Covering Letter PERFORMANCE APPRAISAL SYSTEM AND ITS EFFECTIVENESS IN AN ORGANISATION TRAINING REPORT OF SUMMER TRAINING, UNDERTAKEN AT FEDERAL

MOGUL GOETZE INDIA LTD., BAHADURGARH, PATIALA SUBMITTED IN PARTIAL FULFILLMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRAT ION

COMPANY CERTIFICATE Gian Jyoti Institute of Management & Technology Page92

CERTIFICATE BY PROJECT GUIDE This is to certify that the project entitledPERFORMANCE APPRAISAL SYSTEM AND ITS EFFECTIVENESS IN AN OGANISATION submitted in the partial fulfillment of the requi rement for the degree of MBA of Punjab Technical University, Jalandhar is bonafi ed research work carried out by under my supervision and no part of this research rep rt has been submitted by any other degree. This assistance and help received dur ing the course of this research has been fully acknowledged. Dated: Gian Jyoti Institute of Management & Technology Page92

DECLARATION I,.. hereby declare that the project ITS entitled PERFORMANCE IN AN APPRAISAL SYSTEM AND EFFECTIVENESS ORGANISATION assigned to me by FEDERAL MOGUL GOETZE (INDIA) LTD, during my six we eks training for the partial fulfillment of M.B.A, Degree from GYAN JYOTI INSTIT UTE OF MANAGEMENT AND TECHNOLOGY, MOHALI is the Original work done by me and the information provided in the study is authentic to the best of my knowledge. Thi s study has not been submitted to any other institution or university for the aw ard of any other degree. Gian Jyoti Institute of Management & Technology Page92

ACKNOWLEDGEMENT Thanking may just be a formality, but if done inwardly, it surely reflects your n oblest thoughts within. -Louis Philippe II. This research project is an important part of my long journey in obtaining my de gree in MBA. I have not traveled in a vacuum in this journey. There are some peo ple who made this journey easier with words of encouragement and more intellectu ally satisfying by offering different places to look to expand my theories and i deas. A journey is easier when you travel together. Interdependence is certainly more valuable than independence. It is a pleasant aspect that I have now the op portunity to express my gratitude for all of them. The first person I would like to thank is Mr. V.K.Malhotra, Chief Welfare Officer, Federal Mogul Goetz (India ) limited, Patiala. I have known Mr. V.K.Malhotra as a sympathetic and principle -centered person. His overly enthusiasm and integral view on research and his mi ssion for providing 'only high-quality work and not less', has made a deep impre ssion on me. I owe him lots of gratitude for having me shown this way of researc h. He could not even realize how much I have learned from him. I am really glad that he had accepted to be my guide for this project. He took me on the process of learning and made himself available even through his very heavy work, Gian Jyoti Institute of Management & Technology Page92

teaching schedule. Thank you doesnt seem sufficient but it is said with appreciat ion and respect. I would like to thank my parents, who gave me the confidence an d support to begin my Masters program in Business Administration. They challenged me to set my benchmark even higher and to look for solutions to problems rather than focus on the problem. I learned to believe in my future my work and myself . Thank you so much. I have to put a special note of thanks to Ms.Paramjeet Sujl ana, Project Guide, GJIMT, Mohali, for her valuable suggestions and co-operation during the proceedings of the project .I also have to thank Mr.G.S.Bedi, Chairm an, GJIMT, Mohali, for him being the director of the whole process. Last but not the least, I am thankful to all the faculty members of FMGI, for providing me w ith enough knowledge in the duration of my course, and all those people who have been directly or indirectly been instrumental in the completion of the project. My deepest and sincere gratitude to all those who were directly or indirectly r esponsible for inspiring and guiding this humble being. THANK YOU ONE AND ALL.

Gian Jyoti Institute of Management & Technology Page92

CONTENTS CHAPTER-1 INTRODUCTION TO THE COMPANY.. 13

1) FEDERAL MOGUL- BEGINNING OF THE INDUSTRY14 2) FEDERAL MOGUL GOETZE (INDIA) L A..20 8) QUALITY POLICY22 9) POLICY 18) ORGANISATION OF FEDERAL MOGUL GOETZE (INDIA) LTD., PATIALA PLANT (I) (II) CHAPTER-2

ORGANISATIONAL GOALS.32 ORGANISATIONAL SET UP33 INTRODUCTION TO THE PROJECT..35 1) 2) 3) 4) 5)

INTRODUCTION...36 RATIONALE OF THE STUDY Gian Jyoti Institute of Management & Technology Page92 OBJECTIVES OF THE STUDY...37

(I) PERFORMANCE .40 APPRAISAL AND HISTORY.. (II) DEFINITION .41 CONCEPT. (III)

PROCESS OF PERFORMANCE APPRAISAL....42 (IV) PRE- REQUISITES FOR SUCCESSFUL PERF AL...........42 (V) CHALLENGES APPRAISAL..43 IN PERFORMANCE (VI)

MEASURING EMPLOYEE PERFORMANCE43 (VII) METHODS AND TECHNIQUES OF PERFORMANCE A (VIII) BENEFITS OF SYSTEM47 APPRAISAL

CHAPTER-3 CURRENT GLOBAL TRENDS IN PERFORMANCE APPRAISAL PROGRAM

1) 360 DEGREE APPRAISALS....49 2) TEAM PERFORMANCE APPRAISAL CHAPTER-4 PERFORMANCE APPRAISAL AS MOTIVATION...........51 CHAPTER-5 PERFORMANCE YSTEM AT FEDERAL MOGUL...53

1) POLICY.......54 2) PURPOSE OF PERFORMANCE APPRAISAL ACCORDING TO SURVEY AT FMGI

3) AIMS OF APPRAISAL AT FMGI.....55 4) PROCEDURE.. 6) PROBLEMS ENCOUNTERED DURING PERFORMANCE APPRAISAL57

7) WORKING HOURS AT FEDERAL MOGUL.58 CHAPTER-6 MEASURING EFFECTIVENESS OF APPRAISAL AT FEDERAL MOGUL Gian Jyoti Institute of Management & Technology Page92

1)

PERFORMANCE APPRAISAL FEEDBACK SYSTEM AT FEDRAL MOGUL....

2) PERFORMANCE REWARD SYSTEM..61 3) LINKING PERFORMANCE APPRAISAL TO T& CHAPTER-7 RESEARCH METHODOLOGY.63

1) INTRODUCTION...64 2) STATEMENT OF THE PROBLEM CHAPTER-8 PROFILE OF THE WORKMEN...68 DISTRIBUTION OF RESPONDENTS BY (I) (II) (III) (IV)

AGE..69 MARITAL STATUS...70

CHAPTER-9 DATA ANALYSIS AND INTERPRETATION..73 CHAPTER-10 RESEARCH FINDINGS Gian Jyoti Institute of Management & Technology Page92

CONCLUSION..98 CHAPTER-13 BIBLIOGRAPHY LIST OF TABLES AND ANNEXURES CONTENT OF TABLE DISTRIBUTION OF RESPONDENTS BY AGE PAGE 68 DISTRIBUTION OF RESPONDENTS BY MARITAL STATUS 69 DISTRIBUTION OF RESPONDENTS BY LOCATION 70 DISTRIBUTION OF RESPONDENTS BY EDUCATIONAL QUALIFICATION SERVICE TENURE OF EMPLO YEES SATISFACTION WITH THE PRESENT JOB 71 73 74 Gian Jyoti Institute of Management & Technology Page92

AWARENESS OF TECHNIQUE OF PERFORMANCE APPRAISAL EMPLOYEES OPINION AS TO THE PRESE NT APPRAISAL SYSTEM EMPLOYEE PERCEPTION AS TO THE FREQUENCY OF APPRAISAL APPRAIS AL EFFECTING PRODUCTIVITY OF EMPLOYEES WHO SHOULD DO THE APPRAISAL DOES APPRAISA L HELP IN POLISHING SKILLS AND PERFORMANCE AREA DOES PERSONAL BIAS CREEPS-IN WHI LE APPRAISING AN EMPLOYEE REVIEW OF THE CURRENT APPRAISAL TECHNIQUE APPROPRIATE METHOD OF CONDUCTING THE PERFORMANCE APPRAISAL PERFORMANCE APPRAISAL LEADS TO ID ENTIFICATION OF HIDDEN POTENTIAL SELF-APPRAISAL FOR WORKERS OPINION ABOUT PERFOR MANCE APPRAISAL PERFORMANCE APPRAISAL IS IN UTILIZING THE OPTIMAL SKILLS, KNOWLE DGE AND ABILITIES OF THE EMPLOYEES ESSENTIAL FOR PERFORMANCE APPRAISAL OF AN IND IVIDUAL OPPORTUNITY GIVEN TO EMPLOYEES TO MAKE AN INPUT TO THEIR OWN PERFORMANCE APPRAISAL ARE THE PERFORMANCE APPRAISAL REPORTS FREELY ACCESSIBLE AND COMMUNICA TED TO YOUR EMPLOYEES 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 Gian Jyoti Institute of Management & Technology Page92

PREFACE Excellence is an attitude that the whole of the human race is born with. It is t he environment that makes sure that whether the result of this attitude is visib le or otherwise. A well planned, properly executed and evaluated industrial trai ning helps a lot in inculcating a professional attitude. It provides a linkage b etween the student and industry to develop an awareness of industrial approach t o problem solving, based on broad understanding of process and mode of operation of organization. During this period, the students get the real, firsthand exper ience for working in the actual environment. The quest for knowledge can never e nd. The deeper we dig, the greater the unexplored seems to be. No man can honest ly say that he has learned all that this world has to offer. We cannot achieve a nything worthwhile in any field only on the basis of theoretical knowledge from books. Gian Jyoti Institute of Management & Technology Page92

Pragmatic knowledge obtained through working at the ground zero level and gainin g experience, in my view, is essential as theoretical one, if not more. In order to achieve tangible, positive and concrete results, the classroom knowledge nee d to be effectively wedded to the realities of the situation existing outside th e classroom. Theoretical knowledge is of no use without practical one. This repo rt pertains to Summer Training in partial fulfillment of my degree of M.B.A. I h ad the opportunity to have a real experience on my venture, which has increased my sphere of knowledge to a great extent. Gian Jyoti Institute of Management & Technology Page92

INTRODUCTION TO THE COMPANY Gian Jyoti Institute of Management & Technology Page92

BEGINNING OF THE INDUSTRY Federal-Mogul Corporation is an innovative and diversified $6.9 billion global s upplier of quality products, trusted brands and creative solutions to manufactur ers of automotive, light commercial, heavy-duty and off-highway vehicles, as wel l as in power generation, aerospace, marine, rail and industrial. The 40,000 peo ple of Federal-Mogul located in 36 countries drive excellence in all they do. Ou r globally-networked engineering and technical centers in the U.S., Europe and A sia enable us to bring to our customers breakthroughs in advanced technology and innovation. We are a premier supplier of products, services and solutions to or iginal equipment manufacturers that use our quality components in their vehicles and automotive systems, and to aftermarket customers who sell our world renowne d brand-name in replacement parts through repair shops and retail outlets. We pa rtner with a global network of suppliers whose commitment to excellence and on-t ime delivery is crucial to our success. For more than a century, we have develop ed the innovative products our customers need to produce the next generation of vehicles. Now, as we write the history of our next 100 years, we continue to bui ld on our position status as a market leader in product and service solutions to set ever higher standards and continually exceed customer, shareholder and empl oyee expectations. Gian Jyoti Institute of Management & Technology Page92

