SUMMER TRAINING REPORT

ON
PERFORMANCE APPRAISAL PRACTICES
AT NSIC
Submitted in partial fulfillment of Master of Business Administration
From

Uttrakhand Technical University
Dehradun


UNDER THE SUPERVISION OF: SUBMITTED BY:
Mr. Devkant Kala Taniya Tariyal
Assistant Professor MBA III Semester
UIM, Dehradun Enroll:


(Batch: 2011-2013)
UTTARANCHAL INSTITUTE OF MANAGEMENT, DEHRADUN
ACKNOWLEDGEMENT

The successful completion of my project and execution of job depends upon the hard work,
dedication and enthusiasm of individual towards the project.

At the very outset I wish to express my gratitude to those entire peoples who have given their
kind help, guidance and suggestion for the successful completion of this project.

I am very much thankful to my guide Mr. Devkant Kala for the valuable and enlightened
during this project. I am also very thankful to all my faculty members and staff members of
library as well as my friends for their precious and worthy guidance, without which it would
have been difficult in completion of this project.

At last but not least I express my heartfelt gratitude to my parents for their encouragement
and support for the successful completion of this project and report.



TANIYA TARIYAL
MBA 3
rd
SEM
UIM DEHRADUN








CERTIFICATE


This is to certify that the project report titled Performance Appraisal Practices at
National Small Industries Corporation, is a bonafide work of Taniya Tariyal, student of
MBA III semester. This report neither full nor in part has ever before been submitted for
awarding of any degree of either this institute or any other university. I am pleased to say that
her performance during the period was extremely satisfactory.



Mr. Devkant Kala
Assistant Professor
Deptt. of Management Studies,
Uttaranchal Institute of Management
Dehradun














CONTENTS

Chapter-I Introduction

Micro Small and Medium Enterprises
Features
Role of Govt. in the Development of Small Industries
Indian MSMEs: Areas of Cooperation
National Small Industries Corporation Limited
Schemes
Marketing
Technology Support
SWOT Analysis of NSIC

Chapter-II Performance Appraisal

Performance Appraisal
Concept
Features
Methods of Performance Appraisal
Problems of Appraisal
Importance of Performance Appraisal

Chapter-III Research methodology

Research Design
Research Objective
Sampling Method
Data Collection Method and Tool
Limitations of the Study


Chapter-IV Data Analysis & Interpretation


Chapter- V Finding and Conclusion

Findings
Suggestions and Recommendations
Conclusion

Annexure

(1)Bibliography
(2)Questionnaire






















CHAPTER 1
Micro, Small & Medium Enterprises (MSMEs)
And
National Small Industries Corporation Ltd.




INTRODUCTION
Introduction to MSMEs
India devised a definitive development strategy since Independence for achieving economic
growth with self-reliance, social justice and alleviation of poverty. In this strategy, the Micro,
small and medium enterprise (MSME) sector has been accorded a pivotal role in the
industrial resurgence of India. Since the 1950s, India has adopted a conscious policy for
promotion and development of MSMEs, in view of their vital role in generation of
employment, dispersal of economy and better utilization of resources. The SME
Development Organization was set up in 1954 as an apex body for sustained and organized
growth of MSMEs in the country. The MSME sector has consistently registered a higher
growth rate than the overall industrial sector. The Government has taken several initiatives
and measures for enhancing the competitiveness of MSMEs in the present global
environment.
The definitions of small and medium sized enterprises differ from one country to
another. MSMEs have been defined against various criteria such as the number of worker
employed, volume of output and sales, value of assets employed, and the use of energy.
Organisation for Economic Cooperation and Development (OECD) defines establishments
with upto 19 employees as very small, between 20 and 99 employees as small, from 100 to
499 employees as medium and over 500 employees as large enterprises. The European Union
defines MSMEs that have employees of less than 250, with a turnover not exceeding Euro 50
million. Thus the definition of MSME varies from country to country and from region to
region. In the Indian context, micro, small and medium enterprises as per the MSME
Development Act, 2006 are defined based on their investment in plant and machinery for
manufacturing enterprise and on equipments for enterprises providing or rendering services.
Classification Manufacturing Enterprises* Service Enterprises**
Micro Rs. 2.5 Million / Rs. 25 Lakh Rs. 1 Million / Rs. 10 Lakh
Small Rs. 50 Million / Rs. 5 Crore Rs. 20 Million / Rs. 2 Crore
Medium Rs. 100 Million / Rs. 10 Crore Rs. 50 Million / Rs. 5 Crore
* Investment limit in Plant and Machinery. ** Investment Limit in Equipments.
IMPORTANCE OF MSMEs
The importance of Micro, Small and Medium Enterprises (MSMEs) has increasingly grown
over the years and they have become the backbone of any countrys economy and especially
in developing countries. They play an important role in revitalization and development of
national economy in many countries, by providing various goods and services, forming a
structure of division of labour and developing regional economies and communities. The
most important justification for the exclusive promotion of MSMEs is their potential for
employment intensity. In general, a MSME generates more jobs per unit of capital investment
than a large enterprise. MSMEs have many other benefits: it can be started with relatively
less capital; it facilitates nurturing of entrepreneurship, which could emerge from within; it
can be used as an instrument for alleviating regional disparities in development etc.
In India, MSMEs account for 95 per cent of the countrys industrial units. According to
estimates, in terms of value, the sector accounts for about 45 per cent of the manufacturing
output, 40 percent of the total exports, 35 per cent of value added by the manufacturing
sector, and 7 per cent of net domestic product of India. The MSME sector employs about 42
million persons in over 13 million units throughout the country. There are more than 6000
products, ranging from traditional to high-tech items, which are being manufactured by the
Indian MSMEs.
By its less capital intensive and high labor absorption nature, MSME sector has made
significant contributions to employment generation and also to rural industrialization. This
sector is ideally suited to build on the strengths of our traditional skills and knowledge, by
infusion of technologies, capital and innovative marketing practices. This is the opportune
time to set up projects in the small-scale sector. It may be said that the outlook is positive,
indeed promising, given some safeguards. This expectation is based on an essential feature of
the Indian industry and the demand structures. The diversity in production systems and
demand structures will ensure long term co-existence of many layers of demand for consumer
products / technologies / processes. There will be flourishing and well grounded markets for
the same product/process, differentiated by quality, value added and sophistication. This
characteristic of the Indian economy will allow complementary existence for various diverse
types of units. The promotional and protective policies of the Government have ensured the
presence of this sector in an astonishing range of products, particularly in consumer goods.
However, the bugbear of the sector has been the inadequacies in capital, technology and
marketing. The process of liberalization coupled with Government support will therefore,
attract the infusion of just these things in the sector. Small industry sector has performed
exceedingly well and enabled our country to achieve a wide measure of industrial growth and
diversification.
The Micro, Small and Medium Enterprises (MSME) sector has been recognized as engine of
growth all over the world. Many countries of the world have established a SME
Development Agency as the nodal agency to coordinate and oversee all Government
interventions in respect of the development of this sector. In the case of India, also Medium
establishment has for the first time been defined in terms of separate Act, governing
promotion and development of Micro, Small and Medium Enterprises (MSME) i.e. Micro,
Small and Medium Enterprises (MSME) development Act, 2006 (which has come into force
from 02nd Oct, 2006) the Office of Development Commissioner (Micro, Small and Medium
Enterprises) functions as the nodal Development Agency under the Ministry of Micro, Small
and Medium Enterprises (MSME).
Office of Development Commissioner (Small Scale Industry) was established in 1954 on the
basis of the recommendations of the Ford Foundation. Over the years, it has seen its role
evolve into an agency for advocacy, hand holding and facilitation for the small industries
sector. It has over 70 offices and 21 autonomous bodies under its management. These
autonomous bodies include Tool Rooms, Training Institutions and Project-cum-Process
Development Centers. Office of the Development Commissioner (MSME) provides a wide
spectrum of services to the Micro, Small and Medium Industrial sector. These include
facilities for testing, training for entrepreneurship development, preparation of project and
product profiles, technical and managerial consultancy, assistance for exports, pollution and
energy audits etc. Office of the Development Commissioner (MSME) provides economic
information services and advises Government in policy formulation for the promotion and
development of SSIs. The field offices also work as effective links between the Central and
the State Governments.
Consequent to the increased globalization of the Indian economy, MSMEs are required to
face new challenges. Office of the Development Commissioner (MSME) has recognized the
changed environment and is currently focusing on providing support in the fields of credit,
marketing, technology and infrastructure to MSMEs. Global trends and national
developments have accentuated Office of the Development Commissioner (MSME)'s role as
a catalyst of growth of MSMEs in the country.
INDIAN MSMEs: AREAS OF COOPERATION
India benefited immensely from experience of several countries, especially in the field of
technology. However, the rich Indian experience gained in the last sixty years in the MSME
sectors are:
Fee-based consultancy services and training in the following areas:
(i) Capacity Building of Entrepreneurs and Technical Manpower of MSMEs;
(ii) Policy & Institutional Framework for MSME Promotion, Development and
Enhancing Competitiveness;
(iii) Entrepreneurship Development and Business Development Services.
Establishment of Turnkey Projects for setting up manufacturing MSMEs on commercial
terms.
Skill up-gradation programmes in selected areas such as CNC Machining, Sheet-Metal
Technologies, CAD & CAM Designing, Wool Processing & Weaving, Leather
Technology, Plastic Technology, Wood Working, etc.
Conducting surveys and studies to identify the tooling and related skill requirements in
specific areas or regions like hilly/backward/indigenous.
Providing turnkey assistance to set up Tool Rooms & Training Centres.
Providing consultancy to existing manufacturing SME in upgrading their production
facilities, selection of machine tools, design consultancy for tools, moulds, dies, jigs &
fixtures, etc.
Providing specialized/tailor-made training courses for specific target groups.
Providing consultancy to existing training institutes in course design and curriculum
development including trainers training programmes.

