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A SUMMER TRAINING PROJECT REPORT ON Performance Appraisal

at BLR LOGISTICS (I) LTD. BIJWASAN


Submitted in partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATION (MBA) SESSION (2010-2012) Submitted To: DEPARTMENT OF MANAGEMENT STUDIES

Submitted By: KULDEEP YADAV Roll No. : 10001532024 MBA(GENERAL) DEENBANDHU CHHOTU RAM UNIVERSITY OF SCIENCE AND TECHNOLOGY AND MANAGEMENT, MURTHAL

DECLARATION
I, Kuldeep, student of MBA IInd Semester, studying at Deenbandhu Chhotu Ram University of Science and Technology, Murthal, hereby declare that the summer training report on topic Performance Appraisalat BLR LOGISTICS. submitted to DCRUST, Murthal in partial fulfillment of Degree of Masters of Business Administration is the original work conducted by me. The information and data given in the report is authentic to the best of my knowledge. This summer training report is not being submitted to any other University for award of any other Degree, Diploma and Fellowship

KULDEEP YADAV

ACKNOWLEDGEMENT
I express my sincere gratitude to BLR LOGISTICS and its entire staff for giving me this wonderful opportunity to work and get to know more about the Performance Appraisal. With deep sense of gratitude I express my indebtedness to my mentor and guide Mr.DINESH KUMAR, (Asst. HR Manager)BLR LOGISTICS, BIJWASAN. He has been a great source of inspiration. I thank him for his keen interest and valuable guidance. He was also kind to discuss the problems faced during the course of this project. I take this opportunity to thank Mr.DINESH KUMAR and Mr.PRAVEEN, who gave me this opportunity to do my project at this Organization. .

KULDEEP YADAV

EXECUTIVE SUMMARY
The importance of personnel management is being increasingly realized in industrial and nonindustrial organization both in India and abroad. The realization has come about because of increasing complexity of the task of managers and administrators. In most organizations theproblems of getting the competent and relevant people, retaining them, keeping up their motivationand morale, and helping them to both continuously grow and contribute their best to theorganizations, are now viewed as the most critical problems.So with this reference the project titled Performance Appraisal has been conducted, based on the research in BLR LOGISTICS, BIJWASAN, has been prepared to get a better insight into the management practice adopted with reference to HR Policies prepared by the HR department in organization. It emphasizes the importance of a clear cut organization structure and culture to avoid anyconfusion in order to achieve maximum result with minimum resources. The project is aimed to cover maximum knowledge of the HR practices followed in the organization and how the performance is evaluated of employees, what primary factors are considered , how data is maintained and finally the evaluation done. Here the HR practices of the company have been explained to understand how the company follows these practices and the performance appraisal process adopted. The practical knowledge has been gained mainly by observing all the activities taking place in the H.R. department. This is a brief study done to have understanding of the subject H.R., how it is practically implemented, why it is necessary, its implications and the benefits. With reference to the HR Practices brief knowledge has been gained how the Recruitment cycle functions, Selection done, Training Calendar prepared.

CONTENT

CHAPTER NO. 1.

TOPIC

PAGE NO.

AIM

AND

ESTABLISHMENT

OF

THE

8-10

COMPANY Company profile and key Strength Vision and Mission Key Values 2. POLICY OF THE COMPANY Awards and Achievements Services Offered Work Culture 3. 8 9 10 11-14 11 12-13 14

ORGANIZATIONAL STRUCTURE OF THE 15-17 COMPANY Organizational Structure Service Conduct Rules Responsibilities of HR 15 16 17

4.

INTRODUCTION TO THE PROJECT & 18-39 REVIEW OF LITERATURE Introduction about Project Modern Appraisal Terms Related to Performance Appraisal Process of Performance Appraisal 19 20 21 22-23
5

Appraisal Techniques 360 degree Performance Appraisal Obstacles to success Making Performance Appraisal Relevant Significance of the Problem Review of Literature 5. METHODOLOGY Research Design and Methodology Data Collection Methods 6. PRESENTATION AND ANALYSIS OF DATA 7. DISCUSSION CONCLUSIONS Suggestions and Recommendations Limitations References Questionnaire OF RESULTS

24-30 31 32-33 34 35 36-39 40-43 41-42 43 44-54

AND 55-66

55-59 60 61-62 63-66

COMPANY PROFILE

COMPANY PROFILE AND KEY STRENGTH


As one of India's leading logistics companies BLR offers customized solutions to all industrial sectors with a focus on saving costs and providing world class services. BLR Logistics (I) Ltd stands for globally competitive solutions within a trusting and service oriented environment. BLR offers truly integrated Logistics Services to its customers through its privately owned fleet of more than 500 vehicles and over 24 general and custom bonded warehouses in all major cities across India. With its 100 offices in India BLR can offer you an extensive network and overall coverage. Having grown 58% annually, and Reliance Capital Ltd taking on an equity stake of 31%, BLR Logistiks (I) Ltd has developed from a small trucking company to a 250 crores rupees (equal to 50 million US Dollars) turnover logistics provider.

