ESCORTS LIMITED

ON

PERFORMANCE APPRAISAL

Submitted in partial fulfillment of the requirement of the award of degree in

BACHELOR OF BUSINESS ADMINISTRATION

SUBMITTED TO: -SUBMITTED BY:-

CONTROLLER OF EXAMINATION DEEPAK PAHIL

MDU, ROHTAK B.B.A 5th Sem.

Regn. No.162103021

NGF COLLEGE ENGERNING TECHNOLOGY

MDU ROHTAK
ACKNOWLEDGEMENT

I deem it my proud privilege to express my indebtedness and sincere thanks to all those who
have, in various ways, helped me in the successful completion of the project and without their
invaluable help this project would not have been a reality.

At the outset I would like to express my special thanks toESCORTS LIMITED.for his support
and suggestions which help us to make the project and also learning the organization culture and
work exposure.

Finally I express my most sincere gratitude to my parents and my family members for supporting
and encouraging me to this challenging project. I deeply acknowledge the support and inspiration
provided by my academic career.

DEEPAK PAHIL

2
 PREFACE

Theoretical knowledge as well as practical exposure is necessary in a professional degree.

Research project help us to get familiar with real environment of business. The research project
and title STRESS MANAGEMENT an original work.

I was really fortunate to get an opportunity to my summer training in a reputed, well established,
fast growing and professionally managed organization.
Theoretical Lecture must be correlated with practical training to make learning process more
effective and to judge and apply one’s theoretical knowledge/thus training plays an important
role in development and sharpening ones skills in the field of business management and
marketing.

This project was assigned to find out the behavior and to collect information about the
performance of employees at work place.It gave me a great deal of exposure and I found the
practical work totally different from theoretical work.

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 DECLARATION

I hereby to inform you that the project report entitled “STRESS MANAGEMENT” completed at
ESCORTS LIMITED .Submitted by DEEPAK PAHIL for the partial fulfillment of requirement
of BACHELOR OF BUSINESS ADMINISTRATION (B.B.A.) from MAHARISHI
DAYANAND UNIVERSITY IS my original work and is not submitted for the award for any
other degree, fellowship or similar title or prize.

DEEPAK PAHIL

TABLE OF CONTENTS

4
Contents
LIST OF TABLES
LIST OF FIGURES

 CHAPTER 1: COMPANY PROFILE

 CHAPTER 2: INTRODUCTION
 INTRODUCTION OF STUDY
 OBJECTIVE OF THE STUDY
 SCOPE OF THE STUDY
 LIMITATIONS OF THE STUDY
 RESEARCH METHODOLOGY

 CHAPTER 3: REVIEW OF LITERATURE

 CHAPTER 4: DATA ANALYSIS & INTERPRETATION
 CHAPTER 5: FINDINGS S & CONCLUSION
 QUESTIONNAIRES
 BIBLIOGRAPHY

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 LIST OF TABLES

S.NO PARTICULARS
5.1 Related to the time duration

5.2 Related to the working environment in organization

5.3
Related to the stress

5.4 Related to the stress duration

5.5 Related to the primary reason for the stress

5.6 Related to the area needed to reduce stress

5.7 Related to the effect of stress

5.8 Related to the how stress creeping in your life

5.9 Related to the ability needed to reduce work load

5.10 Related to the change in the prospective of stress

6
 LIST OF FIGURES

S.NO PARTICULARS
4.1 Related to the time duration

4.2 Related to the working environment in organization

4.3
Related to the stress

4.4 Related to the stress duration

4.5 Related to the primary reason for the stress

4.6 Related to the area needed to reduce stress

4.7 Related to the effect of stress

4.8 Related to the how stress creeping in your life

4.9 Related to the ability needed to reduce work load

4.10 Related to the change in the prospective of stress

7
 CHAPTER - 1
COMPANY PROFILE

8
 INTRODUCTION
TO
“ESCORTS LIMITED (FARMTRAC)”

9
THE ESCORTS SYMBOL

The Escorts symbol means more than a seen by the eye. It has been prepared with certain
objective in mind and is symbolic in more then one way.

The philosophy behind Escorts and the ‘E’ in the Escorts is “Enterprise”. The Hexagon is a
symbol of productivity, precision when interposed as a nut. It symbolizes a craftsmanship, and
mending productivity. The sprains superimposed on the Hexagon represent the workers and the
people of the Escorts. This forms the letter ‘E’ the first of Escorts a company even on the more
changing unveiling the future.