FEDERAL-MOGUL GOETZE (INDIA) LIMITED Registered & Corporate Office: Business Group: Industry Type: A - 26/3 Mohan Co-operative Industrial Estate New Delhi - 110044 Tel: 41497600 N anda Group Auto Ancl - Engine Parts Manufacturer of world-class pistons, piston rings, sintered parts and cylinder l iners covering a wide range of applications including two/three-wheelers, cars, SUVs, tractors, light commercial vehicles, heavy commercial vehicles, stationary engines and high output locomotive diesel engines. Widest range of piston rings and pistons varying from 30mm to 300mm diameter. The most modern production fac ilities at Bangalore, Patiala and Bhiwadi are certified TS 16949, ISO14001 and O HSAS 18001. Market leaders both in OEM and aftermarket. Exports to many countrie s. Goetze and Goetze Brico provide leading-edge technologies and competitive sol utions for original equipment manufacturers and the automotive aftermarket. COMPANY PROFILE Gian Jyoti Institute of Management & Technology Page92

Federal-Mogul Goetze (India) Limited was established in 1954 as a joint venture with Goetze-Werke of Germany. Goetze-Werke of Germany is now owned by FederalMog ul Corporation, a $6.3 billion global company and one of the leading manufacture rs of automotive components in the world. Federal-Mogul Goetze (India) Limited i s the largest manufacturer of pistons and piston rings in India. 1954 1957 1958 1960 1968 1977 1982 1985 1989 1990 1994 1996 1997 2000 2003 2004 2004 2006 2006 Incorporated as a joint venture with Goetze werke. Piston ring and liner product ion Piston production as Escorts (automotive division) (Collaboration: MAHLE) Ca st iron/forged piston production started Pins/rings carrier production started N ew production plant installed in Bangalore Steel rings/large bore locomotive pis tons Light alloy products Auto thermic piston production Moly coated/IKA/chrome oil rings Composite pistons/new ring foundry Bangalore Patiala. Bangalore Patial a Bangalore. Patiala. Patiala. Patiala. Patiala. Escorts (automotive division) hived off into joint venture with m/s Mahle, Germa ny. Goetze TP (India) ltd. set up for manufacture of steel rings. Merger of FEDE RAL-MOGUL sintered products ltd. With Goetze (India) ltd. Merger of Escorts pist ons activities with Goetze (India) ltd. Introduction of chrome-ceramic rings. Te chnical collaboration for pistons with Federal-Mogul Corporation Majority stake holding acquisition by Federal-Mogul Corporation Name changed "Goetze (India) Li mited" to "Federal-Mogul Goetze (India) Limited" Gian Jyoti Institute of Management & Technology Page92

ORGANIZATION CHART C E D M a r Hk M x h a i r m a n e e c u t i v i r e c t o r e . Ot iP n . l g a n H t . O a t C e r h i ai F e l if s n a . n c e P S l a Fn t i n M a n a c n e I u . Q f a P . c C e t ur , sI r no i n cn g o n me l i n g e r v &i c e s L A F & & I n s p e c t i o n S t o r e s T o oT l r a i n i n g R o o m gI n h s t p Q e . c CF t i on P ni l iR o n yi e n & g s A r tP i u & n d I r . yE S . t o P r C y l . L i n e r us h r P c Ph T aC e s ce h a n i c a l t D e i as e l Dp a a e r p t a. r t . el a s n t s C L F y C l i n y d l R i e n i r dn R ge i r n L g i i n L e i r n F e o r uM n a d A c r yh l o uM n a d &c r yh iS n h e F o op S h Go p I L L a b Gian Jyoti Institute of Management & Technology Page92

PRODUCTION FACILITIES Gian Jyoti Institute of Management & Technology Page92

MANAGEMENT BOARD OF DIRECTORS Designation Chairman & Director Managing Director & President Whole Time Director & CFO Director Director Name Mr. K.N. Subramaniam Mr. Jean de Montlaur Mr. Rustin Ray Murdock Mr. Rainer Jueckstock Mr. Mukul Gupta CORPORATE LEADERS Whole Time Director & CFO Executive Director - Operations Fina ncial Controller & Company Secretary Head - Information Systems Head AE + R&D He ad - Quality Head - Original Equip. Sales Mr. Rustin Ray Murdock Mr. Andreas Kol f Mr. Rajan Luthra Mr. Peter Miller Mr. SGP Naidu Mr. Rajesh Sinha Mr. Mahesh Jo shi Gian Jyoti Institute of Management & Technology Page92

FEDERAL MOGUL GOETZE (INDIA) LTD. BAHADURGARH, PATIALA Goetze (I) Ltd., Bahadurgarh, Patiala was set up in 1954 with the collaboration of M/s. Goetze Werke, Germany which started its production of Piston Rings for a utomobile industry in 1957. The plant is situated at Bahadurgarh, about 10 kms. From Patiala on the Patiala-Rajpura Road. Considering the need of complete Pisto n assembly, Escorts Ltd. ventured into manufacturing of Pistons in 1958 with the collaboration of M/s. Mahle GmbH, Germany, which delivered the Indian automobil e industry its Pistons in 1960. Escorts entered in collaboration with M/s. SUKO GmbH, Germany for Piston Rings in 1967 and manufacturing started in 1968. To mee t the increasing demand of market, in 1977, a parallel unit for manufacturing Pi stons and Piston Pins was set up in Bangalore. From 1 October 1996, Escorts Ltd. entered into joint venture with M/s. Mahle GmbH, Germany with the formation of the new company Escorts Mahle Ltd. in 1998, Goetze also became a part of Federal Mogul, a well-known group of USA. In June 2000, both Escorts Mahle Ltd. and Goe tze have become QS-9000 certified companies. The present capacity of the plant i s 285.09 lacs nos. Piston Rings and 52.68 lac nos. Pistons (on 302 working days) . The total capital employed as on 31 March 2004 is 134.46 crores in Ring Activi ty and Piston Activity. The workforce including managers and supervisors is 1131 nos. in Ring Activity and 1304 in Piston Activity as on 31 March 2004. The turn over of the Patiala Plants is 159 crores excluding Excise (combined in Ring Acti vity and Piston Activity) as on 31 March 2004. Gian Jyoti Institute of Management & Technology Page92

Manufacturing Facilities: The Patiala plant is located in the north of India abo ut 250 km from the capital - New Delhi. It is connected by road and rail routes. This plant manufactures a wide range of pistons, piston rings, cylinder liners and light alloy castings Campus Manager: Factory:

Phone Number: Fax Number: E-mail: Website: Mr. Sunit Kapur Rajpura Road, Bahadurgarh, Patiala-147001 India 91-175-2381441 t o 46 91-175-2381406 sunit.kapur@federalmogul.com http://federalmogulgoetzeindia. net/web/index.htm Gian Jyoti Institute of Management & Technology Page92

QUALITY POLICY FEDERAL MOGUL GOETZE (INDIA) LIMITED commits itself to leadership in national ma rket for all its products and ensuring total customers satisfaction highest in in dustry. It commits to develop and build an image in the international market to achieve a sustained annual growth in exports. POLICY We shall continue to manufacture ternational norms/ standards. We development of products through n-house developments. Consistent at all levels will be our major all our products in conformity with accepted in shall also continue to retain our leadership in technical know-how from our Collaborators and i development of human resources through training thrust area. MR.CHARLES B.GRANT

MISSION OF THE COMPANY Steadily moving towards leadership with piston with vision strategy seeing it as the best way to leaders in business VISION OF THE COMPANY Page92 To be one of the worlds leading automotive solutions provider Gian Jyoti Institute of Management & Technology

GLOBAL MARKET

FMGI has the distinction of pioneering exports and collaborations with following countries: EXPORT DESTINATION Dubai Bangladesh Singapore Egypt Mauritius Germany Nepal Sri Lanka Uganda COLLABORATIONS A. GERMANY Faun Class B. JAPAN ord D. USA HUGHES E. FRANCE Bosch Gian Jyoti Institute of Management & Technology Page92 Yamaha Kayaka C. UK JCB (Goetze) F

SWOT ANALYSIS STRENGTH Latest technology Established product Established market Stron Experienced and committed personnel. 95 % capacity utilization. State of the ar t quality assurance. Foreign collaboration. Stock of raw materials for 5-6 month s. Decades of experience WEAKNESS Raw material prices are on the increase. Many types of machinery have become obsolete. The operating expenses are on the highe r side.

OPPORTUNITIES Expanding exports. Availability of cheap labor. Forward as well as backward integration.

THREAT Growing competition from foreign brands. Rising prices of raw materials. Gian Jyoti Institute of Management & Technology Page92

PRODUCT PROFILE Federal Mogul Goetze (I) Limited manufactures wide range of Liners, Brackets, Sh ock Absorber, Gudgeon Pins, Light Alloy casting & Sintered Products. Piston, Pis ton rings, Piston Pins, Cylinder blocks, Cylinder Liners, Brackets, Shock Absorb er, Gudgeon Pins, Light Alloy casting & Sintered Products. PISTONS Federal-Mogul Goetze India has state-of-the-art test bed facilities, design faci lities for products and dies and tooling with CAD/PRO-E. Production Capacity: Pr oduct Range: Applications: 13 million pistons per annum 30 mm to 300 mm diameter Bi-wheelers, Cars, Tractors, Heavy commercial vehicles, Gian Jyoti Institute of Management & Techno logy Page92 SUVs,

Heavy output locomotive diesel engines, Stationary engine Products suitable for 4 stroke engines 2 stroke engines Gasoline engines PISTON RINGS Goetze piston rings of OEMs and Aftermarket in India have state-of-the-art desig n facilities for products, tooling with CAD/PRO-E/GLIDE SOFT and test bed facili ties. Federal-Mogul Goetze India is dedicated to developing new technologies and continuously improving its products. Production Capacity: Product Range: Applic ations: 55 million rings per annum 30mm to 300mm diameter Bi-wheelers, Cars, SUV s, Tractors, Heavy output locomotive diesel engines, Gian Jyoti Institute of Management & Technology Page92 Heavy commercial vehicles,

Stationary engine TX Type Expander & Cr Plated Rails Chrome Plated Ring Coating on Running Surface: Chrome ceramic plated rings (CKS) Molybdenum coated rings Plasma filled rings Se mi-inlaid rings Ferrox filled rings Features: Thin rings made from SG iron Asymmetric profile rings Specially honed chrome rin gs Lower sharp edge rings Reverse torsion rings Conformable chrome oil rings Key stone Interrupted cut Narrow land CYLINDER LINERS Gian Jyoti Institute of Management & Technology Page92

Federal-Mogul Goetze India manufactures wet and dry cylinder liners with honing and sleeves for bi-wheeler applications for its quality conscious customers. Pro duction Capacity: Product Range: Applications: 0.5 million liners per annum 50 m m to 120 mm internal diameter Bi-wheelers Cars Tractors Light commercial vehicle s Heavy commercial vehicles Stationary engines Features: Thin-walled Plateau honed With and without flanges Coating: Phosphating METAL CASTINGS Gian Jyoti Institute of Management & Technology Page92 Federal-Mogul Goetze (India) Ltd. makes a wide variety of light metal castings, including cylinder blocks; cylinder heads for single cylinder engines; and alumi num tube castings and aluminum crown handles for motorcycles.