HISTORY
Set up as a small trucking business in 1968, BLR has shifted gears to become one of the largest & most reliable Transportation & Logistic companies in India. The founder of the company Mr. L. C. Goyal started the one man-one-office trucking company Bombay Ludhiana Roadways in 1968. After this, the company grew steadily to a sizeable business of about INR 2 crores (INR 20 Million) and three offices by 1989. Quality, Integrity and Social responsibility are the values that he practiced, preached and imbibed in the culture of BLR. During the 1990s BLR achieved great growth to a network of more than 70 offices all over India and revenues of 180 Crores (INR 1.8 billion) under the dynamic leadership of Mr. Ashok Goyal, Commerce Graduate from Mumbai University and the 2nd generation entrepreneur. The company is now equipped to provide a complete logistics platform for domestic & international logistic requirements with more than 100 offices all over India. With a highly competent management team, supported by the knowledge of the company's 600-people strong family, BLR has become one of the most sought after Transportation & Logistics companies in India.

MISSION AND VISION


MISSION
Our mission is to create competitive edge and superior financial results for our customers by optimizing their supply chains through innovation & total commitment.

VISION
We will be recognized globally as the number one provider of logistic services offering door-todoor solutions from, to and within India. Market Penetration, Market Development Similarly Product Development and Diversification. Partner relationship management, Value chain, Value delivery network.

KEY VALUES
INTEGRITY EQUALITY AMBITION HONESTY RESPONSIBILITY TRUSTWORTHINESS

At BLR Logistiks (I) Ltd integrity and trustworthiness are the basis of our commitment to our customers and employees. BLR allocates tasks and responsibilities to its staff based on their capacities regardless of other factors such as sex or religion. BLR values a strong culture of loyalty towards its employees and from its employees. These values form the backbone of BLR and will continue to provide the framework to realize BLRs potential and ambition in the future.

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AWARDS AND ACHIEVEMENTS


1. CEAT India Road Transportation Award for Customer Service Western Region 2.Certificate of Appreciation by United Spirits 3.Annual SME & Entrepreneurship Excellence Award 2008 4. Order of Merit for Management 5. National Trade Excellence Award 1996

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SERVICES
TRANSPORTATION

Introduction Starting more than 40 years back as a transportation company, BLR Logistics has built a reliable reputation within Indias domestic transportation market. With a fleet of more than 500 vehicles of all types, small, medium and large, we can accommodate all your transport requirements. Our branch network is there to assist you in every region in India.

WAREHOUSING AND DISTRIBUTION


Introduction With more than 20 warehouses around the country linked to its overall distribution network, BLR offers warehousing and distribution services across industries. All the warehouses are linked through state of the art IT infrastructure. BLR Logistics gives real time inventory visibility to customers. Equipped with modern handling equipments and highly trained personnel, BLR Logistics gives utmost importance to the safety of the goods.

INTERNATIONAL FREIGHT MANAGEMENT


Introduction BLR offers you door-to-door service solutions in global freight forwarding. We provide you with import and export services both through sea and air freight and can arrange all necessary steps to handle your custom clearance. Our range of ocean freight services covers all your delivery requirements, supported by a tariff structure that is both straightforward and competitive. Forwarding services start with an analysis of the transportation task. This allows us to find the optimal route coupled with the best time-to-cost variation. Our own fleet of vehicles gives us extra edge covering the inland locations within India. 12

PROJECT & ODC TRANSPORTATION


Introduction BLR has the capacity to take care of all your special project and ODC cargo. We provide you with a tailor made transport solution, supported by our own vehicles and material. Whether your cargo is import or export, BLR organizes a door-to-door solution. BLR has its own Volvo puller and hydraulic axles to transport your heavy lifts and the rest of its fleet, (semi) low bed and normal trailers, is ready to take care of the rest of your packing list.

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WORK CULTURE

Quality of Work Life:


It deals with the impact of work and the work environment on employees and organizational productivity. It focuses on improving the conditions of work to create a supportive and healthy work environment.

Benefits of Quality of Work Life


An Effective QWL initiative leads to the creation of a healthy, satisfied and productive workforce, which brings about the development of efficient, adaptive and profitable organization. QWL provide us a safe and healthy environment; develop a positive attitude in employees towards their job and organization. It provides employee opportunity for learning and professional growth. It ensures fair compensation and security for workers, thus motivating them to perform better, work regularly and be loyal to their organization. Employees enjoy their work. Employees take ownership and initiatives in their work. Creates a sense of freedom and job security amongst the employees. Dealerships have loyal and committed employees.

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ORGANIZATIONAL STRUCTURE OF THE COMPANY

DIRECTORS

L C Goyal, Chairman Ashok Goyal, Managing Director Mohan Menghani, Executive Director Nilu Goyal, Director P. D. Sharma, Director Incharge Manish Chhajed, Nominee Director from Reliance Capital Ltd
SENIOR MANAGEMENT

Prakash Khatri, Chief Executive Officer Sanjay Rane, Chief Operating Officer Uday Malya, Chief Financial Officer B.B. Nair, Vice PresidentSouth Zone Darshana Uttam, General Manager of Finance Accounts
MARKETING

V.R. Krishnan, Vice PresidentCorporate Sales Sanjay Badgamia, Marketing Manager Development Caroline Schneider, Business Development Manager Makarand Kulkarni, Marketing Manager Mahesh Shetye, Marketing Manager \
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SERVICE CONDUCT RULES

1.

Salary structure governed by proper pay scale as specified in appointment letters.

2.

Service conditions are mentioned in appointment letters. 6 working days are observed with one holiday in a week.

3.

Working hours are fixed from 9.00 A.M. to 6.00 P.M. with one hour lunch break. The following National Holidays are observed 26 Jan. (Republic Day), 15th Aug. (Independence Day), 2nd Oct. (Gandhi Jayanti) and other important festival like Holi, Diwali etc. 15 causal leaves are allowed in a year and balance causal leave are credited or paid as incentive for employee.