10
INTRODUCTION
ESCORTS LIMITED are the holding company of Escorts groups. Post restructuring, Agri
Machinery or tractors has become the focus area of operations. Other businesses like I.T.,
construction equipment are controlled through subsidiaries and joint ventures.

HISTORICAL BACKGROUND

Escorts came into being with a vision and a mission. A vision that led two brothers YUDI
NANDA and HARI NANDA to branch out from their family’s prospering transport business and
institute ventures that were to become the foundation of ESCORTS Ltd. Escorts agents limited
was born at Lahore on 17th Oct, 1944 with YUDI NANDA as managing director and HARI
NANDA as the chairman. After that owning to the opportunities lying in the Indian villages
Escorts (Agricultural Machines) Ltd., was launched in 1948 with YUDI NANDA as the director.
Tragically, he died in an accident in 1952. Then Escorts Agents Ltd. And Escorts (Agricultural
Machines) Ltd. Was merged in 1953 to create a single entity Escorts Agents Pvt. Ltd. The
company’s incorporation in its present name, Escorts Ltd. was effected on 18th January 1960.

Having initially started with a franchise for vesting house domestic appliances, Escorts
has come a long way in manufacturing and marketing a large range of products. It has pioneered
farm mechanization in India through import and distribution of agricultural tractors.

The manufacturing operations commenced in 1954, and since then the following range of
products have been introduced in the country:-
1954: Piston rings and Cylinder liners
1960: Pistons
1961: Assembly of tractors
1962: Motorcycles and railway couplers
1963: Automotive shock absorbers
1965: Agricultural tractors under Escorts brand name
1969: Agricultural tractors under Ford brand name

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1971: Industrial and construction equipment
1979: Excavator loaders
1981: 100cc motorcycles
1985: Electronic PABXs
1991: Harvester combines
1992: VSAT Satellite Communication System
1993: Mobile communications
1995: Fork lift trucks
1996: Disengagement of joint venture collaboration with New Holland and launch of
FARMTRAC Tractor.

The single word completely described the character philosophy and success of the
company, which grew from a small beginning to one of the ever-changing dimensions. For five
decades Escorts has been in the core sectors like Agriculture, Transportation, Construction&
Resources for Engineering change through optimum product performance.

Today Company is running with nearly 10,000 employees, 19 modern manufacturing

plants and a turnover exceeding Rs. 400 crores. The Escorts group ranks among India’s leading
Engineering Conglomerates.

From its inception Escorts has firmly believed that success inspiring on being close to the
customer thus every corporate endeavor addresses it to end used, adjusting to ever changing
markets.

At every step of the way, Escorts had inducted the latest technology by forming alliances
with the world’s most advanced Engineering and Electroniccompanies, constantly adopting their
technology according to India’s need and situation.
To make sure the finished product delivers on its promise the company had created an
extra-ordinary distribution and service network that stays with the customer.

12
 Escorts came into its own with a far reaching vision for the future to stay over close to the
customers with products made in India to international standards. The source of Escorts
consistent growth is commitment and contribution to the core needs of the country. Escorts have
firmly believed that success depends on being close to the customers. As early as in 1944 while
others were concentrating on selling their goods. Escorts sought to “Escorts” its merchandise
right up to the customer’s doorstep. This meant staying close to the customer, understanding
their needs, giving them a product that met these needs ensuring that it worked smoothly
thereafter.

Today with Mr. Rajan Nanda as a Chairman and Mr. Anil Nanda as a Vice-Chairman the
ideals have not changed. Thus, every corporate endeavor addresses to the end users and the ever-
changing market, substantial man-hours are being devoted to planning a new range with the
objective of consistently offering greater value to the customer.

“In every area we touch our task has always remained one of engineering change”
Rajan Nanda. In every step, Escorts has induced the latest technology to make products that are
not merely “better” but those meet international standard. For Escorts, these are two benchmarks
of industrial achievements, the distinct, undisputed edge of technology and the
internationalization of business.
In five decades Escorts has grown to become one of the top industrial conglomerates in the
country.