MAJOR CUSTOMERS OF THE COMPANY PASSENGER CARS & JEEPS o Hindustan Motors Ltd. o Premier Automobiles Ltd. o Mahi ndra & Mahindra Ltd. o Maruti Udyog Ltd. o Telco BI-WHEELERS o Bajaj Auto Ltd. o Escorts Yamaha Ltd. o Kinetic Engineering Ltd. o TVS Suzuki Ltd. o Majestic Auto Ltd. o Scooters India Ltd. o Ideal Jawa (I) Ltd . o Lohia Machines Ltd. TRACTORS o Eicher Tractors Ltd. o Mahindra & Mahindra Ltd. o Escorts Ltd. (TD) o Escorts Ltd. (Farmtrac Division) o HMT Ltd. Gian Jyoti Institute of Management & Technology Page92

COMMERCIAL VEHICLES (LCVs & MCVs) o Telco DEFENCE o Vehicles Factory, Jabalpur PRESSORS o Telco STATIONERY ENGINES o Kirloskar Oil Engines Ltd. LOCATION OF DEPOTS Gian Jyoti Institute of Management & Technology Page92

COM

MARKET SHARE OF PISTON MANUFACTURERS IN INDIA Company Name Goetze Perfect Circle IP Ring Shriram Piston SAMKRG Piston Menon Pi ston Market Share (%) 36.5 12.0 16.5 22.5 9.0 3.5 MARKET SHARE OF PIST ON MANUFACTURERSIN INDIA Goetze 9 3.5 22.5 16.5 12 36.5 Perfect Circle IP Rings Shriram Piston SAMKRG Pis ton Menon Piston Gian Jyoti Institute of Management & Technology Page92

ORGANISATION OF FEDERAL MOGUL GOETZE (INDIA) LTD. ORGANISATION GOALS The company has laid down for itself goal of improving the value to the customers through: 1. LEADERSHIP: To maintain leadership in following categories Market sh are: to maintain its status as brand leaders in the country for Piston and Pisto n Pins. Product Development: To develop Piston and Piston Pins for all new appli cations as identified. Technology: modernization and up gradation of technology to the latest improvements to meet customer requirements. 2. CUSTOMER SATISFACTI ON: It shall strive to achieve customer satisfaction rating more than 90%. 3. TE CHNICAL REQUIREMENT: Products are manufactured as per specifications based on DI N / JIS / IS / MAHLE NORMS / SUKO NORMS as also against customers specific requi rements. 4. QUALITY: To improve quality consistently through quality assurance a nd process control. 5. DELIVERY: To strive to achieve 100% on time delivery as p er customer requirements 6. ENVIRONMENT AND SAFETY: FMGI is fully aware of its e nvironment and social responsibilities. To keep the environment healthy, several measures like smoke precipitators, effluent treatment plant, plantation program s etc. have been adopted. Pollution control Gian Jyoti Institute of Management & Technology Page92

methods adopted by the company have been approved by the Central Govt. Periodic checks and regular training is conducted to ensure safety. 7. MEDICAL FACILITIES : Company takes a lot of interest in the extra curricular activities like medica l programs and rural development programs etc. The company has its own medical c entre as well as a heart institute and research centre, where employees get trea tment on reimbursement basis ORGANISATION SET UP The organizational set up of the following departments is studied in detail: 1. 2. 3. 4. 1. HR Department Finance Department Purchase and Store Department Produ ction Department HR DEPARTMENT HR department advises the management on all matters relating to HR administratio n. The top management takes into account its advice before arriving at final dec isions on human resources and administrative matters. HR Policies in FEDERAL MOG UL GOETZE (INDIA) LIMITED have been divided into three parts: a. HR FUNCTIONS to encourage the adoption and utilization of latest methods and techniques in area s of manpower planning and development and keeping avenues of promotion open to employees. b. PROVISION OF COMMUNICATION, TRAINING AND WELFARE MEASURES, EMPLOYE E COMMUNICATION so that employees contributes their best to companys objectives a nd also get opportunities for advancement and self-development. c. INDUSTRIAL RE LATIONS between employer and employee so as to promote satisfactory relations by providing channels for upward and downward communication and establishing syste matic procedure for redress. 2. FINANCE DEPARTMENT Gian Jyoti Institute of Management & Technology Page92 The realization of cash for the purpose of raw materials components and spares t o pay wages and salaries to incur day to day expenses and overhead costs, to mee t selling costs to provide credit facilities to customers and to maintain invent ories is also the function of this department.

The formulation of policies with regard to profitability risk and liquidity, dec isions about comparison and level of current assets and liabilities, formulation of production policy to keep the production steady by accumulating inventories, formulation and execution of credit policy is also the function of Finance Depa rtment. It deals with determination of monthly wages, salaries of employees, fri nge benefits of retirement, provident funds deduction, incentives, bonus and all the rewards, which the employees get for rendering their services to the compan y 3. PURHCASE AND STORE DEPARTMENT Purchase and Store are two Departments, which go hand in hand. It is very essent ial that there should be proper synchronization between Purchase Department and Store Department. In GOETZE (INDIA) LIMITED, the main responsibility of Purchase Department is to receive orders from other Departments, do the market survey, l ist the potential sellers and the rates, choose the best and go ahead with purch ase. The purchase order is placed only with approved contractors. The Purchase D epartment scrutinize the following aspects: a. Quality and Technical specificati ons b. Delivery c. Prices Stores deal with an array of material, which can be di vided into: a. Raw materials b. Components c. Standard items or patent items 4. PRODUCTION DEPARTMENT The Department is responsible for production of various it ems fixed on basis of production budget, which includes: a. Raw material budget b. Labor budget c. Plant utilization budget GOETZE (INDIA) LIMITED turns out a w ide variety of Piston Rings for BiWheelers, Heavy Light Commercial Vehicles and Motor Cars etc. The Company has maintained steady growth in Piston Rings in view of ready acceptability of its products. Form modes production of 22517 rings in 1957 it touched a figure of 24 million in 2003-04. Gian Jyoti Institute of Management & Technology Page92

INTRODUCTION TO THE PROJECT Gian Jyoti Institute of Management & Technology Page92

INTRODUCTION Down the ages in some or the other form Performance Appraisal has always been in vogue in mundane forms and features. Even today in the era of globalization Per formance Appraisal has become very important and a dire necessity for the employ ees, both in the private as well as public sector organizations. This is basical ly a process which evaluates the performance of an employee from time to time. T here are various parameters or yardsticks to measure the efficiency and capabili ties of the employee and his dedication towards the organization. We particularl y chose this company also because we happen to know people who work for the orga nization and can effectively help us in getting meaningful information. Federal Mogul has come a long way as a huge organization, a trendsetter. So our field of interest for research was Federal Mogul Goetze (India) limited, Patiala Perform ance Appraisal has different measures to judge the capabilities and efficiency o f an individual in an organization- how far the targets have been achieved, how has his performance been! It plays a very important role in their analysis as it keeps the employees motivated towards their jobs. This assessment also helps in the overall growth of the organization. So Performance Appraisal today plays a very important role in keeping a track of various employees for different kinds of jobs in the organization. Gian Jyoti Institute of Management & Technology Page92

OBJECTIVES OF THE STUDY The objectives of present study are as follows: To study the current performance appraisal system of the organization and identi fy the gaps between the current state and the desired-in-state To study the impl ications of an effective performance appraisal system on the productivity of emp loyees and the organizational performance as a whole. To study the strengthening the relationship and communication between superior s ubordinates and management employees. To take the response of employees towards the Performance Appraisal activities carried on upon them and to study the impli cations of an effective performance appraisal system on the productivity of empl oyees To analyze the employee expectations and responsibilities towards the organisati on. RATIONALE OF THE STUDY Performance Appraisal is the important aspect in the organization to evaluate th e employees performance. It helps in understanding the employees work culture, in volvement, and satisfaction. It helps the organization in deciding employees prom otion, transfer, incentives, and pay increase. Human Resource (or personnel) man agement, in the sense of getting things done through people, is an essential par t of every managers responsibility, but many organizations find it advantageous t o establish a specialist division to provide an expert service dedicated to ensu ring that the human resource function is performed efficiently. People are our mo st valuable asset is a clich, which no member of any senior management team would disagree with. Yet, the reality for many organizations are that their people rem ain under valued, under trained and under utilized. Performance Appraisal is the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It co nsists of all formal procedures used in the working organizations to evaluate pe rsonalities, contributions and potentials of employees. Gian Jyoti Institute of Management & Technology Page92

LITERATURE REVIEW A literature review is a body of text that aims to review the critical points of current knowledge on a particular topic. Literature reviews are secondary sourc es, and as such, do not report any new or original experimental work. Most often associated with science-oriented literature, such as a thesis, the literature r eview usually precedes a research proposal, methodology and results section. Its ultimate goal is to bring the reader up to date with current literature on a to pic and forms the basis for another goal, such as future research that may be ne eded in the area. A good literature review is characterized by: a logical flow o f ideas; current and relevant references with consistent, appropriate referencin g style; proper use of terminology; and an unbiased and comprehensive view of th e previous research on the topic. According to Cooper (1988) "a literature revie w uses as its database reports of primary or original scholarship, and does not report new primary scholarship itself. The primary reports used in the literatur e may be verbal, but in the vast majority of cases reports are written documents . The types of scholarship may be empirical, theoretical, critical/analytic, or methodological in nature. Second a literature review seeks to describe, summariz e, evaluate, clarify and/or integrate the content of primary reports". Basics of Conducting Employee Performance Appraisals Written by Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Copyright 19 97-2008. Adapted from the Field Guide to Leadership and Supervision. Yearly perf ormance reviews are critical. Organization's are hard pressed to find good reaso ns why they can't dedicate an hour-long meeting once a year to ensure the mutual needs of the employee and organization are being met. Performance reviews help supervisors feel more honest in their relationships with their subordinates and feel better about themselves in their supervisor roles. Subordinates are assured clear understanding of what's expected from them, their own personal strengths and areas for development and a solid sense of their relationship with their sup ervisor. Avoiding performance issues ultimately decreases morale, decreases cred ibility of management, decreases the organization's overall effectiveness and wa stes more of management's time to do what isn't being done properly. Gian Jyoti Institute of Management & Technology Page92