4.

5.

Facility for Annual Medical Checkup.

6.

Incentive to the staff shall be calculated as per policy and will be dispersed before 15th of month.

7.

Every employee has specified dress and two dresses shall be provided to the employee in a year.

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RESPONSIBILITIES OF HR

The key HR areas which are essential to manage employees


Organization Roles & Structure. Recruitment and Selection. Joining and Induction. Training & Development. Compensation and Benefits. Performance Management. Career Plan and Growth.

Rewards and Recognition.

Some good HR practices


Satisfying Customers. Satisfying Employees. Increasing Revenue &Higher Profits. Performance driven work culture. Transparent System. .

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INTRODUCTION

18

INTRODUCTION ABOUT PROJECT

The history of performance appraisal is quite brief. Its roots in the early 20thcentury can be traced to Taylors pioneering Time and motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War- not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the worlds second oldest profession! Thereis a basic human tendency to make judgments about those one is working with, as well as oneself. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is title chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal system began as simple method of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employees performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better that the supervisor accepted, a pay rise was in order. 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. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was 19

gradually recognized. The general model of performance appraisal, as it is known today, began from that time.

MODERN APPRAISAL
Performance appraisal may be define as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi- annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. In many organizations- but not all- appraisal results are used, either directly or indirectly, to the help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get majority of available merit pay increases, bonuses and promotions. By the same token, appraisal results are used to identify the poorer performers who may required some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay.

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TERMS RELATED TO PERFORMANCE APPRAISAL

PERFORMANCE APPRAISAL: The regular (usual annual) process where an employees performance for the year is assessed by manager and/or employee. It is only one part of the performance management.

PERFOMANCE MANAGEMENT: Thelarger process of defining what employees should be doing, ongoing communication during the year, linking of individual performance to the organization needs, and the evaluating of appraising of performance.

RANKING SCALE: A way of evaluating staff by comparing them to each other, so that there is a best, a second best and so on. This is REAL SERIOUS TROUBLE, and almost always destructive.

STANDARDS OF PERFORMANCE: Mutually agreed upon criteria used to describe how WELL an employee must perform, written to reduce subjective judgment

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PERFORMANCE APPRAISAL PROCESS

Performance Information

Evaluation performance Areas

Supervisor Reviews Appraisal

HR Reviews Appraisal

Appraisals/ Documents to HR

Presentation of Appraisal

Time lines/ objectives Established

Evaluation Time lines/ goals Termination Continued Monitoring

Follow up Meeting objectives

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Defined by Schneier and Beatty as, the process of identifying, measuring and development human performance in organizations, performance appraisal tries to: Give feedback to employees to improve subsequent performance. Identify employee-training needs. Document criteria used to allocate organizational rewards. Form a basis for personal decisions- salary (merit) increases, disciplinary actions, etc. Provide the opportunity for organizational diagnosis and development. Facilitate communication between employee and administrator. Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.

APPRAISAL FORMATS
Many different formats and procedures have tried to meet these multiple objectives. For each of these purposes, someone in the organization must make some decisions about the kinds of characteristics of people or their performance to be evaluated and about the manner in which the evaluation will be done, by whom, and how well. There are relatively few special rules or special principals applicable only to the special purposes. Regardless of the types of format used, the following criteria are recommended as important components of an effective performance appraisal.

Examples of outstanding performance; Identification of areas needing improvement; Discussion of goals and objectives for upcoming year; Opportunity for the employee to furnish information on achievements and performance; Appraisal of participation in programs such as diversity initiatives, 23

Feedback from training and professional development opportunities for upcoming year;

The most commonly used appraisal techniques includes:

Essay appraisal. Graphic rating scale. Field review. Forced- choice rating. Critical incident appraisal. Management- by- objectives approach. Work- standards approach. Ranking methods. Assessment centers. Each of these has its own combination of strengths and weaknesses, and none is able to achieve all the purposes for which management institutes performance appraisal system. Nor is any one technique able to evade all of the pitfalls. The best anyone can hope to do is to match an appropriate appraisal method to a particular performance appraisal goal. ESSAY APPRAISAL In the essay method approach, the appraiser prepares a written statement about the employee being appraised.The statement usually concentrates on describing specific strength and weaknesses in the job performance. It also suggests courses of action to remedy the identified problem Areas.The statement may be written and edited by the appraiser alone, or it be composed in collaboration with the appraiser needs.

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GRAPHIC RATING SCALE This technique may not yield the depth of an essay appraisal but it is more consistent and reliable typically, a graphic scale assesses a person on the quality and quantity of his work (is he outstanding above average, or unsatisfactory) and on a variety of other factor that vary with the job but usually include personal traits like reliability and cooperation. It may also include specific performance items like oral and written communication. The graphic scales have come under frequent attack, but remain the most widely used rating method. In a classic comparison between the old- fashioned graphic scales and the much more sophisticated forced- choice technique, the former proved to be fully as valid as the best of the forced-choice forms, and better than most of them. It is also cheaper to develop and more acceptable to raters than the forced- choice form. For many purposes there is no need to use anything more complicated than a graphic scale supplemented by a few essay questions.