FIVE DECADES OF ENGINEERING CHANGE

THE DECADE OF CREATION: 1944-1954

The launch of Escorts Agents Pvt. In Lahore and setting it all up again in Delhi after the
country’s partition. The beginning of an industry legend, with a tractor franchise, followed by

13
India’s first institute of farm mechanization and the company’s first industrial venture, Goetze
(India) Ltd., at Patiala, in equity collaboration with Goetze of Germany.

THE DECADE OF AUTOMATION: 1955-1964

Escorts goes public. A full-fledged manufacturing orientation takes roots with the
commencement of Escorts’ own brand of tractors and next major field of operation: motorcycles.
The company joins hands with Mahle to produce India’s most advanced pistons.

THE DECADE OF CONSOLIDATION: 1965-1974

The foundation of the Ford-Escorts alliance for India’s finest tractors, soon to make the
group the largest selling tractor manufacturing. Escorts Employees Ancillaries Ltd., a unique
venture in industrial democracy, comes into being.

Escorts receives FICCI Award for outstanding contribution to Indian agriculture. The
company crossed national boundaries with its first export of 400 tractors to Afghanistan, won in
a global tender. A triumph of Escorts quality and competitiveness, this was perhaps the world’s
largest ever commercial airlift of its kind.

THE DECADE OF DIVERSIFICATION: 1975-1984

One with KnorrBremse follows an epoch-making alliance with JBC for India’s first
Excavator-loaders for railway breaks. With the Yamaha collaboration, Escorts become the
country’s largest motorcycle manufacturer. Acknowledged leadership in automotive ancillaries-
Mahle pistons and Goetze rings.

THE DECADE OF GLOBALISATION: 1985-1995

Escorts enters into joint venture with buy back arrangement with Class (Harvester
Combines) and Herion (Hydraulic valves) providing an entry to world markets. A tie-up with
Faun, powers the company to supremacy in hydraulic mobile cranes. Escorts fights an epic battle
against a corporate raid, the ultimate victory providing the unshakable confidence of the
company’s small shareholders countrywide. Escorts Heart Institute commissioned, hailed as
among Asia’s most advanced. Escorts turnover crosses Rs. 15 billion. In the sunrise telecom

14
sector, alliances with JS telecom, a Bosch company, and Hughes Network systems, world leaders
in VSAT networks.

THE DECADE AHEAD: 1996-

The Mission is Globalization and the emphasis will be on core sector investments.
Escorts is going in for a global network and for mega projects in the 21st century.

ESCORTS: RESTRUCTURING

Escorts Limited is all set to meet the future by drawing on its 50-year equity gained from its
inherent strengths, a strong presence in the Core Sector providing complementary product lines
and a vast marketing network; combining them with India’s intrinsic cost advantages to become
a global source point for high value engineering products.
In order to meet the challenge of the future and to leave an indelible mark on industrial scenario,
Escorts has restructured the group along 4 business lines, each headed by an independent CEO.
The business groups are as follows:-
1) Agri Machinery Group
2) Construction Equipments
3) Automotive Ancillaries
4) Financial Services

ESCORTS – THE GROUP INFRASTRUCTURE

The flagship of the Escorts group is Escorts Ltd. in the words of Mr. Rajan Nanda.
Chairman Escorts Limited., “in the last 50 years Escorts has been more than merely one of
India’s largest Engineering Companies. It has been a prime mover on the industrial front; at
every stage introducing products and technologies that helped take the country forward in key
areas. Today as the nation engages in its most momentous economic transformation ever, we are
once again adapting ourselves towards being catalysts for qualitative growth by Engineering
Change with a global perspective.”

15
The group infrastructure comprises:-

 23 main associates/subsidiary companies

 12 manufacturing locations

 A full-fledged R&D facility

 Nearly 10,000 employees

 24 regional marketing offices

 Nearly 500 ancillaries forming the vendor base

 4 financial services companies

 Asia’s best training institute of Farm Mechanization with 100 acre demonstration
farm.

 EDDAL
Escorts Dealer Development Association providing management and financial support to
dealers.