National Small Industries Corporation Ltd.
National Small Industries Corporation Ltd. (NSIC), an ISO 9001:2008 certified company,
since its establishment in 1955, has been working to fulfill its mission of promoting, aiding
and fostering the growth of micro and small scale industries and industry related small scale
services / business enterprises in the country. Over a period of five decades of transition,
growth and development, NSIC has proved its strength within the country and abroad by
promoting modernization, up-gradation of technology, quality consciousness, strengthening
linkages with large and medium enterprises and enhancing exports - projects and products
from small industries.
NSIC operates through more than 110 Offices, 5 Technical Services Centers, 3 Extension
Centers and 2 Software Technology Parks supported by a team of over 600 professionals
spread across the country. To manage operations in African countries, NSIC operates from its
office in Johannesburg.
National Small Industries Corporation Ltd (NSIC), a Government of India enterprise under
the aegis of Ministry of MSME, achieved record operational and financial performance in
terms of gross volume of business and profitability in the recently concluded financial year
2010-11. The year witnessed the Corporation achieved new heights on all parameters. There
was substantial improvement in enhancing the companys outreach and its volume of
operations. The Business Turnover of the Corporation for the year jumped to Rs. 7979
Crore over the previous years turnover of Rs. 4488 Crore.
NSIC continued with its efforts to provide various raw materials like steel, aluminum, zinc,
copper, paraffin wax etc to MSMEs through arrangements made with bulk manufacturers of
these materials. In addition, the Corporation also started distribution of Coal to MSMEs in
West Bengal. Total raw material facilitation to MSMEs increased from 355719 MTs in the
year 2009-10 to 524534 MTs in the year 2010-11.
The Corporation during the year provided credit support of Rs. 2349 Crore to MSMEs as
against Rs. 1056 crore provided during the previous financial year, registering a growth
of 122%.
The Revenue from Government Purchase and B2B Portal increased to Rs. 5.94 Crore
thereby posting a growth of 7% over the previous year.
Under the Performance & Credit Rating Scheme, 10327 units were rated during the year
as against 7531 in 2009-10 posting an increase of 37% over previous year.
The performance of NSICs Technical Centres also showed remarkable improvement in
the year 2010-11. Financial year 2010-11 continued to be another year for the technical
centres when all seven technical centres operated without getting any grants to meet their
administrative cost. This could be possible through the technical centres beginning to
undertake "Techno-Commercial Activity".
NSIC organized 8 domestic exhibitions & 739 Marketing Promotion events, buyer-sellers
meets and marketing campaigns in the financial year 2010-11. The trademark exhibition
of the Corporation Techmart India was also held during November,2010. During the
year Corporation, also participated in 103 National & International Exhibitions.
NSIC continued its initiative to set up new Training-cum-Incubation Centres (NSIC-
TICs) under PPP mode for the purpose of inculcating entrepreneurial skills among
unemployed persons by imparting training through which they become employable or can
set up their own small enterprises. Currently 35 NSIC-TICs are functioning.
As per directions from Ministry of Finance, Government of India vide their O.M. No.
F.19 (1)-I.III(A)/98 dated 20th August,1998, 20% of the net profit (i.e. 20% of Rs.
2978.42 lakh) has been provided for in the books of accounts as dividend i.e. Rs. 595.69
lakhs.

The overall improved performance resulted in achievement of higher profit. The Corporation,
during the year achieved Net profit (before tax) of Rs. 35.16 Crore and Net Profit (after tax)
of Rs. 29.78 Crores. During the year 2010-11, the Corporation continued with its endeavor to
reach out to larger number of units, facilitating and providing various inputs to the MSMEs in
the country, adding new members under Single Point Registration Scheme & B2B Portal and
enabling technical centre(s) to operate without any grants for administrative support. All
these could be achieved by opening new offices to reach out to larger number of MSMEs,
inculcating a spirit of self belief and self reliance amongst all in the Corporation. The added
edge and enhanced competitiveness in its services has enabled the Corporation to serve and
satisfy its stakeholders. In addition, more emphasis was given to the delivery of quality of
service and providing omprehensive training to the staff for better customer service.
As a result of its consistent good performance the Government of India has accorded Mini
Ratna Status (Category II) to NSIC. It is first of its kind in the history of MSME Sector.
The Mini Ratna Status will give NSIC higher degree of autonomy to provide greater
service through its innovative schemes for the growth and development of MSME sector in
the country.








Mission of NSIC

Its mission is to promote, aid and foster the growth of small scale industries and industry
related small scale services / business enterprises in the country.
NSIC carries forward its mission to assist small enterprises with a set of specially tailored
schemes designed to put them in a competitive and advantageous position.
The schemes comprise of facilitating marketing support, credit support, technology
support and other support services.
Corporate Excellence Award by Amity International Business School during the year
2006-07 for acknowledging the turnaround in overall performance and quality.
Objectives of NSIC

Creating sustainable entrepreneurship development in the area of ICT especially first
generation entrepreneurs.
Nurturing the innovative ideas to commercially viable business prepositions.
Encouraging commercialization of R&D outputs into commercial ventures.
Harness the expertise of NSIC in extending hand holding of start-up companies to
become successful SSI enterprises.
Networking between R & D and industry Target beneficiaries.
Stimulation & Support to MSMEs.
To develop new enterprises (MSMEs) through financial, marketing and technology
support schemes.
Sustenance and Growth of MSMEs.
Raw material supply for smooth operations of MSMEs.
Bill Financing.
Human Resource Development for MSMEs.
Strategic alliances with institutions for providing necessary guidance &
support.
International Programmes for international experience and exposure.
Technology information dissemination and awareness programmes.

BOARD OF DIRECTORS (As on 10/07/2012)
National Small Industries Corporation Ltd.
S. N. NAME PERTICULARS TELEPHONE NO. (0)

1.

Dr. H.P. Kumar
Chairman-cum-Mg.
Director, NSIC Ltd,
NSIC Bhavan,
Okhla Indl. Estate,
New Delhi
011-26927172 / 26926067
Fax: 011-26926820

2.

Shri Amarendra Sinha
AS& DC
Ministry of MSME
Nirman Bhavan
New Delhi
Tel. 011-23061176
Fax: 011-23062315

3.

Shri Chandra Kishore
Mishra
Joint Secretary
Ministry of MSME
Udyog Bhavan
New Delhi
Tel. 011-23062336
Fax: 011-23063283


4.

Shri Ravindra Nath
Director (Finance)
NSIC Ltd, NSIC
Bhavan,
Okhla Indl. Estate,
New Delhi
Tel. 011-26319452
Fax: 011-26927758

5.

Shri P. Udaya Kumar
Director (Plg. & Mkg.)
NSIC Ltd, NSIC
Bhavan,
Okhla Indl. Estate,
New Delhi
011-26927327
Fax: 011-26927307
Email :dpm@nsic.co.in

6.
Shri Rakesh Rewari Director r_rewari@yahoo.com

7.
Shri Sirajuddin
Qureshi
Director Tel. 011-26372786-92
Fax 011-26817941-42
RECOGNITIONS

Icon of the year Award: Dr. H.P. Kumar, Chairman-cum-Mg.Director, NSIC received
Icon of the year Award from the Institute of Cost and Works Accounts of India
(ICWAI). The award was conferred by the Institute in recognition of the services in
implementing various innovative schemes in NSIC for the promotion and development of
MSME sector in the country. The award was presented by Secretary, Ministry of
Corporate Affairs, Govt. of India at the 52nd National Conventional of ICWAI held at
Chennai.

Meri Dilli Award: Honble Chief Minister of Delhi conferred Meri Dilli Award to
Dr H.P. Kumar, Chairman-cum-Mg. Director, NSIC inrecognition of the innovative NSIC
Incubation programme for Small Enterprise establishment launched by NSIC for creating
new employment opportunities, employment and the growth of MSME sector in the
country.

Small Business Mentor of the Year Award: NSIC received the Small Business
Mentor of the Year at the National Convention for Small Business & Entrepreneurship
organized by Zee TV and Indian Franchise Association held in Mumbai.

FSIA V.B. Gulati Award was conferred on Dr. H.P. Kumar,Chairman-cum-Mg.
Director, NSIC for services rendered to the MSME sector. The award was given by
Faridabad Small Industries Association (FSIA) in recognition of services in implementing
various innovative schemes by NSIC for the promotion & development of MSME sector
in the country.

NTSC- Chennai received an Award and Letter of Appreciation from VEL TECH
Technical University, Chennai for partnering with the University in imparting skills to
students by way of in-plant training and projects entitled India a Superpower in 2020.
NSIC has reinforced its strength by building new competencies to serve the emerging needs
of micro, small and medium enterprises in todays competitive environment. The company
has created several innovative products to provide integrated support in terms of marketing,
technology, credit and information to MSMEs. As a result of these initiatives, Company
achieved record operational and financial performance in 2010-11. Business Turnover
showed a remarkable growth of 71% amounting to Rs. 77000 million.

NSIC has been accorded a Mini Ratna status by Government of India a status awarded
under a benchmark of performances physical and financial. We have got this despite being
in the service sector unlike other public sector undertakings that are into manufacturing. Mini
Ratna Status not only provides us more autonomy but also brings with it more responsibility
and conscientiousness on us to serve micro, small and medium enterprises (MSMEs)
efficiently and sustainable on professionally basis. NSICs bouquet of services comprises of
consortia bidding for big government contracts, single point agency for government
purchases, bulk supplier for raw materials, financial consultancy, B2B marketing, marketing
intelligence provider apart from other services.

Its Rapid Incubation Program for creating self employment opportunities is in big demand
not only in India but also in other developing countries. We are in the process of establishing
such incubation Centres in 10 African countries under the India Africa Union Forum. It has
also been NSICs endeavour to develop micro & small enterprises (MSEs) in other
developing countries also. We have been cooperating with many countries and assisting them
in creating self employment opportunities through development of MSEs.






FACILITATING THE GROWTH OF SMALL ENTERPRISE SINCE
1955

Corporate Information

NSIC, established in 1955, is an ISO 9001 certified company.
Operates through 9 zonal Offices,
33 Branch Offices, 14 Sub Offices,
5 Technical Services Centeres,
10 NSIC Business Development Extension Offices,
3 Extension Centers and 2 Software Technology Parks supported by a team of
over500 professionals spread across the country.













Contribution of National Small Industries Corporation Ltd.:

68,000 Machines worth Rs. 5000 million (US $ 120 million) supplied on hire
purchase and leasing.

3,00,000 Persons employed by units assisted under Hire Purchase and Leasing.

50,000 Persons are provided assistance by various programmes and information
dissemination every year.

30% Investment in backward areas and to special category entrepreneurs like
scheduled caste / scheduled tribe, women, handicapped, ex-Service personnel and
technocrats.

1,200 New units are enlisted every year .Units participated every year in trade fairs
and exhibitions

1,400 Persons from developing countries trained at project sites. Several technology
expositions and seminars organized in Kenya, Malaysia, Ethiopia, Mauritius,
Tanzania, Botswana, Philippines, Bangladesh etc.

NSIC carries forward its mission to assist small enterprises with a set of specially tailored
schemes designed to put them in a competitive and advantageous position. NSIC schemes
comprise of facilitating the following:




MARKETING SUPPORT
Consortia and Tender Marketing
Single Point Registration for Government Purchase
Exhibitions and Technology Fairs
Buyer - Seller Meets
Exports of Products and Projects
CREDIT SUPPORT
Equipment Financing
Tie-up with Commercial Banks
Financing for procurement of Raw Material (Short Term)
Financing for Marketing Activities (Short Term)
Performance and Credit Rating Schemes for Small industries
TECHNOLOGY SUPPORT
INFOMEDIARY SERVICES
SOFTWARE TECHNOLOGY PARKS
Technology Business Incubators
Small Enterprise Establishment Programme
INTERNATIONAL COOPERATION
INTERNATIONAL CONSULTANCY SERVICES



Schemes
(a) Raw Material Assistance Scheme
Raw Material Assistance Scheme aims at helping Small Scale Industries/Enterprises by way
of financing the purchase of Raw Material (both indigenous & imported). This gives an
opportunity to SSI to focus better on manufacturing quality products.