FIELD REVIEW When there is reason to suspect rater bias, when some raters appear to be using higher standards than others, or when comparability of ratings is essential, essay or graphic ratings are often combined with a systematic review process. The field review is one of one of several techniques for doing this. A member of the personnel or central administrative staff meets with small groups of raters from each supervisory unit and goes over each employees rating with them to (a) identify areas of inter-rater disagreement, (b) help the group arrive at a consensus, and (c) determine that each rater convinces the standards similarly. This group- judgment technique tends to be more fair and more valid than individual ratings and permits the central staff to develop an awareness of the Varying degrees of leniency or severity as well as bias- exhibited by raters in different departments. On the negative side, the process is very time consuming.

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FORCED-CHOICE RATING Like the field review, this technique was developed to reduce bias and establish objective standards of comparison between individuals, but it does not involve the intervention of a third party. Although there are many variations of this method, the most common one asks raters to choose from among groups of statements those which best fit the individual being rated and those which least fit him. The statements are then weighted or scored, very much the way a psychological test is scored. People with high scores are, by definition, the better employees; those with low score are poorer ones. Since the rater does not know what the scoring weights for each statement are, in theory at least, he cannot play favorites. He simply describes his and someone in the personal department applies the scoring weights to determine who gets the rating. The rationale behind this technique is difficult to fault. It is same rationale used in developing selection test batteries. In practices, however, the forced-choice method tends to irritate raters, who feel they are not being trusted. They want to say openly how they rate someone and not be second- guessed or tricked into making honest appraisals. A few clever raters have even found ways to beat the system. When they want to give average employee Harry Smith a high rating, they simply describe the best employee they know. If the best employee is Elliott Jones, they describe Jones on Smiths forced -choice from. Thus, Smith gets a good rating and hopefully a raise. An additional drawback is the difficulty and cost of developing forms. Consequently, the technique is usually limited to middle and lower management levels where the jobs are sufficiently similar to make standard or common form feasible. Finally, forced-choice forms tend to be of little value- and probably have a negative effectwhen used in performance appraisal interviews.

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CRITICAL INCIDENT APPRAISAL The critical incident technique looks like a Natural to some people for performance review interviews, because it gives a supervisor actual, factual incidents ti discuss with an employee. Supervisors are asked to keep a record, a little black book, on each employee and to record actual incidents of positive or negative behavior. Instead of arguing over traits, the discussion deals with actual behavior. There are, however, several drawbacks to this approach. It requires that supervisor jot down incidents on a daily or, at the very least, a weekly basis. This can become a chore.

Furthermore, the critical incident rating technique need not, but may, cause a supervisor to delay feedback to employees. And it is hardly desirable to wait six months or a year to confront an employee with a misdeed or mistake. Finally, the supervisor sets the standards. If they seem unfair to a subordinate, might he not more motivated if he at least has some say in setting, or at least agreeing to, the standards against which he is judged?

MANAGEMENT BY OBJECTIVES (Results Method) The use of management objectives was first widely advocated in the 1950s by the noted management theorist Peter Drucker.MBO (Management by objectives) method of performance appraisal is results- oriented. That is, they seek to measure employee performance by examining the extent to which predetermined work objectives have met. Usually the objectives are

establishedjointly by the supervisor and subordinate. Once an objective is agreed, the employee is usually expected to self- audit; that is to identify the skill needed to achieve the objective. Typically they do not rely on others to locate and specify their strengths and weaknesses. They are expected to monitor their own development and progress.

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ADVANTAGES
Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job performance. Employees are judged according to real outcomes, and not on their potential for success, or on someones subjective opinion of their of their abilities. The guiding principle of the MBO approach is that direct results can be observed, whereas the traits and attributes of employees (which may or may not contribute to performance) must be guessed at or inferred.MBO advocates claim that the performance of employees cannot be broken up into so many consitituent parts- as one might take apart an engine to study it. But put all the parts together and the performancemay be directly observed and measured.

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DISADVANTAGES
MBO methods of performance appraisal can give employees a satifying sense of autonomy and achievement. But on the downside, they can lead to unrealistic expectations about what can and cannot be reasonalbly accomlished. Supervisors and subordinates must have very good reality checking skill to use MBO appraisal methods. They will need these skills during the initial stage of objective setting, and for the purposes of self-auditing and self monitoring. Unfortunately, reasearch studies have shown repeatedly that human beings tend to lack the skills needed to do their own reality checking. Nor are these skills easily conveyed by training. Reality itself is an intensely personal experience, prone to all forms of perceptual bias. One of the strenghts of the MBO method is the clarity of purpose that flows from from a set of well-articulated objectives. But this can be a source of weaknessalso. It has become very appearent that the modern organisation must be flexible to survive. Objectives, by their very nature, tend to impose certain rigidity.

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RANKING METHODS
The rating scale method offers a high degree of structure for appraisals. Each employee traits or characteristic is rated on a scale that usually has several points ranging from poor to excellent (or some similar arrangement). The traits assessed on theses scales include employee attributes such as cooperation, communications ability, initiative punctuality and technical (work skill) competence. The nature and scope of the traits selected for inclusion is limited only by the imagination of the scales designer, or by the organizations need to know. The one major provision in selecting traits is that they should be in some way relevant to appraisees job.