THE ESCORTS GROUP

 THE FLAGSHIP COMPANY

Escorts Limited

 OPERATING DIVISIONS
o Agri machinery division

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 o Engineering division
o International business division

 SUBSIDARY COMPANIES
o Escorts construction equipment Ltd.
(Cranes, excavators, truck loaders)
o Esconet services
o Escorts Automotives
(Investment)
o Escosoft technologies
o Escortaltele communication ltd.
o Cellnext solutions
o Automatrix India
o Escorts heart institute & research center
o Escorts hospital & research center
Medical care (erstwhile division of Escorts lived off 100% subsidy

 ASSOCIATE COMPANIES
o India Ltd. GOETZE (India) Ltd.
o GOETZE TP (India) Ltd.
o GOETZE (India) assets management Ltd.
o Escorts securities ltd.
o Escorts Mahle Ltd.
o Escorts Employees Ancillaries Ltd.
o Escorts Finance Ltd.
o IFS India Escorts
o Hughes Escorts communication ltd.
o Carraro (India) ltd.

17
 ESCORTS GROUP CORE BUSINESSES

BUSINESS GROUPS PRODUCTS

Agri-Machnary  Tractors
Construction equipment  Earth moving Machines
 Vibratory Rollers
 Material Handling Equipments
Automotives  Pistons, Piston Rings
 Aluminum Cylinders
 Shock Absorbers
 Carburetors
 Magnetos
 Clutches
Railways  Air Brakes
 Couplers
 Electro-Pneumatic Brakes
 Shock Absorbers
Telecom  Cellular Telephone services
 VSAT Services (satellite
communication system)
Financial Services  Automobile Financing
 Consumer Finance
 Mutual Funds
 Fixed Deposits
Manufacturing Facilities  Machining
 Painting

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  Assembly
Product Units(Pus)  Engine PU
 Transmission PU
 Rear Axle PU
 Assembly/tractor PU
Departments  Personnel & HRD
 Finance
 Manufacturing Engineering
 Plant Engineering & Machine
Maintenance
 Information Systems

THE BIRTH OF FARMTRAC

The Escorts Tractors Ltd, (ETL) came in existence as a separate company in 1969, after a
collaboration of Escorts Ltd. with R.J.Hampson, executive vice president, Ford Motor Company,
USA and Mr. H.P.Nanda, President ETL. The company entered to a capital market with a public-
cum-right issue of partly convertible debentures of 40.89 crores.

The Escorts group initiated the business reconstruction exercises in order to strengthen its
business in the face of reemerging challenges. New Holland the international partner too was

19
looking for ways to independently pursue its business goals in this country. This lead to an
amiable agreement between escorts and Ford Motors to end their joint venture association.
Escorts acquired the entire equity stack of its international partner whereby the company is now
the subsidiary of Escorts Ltd.

This acquisition has taken its logical conclusion on 1st April 1996 with the emergence of
Farmtrac division, which produces Farmtrac tractors with Escorts Ltd. This led to the emergence
of Escorts Agri-Machinery Group.

The parting of ways with New Holland also meant saying goodbye to Ford, a brand name
that has stood the company in excellent stead over two decades and half. The brand name has
also been changed from Ford to Farmtrac and the name of the Md. models Ford 3600, 3610 and
3620 has been changed to Farmtrac 50 and Farmtrac 60.

A TRADITION OF TRUST
Economy range 27 - 35 HP
The very first range of tractors introduced by Escorts range of tractors has a tradition of
service and trust behind them. They are farmer year round dependable friends.

MODELS
Escorts 325
Escorts 335

THE SUPER DIESEL SAVER

Value range 30- 47HP
The Powertrac range of tractor is designed to give spectacular diesel economy. They act
as ambrosia during there trying times of rising diesel costs.

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MODELS
Escorts 430 powertrac- 30 HP
Escorts 435 powertrac- 35 HP
Escorts 440 powertrac- 40 HP
Escorts 450 powertrac- 47 HP

THE WORLD CHAMPIONS

Premium range 30- 75HP
Exported to the most advanced markets in the world, they are sophisticated machines
designed for the world demanding requirements of the progressive farmers. This range is
accepted very well in abroad. The farmtrac range is the ultimate icon in the tractor technology
with the advanced features for scientific farming and other applications.