Benefits of the Scheme
Financial Assistance for procurement of Raw Material upto 90 days.
SSI helped to avail Economics of Purchases like bulk purchase; cash discount etc
NSIC takes care of all the procedures, documentation & issue of Letter of credit in
case of imports.
How to Apply
The Entrepreneurs are required to apply for Raw Material Assistance only on the prescribed
application forms. The application forms downloaded from the link given below may be
filled and submitted to the concerned Regional & Branch Offices. The blank forms are also
available free of charge from the zonal and Branch offices.
The Process
1. Duly filled application form is to be submitted along with the Application
Processing Fee (by Bank Draft / Pay Order in favour of NSIC Ltd.).
2. Preliminary appraisal and Unit inspection is carried out by NSIC.
3. Sanction of Limit to the Unit.
4. Signing of agreement between NSIC and Unit.
5. Disbursement of assistance to the unit.



Terms and Conditions
Processing Fee (depends on amount of assistance sought)
S.No. Slab for Processing fee
a.) upto Rs.25 lacs Rs.2,500/-
b.) above Rs.25 lacs and upto Rs.50 lacs Rs. 5,000/-
c.) above Rs.50 lacs and upto Rs.1 crore Rs. 10,000/-
d.) above Rs.1 crore 0.1% of the assistance applied for
(Security in the form of Bank Guarantee from Approved/Nationalised Banks)
The rate of interest would be as under :
a) Assistance against the security of BG/SDR/FDR :
Particulars Effective Rate of Interest
(w.e.f 20/09/2011)
(i) Units having valid SE 1A rating under NSICs Rating
Scheme
12.40%
(ii) Units having valid SE 2A rating under NSICs Rating
Scheme
12.90%
(iii) Units having valid SE 1B rating under NSICs Rating
Scheme
12.90%
(iv) Other Units 13.40%
The concessional rate of interest on the good rated units, as mentioned at Sl. nos. (i),
(ii) and (iii) above shall be applicable only to those cases, where the units make timely
repayments of the Corporations dues. The units which have not re-paid its dues within the
stipulated 90 days, shall not be eligible for the concessional rate of interest.


The rate of interest on the delayed payment shall be charged as:
The Additional rate of interest on delayed payment shall continue to be charged 3% over and
above the normal rate of interest (i.e. 13.40%) for the delays beyond 90 days.
Revised rate of interest (normal as well as interest on delayed payment) shall be made
applicable on :
A) All the cases sanctioned and / or disbursed on or after 20.09.2011.
B) Principal amount outstanding as on 20.09.2011, against the assistance already granted &
disbursed.
Service Charges: one time service charges @ 1% p.a. on the limit sanctioned if paid upfront
OR 0.25% for the first 30 days and thereafter 0.08% per week subject to maximum of 3%
p.a. of principal amount.
Service Charges For North-Eastern Region
One time service charges @ 1% p.a. on the limit sanctioned if paid upfront OR 0.13% for the
first 30 days and thereafter 0.04% per week subject to maximum of 1.5% p.a of principal
amount.
Infomediary Services
Information today is becoming almost as vital as the air we breathe. We need it every minute
of our working lives. With increase in competition and melting away of international
boundaries, the demand for information is reaching new heights. NSIC, realizing the needs of
MSMEs, is offering Infomediary Services which is a one-stop, one-window bouquet of aids
that will provide information on business, technology and finance, and also exhibit the core
competence of Indian SMEs.



Membership Benefits
Tender & Trade Information.
Banner display on NSIC Website
Access to a wide range of technologies from India and abroad.
Access to national and international business leads, JV opportunities and trade
information.
Comprehensive information on Government policies, rules and regulations, schemes
and incentives.
Access to industrial databases and member's directory.
Various value added, specialized services for members of Infomediary Service.
Objective: To collect and disseminate both domestic as well as international marketing
intelligence for the benefit of MSMEs. This cell, in addition to spreading awareness about
various programmes / schemes for MSMEs, will specifically maintain database and
disseminate information on the following :
Database of Bulk Buyers (Product wise) Buyers in Government / Public Sector
Undertakings.
Database of Rate Contracts of various Government Department and PSUs.
Information on Tenders Floated by Government Department and PSUs.
Database of Indian Exporters to various Countries with Products.
Database of International Buyers with Products.
Database of Technology Suppliers & Projects for MSMEs
List of Micro & Small Enterprises registered with NSIC for Government Purchases,
Raw Material Assistance, Performance & Credit Rating Schemes, List of MSMEs
Industrial Association.
In stepping up its efforts to market the products of MSMEs, NSIC has set up a Specialized
Marketing Intelligence Cell to collect and disseminate both domestic and international
marketing intelligence in coordination with other relevant department/agencies. This Cell
provides a single point contact to collect database relating to bulk buyers in Government,
Public and Private sectors, the detail of exporters, international buyers and technology
suppliers. Besides, the information on trade leads and product wise buyers and sellers as well
as database relating to DGS & D suppliers with prices of their products, shall also be
provided by this NSIC Marketing Intelligence Cell to help MSMEs in getting appropriate
information at one place and at the right time which will enable MSMEs in enhancing their
ability to gauge and be at par with the global demand.
In the current era of globalization, MSMEs need marketing information about the changing
pattern of fashions / tastes in the domestic and international market besides information about
the trends in exports and potential for exports. These are the vital inputs for making MSMEs
aware about their marketing strategy. MSMEs need to be provided with market related
information, new avenues for their products, new business practices, both domestically as
well as overseas. MSMEs are handicapped because of the non availability of information
pertaining to Centre Government / State Government policies and programmes.
Opportunities for :
Bulk buyers in Government / Public & Private Sector
Exporters
International Buyers
Technology Suppliers
Units registered with NSIC under Single Point Registration Schemes
DGS & D registered Suppliers. The Government is the single largest buyer of a variety of
goods. With a view to increase the share of purchases from the small-scale sector, the
Government Stores Purchase Programme was launched in 1955-56. NSIC registers Micro &
small Enterprises (MSEs) under Single Point Registration scheme (SPRS) for participation in
Government Purchases.


Benefits of Registration
Issue of tender sets free of cost.
Advance intimation of tenders issued by DGS&D.
Exemption from payment of earnest money.
Issue of competency certificate in case the value of an order exceeds the monetary
limit, after due verification.

National Small Industries Corporation (NSIC) in its vision 2020 has set an ambitious target to
achieve a turnover of Rs. 50,000 cr by the turn of the present decade. Set to move to the next
level of growth, NSIC is bracing up to create an all-new ecosystem to bring more and more
people especially from tier II and tier III townships to have easy access to a variety of its
services to create work opportunities for them.
Dr. H.P. Kumar, Chairman cum Managing Director, NSIC, has set his vision to turn the
corporation into a magnificent power house of entrepreneurship and the planning is already
underway. Our eyes are on the future which calls for an ecosystem in tune with the growing
demands of work opportunities. Says Dr. Kumar, we will happily achieve the set target by
crossing Rs.10,000 cr turnover in the current year registering a 25-30% growth. We expect
40% jump in our growth from the next year; We are working day and night for making an
elaborate agenda to plan to mobilize our resources. We have requested the government to
provide us investments. We are already working with seven banks and more are likely to
come in our fold and it speaks of our credibility, Dr. Kumar added. Dr. Kumar, a
professional Banker and a Management Expert with Doctorate Degree in Rural
Industrialization, says, the success of any effort lies in developing the mass rural base where
endless opportunities lie untapped.
NSIC which has become a dividend paying corporation also has an eye on foreign funding to
lower the cost from 10% to 7%. To implement its ambitious plans, NSIC would need funding
to the tune of Rs.5000 to 6000 cr. taking advantage of the Foreign Development Funds which
come at a discount. Dr. Kumar is of the view that there exists a big gap between demand and
supply. We can train people and give them relevant training but this will create demand but
where is the supply the opportunity to work and be engaged in entrepreneurial activities.
The supply side has to be stepped up so that jobs are created.

Looking at the futuristic requirements of country vis--vis existing development model, we
need to create an ecosystem where people can actually find work or be engaged in micro
enterprises. A support institutional mechanism has to be created for startups has to be in
place. For setting up small units, resources have to be found and the only answer is financial
back up by angel funding, venture funding, the banks etc. The NSIC's 'planning for
tomorrow' includes stepping up of its efforts in covering more and more vulnerable places for
setting up rapid incubation centers presently being run at 40 places.

A visionary par excellence, Dr. Kumar's regime has seen NSIC grow from strength to
strength. NSIC has taken a quantum leap since he took over the reigns of the corporation
registering an increase in turover from Rs.1524.10 cr (2006) to a whopping Rs.8000 cr
(2010). He has earlier held foreign assignments with the Ministry of Finance and
Development Planning of Government of Botswana. Dr. Kumar has long experience of
dealing with promotion, development and financing of Micro, Small & Medium Enterprises
and is a member of National Small Business Advisory Council of South Africa appointed
by the Government of South Africa.

Dr. Kumar has been a faculty for Damelin School of Banking, South Africa and Botswana
Institute of Bankers. He is also a member of various professional management bodies in
India & abroad and is on the Governing Councils of National Institute for Micro, Small and
Medium Enterprises, Hyderabad, National Institute for Entrepreneurship and Small Business
Development, Noida and Indian Institute of Entrepreneurship (IIE), Guwahati. Dr. Kumar is
also the Co-Chairman of SME Committee of All India Management Association and an
Executive Member of Standing Conference of Public Enterprises (SCOPE). He is also a
member of the Governing & Technology Approval Board (GTAB) of Government of India.


\

Rapid Incubation

Keeping in view the need for creating more and more self employment opportunities and for
capacity building of the unemployed persons who are vulnerable in terms of lack of higher
education and sound financial means, NSIC has started a new programme by providing
integrated support through Rapid incubation of unemployed people in NSIC's Technical &
Incubation Centres. Rapid incubation empowers them with knowledge, infrastructure and
other support services for setting up of new small enterprises in manufacturing and services
sectors. NSIC's Rapid Incubation programme is one of the appropriate tools to prepare any
unemployed person for entrepreneurship and to build his capacity for setting up a new
enterprise. It provides necessary facilities for the prospective entrepreneurs and start-up
companies to learn product manufacturing, its processes coupled with technology
development, business development, financing arrangements etc. under one roof.

According to Dr. Kumar, the aim is to convert an unemployed into an entrepreneur by way of
providing all support services. The programme involves a packaged training which provides
complete hand holding right from start i.e. practical on-the-job training to preparation of
project reports, market survey, raw material assistance, identification and procurement of
plant & machinery, credit support, testing and handing over of the project. Through this
programme, the objective is to equip unemployed person with adequate technical and
supervisory skills so that he or she can either support their own business or become
employable to earn livelihood. This is a very useful programme considering the need of
creating more and more employment opportunities in the country.

Dr. Kumar said our efforts in creating job opportunities for millions will only succeed if we
are able to exploit the enormous potential in the farm sector or at the village level. There
exists a large untapped potential in food products and food process segment. We can actually
produce products which are locally consumable. With the opening of MNC food chains, more
opportunities will be created at the village level. One thing is clear, remarks Dr. Kumar,
opportunities and facilities will have to be brought at their doorsteps of the common man
and for this we have orient their minds and make them work-ready.