Bannister, B.D. & Balkin, D.B. (1990) Performance evaluation and compensation feedback messages: an integrated model, Journal of Occupational Psychology, Vol 63, June, British Psychological Society. Research (Bannister & Balkin, 1990) has reported that appraisees seem to have greater acceptance of the appraisal p rocess, and feel more satisfied with it, when the process is directly linked to rewards. Such findings are a serious challenge to those who feel that appraisal results and reward outcomes must be strictly isolated from each other. There is also a group who argues that the evaluation of employees for reward purposes, an d frank communication with them about their performance, are part of the basic r esponsibilities of management. The practice of not discussing reward issues whil e appraising performance is, say critics, based on inconsistent and muddled idea s of motivation. Performance management By Robert Bacal You can achieve performance levels once thought unattainablebut o nly when managers and workers establish clear lines of communication, and unders tand how their jobs contribute to the goals of both themselves and the organizat ion. Performance Management is the comprehensive guidebook on how to establish a communication system to get top performance and value from each employee. It wi ll show you how to conduct goals-focused performance planning meetings and perfo rmance appraisals and foster a true commitment to success within each employee. A meaningful tool for stimulating workplace cooperation, Performance Management will benefit the employee, the manager, and the organization itself. Understanding performance appraisal: organizational, and goal-based ... By Kevin R. Murphy, Jeanette Cleveland social, A social-psychological model of organizational appraisal processes which emphasi zes the goals pursued by raters, ratees and other users of performance appraisal is described in this book. The authors suggest ways in which this goal-oriented perspective might be applied in developing, implementing and evaluating perform ance appraisal systems. The model emphasizes the context in which appraisal occu rs and takes as a starting point the assumption that many of the apparent shortc omings of performance are, in fact, sensible adaptations to the various requirem ents, pressures and demands of that context. Gian Jyoti Institute of Management & Technology Page92

The Social Context of Performance Appraisal: A Review and Framework for the Futu re Paul E. Levy Department of Psychology, The University of Akron, 290 East Buchtel Avenue, Akron, OH44325-4301, USApelevy@uakron.edu Jane R. Williams Psychology D epartment, Indiana University-Purdue University Indianapolis, 402 N. Blackford S t., Indianapolis, IN 46142, USAjrwillim@iupui.edu Performance appraisal research over the last 10 years has begun to examine the effects of the social context o n the appraisal process. Drawing from previous theoretical work, we developed a model of this process and conducted a systematic review of the relevant research . This review of over 300 articles suggests that as a field we have become much more cognizant of the importance of the social context within which the performa nce appraisal process operates. First, research has broadened the traditional co nceptualization of performance appraisal effectiveness to include and emphasize ratee reactions. Second, the influence that the feedback environment or feedback culture has on performance appraisal outcomes is an especially recent focus tha t seems to have both theoretical and applied implications. Finally, there appear s to be a reasonably large set of distal variables such as technology, HR strate gies, and economic conditions that are potentially important for understanding t he appraisal process, but which have received very little research attention. We believe that the focus of recent performance appraisal research has widespread implications ranging from theory development and enhancement to practical applic ation. Journal of Management, Vol. 30, No. 6, 881-905 (2004) DOI: 10.1016/j.jm.2 004.06.005 Gian Jyoti Institute of Management & Technology Page92

THEORETICAL FRAME WORK PERFORMANCE APPRAISAL HISTORY: The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the fie ld of modern human resources management. As a distinct and formal management pro cedure used in the evaluation of work performance, appraisal really dates from t he time of the Second World War - not more than 60 years ago. Yet in a broader s ense, the practice of appraisal is a very ancient art. In the scale of things hi storical, it might well lay claim to being the world's second oldest profession! There is"... a basic human tendency to make judgments about those one is workin g with, as well as about oneself." Appraisal, it seems, is both inevitable and u niversal. In the absence of a carefully structured system of appraisal, people w ill tend to judge the work performance of others, including subordinates, natura lly, informally and arbitrarily. The human inclination to judge can create serio us motivational, ethical and legal problems in the workplace. Without a structur ed appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems beg an as simple methods of income justification. That is, appraisal was used to dec ide whether or not the salary or wage of an individual employee was justified. T he process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, i f their performance was better than the supervisor expected, a pay rise was in o rder. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended ; but more often than not, it failed. For example, early motivational researcher s were aware that different people with roughly equal work abilities could be pa id the same amount of money and yet have quite different levels of motivation an d performance. These observations were confirmed in empirical studies. Pay rates were important, Gian Jyoti Institute of Management & Technology Page92

yes; but they were not the only element that had an impact on employee performan ce. It was found that other issues, such as morale and self-esteem, could also h ave a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential use fulness of appraisal as tool for motivation and development was gradually recogn ized. The general model of performance appraisal, as it is known today, began fr om that time. DEFINATION AND CONCEPT: Performance Appraisal is the process of obtaining, analyzing and recording infor mation about the relative worth of an employee. The focus of the performance app raisal is measuring and improving the actual performance of the employee and als o the future potential of the employee. Its aim is to measure what an employee d oes. According to Flippo, a prominent personality in the field of Human resource s, performance appraisal is the systematic, periodic and an impartial rating of a n employees excellence in the matters pertaining to his present job and his poten tial for a better job." Performance appraisal is a systematic way of reviewing a nd assessing the performance of an employee during a given period of time and pl anning for his future. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. B y focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the managements interest in the progress of the employees. Gian Jyoti Institute of Management & Technology Page92

PROCESS OF PERFORMANCE APPRAISAL: PRE-REQUISITES FOR SUCCESSFUL PERFORMANCE APPRAISAL: The essentials of an effective performance system are as follows: 1) Documentati on means continuous noting and documenting the performance. It also helps the ev aluators to give a proof and the basis of their ratings. 2) Standards / Goals th e standards set should be clear, easy to understand, achievable, motivating, tim e bound and measurable. 3) Practical and simple format - The appraisal format sh ould be simple, clear, fair and objective. 4) Evaluation technique An appropriat e evaluation technique should be selected; the appraisal system should be perfor mance based and uniform. 5) Communication Communication is an indispensable part of the performance appraisal process. The desired behavior or the expected resu lts should be Gian Jyoti Institute of Management & Technology Page92

communicated to the employees as well as the evaluators. 6) Feedback The purpose of the feedback should be developmental rather than judgmental. 7) Personal Bia s Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. CHALLENGES IN PERFORMANCE APPRAISAL: In order to make a performance appraisal system effective and successful, an org anization comes across various challenges and problems. The main challenges invo lved in the performance appraisal process are: 1) Determining the evaluation cri teria-For the purpose of evaluation, the criteria selected should be in quantifi able or measurable terms 2) Create a rating instrument- The focus of the system should be on the development of the employees of the organization. 3) Lack of co mpetence-Top management should choose the raters or the evaluators carefully. Th ey should have the required expertise and the knowledge to decide the criteria a ccurately. 4) Errors in rating and evaluation-The rater should exercise objectiv ity and fairness in evaluating and rating the performance of the employees 5) Re sistance-The appraisal process may face resistance from the employees and the tr ade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. MEASURING EMPLOYEE PERFORMANCE: The most difficult part of the performance appraisal process is to accurately an d objectively measure the employee performance. Measuring the performance covers the evaluation of the main tasks completed and the accomplishments of the emplo yee in a given time period in comparison with the goals set at the beginning of the period. Measuring employee performance is the basis of the Performance appra isal processes and performance management. For the purpose of measuring employee performance, different input forms can be used for taking the feedback from the various sources like the superior, peers, customers, vendors and the employee h imself. Some suggestions and tips for measuring employee performance are: Clearl y define and develop the employee plans of action (performance) with their role, duties and responsibilities. Organizational outcomes or the achievement of orga nizational goals should also be kept in mind. Gian Jyoti Institute of Management & Technology Page92

 Focus on accomplishments and results rather than on activities. Also take note o f the skills, knowledge and competencies and behaviors of the employees that hel p the organization to achieve its goals. If possible, collect the feedback about the performance of the employees through multi-point feedback and self-assessme nts. Financial measures like the return on investment, the market share, the pro fit generated by the performance of the team should also be considered. For an o rganization to be an effective organization and to achieve its goals, it is very important to monitor or measure its and its employee performance on a regular ba sis. Effective monitoring and measuring also includes providing timely feedback and reviews to employees for their work and performance according to the pre-det ermined goals and standards and solving the problems faced. Timely recognition o f the accomplishments also motivates the employees and help to improve the perfo rmance. Measuring the performance of the employees based only on one or some fac tors can provide with inaccurate results and leave a bad impression on the emplo yees as well as the organization. For example: By measuring only the activities in employees performance, an organization might rate most of its employees as out standing, even when the organization as a whole might have failed to meet its go als and objectives. Therefore, a balanced set of measures (commonly known as bal anced scorecard) should be used for measuring the performance of the employee. METHODS AND TECHNIQUES OF PERFORMANCE APPRAISAL: INDIVIDUAL EVALUATION METHOD: 1. CONFIDENTIAL REPORT: mostly used in govt. organ izations. It is a detailed report prepared by the immediate boss. No feedback is given to the employee. Gian Jyoti Institute of Management & Technology Page92

2. ESSAY APPRAISAL METHOD: This traditional form of appraisal, also known as Free Fo rm method involves a description of the performance of an employee by his superio r. The description is an evaluation of the performance of any individual based o n the facts and often includes examples and evidences to support the information . 3. CRITICAL INCIDENTS METHODS: In this method of Performance Appraisal, the ev aluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. 4 . CHECKLIST METHOD: The rater is given a checklist of the descriptions of the be havior of the employees on job. The checklist contains a list of statements on t he basis of which the rater describes the on the job performance of the employee s. 5. GRAPHIC RATING SCALE: In this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal character istics and characteristics related to the on-the-job performance of the employee s. 6. 7. BARS (BEHAVIORALLY ANCHORED RATING SCALE) Step 1. Identify critical inc idents Step 2. Select performance dimension Step 3. Retranslate the incidents St ep 4. Assign scales to incidents Step 5. Develop final instrument FORCED CHOICE METHOD: Focus of this method is to eliminate the rater from giving too high or too low ratings to the employee. This method uses paired phrases th at carry favorable or unfavorable credits. The rater is unaware of how the phras es are marked and therefore chooses what best describes the employee. 8. MANAGEM ENT BY OBJECTIVES (MBO): This requires the management to set specific, measurabl e goals with each employee and then periodically discusses the performance towar ds these goals. Steps in MBO: Gian Jyoti Institute of Management & Technology Page92

