published then its called secondary data. Secondary data is collect from the different sources like books, journals, magazines, Confidential Reports (CR), websites etc. In this project websites are the used for collecting secondary data.

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Methods of data collection

1] Interview method. 2] Questionnaire method.

:-

Following are the methods for collecting primary data -

For this study Questionnaire, method is used. Questionnaire was framed to collect data, which is attached in annexure.

DATA ANALYSIS AND INTERPRETATION

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Table no. 1

Performance appraisal system helps employee for their future planning

Particular Helpful Not Helpful Cant Say Total

No of Employees 38 5 7 50

In percentage 76 % 10 % 14 % 100 %

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Interpretation:From pie chart it is seen that 76% employee think that appraisal system is helpful for them. While 10% employee say that appraisal system is not helpful for them. And 14% employee are not sure that whether appraisal system is helpful for them or not.

Table no. 2

Satisfaction of employees with performance appraisal system Particular Satisfied Unsatisfied Cant say Total No of Employees 41 5 4 50 In percentage 82 % 10 % 8% 100 %

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Interpretation:From pie chart it is seen that 82% employee think that they are satisfied with appraisal system. While 10% employee say that they are not satisfied with appraisal system. And 8% employee are not sure that whether they are happy with appraisal system or not.

Table no. 3

Awareness about performance rating Particular Yes No Total No of Employees 46 4 50 In percentage 92 % 8% 100 %

Interpretation:-

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From pie chart it is seen that 92% employee are aware about performance rating system. While 8% employee are not aware about performance rating system

Table No. 4
Credibility of appraisers affect the performance appraisal system Particular Yes No Total No of Employees 43 7 50 In percentage 86 % 14 % 100 %

Interpretation:-

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From pie chart it is seen that 86% employee think that credibility of appraisers affect the performance appraisal system. While 14% employee say that credibility of appraisers not affect the performance appraisal system.

Table No. 5
Standards followed for performance appraisal system Particular Yes No Total No of Employees 45 5 50 In percentage 90 % 10 % 100 %

Interpretation:-

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From pie chart it is seen that 90% employee think that standards are followed for performance appraisal system. While 10% employee think that standards are not followed for performance appraisal system

Table No. 6
Clear view of objectives to the employees Particular Yes No Total No of Employees 41 9 50 In percentage 82 % 18 % 100 %

Interpretation:-

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From pie chart it is seen that 82% employee think that they have clear view of objectives. While 18% employee think that they have not clear view of objectives.

Table No. 7
Good communication between top-management plans & business goals to the staff below due to appraisal system Particular Yes No Total No of Employees 34 16 50 In percentage 68 % 32 % 100 %

Interpretation:From pie chart it is seen that 68% employee think that there is a good communication between top-management plans & business goals to the staff below due to appraisal system. 49 | P a g e

While 32% employee think that there Is no good communication between top-management plans & business goals to the staff below due to appraisal system.

Table No. 8
Comments and suggestion by employee to be taken into consideration during appraisal Particular Yes No Total No of Employees 48 2 50 In percentage 96 % 4% 100 %

Interpretation:From pie chart it is seen that 96% employee think that comments and suggestion by them to be taken into consideration during appraisal. While 4% employee think that comments and suggestion by them not to be taken into consideration during appraisal.

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Table No. 9
Post appraisal interview of employee conducted Particular Yes No Total No of Employees 0 50 50 In percentage 0% 100 % 100 %

Interpretation:From pie chart it is clearly understand that post appraisal interview of employees not conducted.

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Table No. 10
Action taken by employees about performance appraisal system result Particular Yes No Total No of Employees 19 31 50 In percentage 38 % 62 % 100 %

Interpretation:From pie chart it is seen that 38% employee take action on basis of performance appraisal system result. While 62% employee do not take action on basis of performance appraisal system result.

Table No. 11
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Performance appraisal system helps employee to understand your strength and weaknesses. Particular Yes No Total No of Employees 26 24 50 In percentage 52 % 48 % 100 %

Interpretation:From pie chart it is seen that 52% employee think that performance appraisal system help them to understand their strength and weaknesses. While 48% employee think that performance appraisal system do not help them to understand their strength and weaknesses.

Table No. 12
Desire of employee about training facility by company after performance appraisal 53 | P a g e

Particular Yes No Total

No of Employees 33 17 50

In percentage 66 % 34 % 100 %

Interpretation:From pie chart it is seen that 66% employee think that they want to get training by company after performance appraisal. While 34% employee think that they dont want training by company after performance appraisal

Table No. 13
Employees thinking that they should be given an opportunity to rate their own performance Particular No of Employees In percentage 54 | P a g e

Yes No Total

44 6 50

88 % 12 % 100 %

Interpretation:From pie chart it is seen that 88% employees think that they should be given an opportunity to rate their own performance. While 12% employees think that they should not be given an opportunity to rate their own performance.

ANNEXURE
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Is the Performance Appraisal helping you to plan your work well? a. Yes b. No c. Cant say
1. Satisfaction of employees with performance appraisal system

a. Satisfied

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b. Unsatisfied
c. Cant say

2. Are you aware about performance rating?

a. Yes b. No

3. Credibility of appraisers affect the performance appraisal system?

a. Yes b. No

4. Does the credibility of Appraiser affect the Performance Appraisal System?

a. Yes b. No

5. Do you think that that standards are followed by the organization for performance

appraisal system? a. Yes b. No

6. Do you think that there is a good communication between top-management plans & business goals to the staff below due to appraisal system?

a. Yes b. No

7. Do you think that comments and suggestion by you to be taken into consideration

during appraisal? a. Yes 57 | P a g e

b. No
8. Does your post appraisal interview of employee conducted?

a. Yes b. No
9. Do you take any action after performance appraisal system result?

a. Yes
b. No

10. Does performance appraisal system helps you to understand your strength and

weaknesses? a. Yes b. No
11. Do you want training facility by company after performance appraisal?

a. Yes b. No
12. Do you think that you should be given an opportunity to rate their own performance?

a. Yes b. No

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