MODELS
Farmtrac30- 30HP
Farmtrac35- 35HP
Farmtrac45- 42HP
Farmtrac50- 45HP
Farmtrac60- 50HP
Farmtrac70- 60HP
Farmtrac80- 75H

FARMTRAC DIVISION – A PROFILE

1) MANPOWER : 1659
MANAGERS : 162
SUPERVISORS : 156
TEAM MEMBERS : 1341

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2) PRODUCTION CAPACITY
120 Tractors per day

3) CURRENT PRODUCT RANGE

 FT 30
 FT 35
 FT 45
 FT 50
 FT 55
 FT 60
 FT 70
 FT 80

4) TURNOVER
Rs. 400 CRORES

5) EXPORTS
EXPORTED TO USA, TURKEY
TRACTORS EXPORTED IN 2001-02:
PLANNED FOR 2002-03 :

6) ISO 9000 CERTIFIED

ISO 9001 CERTIFIED

THE PLANT

The plant is equivalent with the following units:-

 Engine Productive Unit (EPU)
 Transmission Productive Unit (TPU)

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  Rear Axle Productive Unit (RAPU)
 Tractor Productive Unit (TPU)
 Paint Shop
Now transmission productive unit and rear axle productive unit have been merged and
now it is one productive unit known as transmission and rear axle productive unit.

The plant is equipped with the following facilities:-

MACHINE SHOP: EPU, RAPU AND TPU have separate machine shops equipped with
several purpose machine (SPM) as well as Computerized Numerically Controlled (CNC
machine).

The different components machine in these shops with their respective sections are listed
below:
 Cylinder Head, Cylinder Block and Connecting Rod.
 Case Transmission.
 Center Housing & Trumpet Housing.
 Tool Room.
 Turning, CNC, Gear Cutting, Grinding & Heat Treatment.

In heat treatment shop following facilities are available:

 Gas Carbonizing, Hardening & Tempering
 Induction Hardening
Following facilities are available in the various productive units:
 Transmission assembly
 Rear axle assembly
 Engine assembly and testing
 Tractor assembly and testing

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 QUALITY POLICY

We shall strive to continuously

Improve to meet the ever rising
Expectations of our customers
At the lowest cost.

Each one of us must fulfill the

Need of our customers, both
Internal and external, with the
Highest degree of commitment,
Thereby creating a quality
Organization geared to ensure
Total customer satisfaction and
The sustained health and
Prosperity of our business.

QUALITY OBJECTIVES

Escorts Limited – AMG Plant-II Quality Objectives are derived for the quality policy and
are intended to provide quality direction to employees in the day to day operation of the plant.

The quality objectives are applicable to AMG Plant-II is approved by Plant Head. The
approved quality objectives are below:

 Escorts Limited- AMG Plant Quality Objectives are derived from the Quality policy and
are intended to provide Quality Director to Employees in the day to day operations of the
company.

24
  We will attempt to give our Customers the best value for their money by supplying
products to match customer specifications/needs.

 We will attempt full customer satisfaction by monitoring customer perceptions and brand
image of our product through market surveys and periodic direct customer contact in the
market place.

 We will pursue continuing improvement in Product Quality and Productivity by suitable

indicators to measure the trends of improvement resulting from our efforts.

 We will strive to ensure full commitment and conformance to the Escorts Limited –
AMG Plant-II Quality Management System in all areas of work and take prompt
corrective action on any problem that may occur.

 We will work together as a team across departments and organizational levels using Task
Forces to develop a common focus and greater effectiveness in solving problems.

 Specific Corporate and Departmental Objectives for a particular year will be derived
from the above used to monitor and control company operations.

Best value for money, customer satisfaction, continued improvement in product quality,
productivity conformance to quality management system in each area of work, prompt corrective
action and team building are the major focus areas of quality objective of AMG Plant-II.

25
 CHAPTER -2
INTRODUCTION

26
OBJECTIVES OF THE STUDY
The objectives of doing work on the performance appraisal in the escorts ltd company are as follows:

1. To study the effectiveness of appraisal system in the escorts ltd company.

2. To study the performance appraisal process of Junior Managers in the escorts ltd company.

3. To study, whether the system is helpful for both the employer (to communicate the organizations
plans, expectations, etc.) and employees (to express the training & development needs).

4. To study the employees view points on their performance appraisal.

SCOPE OF THE STUDY

I have chosen the topic “PERFORMANCE APPRAISAL in Escorts LTD”. Keeping in mind the
company nature of work, with a hope that the company is benefited from its findings by modifying
its existing performance appraisal rules if felt necessary.

The study has immensely helped in understanding the various steps of the process of performance
appraisal as well as the various process of the motivation. I had the privilege to gain practical
experience by working in the Escorts Ltd.