MULTIPLE- PERSON EVALUATION METHODS 9. STRAIGHT RANKING METHOD: This is one of t he oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation 10. PAIRED COMPARISON: A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. 11. FORCED DISTRIBUTION: To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employ ees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion. OTH ER METHODS 12. GROUP APPRAISAL: An employee is appraised by a group of appraiser s. Group consists of immediate supervisor, other supervisors, HOD, manager etc. this group used any of the techniques mentioned above of appraising. 13. HUMAN R ESOURCE ACCOUNTING (HRA): It is a sophisticated way of accounting for people as an organizational resource. The value if an employee is increased when organizat ions invest in T&D. This technique is not fully developed. Gian Jyoti Institute of Management & Technology Page92 14. FIELD REVIEW: In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their res pective

subordinates. A major drawback of this method is that it is a very time consumin g method. But this method helps to reduce the superiors personal bias. 15. ASSESS MENT CENTRE: Individuals from various departments are brought together to spend 2-3 days working on individual or group assignments similar to the ones they hav e handled. Observers then rank the performance of each and every participant. Th ese centers are basically meant for evaluating the potential of candidates. BENEFITS OF APPRAISAL SYSTEM BENEFITS TO THE APPRAISER Improved performance of individual and department Impr oved relationship Identification of staff weakness Identification of existing pr oblem Identification of departmental training needs Identification of individual training needs Identification of potential Identification of own strength and w eaknesses Increased opportunity to communicate companies objective BENEFITS TO T HE APPRAISER Opportunity to express own views Opportunity to find about own stre ngths and weaknesses Find out the areas in which to increase the delegation Incr eased opportunity to praise and conduct To demonstrate own managerial skills BEN EFITS TO THE ORGANISATION Improved performance of individuals Improved performan ce of department Improved profitability and efficiency Improved quality of produ ction Increased ability to evaluate value of training provided Valid information relating to labour turnover More accurate assessment of potential individuals a nd department Able to plan & adjust salary scales where appropriate Able to adop t the short terms needs Gian Jyoti Institute of Management & Technology Page92

CURRENT GLOBAL TRENDS IN PERFORMANCE APPRAISAL PROGRAM Gian Jyoti Institute of Management & Technology Page92

CURRENT GLOBAL TRENDS IN PERFORMANCE APPRAISAL PROGRAM: The performance appraisal process has become the heart of the human resource man agement system in the organizations. Performance appraisal defines and measures the performance of the employees and the organization as a whole. It is a tool f or accessing the performance of the organization. The important issues and point s concerning performance appraisal in the present world are: The focus of the pe rformance appraisals is turning towards career development relying on the dialog ues and discussions with the superiors. Performance measuring, rating and review system have become more detailed, structured and person specific than before. P erformance related pay is being incorporated in the strategies used by the organ izations. Trend towards a 360-degree feedback system The problems in the impleme ntation of the performance appraisal processes are being anticipated and efforts are being made to overcome them. In India, the performance appraisal processes are faced with a lot of obstacles, the most prominent being the lack of quantifi able indicators of the performance. GLOBAL TRENDS The emergence of following con cepts and the following trends related to Performance appraisal can be seen in t he global scenario: 360 DEGREE APPRAISALS: Gian Jyoti Institute of Management & Technology Page92 360 degree feedback, also known as 'multi-rater feedback', is the most comprehen sive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job. Organizations are increasingly using feedback from various sources such as peer input, customer f eedback, and input from superiors. Different forms with different formats are be ing used to obtain the information regarding the employee performance.

TEAM PERFORMANCE APPRAISAL: According to a wall street journal headline, Teams ha ve become commonplace in U.S. Companies. Most of the performance appraisal techni ques are formulated with individuals in mind i.e. to measure and rate the perfor mance of the individual employee. Therefore, with the number of teams increasing in the organizations, it becomes difficult to measure and appraise the performa nce of the team. The question is how to separate the performance of the team fro m the performance of the employees. A solution to this problem that is being ado pted by the companies is to measure both the individual and the team performance . Sometimes, team based objectives are also included in the individual performan ce plans. RANK AND YANK STRATEGY: Also known as the Up or out policy, the rank and yank strategy refers to the perfo rmance appraisal model in which best-to-worst ranking methods are used to identi fy and separate the poor performers from the good performers. Then the action pl ans and the improvement opportunities of the poor performers are discussed and t hey are given to improve their performance in a given time period, after which t he appropriate HR decisions are taken. Some of the organizations following this strategy are Ford, Microsoft and Sun Microsystems Gian Jyoti Institute of Management & Technology Page92

PERFORMANCE APPRAISAL AS MOTIVATION Gian Jyoti Institute of Management & Technology Page92

PERFORMANCE APPRAISAL AS MOTIVATION Keeping in mind the growing attrition rates and the employee dissatisfaction amo ng the employees, the HR professionals are approaching and using the performance appraisal as a fuel to motivate employees. The latest trend being followed by t he HR professionals is to use the performance appraisal and review process as a motivating mechanism. Various surveys and studies have testified the relationshi p between performance review, pay and motivation. One of the most motivating fac tors for the employees, in the performance appraisal processes is to receive a f air an accurate assessment of their performance. Inaccurate evaluation is one re ason because of which most employees dread going through performance appraisals. An employee always expects his appraiser to recognize and appreciate his achiev ements, support him to overcome the problems and failures. The discrepancies and the inaccuracies in the performance review can de motivate the employees, even if there has been an increase in the salary. Such inaccurac ies can kill the innovating and risk taking enthusiasm and spirit in the employe es. Similarly, inaccurate reviews with no hike in compensation can increase the attrition rate in the organization, forcing the employees to look out for other options. An employee prefers an accurate performance review with no increase in the salar y over inaccurate performance review with an increase in salary. Employees, who receive both accuracy and a pay increase during their performance review, are li kely to be the most motivated. Therefore, performance appraisal (review and its consequence in the form of compensation adjustments) has the potential of motiva ting employees and increasing their job satisfaction. Gian Jyoti Institute of Management & Technology Page92

PERFORMANCE APPRAISAL SYSTEM AT FEDERAL MOGUL Gian Jyoti Institute of Management & Technology Page92

POLICY A Well defined appraisal policy exists in FEDRAL MOGUL GOETZE INDIA. For both the workers & staff. The objectives have been defined and the set objective s are:To overhaul and improvise the existing personnel policies and practices of the company, with the personnel policies and practices of the company, with per sonnel department as the critical initiating and coordinating factor, the heads of the department as the executing forces, and the top management as the spirit. The second board objective of the document is to introduce value orientation in the company with the heads of department being the key inculcating forces of su ch values in their respective departments, so that the company, as a whole becom es an effective, productive as well as humane organization. PURPOSE OF PERFORMAN CE APPRAISAL ACCORDING TO SURVEY AT FEDERAL MOGUL According to a recent survey, the percentage of employees of the FMGI using performance appraisal for the vari ous purposes is as shown in the diagram below: The most significant reasons of using Performance appraisal are: Making payroll and compensation decisions 80% Identifying the gaps in desired and actual performance and its cause 76% Gian Jy oti Institute of Management & Technology Page92 Training and development needs 71%

 Deciding future goals and course of action 42% Promotions, demotions and transfe rs 49% Other purposes 6% (including job analysis and providing superior support, assistance and counseling) AIMS OF PERFORMANCE APPRAISAL AT FMGI: Give feedback on performance to employees. Identify employee training needs. Doc ument criteria used to allocate organizational rewards. Form a basis for personn el decisions: salary increases, promotions, disciplinary actions, etc. Provide t he opportunity for organizational diagnosis and development. Facilitate communic ation between employee and administrator. Validate selection techniques and huma n resource policies to meet federal Equal Employment Opportunity requirements. PROCEDURE Periodicity of appraisal will be half yearly for all categories of sta ff and annual for workers. The performance appraisal from will be maintained by personnel department and it will be responsible for sending and collecting it ti mely. The appraisal below second line in command will be done by heads of the de partment. Executive director will be appraising the top category. The objective and expectations should be clearly defined in the beginning of the year and well communicated to the appraisee. The performance is based on factor analysis and appraises has to select the best suited in front of each anchor (activity) accor ding to the performance of the appraisal based on the objective determined and n orms set by the company. Gian Jyoti Institute of Management & Technology Page92 For officer and above appraisal has to fill critical incident form. This form wi ll be retained by the appraisal and he will make nothing of extra ordinary perfo rmance and not up to mark round the year. He will make the help of this data dur ing appraising the appraise and while conducting the appraisal

interview. Heads of the department will be sending critical incident from of sec ond line in command duly fulfilled to executive director for his reference. Appr aisal interview for officers and above will be conducted by the immediate apprai ser/superior and feedback is to be given on their performance. Such appraisal in terview would go a long way in motivating the subordinates effectively. Periodic training is to be given to appraiser on appraising techniques orientation sessi on are conducted for first line and second line for the following purpose:a) How to fill in initial incident method form. b) How to apply/administer the apprais al form, recording twice a year. c) How to conduct appraisal interview with the concerned subordinates/appraisees. The personal departments will analysis the ap praisal data submit is recommendation for necessary action as below. a) Incremen ts b) Promotion c) Training d) Transfer e) Counseling f) Stoppage of increments g) Stoppage of promotions h) Termination i) Any other APPRAISAL FOR EMPLOYEES AT DIFFERENT LEVELS: Performance appraisal is important for employees at all level s throughout the organization. The parameters, the characteristics and the stand ards for evaluation may be different, but the fundamentals of performance apprai sal are the same. But as the level of the employees increases, performance apprai sal is more effectively used as the tools of managing performance. The general p arameters for the measurement of employees performance are: Speed i.e. process pe rformance, Accuracy and Productivity of each process, Gian Jyoti Institute of Management & Technology Page92

PROBLEMS ENCOUNTERED DURING PERFORMANCE APPRAISAL Ineffective organizational policies Judgment errors First impressions Halo t Horn effect Leniency Central tendency Stereotyping Recency effect Poor appraisal forms The rating scale may be vague and unclear The form may igno re important aspects of job performance The rating form may contain irrelevant d imensions The forms may be too long and complex Lack of rater preparedness The rater may not be trained PA activities. The rater might not be competent to do the evaluations Gian Jyoti Institute of Management & Technology Page92

WORKING HOURS AT FEDERAL MOGUL The factory runs round the clock in three shifts, namely- Morning, Afternoon and Night. TIMINGS SHIFTS 6.30 a.m. To 2.30 p.m. 2.30 p.m. To 10.30 p.m. 10.30 p.m. to 6.30 a.m. Morning Shift Afternoon Shift Night Shift However the Non-production department works in a General Shift. (From 9 a.m. to 5 p.m.). Gian Jyoti Institute of Management & Technology Page92

MEASURING EFFECTIVENESS OF APPRAISAL AT FEDERAL MOGUL Gian Jyoti Institute of Management & Technology Page92