ASSESSMENT CENTERS
In any placement decision and even more so in promotion decision, some prediction of future performance is necessary. How can this kind of prediction be made most validly and most fairly? One widely used rule of thumb is that what a man has done is the best predictor of what he will do in the future. But suppose you are picking a man to be a supervisor and this person has never held supervisory responsibility? Or suppose you are selecting a man for a job from among a group of candidate, none of whom has done the job or one like it? In these situations, many organizations use assessment centers to prediction future performance more accurately. Typically, individuals from different departments are brought together to spend two or three days working on individual and group assignments similar to the observers- sometimes derived by paired comparison or alternation ranking- leads to an order- of- merit ranking for each participant. Less structured, subjective judgments are also made.

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3600-degree performance Appraisal

Boss

Peer

Self

Tea m

Client

3600 Feedbackis a proven method of helping individual their performance through the eyes of their working colleagues. The individual first complete a self- assessment, rating themselves over a serious of specific behaviors. They select a number of working colleagues and categorize as e.g. Manager, Colleagues, and Team Member. Each selected person then assesses the individual for their current performance under the same series of behaviors using a simple rating scale mechanism. The feedback is then summarized and collected for the individual as a series of reports. Each report is designed to emphasize a different aspect of the feedback e.g. strengths, Development Areas, opinion differences. Once the individual has received the report they are in a position to identify which behaviors are seen as in need of improvement and to choose appropriate development actions. 360 feedbacks is often used as a support aid for management development training. Managers can use the 360 report to focus on areas of the course which have been highlighted by colleagues. 360 feedbacksare also highly effective as a self development tool as it provides managers with key information which they would otherwise find hard to obtain. 31

SOME COMMON PITFALLS

Obstacles to the success of formal performance appraisal programs:

Performance appraisal programs demand too much from supervisors. Formal performance appraisals obviously require at least periodic supervisor observation of subordinates performance. However, the typical first- line supervisor can hardly know, in a very adequate way, just what each of 20, 30, or more subordinates is doing.

Standards and ratings tent to vary widely and, often, unfairly. Some raters are tough, others are lenient. Some departments have highly competent people; others have less competent people. Consequently, employee subject to less competition or lenient ratings can receive higher appraisals than equally competent or superior associates.

Personal values and bias can replace organizational standards..

Because of lack of communication, employees may not know how they are rated. No performance appraisal system can be very effective for management decisions, until the people being appraised know what is expected of them and by what criteria they are being judged.

In many cases, the validity of ratings is reduced by supervisory resistance to making the rating. Rather than confront their less effective subordinates with negative ratings, negative feedback in appraisal interviews, and below- average salary increases, supervisors often take more comfortable way out and give average or above- average ratings to inferior performers. Performance appraisal ratings can boomerang when communicated to employees. Negative feedback not only fails to motivate the typical employee, but also can cause him to 32

perform worse. Only those employees who have a high degree of self- esteem appear to be stimulated by criticism to improve their performance. Performance appraisal interviews tend to emphasize the superior position of the supervisor by placing him in the role of judge, thus countering his equally important role of teacher and coach. This is particularly damaging in organizations that are attempting to maintain a more participative organizational climate.

TRADITIONAL PROBLEMS WITH APPRAISALS

Halo Effect: -One trait of the individual affects the others bias. Graphic forms are
susceptible to this problem.

Central Tendency: - Supervisors tend to play it safe and rate everyone generally
so that they do not get questioned about their judgment.

Leniency/ Strictness: - Some supervisors constantly under or over rate their staff.

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MAKING PERFORMANCE APPRAISAL RELEVANT


Performance appraisal programs can be considerably more effective if management will fit practice to purpose when setting goals and selecting appraisal techniques to achieve them. Then he shows how they can be used singly and in combination with different performance appraisal objectives. He maintains that if management will undertake this matching effort, many familiar pitfalls of appraisal programs can be avoided. These frequently voiced goals of performance appraisal programs underscore the importance of much programs to such programs to any observe their subordinates more closely and to do a better coaching job. Motivate employee by providing feedback on how they are doing. Provide back-up data for management decisions concerning merit increases, transfers, dismissals, and so on.

Improve organization development by identifying people with promotion potential and pin- pointing development needs.

Establish a research and reference base for personnel decisions.

It has been estimated that over three fourths of U.S. companies now have performance appraisal programs. Appraisal programs. In actual practice, however, formal performance appraisal programs have often yielded unsatisfactory and disappointing results, as the growing body of critical literature attests. Some critics even suggest that we abandon performance appraisal as a lost hope, and they point to scores of problems and pitfalls are evidence. But considering the potential of appraisal programs, the issue should not be whether to scrap them; rather, it should be how to make them better. One reason for failures is that companies often select indiscriminately from the wide battery of available performance appraisal techniques without really thinking about which particular technique is best suited to a particular appraisal objective.

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SIGNIFICANCE OF THE PROBLEM


Performance appraisal has described as Americas number one management problem and yet one of the most critical responsibilities of human resources management. Organizations regularly expend scarce resources to train supervisor on how to effectively conduct performance appraisals. Both practitioners and empiricists have generated volumes of literature investigating and or reporting how to, how often, and who should give performance feedback to a worker. Experts and researchers that they have analyzed performance appraisal have suggested two broad uses of appraisal in organizations. Performance appraisals serve as administrative purposes in areas such as reward allocation (salary increases, bonuses), and assignment decision (promotions, transfers, demotions). Evaluation also contributed to employee development, because it allows the identification of their strengths and weaknesses, provides performance feedback, and facilitates exchanges with supervisors. However, many surveys of both employee and managers indicate dissatisfaction with performance appraisals. Since organizations will most likely continue to make personnel decisions based on performance appraisals, this problem must be reconciled. Hence, the purpose of the study is the determine whether effective communication took place during the appraisal process from both the managerial and employee perspective.