Promoting & Developing Competitive MSMEs in Global Economy

Previous years gone by have indeed been most challenging for the world economy. The
unprecedented financial crisis had shaken the foundations of some of the strongest economies
in the world. Though, Governments across the continents have responded speedily and in rare
unison, the path to recovery is expected to be long and arduous.
India has not been immune to this shock. While at the aggregate level, our country has
displayed remarkable resilience, sustaining relatively high growth rates, several sectors still
had to bear the impact. Though, there were signs of a recovery, recent happenings in major
economy of the world, has again given signals of recession. However, Indian MSME's
inherent strengths provide a strong foundation to better withstand the expected downturn in
the global economy. Globally, India commands a new respect today and is increasingly being
seen as part of a new axis of economic power in the world.

Building New Competencies

Over the years, aligning with the changing economic environment, NSIC has reinforced its
core strengths by building new competencies that efficiently serve the emerging needs of the
MSME sector. Company has created several products that serve the MSMEs and have added
new dimensions to its capability profile. NSIC has nurtured internal synergies that constitute
a competitive force capable of sustaining its position at the forefront for serving the diverse
needs of MSME sector. NSIC has assisted hundreds of thousands of first generation
entrepreneurs in setting up their small enterprises and helped them in their growth. A
significant number of medium and large enterprises of today had started their businesses with
the help of NSIC and have now become multi-national conglomerates. With the changing
needs of MSMEs' sector due to new global business environment, NSIC has also re-oriented
its various schemes for rendering assistance to the sector and making it more competitive.

The schemes of Hire Purchase and Leasing of machinery and which were the prime focus of
NSIC's assistance a few years back, have now been replaced by other innovative products
which are more relevant in today's scenario. The diagrams depict in short the range of
services provided by NSIC. Many developing countries are also seeking our assistance in
development of small enterprise sector in their countries and replicating the Indian success
story. NSIC has been providing assistance to various developing countries in formulation of
their policies for development of SMEs' sector and implementing various programmes of
assistance which have already succeeded in our country. NSIC has also signed MOU with 28
countries to enhance technical and business cooperation or other forms of sustainable
business relationships among Micro, Small and Medium Enterprises (MSMEs) of India and
those of developing and developed countries.

The emphasis is on developing sustainable business relations rather than one-way
transactions which is achieved through:
(i) Developing institutional arrangements and partnerships with developed countries with a
view to access best practices, policy initiatives, latest technologies as well as market for
MSMEs in developed economies,
(ii) By targeting developing countries or least developed countries to widen not only market
access for Indian MSMEs but also transfer of Indian technologies, plant & equipment and
sharing of Indian expertise at policy as well as at enterprise level to/ with these countries.

Developing Competitive MSMEs

NSIC has been operating various schemes of assistance for providing help in marketing,
technology, credit and infomediary support. These schemes are designed keeping in view the
needs of the micro and small enterprises operating in various clusters or elsewhere. The
schemes are user friendly with least paper work. The aim is to render assistance well in time
when it is needed. We function like a professional organization in order to market our
products and make them acceptable to the customers in order to be a self sustaining
organization.

In recent past, NSIC has taken many initiatives to enhance the competitiveness of MSMEs. It
had introduced Performance & Credit Rating Scheme for MSMEs, which is an innovative
scheme to create awareness amongst small enterprises about the strengths and weaknesses of
their existing operations and to provide them an opportunity to enhance their organizational
strengths and credit worthiness.

Marketing Intelligence Cell

The objective of this cell is to collect and disseminate both domestic as well as international
marketing intelligence for the benefit of MSMEs as recommended by the PM's Task Force on
MSME Sector. This cell, in addition to spreading awareness about various programmes/
schemes for MSMEs, will specifically maintain database and disseminate information on the
following:
Database of Bulk Buyers (Product wise) Buyers in Government / Public Sector
Undertakings.
Database of Rate Contracts of various Government Department and PSUs.
Information on Tenders Floated by Government Department and PSUs.
Database of Indian Exporters to various Countries with Products.
Database of International Buyers with Products.
Database of Technology Suppliers & Projects for MSMEs
List of Micro & Small Enterprises registered with NSIC for Government Purchases,
Raw Material Assistance, Performance & Credit Rating Schemes, and List of MSMEs
Industrial Association.
This Cell provides a single point contact to collect database relating to bulk buyers in
Government, Public and Private sectors, the detail of exporters, international buyers and
technology suppliers. Besides, the information on trade leads and product wise buyers and
sellers as well as database relating to DGS & D suppliers with prices of their products, shall
also be provided by this NSIC Marketing Intelligence Cell to help MSMEs in getting
appropriate information at one place and at the right time which will enable MSMEs in
enhancing their ability to gauge and be at par with the global demand.

To complement this cell with latest ICT facilities and make it globally present, NSIC has very
recently, launched a very comprehensive web portal (www.msmeintelligence.com) which
will provide Marketing Intelligence to MSMEs, online.


International Trade through NSIC's B2B Web Portal

NSIC has launched a B2B Web Portal 'http://www.nsicindia.com' to provide online
information on business opportunities and business practices in different countries to Indian
enterprises. This Web Portal which is one of the most advanced technology based B2B
portals also facilitates enterprises to showcase their products and services globally.
Enterprises seeking business collaborations and co-production opportunities, aspiring for
joint ventures, exports or imports of products and those looking for technology transfers are
deriving benefits from this portal. This portal, at present, hosts database of 2.50 Lac MSMEs
and has a hit rate of 80,000 hits per month.

Some of the salient features of this portal are: Product specific database searches; Sector
specific domestic tender notices with alert factors; Country specific global tender notices
from World Bank, United Nations Organization, ILO etc.; Business Trade Leads from more
than 200 countries; Automatic Match Making for Product, Services & Technology; Virtual
Exhibition; Self-web development tool; Information on Global Trade Shows; WAP services
for GPRS activated Mobiles; SMS Alerts; Centralized Mail System for each member;
Customer Support through Call Centre etc.

NSIC has, further, strengthened this Portal with linkage to its International SME
Development website, which can also be accessed on www.nsicpartners.com. The website
provides a unique platform where the recognized partners of NSIC in 28 countries keep
exchanging information to facilitate sustainable collaborations amongst SMEs of respective
countries. The Website, being forerunner of its kind, is significantly assisting the selected
International SME Support Institutions in communicating electronically and disseminating
key information on Marketing, Technology and Investment opportunities to SMEs across the
world.






NSIC's Marketing cum Business Park

NSIC is establishing Marketing cum Business Park for enterprises in New Delhi. Foundation
Stone for the Park to be established in Delhi was laid by the Hon'ble Minister of MSME in
the first week of August, 2011. This eco-friendly Business Park is an innovative concept of
making available modern infrastructure support to provide impetus to the marketing efforts of
MSMEs. This would be an exclusive project complying to international standards which will
also make available all the support services such as banking, credit, insurance, marketing
facilitation and other business support services to MSMEs under one roof. This Business Park
shall also be utilized for conducting National & International exhibitions and buyer-seller
meets at periodical intervals to support MSMEs of India. MSMEs of India will take full
advantage of the benefits of this forthcoming Infrastructure which it envisages to offer such
as Office/ Marketing space at affordable rates, availability of space to showcase the MSME
products and services at prime location, availability of conference facility for business
meetings, Easy connectivity with all major commercial centers, close proximity to one of the
most vibrant industrial estates, availability of NSIC's schemes and services. Recently, NSIC
established a similar state-of-the-art Marketing-cum-Business Park at Hyderabad to provide
infrastructural Marketing support to MSMEs of South India.

Realizing New Paradigm of High Growth

Unprecedented opportunities for growth in India are unfolding, making our continent a
powerful engine of global economic growth. NSIC's primary focus at this stage is to create
new fountainheads of value creation for MSMEs within India, while continuing to expand the
existing flanks of value creation for the MSME sector. The path to realizing a new paradigm
of high growth is strewn with several fundamental challenges. The most critical factor in the
longevity of an organization is its internal vitality, namely the capacity to remain relevant and
contemporary, its ability to anticipate and proactively manage change and its agility to
continuously reinvent and reinvigorate itself. This entire para copied from one of my previous
articles. I am honored!!! We have to delete this para.. NSIC's sustained growth in the last
five years is testimony to Company's organizational vitality.

It is also manifest in NSIC's strategy of organization, its climate of professionalism and its
time-tested caring culture and growing contribution to win over the MSMEs. NSIC has
successfully integrated Vision, Values and Vitality in a distinctive blend that shall
significantly enhance its potential for the larger society. The compelling Vision of enlarging
its contribution to the Indian MSMEs has been a source of inspiration for NSIC in this long
and fulfilling journey. NSIC's core values are embedded in its philosophy of trusteeship and
the related belief that enterprises exist to serve society. An unwavering commitment to
integrity, ethical conduct, meritocracy, team work and an abiding concern for stakeholders
are at the heart of NSIC's core values. NSIC's Vision provides the overarching inspiration; its
values serve to guide thought and action; and its Vitality enables excellence in strategy
formulation and execution. Together, they shall continue to form the core inner strength of
NSIC for creating growing value for all its stakeholders. An ignited corporation is a self-
energized body that sets out to outperform itself. NSIC will become far stronger in the years
to come. However, the stronger we grow, the more humble we feel.
NSIC operates through countrywide network of offices and Technical Centres in the Country.
To manage operations in African countries, NSIC operates from its office in Johannesburg,
South Africa. In addition, NSIC has set up Training cum Incubation Centre & with a large
professional manpower, NSIC provides a package of services as per the needs of MSME
sector. NSIC carries forward its mission to assist small enterprises with a set of specially
tailored schemes designed to put them in a competitive and advantageous position. The
schemes comprise of facilitating marketing support, credit support, technology support and
other support services.



Marketing
Marketing, a strategic tool for business development, is critical to the growth and survival of
small enterprises in today's intensely competitive market. NSIC acts as a facilitator to
promote small industries products and has devised a number of schemes to support small
enterprises in their marketing efforts, both in an outside the country. These schemes are
briefly described as under:
Consortia and Tender Marketing: Small Enterprises in their individual capacity face
problems to procure & execute large orders, which inhibit and restrict their growth. NSIC,
accordingly adopts Consortia approach and forms consortia of units manufacturing the same
products, thereby easing out marketing problems of SSIs. The Corporation explores the
market and secures orders for bulk quantities. These orders are then distributed to small units
in tune with their production capacity. Testing facilities are also provided to enable units to
improve and maintain the quality of their products conforming to the standard specifications.
Single point Registration for Government Purchase: NSIC operates a single Point
Registration Scheme under the Government Purchase Programme, wherein the registered SSI
units get purchase preference in Government purchase programme, exemption from payment
of Earnest Money Deposit etc.
Issue of tender sets free of cost.
Advance intimation of tenders issued by DGS&D.
Exemption from payment of earnest money.
Waiver of security deposit up to the monetary limit for which the unit is registered.
Issue of competency certificate in case the value of an order exceeds the monetary
limit, after due verification.
B2B Web Portal for Marketing: NSIC Infomediary is a Business-to-Business (B2B)
Portal that has been established to give online services for small and medium time importers,
exporters and service providers in India. The portal is an initiative to provide business
opportunities to small businesses, firms and small scale units to expand further. Thus, anyone
involved in business activities and wants to utilize the strength and visibility of Internet can
join NSIC Infomediary. Those who look for promotion and prospect for their trade and
products/services can also join NSIC Infomediary.
Marketing Intelligence: Collect and disseminate both domestic as well as international
marketing intelligence for the benefit of MSMEs. This cell, in addition to spreading
awareness about various programmes / schemes for MSMEs, will specifically maintain
database and disseminate information.
Exhibitions and Technology Fairs: To showcase the competencies of Indian SSIs and to
capture market opportunities, NSIC participates in select International and National
Exhibitions and Trade Fairs every year. NSIC facilitates the participation of the small
enterprises by providing concessions in rental etc. Participation in these events exposes SSI
units to international practices and enhances their business prowess.
Buyer-Seller meets: Bulk and departmental buyers such as the Railways, Defence,
Communication departments and large companies are invited to participate in buyer-seller
meets to enrich small enterprises knowledge regarding terms and conditions, quality
standards, etc required by the buyer. These programmes are aimed at vendor development
from MSMEs for the bulk manufacturers.