LIMITATIONS OF THE STUDY

With the proper due care this study has been conducted but it consists of some of its limitations also
which are as follows:

27
1. Sample size was small i.e. 40Junior Managers.

2. The time limit is also one of the major constraints in conducting study.

3. Biases may creep in the information given by the respondents.

4. Main root of this research study was questionnaire & interview, which has its own limitations, for
example we can’t measure the reliability, enthusiasm dissonance etc.

RESEARCHMETHODOLOGY

The research methodology is a way to solve the research problem in a systematic manner.
It depends upon the various steps like objectives of the study, how the data is collected, how
much is the sample size required and the limitations of the study. Properly conducted study is a
valuable tool for the top management in making some decisions. Good study reduces the
uncertainty. Effective research methodology leads to good research.

RESEARCH DESIGN
Research design is the arrangement of the condition for collection and analysis of data in the
manner that aims to combine relevant to the research purpose with the economy in the
procedure.
Research design of the study is Exploratory Research Design
Exploratory research design’s major emphasis is on the discovery of ideas and insights. In this
research problem is transformed into one with more precise meaning.
Methods of explorative research design -:
1. Depth Interviews

2. case study

3. surveys

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Sample Size for the study was 50 employees and managers

COLLECTION OF DATA

The data collection is mainly of two types:

1) primary data
2) secondary data

Primary Data was collected by conducting

(a) Questionnaire and
(b). By conducting personnel interview of the managers

Different methods of collecting primary data

1. Questionnaire Method: A questionnaire is means of electing the feeling, beliefs,

experience, perception & attitude of sample of the individual. As a data collecting
instruments. It could be:-
a) Structured
b) Unstructured

2. Interviews: Finally, for the purpose of additional information all the respondents were
personally interviewed. In addition, classification and

To know about the performance appraisal, the QUESTIONNAIRE, INTERVIEW method has
been used.
I have prepared a list of questions regarding recruitment process of Escorts Agri – Powertrac
Ltd., Faridabad and distributed it to the respondents.

29
This questionnaire has 17 questions, which are aimed to achieve the objectives of the study. All
the questions are close ended with two to five options.

For the purpose of analysis, various tables and charts were prepared with numbers and
percentages of the employees in different choices.

Along with primary data collected through questionnaire-interview, I also have used secondary
data, which include theory part from some books and the performance appraisal process in
Escorts from its own policies.
Sample size for the study was 40 Junior Managers.

Secondary Data was collected from websites, company reports, company manuals and
management books.

30
 CHAPTER - 3
Review of Literature

31
PERFORMANCE APPRAISAL

People differ in their ability and aptitudes. These differences are natural to a grate extent
and cannot be eliminated even by giving the same basic education and training to them. There
will be some differences in the quality and quantity of work done by different employees even on
the same job. Therefore,it is necessary for management to know these differences so that the
employees having better abilities may be rewarded and the wrong placements of employee may
be rectified through transfers. The individual employee may also like to know the level of his
performance in comparison to his fellow employees so that he may improve upon it. Thus there
is grate need to have suitable performance appraisal system to measure the relative merit of each
employee.

The basic purpose of performance appraisal is to facilitate orderly determination of an

employee’s worth to the organization of which he is a part. However, a fair determination of the
worth of an employee can take place only by appraising numerous factors some of which are
highly objective, as for instance, attendance, while others are highly subjective, as for instance,
attitude and personality.

PERFORMANCE APPRAISAL

Performance appraisal means systematic evaluation of the personality and performance of

each employee by his supervisor or some other person trained in the techniques of merit rating.
“Performance appraisal includes all formal procedures used to evaluate personalities and
contributions and potentials of group members in a working organization. It is a continuous
process to secure information necessary for making correct and objective decisions on
employees.”
Performance appraisal is the systematic evaluation of the individual with respect to his
performance on the job and his potential for development. Performance appraisal is concerned
with determine the differences among the employees working in the organization.

32
PURPOSES OF PERFORMANCE APPRAISAL

2) Promotions:- promotion is the most important objective of performance appraisal. It is to

the common interests of both the management and employees to promote employees into
positions where they can most effectively utilize their abilities. It is mismanagement to
promote employees into positions where they cannot perform effectively at the time in
question. A properly developed and administered performance appraisal system can aid
in determining whether individuals should be considered for promotion or not. The
system should rate the individual for the present job and his potentialities for the higher
job. A person performing his job well does not necessarily mean that he is fit for
promotion.