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REVIEW

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REVIEW OF LITRATURE
Job performance is a fundamentally important construct in organizational practice and research. Performance appraisals also play a central role in most personnel decisions, and are also used as an important source of developmental feedback. The performance appraisal process has been known to leave employees embittered, dejected, and unfit for productive work for many weeks after the rating. They have also been known to elicit negative psychological responses such as resistance, denial, aggression, or discouragement, particularly if the assessment is negative. Evidently, something must be done to address the problems with process. Assessment of employees reactions toward their performance appraisal is important for many reasons. These reasons include: a). The notion that reactions represent a criteria of great interest to practitioners and b). The fact reactions have been theoretically linked to determinants of appraisal acceptance and success but have been relatively ignored in research. Many researchers have suggested that appraisal reactions play an important role in the appraisal process because they are vital to the acceptance and use of an appraisal system as well as a contributing factor to the validity of an appraisal. Thus, it seems vital to organizations that researchers continue to address the issue of employee appraisal reactions to help bridge the gap between science and practice in performance appraisal. With dissatisfaction, and feelings of unfairness in process and inequity in evaluations, any appraisal system will be doomed for failure. If not accepted and supported by its users, an appraisal system will ultimately be unsuccessful. Clearly, there is general consensus among performance appraisal researchers that the assessment of appraisal reactions is important. Satisfaction has been the most frequently measured appraisal reaction. One advantage of using satisfaction, as a measure of individual reactions is that it appears to assess both fairness cognitions and simple affect, thus affording a broader indicator of individuals reaction to appraisal than more specific, cognitively orientated criteria. Appraisal satisfaction has been primarily conceptualized in three ways:

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i.) ii.) iii.)

Satisfaction with the appraisal interview or session Satisfaction with the appraisal system Satisfaction with performance ratings.

The study highlighted some of the benefits associated with allowing performance appraisal systems to become more involvement orientated through employee participation in the process. Employee participation was positively related to employee satisfaction with the appraisal session, the appraisal system, perceived utility of the appraisal, motivation of employees to improve performance, and perceived fairness of the system. There were at least five ways empirically identified including allowing employees to voice their opinions (e.g. valueexpressive participation), allowing them to influence the appraisal through voicing their

opinions ( instrumental participation), allowing influence the appraisal, and allowing them to participate in goal setting in then appraisal process. Most notable of this operationalisation of participation was value- expressive participation. The value- expressive explanation suggests that employees perceive the chance for self- expression as periodically just, regardless of appraisal outcomes. These explanations states that attitudes are affected because the opportunity to voice ones opinions is a desired end in itself. Valueexpressive participation was more strongly related to positive reactions than instrumental participation. Appraisal is a communication process and therefore, the quality of communication cannot be neglected regarding satisfaction. Therefore, in this study, we will be looking at satisfaction with the appraisal session in the context of communication.

FOCUS OF THE PROJECT


The project has been designed mainly to focus on to understand the performance management system prevailing in the organization and an effort to design a better performance management system for the organization keeping in view the practical aspect of the applicability.

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OBJECTIVES OF PROJECT

1. To understand the performance management system at the organization. 2. To analyze problem in the exiting performance management system. 3. To provide feedback to the employees regarding their past performance.

4. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed. . 1. To design performance appraisal forms for three main levels viz i.) ii.) iii.) Workmen (Factory Staff) Supervisory Managerial ( Executive)

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RESEARCHMETH ODOLOGY

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WHAT IS RESEARCH?

Research is an active, diligent and systematic process of inquiry in order to discover, interpret or revise facts, events behaviors, or theories or to make practical application with the help of such fact6s, laws or theories. The term research is also used to describe the collection of information about a particular subject. A research design is a specification of methods and procedures for acquiring the information needed. It is overall operation pattern and the framework of the project that stipulates what information is to be collected from which source and by what procedure. Supervision in the human services is a role, which usually requires periodic appraisal of employee performance. How that appraisal is conducted in human services agencies in two mid- sized American cities is the subject of this study For present study the research design has been descriptive. It is descriptive because of analysis of exiting performance management system.

METHODOLOGY RESEARCH DESIGN


Through study of the exiting performance management system in the organization. Study of the levels/ bands in the organization. Study of behavioral skills at various levels in the organization. To study flaws in the exiting performance management system. To design performance appraisal forms for three levels of the organization viz 1.) 2.) 3.) Workmen (Factory staff) Supervisory Non supervisory (Executive/ Managerial)

Hypothesis was developed on the basis of methodology adopted as above. 41

Concrete Suggestions/ Recommendations.

UNIVERSE & SURVEY POPULATION


For the accomplishment of the project the universe and the survey sample both are the organization itself. The universe is the organization in the sense that the project of performance appraisal is designed for the company and so the survey sample is the organization itself.

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DATA COLLECTION
The data collected for the research is undertaken through primary as well secondary data methods. This can be illustrated in the following way: Primary data The primary data has been collected from the various mediums like: Review of exiting performance appraisal system in the organization Telephone survey.

Survey data The secondary data has been collected from the mediums like: Information acquiring through Internet. Articles on the relative topics in various books, magazines, newspapers.

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PRESENTATION AND MICRO ANALYSIS OF DATA

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TABLE No. 1 IS PERFORMANCE APPRAISALNECESSARY?