PERFORMANCE APPRAISAL FEEDBACK SYSTEM AT FEDERAL MOGUL: Performance so appraised should be communicated to the employee and comprehensiv e feedback must be given so as to suggest & explain the ways to improve the perf ormance and appreciate good work. This feedback mechanism will work in the follo wing manner: 1. Personal Counseling Sessions: Every employee will have counselin g session with his team leader on the appraisal in presence of the PMS Facilitat or. The appraisers will discuss the achievements and shortcomings of the apprais ee. The team leader will appreciate the positive incidents and provide guideline s to improve the performance in the problem areas. Employees performance on each Performance Appraisal criteria will be discussed and explained to the employee. The preliminary ratings will be finalized at this stage but will not be revealed to the appraisee as the rating might change after the ranking meeting. 2. Impro vement Statement: A written statement will be prepared by the technicians/ team members in consultation with the team leader & PMS Facilitator detailing how the y intend to improve their performance in the next appraisal period. This improve ment statement will be noted down in the space provided in the form. 3. Review S ession: The review session will be attended by appraisee, the HR Manager and the Function Head. The HR Manager and the Function Head will briefly discuss the ac hievements and the shortcomings of the appraisee and will also discuss the speci al points raised in the ranking meeting, if any. Thereafter the ratings will be revealed to the appraisee and the form will be duly signed by all concerned. The purpose of this session is to reinforce the feedback given in the counseling se ssion and to discuss things beyond performance appraisal. The ratings assigned i n the ranking meeting will not be changed during this review. Once the Employee Satisfaction Survey has been instituted in the factory, its findings can also be discussed at this stage. 4. Dissatisfaction with Appraisal: If any technicians/ team members is dissatisfied with his appraisal and has sufficient reason to be lieve that there is inaccuracy in the appraisal, he can take up the issue with m anufacturing/production/HR manager. Gian Jyoti Institute of Management & Technology Page92

PERFORMANCE REWARD SYSTEM The compensation of the technicians/ team members will be linked to the performa nce by two components: 1. Individual Performance based wage increments 2. Plant Productivity based bonus 1. PERFORMANCE BASED WAGE INCREMENT The yearly wage inc rements will be dependent on the individual performance of the technicians/ team members. The wage increments will be decided as follows: Decide Average Increme nt figure every year Decide Individual Increment based on normal curve o 3 Bands of increments based on Performance Appraisal percentage score o Top 15% - Middl e 70% - Bottom 15% Low Performers Average Performers High Performers Middle Band gets the pre decided average increment Top and bottom Bands get high er and lower increments respectively Overall decided average maintained Rationale The performance based wage increment is based on the following rationa le: Results in permanent change in Income Level Strong Motivator Clear differenc e in pay level of consistent performers & non performers in long run Helps recog nize & retain the best talent 2. PRODUCTIVITY BONUS The second component of perf ormance reward system, Productivity Bonus, will be linked to the overall plant p erformance. It will be decided as follows: Flat rate of bonus for all technician s and team members on basis of Plant AU Certain minimum acceptable AU level will attract zero productivity bonus Every percentage point over such level leads to increasing productivity bonus Gian Jyoti Institute of Management & Technology Page92

Rationale The productivity bonus is based on the following rationale: Links over all performance to reward Promotes overall teamwork Sets clear motivation for in creasing productivity Peer Pressure Performers will automatically check non perf ormers PERFORMANCE REWARD SYSTEM SALIENT FEATURES Enhances individual performance o Directly links Performance Appraisal results t o Salary Structure o Permanent Change Enhances performance as a unit by linking AU to bonus o Promotes coordination and instills a sense of responsibility o Tem porary Chan LINKING PERFORMANCE APPRAISAL TO T&D The performance appraisal results so obtained will be used to determine the trai ning and development needs of employees. The following three step process will b e followed to ensure that Performance Appraisal results are actively linked with Training & Development: 1. The HR department will review the completed Performa nce Appraisal forms to filter out all forms where: a. Overall Rating is Below Exp ectation and/or b. Rating in any functional or behavioral competency is Below Expe ctation These shall be the employees who need training in various fields. 2. The forms so filtered out will then be analyzed to establish any possible trend in l ack of competencies. If more than 10 people exhibit the lack of same competency, a mass training need exists. For example, if 13 people are scoring Below Expecta tion in the Making department, there exists a specific need for refresher trainin g in the making concepts. 3. The list of the employees in need of training along with established trend, if any, will be forwarded to the Training & Development department for further action. Gian Jyoti Institute of Management & Technology Page92

Gian Jyoti Institute of Management & Technology Page92

RESEARCH METHODOLOGY INTRODUCTION The word research refers to finding the truth about something throu gh a systematic study. Research may be done to -Gain familiarity with a phenomen on or to achieve new insights into it: -Portray accurately the characteristics o f the particular individual, situation or a group: -Determination the frequency with which phenomenon occurs or with which it is associated with another: -Test a hypothesis of a casual relationship between variables STATEMENT OF THE PROBLEM : "Performance appraisal system and its effectiveness in an organization". CONCE PTUAL DEFINITION: Performance Appraisal is defined as the process of assessing t he performance and Gian Jyoti Institute of Management & Technology Page92

progress of an employee or a group of employees on a given job and his / their p otential for future development. It consists of all formal procedures used in wo rking Organizations and potential of employees OPERATIONAL DEFINITION: Performan ce Appraisal is the systematic, periodic and an important rating of an employees excellence in matters pertaining to his present job and his potential for a bett er job. TYPE OF STUDY: The type of the study was descriptive in nature. Descriptive stud ies aim at portraying accurately the attitudes or views of a particular group of people towards any situation. METHODOLOGY: To fulfill any task, it is necessary to follow a systematic method. The methodology followed in this study is detail ed here. Gian Jyoti Institute of Management & Technology Page92

SOURCE OF INFORMATION: The relevant data in the subject under study was collecte d from the following sources. 1. Primary data: These data were collected from th e workmen of the company. 2. Secondary data: The secondary data was collected fr om journals, manuals and existing records of the company. Also number of books a nd papers on quality of work life were used. SAMPLING DESIGN: For the research, simple random sampling method was adopted. SAMPLE SIZE: All the employees in the organization are considered as universe. Hundred respondents were selected at r andom basis. Gian Jyoti Institute of Management & Technology Page92

RESPONDENTS: The respondents were the workmen of Federal Mogul Goetze (India) Lt d, Bahadurgarh, and Patiala. TOOLS FOR DATA COLLECTION AND ANALYSIS: The tool used for data collection was in terview scheduled for workers (Questionnaire). The schedule was prepared to coll ect the data on areas, which affect quality of work life. The investigator condu cted personal interview with all the respondents chosen as sample. The tools use d for data analysis include diagrams like Pie diagram, bar diagram etc. PRE- TES TING: In order to understand the effectiveness of the questionnaire designed, a pre-test was conducted with five respondents. Based on the pre-test questionnair e was redrafted. PILOT STUDY: Pilot study was conducted in order to check the fe asibility of the study and availability of data. During the pilot study it was e vident that the workers were ready to give any information and they offered thei r full co-operation. SURVEY: Personal interviews were conducted with hundred wor kers out of the universe. Pre-tested questionnaire was used to collect informati on. LIMITATIONS OF THE STUDY: Every study has its own limitations whether it is an exploratory, descriptive or casual research. They can be regarding collection of data, forming of the questionnaire, analysis of the data collected etc. The limitations of the study done by me can fit somewhere in the given categories. T he collection of data was one of the limitations faced. Employees were not at al l interested in giving their job detail or the personal detail. They were feelin g insecure and didnt believe that it was just a survey. Employees were not at all enthusiastic in providing the information. On requesting a lot they cooperated a bit. Employees were not willing to fill the questionnaires and use to say that fill what ever you want. Time allotted for the survey was less Gian Jyoti Insti tute of Management & Technology Page92

STUDY DESIGN Title of the study Performance appraisal system and its effectiveness in an organization Descriptiv e 1. 2. Primary data Secondary data Type of the study Sources of information Method of data collection Sample size R espondents Method of sampling Tools for data collection Tools for data analysis Sample survey Hundred Workers of FMGI, Patiala. Simple random sampling 1. 2. 1. 2. Questionnaire Personal interviews Bar diagram Pie diagram Gian Jyoti Institute of Management & Technology Page92

PROFILE OF THE WORKMEN The study on the personal data is necessary for a research study. In the case of this study also investigator study the personal details of the workmen of the F MGI.. A sample was fixed as 100 from workmen category. This was deliberately fix ed because the preliminary study shows that the workers had the same aspirations and desire and they all had almost the same opinion. The profiles of the workme n were categorized according to age, location, educational qualification, experi ence & marital status. The details are given below. Gian Jyoti Institute of Management & Technology Page92

TABLE 2 DISTRIBUTION OF RESPONDENTS BY AGE Age group 18-28 28-38 38-48 48-58 Total Distribution 0 8 28 64 100 Out of the 100 workers, 8 workers come under the category of 28-38 years, and 28 workers come under the category of 38-48 years. A maximum of 64 workers are in the age group of 48-58 years. This points out that a majority of 64 % were highl y experienced workers. This can be represented with the help of following figure . FIGURE 2 DIST RIBUT ION OF RESPONDENT S BY AGE 18-28 0% 28-38 8% 38-48 28% 18-28 28-38 38-48 48-5 8 48-58 64% Gian Jyoti Institute of Management & Technology Page92

TABLE 3 DISTRIBUTION OF RESPONDENTS BY MARITAL STATUS Marital status Married Bac helor Total Distribution 100 0 100 From the above table it is clear that all the respondents were settled down with their family. This can be represented by the following diagram. FIGURE 3 DI ST RI BUT I ON OF RESPONDENT S BY MARIT AL ST AT US Bachelor 0% Married Bachelor Married 100% Gian Jyoti Institute of Management & Technology Page92

TABLE 4 DISTRIBUTION OF RESPONDENTS BY LOCATION Location Village Town Corporation Total Distribution 62 28 10 100 Out of the 100 workers, majority of workers, i.e., 62% were coming from village. From the remaining 38%, 10% were coming from corporation and 28% were coming fr om town. This is represented in the following figure. FIGURE 4 DI ST RIBUT ION OF RESPONDENT S BY LOCAT ION Corporation 10% Town 28% Village 62% Village T own Corporation Gian Jyoti Institute of Management & Technology Page92

TABLE 5 DISTRIBUTION OF RESPONDENTS BY EDUCATIONAL QUALIFICATION Educational qua lification Below 10th 10-12/Diploma Degree/Graduate Post Graduate Total Distribu tion 10 54 28 8 100 Among the workmen majority of 74% come under the category of 8-10. There were 8 diploma holders and 8PDC holders. 10% of workers were educated below 8th standar d. This is illustrated in the following figure FIGURE 5 DIST RIBUT ION OF RESPONDENT S BY EDUCAT IONAL QUALIFICAT ION Post Graduate Below 10th 8% 10% Degree/Graduate 28% 10-12/Diploma 54% Below 10th 10-12/Diplom a Degree/Graduate Post Gradu ate Gian Jyoti Institute of Management & Technology Page92

DATA ANALYSIS & INTERPRETATION Gian Jyoti Institute of Management & Technology Page92

Q1. For how many yrs you are working with sonali? TABLE 6 Number of years 0-2 2-5 5-10 >10 Total Distribution 1 2 11 16 30 FIGURE 6 SERVICE T ENURE OF EMPLOY EES 0--2 2% 2--5 6% 0--2 2--5 > 10 56% 5--10 36% 5--10 >10 INTERPRETATION It can be seen that 56% of the workers at FMGI are working for mo re than 10 years whereas 36% are working for more than 5 yrs. Gian Jyoti Institute of Management & Technology Page92