SWOT ANLYSIS OF NSIC

Strengths:
NSIC is a government undertaking company, which facilitating the growth of small
enterprise since 1955.
It operates through 9 zonal Offices, 33 Branch Offices, 14 Sub Offices, 5 Technical
Services Centres, 10 NSIC Business Development Extension Offices, 3 Extension
Centers and 2 Software Technology Parks supported by a team of over 500
professionals spread across the country.
It has government tendering partners like; NABARD, SIDBI, SBI, IOC, Indian
Railways.
Competent and dedicated work force across the country.
Efficient and effective services, covering all areas for MSMEs such as Marketing,
Financial, Human resource development, infrastructure development, training for
enhancing skills, production and product development etc.


Weaknesses:
Some gaps in range for certain sectors and areas, since new sector and industries and
organizational processes and complexities are growing.
Due to Government organization, Process time is too long and lengthy and too much
of paper formalities.
Customers service staff needs training on new areas, technology and other
modifications and developments.
Attitude and outlook of Government employees.
Opportunities:
Growing Awareness among small manufacturers and service providers regarding
NSIC and its schemes.
Supporting policies and outlook of Government towards MSMEs and its relevance in
Indian Economy.
Opening up of new offices and development cells of NSIC at different locations
across the country.

Threats:
Threats of Globalization and presence of Global giants in Indian economy.
Sickness of MSMEs is very high.












CHAPTER 2
PERFORMANCE APPRAISAL








INTRODUCTION TO PERFORMANCE APPRAISAL

Performance appraisal is an objective assessment of an individuals performance against well
defined benchmarks. Performance appraisal or performance evaluation is the process of
assessing the performance & progress of an employee or of a group of employees on a given
job & his potential for future development. It consists of all formal procedures used in
working organizations to evaluate personalities, contributions & potentials of employees.
According to Garry Desseler, A process that consolidates goal setting, performance
appraisal and development into single, common system, the aim of which is to ensure that the
employees performance is supporting the companys strategic aims.
According to flippo, Performance appraisal is the systematic, periodic & an impartial rating
of an employees excellence in matters pertaining to his present job & his potential for a
better job. Performance appraisal is the process of obtaining, analyzing & recording
information about the relative worth of an employee.
Characteristics of Performance Appraisal:
Performance appraisal is the systematic examination of an employees strengths &
weaknesses in terms of the job.
Performance appraisal is a scientific or objective study.
It is an ongoing or continuous process where in the evaluations are arranged
periodically according to a definite plan.
It used to secure information necessary for making objective & correct decisions on
employees.






NEED FOR PERFORMANCE MANAGEMENT
The increasing use of Performance management reflects several things. It reflects, first, the
popularity of the Total Quality Management (TQM) concepts advocated several years ago by
management experts like W. Edwards Deming. Basically, Deming argued that an employees
performance is more a function of things like training, communication, tools, and supervision
than of his or her own motivation.
Performance Management emphasis on the integrated nature of goal setting, appraisal, and
development reflects this assumption. Second, it reflects the fact that a vast array of studies
that traditional performance appraisal are often not just useless but counterproductive. Third,
Performance management as a process also explicitly recognizes that in todays globally
competitive industrial environment, every employees efforts must focus like a laser on
helping the company to achieve its strategic goals. In that regard adopting an integrated;
performance management approach to guiding, developing, and appraising employees also
aids the employers continuous improvement efforts. Continuous improvement refers to a
management philosophy that requires employers to continuously set and relentlessly meet
ever-higher quality, cost, delivery, and availability goals.

OBJECTIVE OF PERFORMANCE APPRAISAL
Data relating to performance assessment of employees are recorded, stored, and used for
several purposes. The main purposes of employee assessment are:
1. To effect promotion based on competence and performance.
2. To confirm the services of probationary employees upon their completing the
probationary period satisfactorily.
3. To assess the training and development needs of employees.
4. To decide upon a pay rise where (as in the unorganized sector) regular pay scales have
not been fixed.
5. To let the employees know where they stand insofar as their performance is concerned
and to assist them with constructive criticism and guidance for the purpose of their
development.
6. To improve communication. Performance appraisal provides a format for dialogue
between the superior and the subordinate, and improves understanding of personal goals
and concerns. This can also have the effect of increasing the trust between the rater and
the ratee.
7. Finally, Performance appraisal can be used to determine whether HR programs such as
selection, training, and transfers have been effective or not.
Broadly, performance appraisal serves four objectives-(1) Developmental uses, (2)
Administrative uses/decisions, (3) Organizational maintenance/ objectives, and (4)
Documentation purposes.
PROCESS OF PERFORMANCE APPRAISAL
Performance appraisal or performance evaluation is the process of assessing the performance
& progress of an employee or of a group of employees on a given job & his potential for
future development. It consists of all formal procedures used in working organizations to
evaluate personalities, contributions & potentials of employees. The steps of performance
appraisal process are:









1. Establishing Performance Objectives:
Performance standard are established based on job description and job specification. The
standard should be clear, objective and incorporate the entire factor.

Establish Performance Standard

Communication Performance Expectation to employees

Measure Actual Performance

Compare Actual Performance with Standard

Discuss the Appraisal with the Employee

If necessary, Initiate Corrective Action

2. Communicating Standards:
To communicate this standard to the employees for the employee left they would find it
difficult to guess what is expected of them.
3. Measure Actual Performance:
The instruction are given for appraisal, measurement of the employee performance by the
appraisers through observation, interview.

4. Comparing Actual with standard:
In this stage comparison between actual performance and the standard performance is made
to know how well employees are performing. The employee is appraised and judge of his
potential for growth and advancement.

5. Discussion of Results:
The result of Appraisal is discussed periodically with the employees, where good point, weak
point and difficulties are indicated and discussed so that performance is improved.

6. Corrective Action:
The final step is the initiation of corrective action when necessary. This can improve the
performance of employees. The corrective action could be training, guidance, counseling,
motivation etc.


















METHODS OF PERFORMANCE APPRAISAL

Traditional Method
Straight Ranking Method
Paired Comparison Technique
Man-to-Man Comparison Method
Graphic or Linear Rating Scale
Forced Choice Description Method
Free Essay Method
Critical Incident Method
Group Appraisal Method
Field Review Method









TRADITONAL METHODS
1 . Straight Ranking Method:
It is the oldest and simplest method of performance appraisal, by which the man and his
performance are considered as an entity by the rater. No attempt is made to fractionalize the
rate or his performance; the whole man is compared with the whole man; that is the
ranking of a man in a work group is done against another. The relative position of each man
is tested in terms of his job as number one or two or three in total group; i.e.; persons are
tested in order of merit and placed in a simple grouping.
This is the simplest method of separating the most efficient from the least efficient; and
relative easy to develop and use. But the greatest limitation of this method is that is practice
it is very difficult to compare a single individual with worse he is than another. Thirdly, the
task of ranking individuals is difficult when a human beings having varying behavior traits.
Secondly, the method only tells us how a man stands in relation to the group but does not
indicate how much better or large number of persons is rated. Fourth, the-ranking system
does not eliminate snap judgments, nor does it provide us with a systematic procedure for
determining the relative ranks of subordinates.
2 . Paired Comparison Technique:
By this technique, each employee is compared every trait with all the other persons in pairs
one at a time. With this technique, judgment is easier and simpler than with the ordinary
ranking method. The number of times each individual is compared with another is tallied on a
piece of paper. These numbers yield the rank order of the entire group. For example, it there
are five persons to be compared, then As performance is compared to Bs and a decision is
arrived at as to whose is the better performance. Then A is compared to C.D and f. in that
order. Next B is compared with all the others.

3 . Man-to-Man Comparison Method:
The USA army used this technique during the First World War. By this method, certain
factors are selected for the purpose of analyses (such as leadership, dependability and
initiative), and a scale is designed by the rather for each factor. A scale of nine is also created
for each selected factor. Then each man to be rated is compared with the man in the scale,
and certain score for each factor are awarded to him. In other words, instead of comparing
whole man, personnel are compared to the key man in respect of one factor at a time. This
method is used in job evaluation, and is known is the factor comparison method. In
performance appraisal, it is not of much use because the designing of scales is a complicated
task.
4 . Grading Method:
Under this system, the rater considers certain features and marks them accordingly to a scale.
Certain categories of worth are first established and carefully defined; the selected features
may be analytical ability, cooperativeness, dependability, self-expression, job knowledge,
judgment, leadership and organizing ability, etc. They may be: A-out standing; B-very good;
C-good average; D-fair; E-poor; and B (or B-very) poorer or hopeless.
5 . Graphic or Linear Rating Scale:
This is the most commonly used method of performance appraisal, under it, a printed form,
one for each person to be rated, According to juices, these factors are: employee
characteristics and employee contribution. In employee characteristics, which included such
qualities as initiative, leadership, co-cooperativeness, dependability, industry, attitude,
enthusiasm, loyalty, creative, ability, decidedness, analytical ability, emotional ability, and
co-ordination. In the employee contribution are included the quantity of work, the
responsibility assumed, specific goals achieved regularity of attendance leadership offered,
attitude towards superiors and associates, versatility, etc.


6 . Forced Choice Description Method:
This method was evolved after a great deal of research conducted for the military services
during World War II. It attempts to correct a raters tendency to give consistently high or
consistently low rating to all the employees. The use of this method calls for objective
reporting and minimum subjective: judgment. Under this method, the rating elements are
several sets of pair phrases or adjectives (usually sets of four phrases two of which are
positive, two negative) relating to job proficiency or personal qualifications. The rater is
asked to indicate which are the four phrases is most and least descriptive of the employee.

7. Free Essay Method:
Under this method, the supervisor makes a free form open ended appraisal of an employee in
his own words and puts down impressions about the employee. He takes note of these factors:
a) Relation with fellow supervisors and personnel assigned to him,
b) General organization and planning ability;
c) Job knowledge and potential;
d) Employee characteristics and attitude;
e) Understanding and application of company policies and procedure;
f) Production, quality and control;
g) Physical condition: and
h) Development needs for future.
i) The description is always as factual and concrete as possible. No attempt is
made to evaluate an employee in a quantitative manner.
There is several advantage of this method. An essay provide a good deal of information,
especially if the supervisor is asked, for instance, to give two or three can examples of each
judgment he makes, the explanation will give specific information about the employee, and
can reveal even more about the supervisor.