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 72 28

Yes No TOTAL

36 14 50

Is performance appraisal necessary? Out of the total respondents 72% believed that performance appraisal is necessary for growth of the company whereas 28% do not believe it.

IS PERFORMANCE APPRAISAL NECESSARY

No 28% Yes No Yes 72%

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TABLE No. 2 IMPORTANCE OF PERFORMANCE APPRAISAL

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 52 16 32

Motivation Competitive feel Distinction

26 8 16

Importance of performance appraisal: 52% respondents think that performance appraisal is important to motivate an employee, 32% think that performance appraisal helps to distinguish between efficient staff from non-efficient ones.

IMPORTANCE OF PERFORMANCE APPRAISAL

32% Motivation Competitive feel 52% 16% Distinction

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Table No. 3 FORM OF PERFORMANCE APPRAISAL

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 26 74

Monetary rewards Non monetary

13 37

Form of performance appraisal: Among all the officials, 74% prefer non monetary rewards like challenging jobs, appreciation whereas 26% prefer monetary rewards like bonus, incentives, etc.

FORM OF PERFORMANCE APPRAISAL

Monetary rewards 26% 74% Non monetary rewards

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TABLE No. 4 METHOD FOR PERFORMANCE APPRAISAL

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 36 40 10 14

Graphic rating scale Ranking method Paired comparison Group appraisal

18 20 5 7

Method for performance appraisal: 40% respondents prefer ranking method to be adopted, 36% are in favour of graphic rating scale and the least are in favour of group appraisal.

METHOD FOR PERFORMANCE APPRAISAL

14% 10% 36% Graphic rating scale Ranking method Paired comparison method Group appraisal 40%

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TABLE No. 5 TYPE OF PERFORMANCE APPRAISAL

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 18 82

Group appraisal Individual appraisal

9 41

Type of performance appraisal: Among all the respondents 82% prefer individual appraisal in comparison to group appraisal.

TYPE OF PERFORMANCE APPRAISAL

18%

Group appraisal Individual appraisal

82%

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TABLE No.6 CONSIDERATIONS DURING PERFORMANCE APPRAISAL


CATEGORIES NO. OF RESPONDENTS Achievement Leadership Teamwork Presentation skills Customer orientation 6 15 11 9 9 TOTAL NO. OF PERCENTAGE 12 30 22 18 18

Considerations during performance appraisal: 30 % officials consider leadership important for performance appraisal, 22% consider teamwork important and achievement is considered as least important for performance appraisal.

CONSIDERATION DURING PERFORMANCE APPRAISAL

18%

12% Achievement Leadership Teamwork Presentation skills Customer orientation 22%

18%

30%

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TABLE No.7 GRADES & ACHIEVEMENTS

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 36 74

Yes No

18 32

Grades & achievements: 74% respondents do not agree that previous years grades & achievements should be taken into consideration for current years appraisal whereas 36% are in the favour of the same.

GRADES & ACHIEVEMENTS

36% Yes No 64%

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TABLE No.8 BEST FORM TO GIVE APPRAISAL

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 18 12 40 30

Promotion Bonus Challenging work Appreciation

9 6 20 15

Best Form to give appraisal: Challenging work is considered as the best way to give appraisal, 40% respondents are in its favour. 30% prefer appreciation, 18% are in favour of promotion.

BEST FORM TO GIVE APPRAISAL

18% 30% Promotion 12% Bonus Challenging projects Token of appreciation

40%

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TABLE No.9 PRIME FACTOR TO MESURE PERFORMANCE

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 26 14 38 22

Attendance Punctuality Execution of plans Convincing power

13 7 19 11

Prime factor to measure performance: According to 38% execution of plans is the prime factor to measure the performance of officials, 26% says attendance is important whereas only 14% consider punctuality as the prime factor for measuring performance.

PRIME FACTOR TO MEASURE PERFORMANCE

22%

26% Attendance Punctuality Execution of plans Convincing power 14%

38%

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TABLE No.10 MAJOR PROBLEM DURING APPRAISAL

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 38 28 34

Lack of competence Biasness Resistance

19 14 17

Major problem during appraisal: The major problem faced during the performance appraisal is lack of competence according to 38%, 34% say it is resistance and 28% consider biasness as the major problem.

MAJOR PROBLEM DURING PERFORMANCE APPRAISAL

34%

38% Lack of competence Biasness Resistance

28%

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OBSERVATIONS AND SUGGESTIONS

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OBSERVATIONS & SUGGESTIONS


Yearly performance reviews are critical. Organizations are pressed to find good reasons why they cant dedicate an hour- long meeting once a year to ensure the mutual needs of employee and organization are being met. Performance reviews help supervisors feel more honest in their relationship with their subordinates and feel better about them self in their

supervisor roles. Subordinates are assured clear understanding of what expected from them their own personnel strengths and area of development and solid sense of their relationship with their supervisors. Avoiding performance issues ultimately decreases morale, decreases credibility of management, decreases the organizations overall effectiveness and wastes more of managements time to do what isnt being done properly.

Conduct the following activities.


1. Design a legally valid performance review process; consider these legal requirements of the performance review process: Patricia king, in her book, performance planning and appraisal state that the; law requires that performance appraisal be: Job- related and valid; Based on a through analysis of the job; Standardized for all employees; Not biased against any race, color, sex, religion, or nationality and; Performed by people who have adequate knowledge of the person or job. Be sure to build in the process, a route for recourse if an employee feels he or

She has been dealt with unfairly in an appraisal process, e.g. that the employee can go to his or her supervisors.