Q2.Are you satisfied with your present job at sonalika? TABLE 7 Are you satisfie d with the present job? Yes No Average Total Distribution 20 7 3 30 FIGURE 7 SAT ISFACT I ON WIT H T HE PRESENT JOB A v er a ge, 10% No, 23% Yes No A v er a ge Yes, 67% INTERPRETATION Job satisfaction is a major indicator of employee morale. 82% of the represents are satisfied with their job. 16% of the respondents are not sati sfied with their job. 2% of them have average satisfaction. This can be represen ted with the help of the following figure Gian Jyoti Institute of Management & Technology Page92

Q3. Awareness of technique of Performance Appraisal being followed at FMGI among Employees TABLE 8 Awareness of technique of Performance Appraisal Yes No Total Distribution 21 9 30 FIGURE 8 AWARENESS OF T ECHNIQUE OF PERFORMANCE APPRAISAL No 28% Yes No Yes 72% INTERPRETATION 72% of the respondents agree that they are aware of performance a ppraisal system in their organization. But 28% of the respondents were of the vi ew that they dont have any knowledge about the appraisal system. Gian Jyoti Institute of Management & Technology Page92

Q4. Employees opinion as to the present appraisal system TABLE 9 Employees opinion as to Responses (in %) the present appraisal system Fully Satisfied Satisfied C ant Say Dissatisfied Total 1 10 15 4 30 FIGURE 9 EMPLOY EES OPINION T O PERFORMANCE APPRAI SAL Fully Satisfied 2% Dissatisfied 30% Satisfied 24% Fu lly Satisfied Satisfied Can't Say Can't Say 44% Dissatisfied INTERPRETATION Majority of respondents do not possess any opinion about the pres ent appraisal system. Whereas only 24% are satisfied and 30% are those who are c ompletely dissatisfied. Gian Jyoti Institute of Management & Technology Page92

Q5 Employee perception as to the frequency of appraisal TABLE 10 Employee perception as to the frequency of appraisal Once During The Se rvice Period Continuous Never Cant Say Total Response (in %) 2 24 0 4 30 FIGURE 10 EMPLOY EE'S PERCEPT ION T O T HE FREQUENCY OF APPRAISAL 0% 6% 2% Once During T h e Serv ice Period Continuou s Nev er 92% Cant Say INTERPRETATION 92% of the respondents agree that they continuously go through th e appraisal process. Q6. How Performance Appraisal affects the productivity of the employees Gian Jyo ti Institute of Management & Technology Page92

TABLE 11 Opinion Positive Feedback Negative Feedback Indifferent Total Response 14 9 7 30 FIGURE 11 HOW DOES APPRAI SAL EFFECT T HE PRODUCT IVIT Y OF EMPLOY EES Indifferent 24% Neg ativ e Feedback 12% Positiv e Feedback 64% Positive Feedback Negativ Feedback e Indifferent INTERPRETATION 64% of the respondents feel that Performance Appraisal helps in i ncreasing their productivity as they get motivated while 12% of the respondents feel that Performance Appraisal decreases their productivity. 24% of the respond ents feel that Performance Appraisal doesnt affect their productivity. Q7. Who should do the appraisal? Gian Jyoti Institute of Management & Technology Page92

TABLE 12 Options Superior Peer Subordinate Self Appraisal Consultant All of the above Superior + Peer Total Response ( in % ) 8 0 0 4 2 12 4 30 FIGURE 12 Who sh ould do th e appraisal? 16 Superior 24 0 8 Peer Subordinate Self Appraisal Consu ltant All of the abov e Su perior + Peer 48 4 INTERPRETATION 48% of the respondents feel that performance appraisal can be don e by their superior, peer, subordinate, or it can be self appraisal, or by consu ltant whereas 24% of the respondents feel that the appraisal would be done by th eir superior at work and 16% of the respondents feel that appraisal would be don e by both the superior and peer. Q8. Does appraisal help in polishing skills and performance area? Gian Jyoti Institute of Management & Technology Page92

TABLE 13 Options Yes No Somewhat Total Response ( in % ) 21 5 4 30 FIGURE 13 DOES APPRAISAL HELPS I N POLISHI NG SKILLS AND PERFORMANCE AREA Somewhat 1 6% No 1 0% Y es 7 4% Y es No Som ewh at INTERPRETATION If the process of appraisal does not lead to the improvement of t he skills and proficiency of the employees, the very purpose of appraisal become s illogical. In the survey conducted it was observed that nearly 74 % of the res pondents agree that Performance Appraisal does leads to polishing the skills of the employees. Nearly 10 % of the respondents view that it does not serve this p urpose and around 16 % were not able to respond as to whether it serve any such purposes or not. Q9. Does personal bias creeps-in while appraising an employee TABLE 14 Options R esponse ( in % ) Gian Jyoti Institute of Management & Technology Page92

Yes No Total FIGURE 14 24 6 30 DOES PERSONAL BIAS CREEPS I N WHI LE APPRAISING AN EMPLOY EE No 18% Yes 82% Y es No INTERPRETATION In the process of appraising, both the parties are human being, t hat is, the one who is being apprised and the other who is appraising. Thus, the re bound to be subjectivity involved, be it an objective way of appraising. Thus , when asked from among the sample size of 100 respondents, as huge as 82 % resp ond ended that personal bias do creep in while appraising an individual. Hence, it is inevitable to say that personal likings do not come in the process of appr aisal. It is the extent to which the appraiser manages it so that it does not be come very partial and bias. Q10. If given a chance, would employees like to review the current appraisal tec hnique? TABLE 15 Gian Jyoti Institute of Management & Technology Page92

Options Yes No Cant Say Total Response ( in % ) 16 2 12 30 FIGURE 15 IF GI VEN A CHANCE, WOULD EMPLOY EES LIKE T O REVIEW T HE CURRENT APPRAI SAL T E CHNIQUE Can't Say 24% Y es No 4% No Yes 72% Can't Say INTERPRETATION 72% of the respondents are in favor of reviewing the current appr aisal technique whereas 24% of the respondents cant find any answer while answeri ng to this question. Q11. Appropriate method of conducting the performance appraisal Options Ranking Method Response ( in % ) 2 Gian Jyoti Institute of Management & Technology Page92 TABLE 16

Paired Comparison Critical Incidents MBO Assessment Centre 360 degree Total 0 5 4 2 17 30 FIGURE 16 APPROPRIAT E MET HOD OF CONDUCT I NG PERFORMANCE APPRAISAL 6% 0% 20% Ranking Method Paired Comparison Critical Incidents MBO 12% 4% Assessment Centre 360 degree 58% INTERPRETATION 58% of the respondents feel that the appropriate method of conduc ting the performance appraisal is through 360 degree approach whereas 20% of the respondents feel that critical incidents is the best method. Q12. Does performance appraisal leads to identification of hidden potential TABL E 17 Gian Jyoti Institute of Management & Technology Page92

Options Yes No Total Response ( in % ) 26 4 30 FIGURE 17 DOES PERFORMANCE APPRAISAL LEADS T O IDENT IFI CAT I ON OF HIDDEN POT ENT IAL No 4% Y es No Yes 96% INTERPRETATION 96% of the respondents feel that performance appraisal leads to i dentification of the hidden potential. Q13. Does the organization facilitate self-appraisal for workers? TABLE 21 Gian Jyoti Institute of Management & Technology Page92

Does the organization facilitate self-appraisal for workers? Yes No Total Distribution 12 18 30 FIGURE 21 DOES THE ORGANISATION FACILITATE SELFAPPRAISAL FOR WORKERS no 7 2% y es no y es 28% INTERPRETATION 72% of the workers have the opinion that the organization does no t facilitate any programs for their self-improvement. Q14.What according to you is Performance Appraisal? TABLE 22 Gian Jyoti Institute of Management & Technology Page92

Opinion Evaluation of employees Part of career development Total Distribution 18 12 30 FIGURE 22 OPINION ABOUT PERFORMANCE APPRAI SAL Pa r t of ca r eer 0% dev el opm en t 16% Ev alu ation of em ploy ees Ev a l u a t i on of em pl oy ees 84% Part of c areer dev elopm ent INTERPRETATION 84% feels that Performance Appraisal majorly revolves around eval uation of employees. The company thinks that performance appraisal gives a clear view of how the employees are performing and where they can improve. They think that performance appraisal helps in their personal development. A performance a ppraisal system is a means for both setting and recognizing the achievement of g oals or standards and also helps them in planning the employees own career devel opment. Q15.How important Performance Appraisal is in utilizing the optimal skills, know ledge and abilities of the employees? TABLE 23 Gian Jyoti Institute of Management & Technology Page92

Opinion Very important Important Least important Not at all important Total Distribution 30 0 0 0 30 FIGURE 23 IMPORT ANCE OF PERFORMANCE APPRAISAL 100 80 60 40 20 0 Distribution Very im portant Im portant Least im portant Not at all im portant INTERPRETATION 100% people agree to the fact that Performance Appraisal is extre mely important in utilizing the optimal skills, knowledge and abilities of the e mployees. Performance appraisal motivates the employees to perform their best by utilizing their knowledge and abilities to fullest. Q16.What do you consider as essential for performance appraisal of an individual ? TABLE 24 Gian Jyoti Institute of Management & Technology Page92

Opinion Experience Individual performance Individual potential Current performan ce Total Distribution 0 11 19 0 30 FIGURE 24 ESSENT I AL FOR PERFORMANCE APPRAISAL Current Experience performance 0% 0% Ex pe rience Individual potential 49% Indiv idual performance 51% Indiv idual perform ance Indiv idual potential Current perform ance INTERPRETATION 51% i.e. the majority feels that the most essential thing for Per formance Appraisal is an individuals performance even more than the Team or Group performance. Individual performance is taken into account, that, has the employ ee met his given targets, their attitude towards seniors and colleagues and atte ndance. Q17.Are employees given an opportunity to make an input to their own performance appraisal? TABLE 25 Gian Jyoti Institute of Management & Technology Page92

Opinion Yes No Total Distribution 30 0 30 FIGURE 25 OPPORT UNIT Y GI VEN T O EMPLOY EES T O MAKE A N INPUT T O T HEIR OWN PERFORMANC E APPRAI SAL No 0% Y es Y es 100% No INTERPRETATION 100% employees are given opportunities to make inputs to their ow n Performance Appraisal by filling the employee Self-Assessment Questionnaire. T he employees can document not only their achievements, but also the difficulties encountered while working. TABLE 26 Gian Jyoti Institute of Management & Technology Page92 Q18.Are the performance appraisal reports freely accessible and communicated to your employees?