8 . Critical Incident Method:
This method was developed following research conducted by the armed forces in the United
States during World War II. The essence of this system is that it attempts to measure
workers performance in terms of certain events or episodes that occur in the performance of
the rates job. These events are known as critical incidents. The basis of this method is the
principle that there are certain significant acts in each employees behavior and performance
which make all the difference between success and failure on the job.
The supervisor keeps a written record of the events (either good or bad) that can easily be
recalled and used in the course of a periodical or formal appraisal. Feedback is provided
about I the incidents during performance review session.

This method suffers from several problems:
1. It is very time consuming.
2. It provides desirable response to an event.
3. In this, superior has to maintain a written record for each employee during every
major event.

9 . Group Appraisal Method:
Under this method, an appraisal group rates employees, consisting of their supervisor and
three or to the other. Supervisor who9 have smoke knowledge of their performance. The
supervisor explains to the group the nature of his subordinates duties. The group then
discusses the standards or performance for that job, the actual performance of the jobholder,
and the causes of their particular level of performance, and offers suggestions for future
improvement. If any the advantage of this method is that it is through, very simple and is
devoid of the any bias, for it involves multiple judges. But it is very time consuming.
1 0 . Field Review Method:
Under this method, a trainer employee from the personnel department interviews line
supervisors to evaluate their respective subordinates. The appraiser is fully equipped with
definite test questions, usually memorized in advance, which he puts to the supervisor. The
supervisor is required to give his opinion about the progress of his subordinates, the level of
the performance of each subordinate, his weakness, good points, outstanding ability,
permeability, and the possible plans of action incases requiring further consideration. The
questions are asked and answer, verbally. The appraiser takes detailed notes of the answers,
which are then approved by the supervisor and placed in the employees personnel folder.
General Demerit of Traditional Techniques
Many of the above traditional performance evolution techniques are internal weaknesses for
example:
1. The Manager generally is not qualified to assess personally traits, and most
managers are even not properly trained to conduct evolution and performance
interviews. They have very vague notions of the purpose of evolution. Hence, they
do a poor job.

2. Some managers discourage good performance by overemphasis shortcomings and
almost neglecting good work. Others have little effect on poor workers because they
tend to sugarcoat their crises; consequently the real message is lost.

3. Raters personality also plays an important part in the effectiveness of evolution
programmers. Some raters are by temperament, overtly harsh and give low ratings
to all subordinates. Others are too lenient and give everyone a good rating; some
rather play favorites, some are victim of halo effect.

4. The relative status of raters in their organization is a factor that is important to the
validity of performance appraisal.












MODERN METHOD OF PERFORMANCE APPRAISAL

As we have seen, most traditional methods emphasis either on the task or the workers
personality, while making an appraisal. In order to bring about a balance between these two,
modern have been developed. Of such methods, the most important are:

Appraisal by results or management by objectives.
Assessment center method.
Human Behaviorally Anchored Rating Scales.

1. MANAGEMENT BY OBJECTIVES (MBO):
This method has been evolved by Peter Drucker. MBO is potentially a powerful philosophy
of managing and an effective way for portioning the evolution process. It seeks to minimize
external controls and maximize internal motivation through joint goal setting between the
managers and subordinate and increasing the, subordinates own control of his work. It
strongly reinforces the importance of allowing t6he subordinate to participate activity in the
decisions that affect him directly.
Management by objectives can be described as A process whereby the superior and
subordinate managers of an organ negation jointly identify its common goals, definite each
individuals major areas of results expected of him and use these measures as guides for
operating the unit and assessing the contributions of each of its members.
OBJECTIVE OF MBO: Management by Objectives (MBO) has an objective in itself. The
objective is to change behavior and attitudes towards getting the job done. Another words, it
is result-oriented; it is performance that than methods. It provides responsibility and
accountability and recognizes that employees have needs for achievement and self-
fulfillment. It meets these needs by providing opportunities for participation in goal-setting
process. Subordinates become involved in planning their own careers.
2. ASSESSMENT CENTRE METHOD:
The assessment centre concept was initially applied to military situations by simonies in the
German Army in the 1930 and the war office selection Board of the British Army in the
1960s. The purpose of this method was and is to test candidates in a social situation, using a
number of assessors and a variety of procedures. The most important feature of the
assessment centre is job related assimilations. These simulations involve characteristics that
managers feel are the important to the job success. The evaluators observe and evaluate
participants as they perform activities commonly found in higher-level jobs.
Under this method, many evaluators join together to judge employee performance in several
situations with the use of a variety of criteria. It is used mostly to help select employees for
the first level (the lowest) supervisory position. Assessment is generally done with help of a
couple of employees and involves a paper and pencil test, interviews and situations exercise.
Some of the other features of this system are:

The use of situations exercise (such as an in baskets exercise, business game, a role
playing incident and leader less group discussion)

Evaluators are drawn form experienced managers with proven ability at different levels
of management.

They evaluate all employees, both individually and a feedback and unacceptable, less
than acceptable and unacceptable.

A summary report is prepared by the members, and a feedback on a face-to-basis is
administered to all the candidates who ask for it.


Purpose of Assessment Centers:
Assessment centers are used for the following purpose:
To measure potential for first, level supervision, sales and upper management
positions: and also for higher levels of management for development purpose.
To determining individual training and development needs to employees.
To select recent college students for entry level position.
To provide more accurate human resource planning information.
To make an early determination of potential.
To assist in implementing affirmative action goals.
The assessment centers generally measures interpersonal skills and other aspects such as
organizing and planning interpersonal competence (getting along with others), quality of
thinking, resistance to stress, orientation (motivation) to work, dependence on others, other
community communication and creativity. The ability to organize, plan and make decisions,
as in basket simulations and scores obtained on paper and pencil, psychological tests, are
important to the overall assessment score.
3. HUMAN ASSET ACCOUNTING METHOD
The human asset accounting method refers to activity devoted to attaching money, estimates
to the value, of a firms internal human organization and its external customer goodwill. If
abele, well-trained personnel leave a firm, the human organization is worthless; if they join
its, its human assists are increased. If distrust and confect prevail, the human enterprise is
devalued. If teamwork and high morale prevail, the human organization is a very valuable
asset. The current value of a firms human organization can be appraised by developed
procedure, by undertaking periodic measurements of key causal and intervening
enterprise variables. The key causal variable includes the structure on an organizations
management policies decisions business leadership, strategies, skills and behavior. The inter
veining variables reflect the internal state and health of an organization. They include
loyalties, attitudes, motivations, and collective capacity for effective interaction,
communication and decision-making. These two types of variable measurements must be
made over several years to provide. The needed data for the computation of the human asset
accounting.
4 . BEHAVIOURALLY ANCHORED RATING SCALES (BARS)
This is a new appraisal technique which has recently been developed. It supported claim that
it provides better, more equitable appraisal as compared to other techniques. The procedure
for BARS is usually five stepped.

1 . GENERATE CRI TI CAL I NCI DENT:
Persons with knowledge of the job to be appraised (job hold /supervisors) are asked to
describe specific illustration (critical incidents) of effective and ineffective performance
behavior.

2 . DEVELOP PERFORMANCE DI MENSI ONS :
These people then clusters indicate into a smaller set (or say 5 or 10) of performance
dimension each (dimension) is then is then defined.

3 . REALLOCATE I NCI DENT:
Any group of people, who also known the job then reallocate the original critical incidents.
They are given the clusters definitions and critical accidents and asked to redesign each
incident to the dimension it best describes. Typically a critical incident is retained if some
percentage (usually 50 to 80%) of this group assigns it to the same cluster as the previous
group did.

4 . S CALE OF I NCI DENTS :
This second group is generally asked to rate (7 or 9 point scales are typical) the behavior
described in the incident as to how effectively or ineffectively it represent performance on the
appropriate dimension.

5 . DEVELOP FI NAL I NSTRUMENT :
A subset of incidents (usually 6 or 7 per cluster) is used as Behavior anchors for the
performance dimension.



5. 360-DEGREE PERFORMANCE APPRAISAL

The appraisal is any person who has thorough knowledge about the job done by contents to
be appraised standards of contents and who observe the employee while performing a job.
Appraise should be capable of determining what is more important and what is relatively less
important. He should asses the performance without bias. The appraisers are supervisors,
peers, subordinates employees themselves users of service and consultants. Performance
appraisal by all these parties is called 360 deg360-degree system involves evaluation of a
manager by everyone above, alongside & below him. Structured questionnaires are used to
collect responses about a manager from his bosses, peers & subordinates. Several parameters
relating to performance & behavior are used in the questionnaires.
Traditionally, performance appraisal was just limited to two main persons involved in the
feedback process - namely the supervisor and the employee. The top-down approach, the
usual performance appraisal jamboree in corporate, is conducted where the supervisor and the
employee discuss one-to-one on broad swathe of issues pertaining to the latter's performance
out comes. This traditional approach, involving supervisor and employee, is riddled with the
problems of subjectivity, bIAS,es and halo effect. The traditional top-down approach
predicated on single source of feedback (i.e. supervisor) suffers on account of limited
knowledge and inaccurate view of the not-so-competent supervisor. Many a time, supervisors
also try to avert being on collision course with the sub-ordinates and may obscure the picture
by giving inputs that may be entirely untrue. Since supervisors are far removed from the flow
of work, they may find it tough to give feed back hinged on actual observation. Even if the
supervisor intends to give a positive criticism he may still hold himself in the tracks for want
of actual incident to buttress his opinion.
Half the time an individual does no get a real picture and gain an actual glimpse into the kind
of person one is. An employee's ability to identify core strengths and quelling weaknesses
gets irredeemably impaired. The information asymmetry about our competencies, skills and
performance related outcomes strait jackets the development, stultifies the growth and limits
the perspectives. The question that begs an answer is: is there a way forward? Is there a feed
back approach where the inputs about an individuals performance can be sourced from
multiple levels? Will it be possible for the individual to get feed back about his/her
managerial and behavioral dimension from multiple sources? The answer to all these
questions are deafeningly loud and crystal clear - 360-degree feedback holds the key. In
today's competitive environment, gathering information from all directions to assess one's
standing has become an urgent imperative and compelling necessity. In addition to this, the
corporate culture is on the cusp of profound evolution. There is an increased thrust on
teamwork and delivering a world-class customer service. Employees development needs has
become the byword among businesses. In a highly commoditized job market, companies are
using every thing at the command to attract and retain the best talent. Businesses are helping
employees to replenish their skills to stay relevant in the evolving times. Companies are
looking to ways and means to optimize and measure employees and companys performance.
The trajectory of these developments has shifted the focus from single source feed back
system to multiple source feed back system.