2. Design a standard from for performance appraisals, and include the following Name of the employee, 56

Date the performance from was completed Dates specifying the time interval, over which the employee is being evaluated, Performance dimensions (include responsibilities from the job description, any assigned goals from the strategic plan, along with needed skill, such as communications administration etc.)

A rating system (e.g. poor, average, good, excellent) Space for commentary for each dimension, a final section for overall commentary,

A final section for action plans to address improvements, and lines for signatures of the supervisor and employee.

Signature may either specify that the employee aspects the appraisal or has been it, depending on warding on the form.

3. Schedule the first performance review for six months after the employee starts employment.: Schedule another six months later, and then every year on the employees anniversary date.

4. Initiate the performance review. Tell the employee that youre imitating a schedule performance review. Remind them of whats involved in the process. Schedule a meeting about two weeks out. 5. Have the employee suggest any update to the job description and provide written input to the appraisal Have themrecord their input concurrent to the recording theirs. Have them record their input on their own sheets (their feedback will be combined on the official from later on in the process). You and the employee can exchangeeach of your written feedback in the upcoming review meeting. (Note that by now, employees should have received the job descriptions and goals well in advance of the review, i.e year before. 57

The employee should also be familiar with the performance appraisal procedure and from.

6. Record your input to the appraisalappraisal references the job description and associated formal goal for basis of review. Be sure you are familiar with the job requirements and have sufficient contact with the employee to be making valid judgments Dont comment on the employees race, sex, religion, nationality, or a handicap or veteran status. Record major accomplishments, exhibited strengths and weaknesses according to the dimensions on the appraisal from, and suggest actions and training or development to improve performance. Use example of behaviors, whereas you can in the appraisal to help avoid counting on hearsay. Always address behaviors, not characteristics of personalities. The best way to follow this guideline is to consider what you saw with your eyes. Be sure to address only the behaviors of that employee, rather than behaviors of other employees. 7. Hold the performance appraisal meeting. State the meetings goals of exchanging feedback and coming to action plans, where necessary. In the meeting let the employee speak first and give their input. Respond with your own input. Then discuss areas where you disagree. Attempt to avoid defensiveness; admitting how you feel at the present time, helps a great deal. Discuss behaviors, not personalities. Avoid final terms such as always, never, etc. Encourage participation and be supportive. Come to terms on actions, whe5re possible. 58

Try to end the meeting on a positive note.

8. Update and finalize the performance appraisal form. Add agreed- to commentary on to the from. Note that if the employee wants to add attach written input to the final from, he or she should be able to do so. The supervisor signs the form and asks the employee to sign it. The form and its action plans are reviewed every few months, usually during one- on- one meeting with the employee. 9. Notes that if that supervisor has been doing a good job supervising, then nothing should be surprising to the employee during the appraisal . Any performance issue should have been conveyed when they occurred, so nothing should be a surprise in the review meeting.

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LIMITATIONS
The report had to work under some constraints and limitations, as nobody is interested in disclosing the HR related policies and procedures and when it comes to performance appraisal process it becomes ill at ease. Respondents may not have been true in answering various questions and may be biased to certain other questions. Some respondents were however not willing to share their views and were reluctant to give any information. Also as the performance appraisal was designed for exiting organization, the sample size was the only organization. Respondents were also reluctant to answer some questions are they took them as personal.

But all is well that ends well . In spite of the above limitation I was able to complete the project successfully and it was highly appreciated as a sincere effort of my hard work.

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BIBLIOGRPHY

61

BIBLIOGRAPHY

www.hrm.neu.edu/from/paform www.perfomance-appraisal.com www. blrlogistiks.com Personnel / Human Resource Management, David and Stephen Robinsons Personnel Management, R.S.Dwivedi Human Resource Management, V S P Rao

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ANNEXTURE

63

PERSONAL INFORMATION
(A) Name ---------------------------

(B) Age

-----------------------------

(C) Marital Status : (i) Married

(ii) Unmarried

(D) Educational qualification :

(a) Middle (b) Metric (C) Secondary (d) Graduate

(E) Professional / technical qualification -------------------------

(F) Length of service (in years)

------------------------------

(G) Department

----------------------------------

(H) Designation

----------------------------------

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QUESTIONNAIRE
Dear Respondent, this questionnaire is only for my educational purpose and no ones individuals identity or their viewpoints will be disclosed to anybody.

Q .1. Is performance appraisal necessary?

a). Yes

b). No

Q.2. What is the importance of performance appraisal?

a). Motivation

b).

Competitive Feel

Q.3. Form of performance appraisal?

a). Monetary rewards b).

Non monetary

Q.4. Method for performance appraisal?

a). Graphic rating scale b).

Ranking method

c). Paired comparison

Q.5. Type of performance appraisal?

a). Group appraisal b).

Individual appraisal

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Q.6. Considerations during performance appraisal?

a). Achievement b).

Leadership

c). Teamwork

d).

Presentation skills

e). Customer orientation

Q.7. Are you agree with the previous year Grades & Achievements?

a). Yes

b). No

Q.8. What is the Best Form to give appraisal?

a). Promotion b).

Bonus

e). Appreciation

c). Challenging work

Q.9. What is the Prime factor to measure performance?

a). Attendance b).

Punctuality

Convincing power

c). Execution of plans

e)

Q.10. What are the major problem during appraisal?

a). Lack of competence b).

Biasness c). Resistance

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