Opinion Yes No Total Distribution 17 13 30 FIGURE 26 ARE APPRAISAL REPORT S FREELY ACCESSIBLE AND COMMUNICAT ED T O EMPLOY EES 0% No 17 % Y es Y es 83% No INTERPRETATION In Federal Mogul, the Performance Appraisal reports are freely av ailable to the employee which is a good thing. Only few team leaders think that performance appraisal reports are not so easily accessible. The employees can ea sily check what ratings they have got from their superiors and also what their w eaknesses are and what are their strengths. Q19. How Performance Appraisal helps in retention of employee? Majority of emplo yees feel that effective Performance Appraisal helps a great deal in retention o f employees. They get monetary benefits which enhance their confidence and motiv ate them to work towards organizational goal. Performance Appraisal helps in the personal development of the employees and thus the employees in Gian Jyoti Inst itute of Management & Technology Page92

planning their own career development. Few employees think that Performance Appr aisal gives HR an insight about how the employee is performing. Q20. What are the parameters that determine the Performance Appraisal of an indi vidual? Most say that the major parameters that determine Performance of an indi vidual are whether he has met the targets (CPM) or not. It depends a lot on cust omer satisfaction. Rest of the parameters is like their attitude towards seniors and colleagues and attendance, how they work in a team and also last years reco rds also affect the Performance Appraisal system. Q21. What do you like or disli ke about the Performance Appraisal policy of your company? Most employees dislik e the fact that Performance Appraisal happens yearly and in that also the salary hike is minimal. They get no incentives to be loyally attached to the organizat ion. The employees want that the performance appraisal cycle should be half- yea rly or quarterly and not yearly and the increments given should be more. But the y like the trend that the feedback of previous years Performance is given to them by their supervisors and also self-assessment performance appraisal system is t here. They think that self-assessment brings more motivation and they are happy that it is a part of Performance Appraisal. Q22. If given a chance what changes would you like to bring in the Performance A ppraisal policies of your company? Almost all the employees feel that Performanc e Appraisal should be done on individual ground instead of team or group capabil ities. They would really like to change the Appraisal Cycle from yearly to halfyearly or quarterly. Last but not the least they would like salary hikes and loy alty bonuses. Q23. Who are the persons involved in performance appraisal system of your company? Gian Jyoti Institute of Management & Technology Page92 People involved in the Performance Appraisal system are-

Process AVP Manager- Group leader- Supervisor- and the employees. Above all on a broader perspective we can call the HR Department which is responsible for Perf ormance Appraisal system of a company. RESEARCH FINDINGS Page92 Gian Jyoti Institute of Management & Technology

Study has found the following facts about the appraisal system of FEDERAL MOGUL GOETZE (INDIA) LTD., PATIALA: 1. Among the 16% of the respondents who are not satisfied with the present job, the job satisfaction is the least in the age group 38-58. This shows that the co mpany has failed in motivating those workers. 2. 56% of the workers at FMGI are working for more than 10 years whereas 36% are working for more than 5 yrs. 3. T hose who are educated beyond matriculation agree that they are quite aware of ap praisal system in the organization. As against this 28% of the respondents were of the view that they dont have any knowledge about the appraisal system. General ly more educated employees tend to be more satisfied with their appraisal system probably due to their higher job aspirations 4. Majority of respondents do not possess any opinion about the present appraisal system. Whereas only 24% are sat isfied and 30% are those who are completely dissatisfied Awareness sessions abou t the performance appraisal (objectives and importance) are conducted in the org anization. It is normally done for new employees. 5. The findings show a positiv e attitude of people regarding appraisal system. 6. 64% of the respondents feel that Performance Appraisal helps in increasing their productivity as they get mo tivated while 12% of the respondents feel that Performance Appraisal decreases t heir productivity. 24% of the respondents feel that Performance Appraisal doesnt affect their productivity. 7. Appraisal can be a motivating factor when it is li nked with increased pay packets. Financial incentives pay an important role in i nducing employees to perform better Gian Jyoti Institute of Management & Technol ogy Page92

8. If the process of appraisal does not lead to the improvement of the skills an d proficiency of the employees, the very purpose of appraisal becomes illogical. In the survey conducted it was observed that nearly 74 % of the respondents agr ee that Performance Appraisal does leads to polishing the skills of the employee s. Nearly 10 % of the respondents view that it does not serve this purpose and a round 16 % were not able to respond as to whether it serve any such purposes or not. 9. When asked from among the sample size of 100 respondents, as huge as 82 % res pond ended that personal bias do creep in while appraising an individual. Hence, it is inevitable to say that personal likings do not come in the process of app raisal. It is the extent to which the appraiser manages it so that it does not b ecome very partial and bias. 10. 72% of the respondents are in favor of reviewin g the current appraisal technique whereas 24% of the respondents cant find any an swer while answering to this question. 11. 100% employees are given opportunitie s to make inputs to their own Performance Appraisal by filling the employee Self -Assessment Questionnaire. The employees can document not only their achievement s, but also the difficulties encountered while working. Gian Jyoti Institute of Management & Technology Page92

Gian Jyoti Institute of Management & Technology Page92 SUGGESTION &

RECOMMENDATIONS 1. Performance appraisal should not be perceived just as a regular activity but its importance should be recognized and communicated down the line to all the em ployees. New methods of appraisal should be adopted so that both appraiser and t he appraisee take interest in the appraisal process. onlineappraisal can be intr oduced 2. There should be a review of job analysis, job design and work environm ent based on the performance appraisal. 3. It should bring more clarity to the g oal and vision of the organization and provide more empowerment to the employees by providing them feedback regarding their appraisal 4. Assistance should be so ught from specialists for framing a proper appraisal system that suits the organ ization climate The employees who have excellent performance should be used as a mentor for other employees who would motivate others to perform better. 5. Fina ncial and non-financial incentives should be linked to the annual appraisal syst em so that employees would be motivated to perform better. 6. The frequency of t raining program for the appraiser should be increased and these sessions should be made interactive. 7. The awareness sessions for the employees/appraisees shou ld be made more interactive and the views and opinion of the appraisees regardin g appraisal should be given due consideration. 8. Combining the different method s of appraisal can minimize the element of biasness in an appraisal. Use of mode rn appraisal techniques like 360o appraisal, assessment centers which are more e ffective. 9. More transparency should be brought about in the appraisal system a nd it should be effectively link to the performance management system of the org anization. Gian Jyoti Institute of Management & Technology Page92

10. The appraisal system should cover all employees in the organization both whi te collar and blue-collar jobs. 11. Some of the performance appraisals should be conducted by the top management so that they can understand the employees and t heir needs, behavior better and to find out the loopholes. CONCLUSION Page92 Gian Jyoti Institute of Management & Technology

The analysis and interpretation of data on study of performance appraisal and it s effectiveness in an organization led to the following conclusions: The result shows that most of the employees in the company have principally faith in the sy stem which is a positive sign and leave scope for easy adoption. The promotion r ules though defined need to be communicated to every employee before appraisal p rocess is done and also justifies the promotion as a result of the appraisal. Th at the promotion policy followed differs at different position and category. Uni formity has to be there in the implementation of promotion policy at all levels. The appraisal outcome has to be used frequently for the purpose of reward on pe rforming well together with the feedback on the performance. Also when performan ce goes down employee has to be given feedback and motivated to do better. In Fe deral Mogul (India) Ltd. feedback is being provided to the employee though on a few occasion and Appraisal System focuses on the performance and future potentia l of the employee The result of the appraisal is used for the overall developmen t of the employee. Training needs of an individual employee are assessed from hi s performance rating in respect of various parameters based on which the perform ance of an employee is appraised. Gian Jyoti Institute of Management & Technology Page92

The employees are made aware by the company regarding their specific roles to pl ay at work. They are made clear about their assigned special duties and responsi bilities towards accomplishment of work. It is considered appropriate to apprais e performance of an employee in manufacturing sector on annual basis. However, i n service sector appraisal need to be on quarterly basis. Gian Jyoti Institute of Management & Technology Page92

BIBLIOGRAPHY Human Resource Management and Personnel Management By K. A. Aswathappa Personnel and Human Resource Management By P. Subba Rao and V. S. P. Rao Management By Ha rold Koontz & etal. The Complete Guide to Performance Appraisal By Richard C Gro te Performance Management By Robert Bacal www.goetzeindia.com federalmogulgoetzeindia.net www.benifits.org www.employer-em ployee.com www.citehr.com www.management-issues.com www.e-days.com www.performan ce-appraisal.com Gian Jyoti Institute of Management & Technology Page92

www.businessballs.com/performanceappraisals.htm http://www.bizhelp24.com/employm ent-and-personaldevelopment/employee-appraisal.html www.hr-guide.com performance -appraisals.org/ www.managementparadise.com QUESTIONNAIRE Gian Jyoti Institute of Management & Technology Page92

Designation Years at Service Marital status Life Background Age Educational qual ification Monthly Income : : : : : : : Q1. For how many years you are working with FMGI ? a) 0-2 yrs b) 2-5 yrs c) 5-10 yrs d) >10 yrs Q2.Are you satisfied with your present job at FMGI? Yes No Avera ge Q3. Awareness of technique of Performance Appraisal being followed at FMGI among Employees Yes No Q4. Employees opinion as to the present appraisal system Fully satisfied Satisfie d Cant say Dissatisfied Q5. Employee perception as to the frequency of appraisal Gian Jyoti Institute of Management & Technology Page92

Once During the Service Period Continuous Never Cant Say Q6. How Performance Appr aisal affects the productivity of the employees Positive Feedback Indifferent Ne gative Feedback Q7. Who should do the appraisal? Superior Subordinates Consultan t Peer Self Appraisal All of the above Q8. Does appraisal help in polishing skills and performance area? Yes No Somewha t Q9. Does personal bias creeps-in while appraising an employee Yes No Q10. If given a chance, would employees like to review the current appraisal tec hnique? Yes No cant say Q11. Appropriate method of conducting the performance appraisal Ranking Method Page92 Paired Comparison 360 degree Gian Jyoti Institute of Management & Technology

MBO Assessment Centre Critical Incidents Q12. Does performance appraisal leads t o identification of hidden potential Yes No Q13. Does the organization facilitate self-appraisal for workers? Yes No Q14. What according to you is Performance Appraisal? Evaluation of employees Par t of career development Q15. How important Performance Appraisal is in utilizing the optimal skills, knowledge and abilities of the employees? Very important No t at all important Least important Important Q16. What do you consider as vital for performance appraisal of an individual? Experience Individual performance Cu rrent performance Individual potential Q17. Are employees given an opportunity t o make an input to their own performance appraisal? Yes No Gian Jyoti Institute of Management & Technology Page92

Q18. Are the performance appraisal reports freely accessible and communicated to your employees? Yes No

Q19. How Performance Appraisal helps in retention of employees? . Q20. What are the parameters that determine the Performance Appraisal of an indi vidual? .. .. Q21. What do you like or dislike about the Performance Appraisal policy of your company? .. ..

Q22. If given a chance what changes would you like to bring in the Performance A ppraisal policies of your company? .. Q23. Who are the persons involved in performance appraisal system of your compan y? .. ..

Suggestions and views .. Gian Jyoti Institute of Management & Tec Page92

.. Date --/--/-Gian Jyoti Institute of Management & Technology Page92