Advantages of 360 degree feed back
360 degree feedback, if implemented properly, will bestow many benefits up on the
organization.
Feed back that emanates from various source, leaves little room for any discrimination or
bIAS,. In appraisal exercises, any discriminative slant of the supervisor can be nullified if
the multi source feed back shows that the supervisor input is not in conjunction with
that of co-workers and customers and other constituents
Feed back originating from multi sources can give a glimpse in to individuals
performance improvement needs.
Enhanced cohesion in the team, better communication and improved productivity levels
are the positive fall out of implementing 360 degree feedback
Front line employees can hone their customer skills to near perfection owing to the feed
back of the customers. This may enhance the customer service levels.
Subordinates, derive enormous sense of importance and empowerment when asked to
provide feed back about their superiors
Decisions making percolates down to the lowest and lowest echelons of an organization,
making it truly participative
Fosters a very open culture where giving and receiving feed back is common place
360 degree helps the organization to zero in on and leverage the overall strengths.
Increased focus on internal customer satisfaction
Brings in more objectivity to the appraisal process and complements the traditional
appraisal system
360 feed back is an effective tool for identifying development needs

360 degree can work wonders if it is properly implemented in organizations. For 360 degrees
to work the organization climate should be supportive. In a wrong environment if 360 degree
is implemented without providing training to the raters to enable them handle the process
effectively, it can have a deleterious effect on the well-being of the organization. If 360
degree is tied to the strategic initiatives of the organization, it may have a winning process on
their hands.
PROBLEMS OF APPRAISAL

The idea approach to performance evaluation is that in, which the evaluator is free from
personal biases, prejudices, and idiosyncrasies. This is because when an evaluation is
objective, it minimizes the potential capricious and dysfunctional behavior of the evaluator,
which may be detrimental to the achievement of the organizational goals. However a single
foolproof evaluation method is not the performance system resulting in inaccurate invalid
appraisals, which are unfair too.
There are many significant factors, which deter or impede objective evaluation. These
factors are:

1 . THE HALO EFFECT OR ERROR:
The halo effect is a tendency to let the assessment of an individual one trait influence the
evaluation of that person on other specific traits. There is this effect in appraisal when the
appraiser assigns the same rating to all traits regardless of an employees actual performance
on these traits. The halo effect refers to the tendency to rate an individual consistently high
or low or average on the various traits, depending upon whether the raters overall impression
of the individuals is resolvable or not. This means that the halo effect allows one
characteristic observation or occurrence (either good or bad) to influence the rating of all
performance factors. The halo effects arise when traits are unfamiliar, ill defined and involve
personnel relations. This often occurs when an employee tends to be more conscious and
dependable. That the appraises might become biased towards that individual to the extent that
the appraiser rates him high on many desirable distributors: or when the employee is more
friendly or unfriendly toward the appraiser.

2 . LENI ENCY OR STRI CTNES TENDENCY OR CONSTANT
ERRORS :
Every evaluator has his own value system, which acts as a standard against which he makes
his appraisal. Relative to the true or actual performance and individuals exhibits. Some
supervisor has a tendency to be liberal in their ratings, i.e. they consistently assign high
values to counseling purposes. The ranking tools discussed earlier are aimed at avoiding this
problem.


3 . S OCI AL DI FFERENTI ATI NG:
Rating is sometimes impeded by the evaluators style of rating behavior. Pious has classified
raters as: high differentiates: i.e. using all or most of the scale: or low differentiates i.e.
using limited range of the scale.

WHY APPRAI S AL TECHNI QUES PROVE FAI LURE?
Performance appraisals techniques have often failed to give caused of such failures are:
1. The supervisor plays dual and conflicting role of both the judge and the helper.
2. Too many objectives often cause confusion.
3. The supervisor feels that subordinate appraisal is not rewarding.
4. A considerable time gap between two appraisal programmers.
5. The skills required for daily administration and employee development are in conflict.
6. Poor communication keeps employees in the dark about what is expected of them.
7. There is a difference of opinion between supervision and subordinate, in regard to the
latters performance.














CHAPTER 3
OBJECTIVES
&
RESEARCH
METHODOLOGY



OBJECTIVES OF THE STUDY


Problem Statement
The subject matter for this research Project is to study the present scenario of performance
management system in NSIC and give suggestions on the basis of the study.



Objectives of the study:
1. To study the pattern of Performance Appraisal system employed in the organization.
2. To find out the role and importance of performance appraisal in organization.
3. To study the effectiveness performance appraisal of system at NSIC.
4. To explore the problems related to performance appraisal.
RESEARCH METHODOLOGY

An appropriate methodology is an essence of any research work. The success of any project
depends upon the method chosen. Research always starts with a question or a problem. Its
purpose is to answer to questions through the application of the scientific methods. It is a
systematic and intensive study directed towards a more complete knowledge of the subject
studies. Once the problem is defined properly then one can easily check out the Objectives
for the research. Study of Performance Appraisal system in NSIC is descriptive and based on
observation and questionnaire.

DATA COLLECTION

PRIMARY DATA

Primary data consists of information collected for the specific purpose at hand. For the
purpose of collecting primary data, survey research was used and employees of NSIC were
contacted. Survey research is the approach best suited gathering description. The Primary
data was collected through Questionnaire and Personal Observation techniques.



SECONDARY DATA

The secondary data consists of information that already exists somewhere. Having been
collected for another purpose, any researcher begins the research work by first going through
the secondary data. Secondary data includes the information available with the company. It
may be the findings of research previously done in the field. Secondary data can also be
collected from magazines, newspapers, other surveys conducted by known research agencies
etc. The secondary data was collected through Corporate Profile of NSIC and Text books and
references of Human Resource Management and Performance Management.


Research Instrument:
The research Instrument used was questionnaire .

Sampling Plan
Sampling plan means the method, decide before the survey is undertaken of selecting the
object out of universe.


Tool used Statistical tool
Type of Research Descriptive Research
Type of Data Primary Data
Sampling Unit Employees of NSIC
Data Collection Method Questionnaire
Sample Size 30
Sampling Technique Systematic and convenience Sampling




























CHAPTER 4
DATA ANALYSIS
&
INTERPRETATION






Demographical Characteristics of Respondents

S.N. Demographic
Variable
Parameters No. of
Respondents
Percent
1. Gender
Male 24
Female 6
2. Age
Upto 20 Years 1
20 30 Years 16
30 40 Years 10
Above 40 Years 3
3. Marital Status
Married 24
Unmarried 6
4. Qualification
Graduation 6
Post Graduation 22
Diploma 2
Others 2


Professional Characteristics of Respondents

S.N. Demographic
Variable
Parameters No. of
Respondents
Percent
1. Department
Marketing 4
Human Resource 6
Finance 4
Others 16
2. Year of service
Upto 2 years 8
2 -5 years 18
5 -10 years 3
Above 10 years 1
3. Monthly Income
Below 20,000 4
20,000 - 30,000 9
30,000 40,000 11
Above 40,000 6









DATA ANALYSIS
1. Performance appraisal system is needed in organization.

Parameters No. of Respondents Percent age
Strongly Agree
18 60 %
Agree
9 30 %
Neutral
3 10 %
Disagree
0 0 %
Strongly Disagree
0 0%
Total
30 100 %


Interpretation:
The graph indicates that 18 (60%) respondents strongly believed that performance appraisal
system is needed for the organization. 9 (30%) respondents also agree that performance
appraisal is important for the organization. Only 3 (10%) respondents have neutral reaction
towards performance appraisal practices in the organization.
Need of Performance Appraisal
0
5
10
15
20
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
1. I am clear about what I am supposed to achieve.

Parameters No. of Respondents Percent age
Strongly Agree
15 50 %
Agree
7 23 %
Neutral
6 20 %
Disagree
2 7 %
Strongly Disagree
0 0%
Total
30 100 %



Interpretation:
The graph indicates that 15 (50%) respondents strongly believed that performance appraisal
system helps them to understand their contribution in the organization. 7 (23%) and 6 (20%)
respondents are agree and neutral about the role of performance appraisal in role clarity
respectively. Only 2 (7%) respondents are disagreeing to it.
Individual Contribution Explanation
0
2
4
6
8
10
12
14
16
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
3. I am satisfied with the existing performance appraisal system.
Parameters No. of Respondents Percent age
Strongly Agree
2 7 %
Agree
9 30 %
Neutral
15 50 %
Disagree
3 10%
Strongly Disagree
1 3 %
Total
30 100 %



Interpretation:
The graph indicates that only 2 respondents (7%) are strongly satisfied with the existing
performance appraisal sytem. 9 (30%) respondents are agree 15 (50%) are neutral 3 (10%)
disagree while 1 (3%) respondents are disagreeing to it.
Satisfaction with Existing PA System
0
5
10
15
20
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree

4. The performance of the organization is assessed by self, colleagues, superior and
subordinates.
Parameters No. of Respondents Percent age
Strongly Agree
4 13 %
Agree
11 37 %
Neutral
12 40 %
Disagree
2 7 %
Strongly Disagree
1 3 %
Total
30 100 %


Interpretation:
The graph indicates that 4 (13%) respondents strongly believed that performance of the
organization is asssessed by self, colleauges, superior and subordinates. 11 respondents
(37%) are agree, 12 (40%) respondents are neutral, 2 (7%) respondents are disagree and
1 respondent (3%) are strongly disagree to it.
Organization Performance
0
2
4
6
8
10
12
14
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
5. Organization has a separate committee to review the performance appraisal
result.
Parameters No. of Respondents Percent age
Strongly Agree
0 0 %
Agree
3 10 %
Neutral
7 23 %
Disagree
18 60 %
Strongly Disagree
2 7 %
Total
30 100 %



Interpretation:
This graph shows that 3 respondents (10%) is agree with the statement that
Organization has a separate committee to review the performance appraisal result. 7
(23%) respondents are neutral, 18 (60%) respondents are disagree and 2 (7%)
respondents are strongly disagree to it.
Performance Appraisal Committee
0
5
10
15
20
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree

6. The environment and relationships among individual during review meetings are
open & cordial.

Parameters No. of Respondents Percent age
Strongly Agree
2 7 %
Agree
8 27 %
Neutral
14 47 %
Disagree
5 16 %
Strongly Disagree
1 3 %
Total
30 100%



Interpretation:
This graph shows that 2 respondents (7%) is agree with the statement that the environment
and relationships among individual during review meetings are open & cordial. 8
respondents (27%) are agree, 14 (47%) respondents are neutral, 5 (16%) respondents are
disagree and 1 (3%) respondent are strongly disagree to it.
0
2
4
6
8
10
12
14
16
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
Cordial Environment & Relationship

7. The performance appraisal is helpful in reducing grievance among the employees.

Parameters No. of Respondents Percent age
Strongly Agree
15 50%
Agree
9 30 %
Neutral
4 13%
Disagree
2 7 %
Strongly Disagree
0 0 %
Total
30 100 %




Interpretation:
This graph shows that 15 respondents (50%) is strongly agree with the statement that the
performance appraisal is helpful in reducing grievance among the employees. 9
respondents (30%) are agreed, 4 (13%) respondents have neutral response and 2
respondents (7%) are disagree to it.
0
2
4
6
8
10
12
14
16
Strongly Agree Agree Neutral Disagree Strongly Disagree
Reducing Grievances
8. The performance appraisal is helpful for improving personnel skills.

Parameters No. of Respondents Percent age
Strongly Agree
18 60 %
Agree
10 33 %
Neutral
2 7 %
Disagree
0 0 %
Strongly Disagree
0 0 %
Total
30 100 %




Interpretation:

The graph indicates that 18 respondents (60%) Strongly believe that performance
appraisal is helpful for improving personnel skills. 10 respondents (33%) are agree, 2
(7%) respondents have neutral response to it.

0
2
4
6
8
10
12
14
16
18
20
S
t
r
o
n
g
l
y
A
g
r
e
e
A
g
r
e
e
N
e
u
t
r
a
l
D
i
s
a
g
r
e
e
S
t
r
o
n
g
l
y
D
i
s
a
g
r
e
e
Improving Personal Skills
9. The performance ratings are done periodically.

Parameters No. of Respondents Percent age
Strongly Agree
10 33%
Agree
18 60%
Neutral
2 7%
Disagree
0 0 %
Strongly Disagree
0 0 %
Total
30 100 %





Interpretation:

The graph indicates that 10 respondents (33%) Strongly believe that performance
ratings are done periodically. 18 respondents (60%) are agree, 2 (7%) respondents have
neutral response to it.
0
2
4
6
8
10
12
14
16
18
20
S
t
r
o
n
g
l
y

A
g
r
e
e
A
g
r
e
e
N
e
u
t
r
a
l
D
i
s
a
g
r
e
e
S
t
r
o
n
g
l
y
D
i
s
a
g
r
e
e
Series1
10. The performance appraisal system helps to identify the strength and weakness of
the employee.

Parameters Respondents Percent age
Strongly Agree 6 20%
Agree 19 63%
Neutral 3 10%
Disagree 2 7%
Strongly Disagree 0 0%
Total 30 100%




Interpretation:
This graph indicates that 6 respondents (20%) are strongly agree with the statement that
performance appraisal system helps to identify the strength and weakness of the
employee. 19 (63%) respondents are agree, 3 (10%) respondents are neutral and 2 (7%)
respondents are disagree with it.
0
2
4
6
8
10
12
14
16
18
20
S
t
r
o
n
g
l
y

A
g
r
e
e
A
g
r
e
e
N
e
u
t
r
a
l
D
i
s
a
g
r
e
e
S
t
r
o
n
g
l
y

D
i
s
a
g
r
e
e
Information about Strenghts & Weaknesses
11. Low performance is highlighted, but no development Support is defined by existing
performance appraisal system.

Parameters Respondents Percent age
Strongly Agree 2 7%
Agree 21 70%
Neutral 4 13%
Disagree 3 10%
Strongly Disagree 0 0%
Total 30 100%





Interpretation:
This graph indicates that 2 respondents (7%) are strongly agree with the
statement that Low performance is highlighted, but no development
Support is defined by existing performance appraisal system. 21 (70%)
respondents are agree, 4 (13%) respondents are neutral and 3 (10%)
respondents are disagree with it.

0
5
10
15
20
25
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
Support in Development
































12. Promotion is purely based on performance appraisal.

Parameters No. of Respondents Percent age
Strongly Agree
0 0%
Agree
4 13%
Neutral
16 53%
Disagree
8 27 %
Strongly Disagree
2 7 %
Total
30 100 %




Interpretation:
This graph indicates that 4 (13%) respondents are agree with the statement that
Promotion is purely based on performance appraisal. 16 (53%) respondents are
neutral, 8 (27%) respondents are disagree and 2 (7%) respondents are strongly
disagree to it.
0
2
4
6
8
10
12
14
16
18
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
Promotion based on Performance Appraisal
13. Performance rating helps to fix salary increment.

Parameters No. of Respondents Percent age
Strongly Agree
0 0 %
Agree
3 10 %
Neutral
18 60 %
Disagree
5 17 %
Strongly Disagree
4 13%
Total
30 100 %




Interpretation:
The graph indicates that 3 (10%) respondents believe that Performance rating helps to
fix salary increment. 18 respondents (60%) are neutral, 5 (17%) respondents are
disagree and 4 respondent (13%) are strongly disagree to it.
0
2
4
6
8
10
12
14
16
18
20
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
Increment Based on Performance Appraisal

14. The desired target of the organization is achieved through the effective
performance appraisal system.


Parameters No. of Respondents Percent age
Strongly Agree
8 27 %
Agree
16 53 %
Neutral
6 20 %
Disagree
0 0 %
Strongly Disagree
0 0 %
Total
30 100 %



Interpretation:
The graph indicates that 8 respondents (27%) Strongly believe that the desired target
of the organization is achieved through the effective performance appraisal system. 16
respondents (53%) are agree, 6 (20%) respondents have neutral response to it.

0
2
4
6
8
10
12
14
16
18
Strongly Agree Agree Neutral Disagree Strongly Disagree
Organizational Goals & Performance Appraisal

15. Performance appraisal increases employee motivation.

Parameters No. of Respondents Percent age
Strongly Agree
3 10 %
Agree
14 47 %
Neutral
7 23 %
Disagree
4 13 %
Strongly Disagree
2 7 %
Total
30 100 %



Interpretation:
This graph shows that 3 respondents (10%) are strongly agree with the statement that
Performance appraisal increases employee motivation. 14 (47%) respondents are
agree, 7 (23%) respondents are neutral, 4 respondents (13%) are disagree and 2 (7%)
respondents strongly disagree with it.
0
2
4
6
8
10
12
14
16
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
Appraisal & Employee Motivation

16. The performance appraisal helps to win co-operation and team work.

Parameters No. of Respondents Percent age
Strongly Agree
3 10 %
Agree
14 47 %
Neutral
10 33 %
Disagree
2 7 %
Strongly Disagree
1 3 %
Total
30 100 %




Interpretation:
This graph shows that 3 respondents (10%) are strongly agree with the statement that
performance appraisal helps to win co-operation and team work. 14 (47%) respondents are
agree, 10 (33%) respondents have neutral response, 2 respondents (7%) are disagree and 1
(3%) respondent strongly disagree with it.

0
2
4
6
8
10
12
14
16
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
Co-operation & Team Work




CHAPTER 5
FINDINGS & CONCLUSION













FINDINGS

I find that 60% respondents were strongly agreed that performance appraisal system is
needed for the organization. While 30% respondents agreed. Only 10% respondents
showed neutral reaction towards performance appraisal practices in the organization.

I find that 50% respondents strongly agreed that performance appraisal system helps
them to understand their contribution in the organization.

I find that 23% and 20% respondents agreed and neutral about the role of
performance appraisal in role clarity respectively. Only 7% respondents were disagree
with it.

I find that only 7% respondents were strongly satisfied with the existing performance
appraisal sytem. 30% respondents agreed 50% were neutral 10% disagree while
3% respondents strongly disagree to it.

I find that 13% respondents were strongly believed that performance of the
organization is asssessed by self, colleauges, superior and subordinates. 37%
agreed, 40% respondents were neutral, 7% respondents disagreed and 3%
respondents strongly disagree to it.

I find that 10% respondents agree that Organization has a separate committee to
review the performance appraisal result. 23% respondents were neutral, 60%
respondents disagreed and 7% respondents strongly disagree to it.

I find that 7% respondents strongly agree that the environment and relationships
among individual during review meetings are open & cordial. 27% respondents
agreed, 47% respondents were neutral, 16% respondents disagreed and only 3%
respondent strongly disagree to it.

I find that 50% respondents strongly agree that the performance appraisal is helpful
in reducing grievance among the employees. 30% respondents agreed, 13%
respondents had neutral response and 7% respondents disagree to it.

I find that 60% respondents strongly believed that performance appraisal is helpful
for improving personnel skills. 33% respondents agreed, 7% respondents had
neutral response to it.


I find that 33% respondents were strongly agree that performance ratings are done
periodically. 60% respondents agreed, 7% respondents had neutral response to it.

I find that 20% respondents were strongly agreed that performance appraisal system
helps to identify the strength and weakness of the employee. 63% respondents
agreed, 10% respondents had neutral response and 7% respondents disagreed to it.

I find that 7% respondents strongly believe that low performance is highlighted, but
no development Support is defined by existing performance appraisal system. 70%
respondents h agreed, 13%respondents had neutral response and 10% respondents
disagreed to it.

I find that 13% respondents agree that promotion is purely based on performance
appraisal. 53% respondents had neutral response, 27% respondents disagreed and 7%
respondents strongly disagree to it.

I find that 10% respondents believe that performance rating helps to fix salary
increment. 60% respondents had neutral response, 17% respondents disagreed and
13% respondent strongly disagree to it.


I find that 27% respondents strongly believe that the desired target of the
organization is achieved through the effective performance appraisal system. 53%
respondents agreed, 20%respondents had neutral response to it.

I find that 10% respondents strongly agree that performance appraisal increases
employee motivation. 47% respondents agreed, 23% respondents were neutral, 13%
respondents disagreed and 7% respondents strongly disagree with it.


I find that 10% respondents strongly agreed that performance appraisal helps to win
co-operation and team work. 47% respondents agreed, 33% respondents had neutral
response, 7% respondents disagreed and 3% respondent strongly disagrees with it.












SUGGESTI ONS
Now a days performance appraisals purpose is development of
individuals to improve performance on the job and provide emotional
security. So, a better method may be adopted.
Negative factor should be communicated to the employees related to
their performance.
The appraisal results should be advised to improve his level of
efficiency.
Remarks should not be given on the relationship between the employee
and his superior that is biasness should not be there.
Accounting to the work performed by the employees remarks should
be given that means transparency should be there.












CONCLUSION





























ANNEXURES











QUESTIONNAIRE
SECTION -A
1) Name (optional):
2) Sex Male Female
3) Age : Upto 20 years 20 30 years
30 40 years above 40 years
4) Marital status: Married Unmarried
5) Educational qualification:
SSLC HSC Diploma UG PG
6) Department: Production HR R&D
Accounts Others
7) Year of service: Upto 2 years 2 -6 years
6 -10 years above 10 years
8) Monthly Income: (in Rs.) Below 10,000 10,000 -15,000
15,000 20,000 above 20,000






SECTION B
9) On the scale of 1 to 5, Kindly rate the following statement according to your opinion.
5 Strongly Agree 1 Strongly Disagree

S.NO.
Statements 5 4 3 2 1
1 Performance appraisal system is needed in organization
2 I am clear about what I am supposed to achieve.


3 I am satisfied with the existing performance appraisal system.


4 The performance of the organization is assessed by self,
colleagues, superior and subordinates.


5 Organization has a separate committee to review the
performance appraisal result.


6 The environment and relationships among individual during
review meetings are open & cordial.


7 The performance appraisal is helpful in reducing grievance
among the employees.


8 The performance appraisal is helpful for improving personnel
skills.


9 The performance ratings are done periodically.


10 The performance appraisal system helps to identify the
strength and weakness of the employee.


11 Low performance is highlighted, but no development Support
is defined by existing performance appraisal system.


12 Promotion is purely based on performance appraisal.


13 Performance rating helps to fix salary increment.


14 The desired target of the organization is achieved through the
effective performance appraisal system.
.

15 Performance appraisal increases employee motivation.


16


The performance appraisal helps to win co-operation and team
work.
















19) Suggestions if any:

BIBLIOGRAPHY












BIBLIOGRAPHY







1. Human Resource Management : Gary Dessler
2. Human Resource Management : K. Aswathappa
3. Human Resource Management : C.B. Gupta

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