3) Human resource planning: - Performance appraisal generates significant, relevant and

useful information about the promo ability and potential of employees. This information
is used to assess the organization’s internal supply of human resources and availability of
managerial personnel for succession planning.

4) Recruitment and selection: - Evaluation made in performance appraisal can be used to

find out the particular areas of knowledge, skills and experience which successful
performer’s posses. This information can be used to review effectiveness of recruitment
and selection procedures and practices so that right type of candidates can be selected.

5) Training and development: - Performance appraisal helps in identifying development

needs of employees. This information can be used to advise suitable training and
development programmes to enable employees to overcome their weaknesses and
improve their strengths.

6) Compensation: - Information gathered through performance appraisal provides inputs

for making decisions concerning salary administration, financial incentives,
appreciations, additional responsibilities etc.

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PERFORMANCE APPRAISAL PROCESS

 Establishing performance standards

 Communicating the standards to employees

 Evaluating actual performance

 Comparing actual performance with standards

 Discussing the appraisal results with the employees

 Taking corrective action, if necessary

METHODS OF PERFORMANCE APPRAISAL

 Written essay

 Critical incidents

 Checklist

 Graphic rating scale

 Behaviorally anchored rating scales (BARS)

 Group order ranking

34
  Individual or straight ranking

 Paired comparison

 MBO (result oriented appraisal method)

 Group appraisal of subordinates

 Peers appraising the colleague

 Subordinates appraising the boss

 360 degree feedback method

 Assessment centers method

ERRORS IN PERFORMANCE APPRAISAL

 Leniency or severity error

 Central tendency

 Halo effect/error

 Similarity error

 Contrast error

 Shifting standards

35
  Influence of recent events

 Tendency to give high rating

 Length of service bias

 Personal bias

HOW TO MINIMISE ERRORS

 Clearly defined performance dimensions and standards

 Performance appraisal only for providing feedback

 Combination of methods for appraising performance

 Continuous feedback

 Many appraisers rating backed up with examples

 Appraisal of subordinates on the same performance dimensions

 Appraiser with ability to appraise

 Training of appraisers

36
PERFORMANCE APPRAISAL IN ESCORTS LIMITED

PERFORMANCE APPRAISAL

In today’s competitive environment it is essential to harness individual aspiration and

potential and gear them suitably to meet business objectives. To make this happen, both you and
the organization would like to know how you have been performing and your potential for
growth.

THE OBJECTIVES OF PERFORMANCE APPRAISAL

 To be developmental in nature where individuals grow with the organization.

 To integrate individual performance and contributions to larger organizational goals and
needs.
 To open greater communication between superior and subordinate.
 To ensure a realistic link between performance, recognition and reward.
 To provide core data for human resource development / organizational development
efforts.
 To encourage innovativeness through unique contribution.
 To focus on employee contribution and not on efforts.

APPRAISAL CYCLE

The appraisal cycle for DGM and above is 1stJune to 30th June. Increments / promotions
are effective from 1st July every year.

37
 The appraisal cycle for employees in grades M2 to M8 grade become effective from 1 st
Jan. each year and from M8 to DGM from 1st April. Consequently, the appraisal period in
respect of such employees after promotion is of 15 month for the first year i.e. the next review
would be on 1st April or 1st July, as the case may be, of the following year.

APPRAISAL OF EMPLOYEES ON DEPUTATION

In case the employees are working on deputation in a different company/division of

Escorts, the parent company division shall carry out employees’ appraisal. This is not applicable
to employees in the categories of DGM and above and their cases will continue to be processed
as usual from the chairman / vice chairman’s office as is being done at present.

APPRAISAL OF TRAINEES (All categories)

Only trainees who have been regularized (confirmed on or before 30th September) shall
be eligible for performance appraisal for that block of appraisal period. Trainees regularized
there shall be eligible for confirmation appraisal according to the rules laid there under.

CONFIRMATION APPRAISAL

Trainees on completion of the training period and employees on completion of probation

period shall be appraised for regularization / confirmations. During confirmation / regularization,
incumbents are evaluated for:-
1. Group performance
2. Personal performance
3. Supervision and leadership qualities
4. Developmental needs

Employees are covered for superannuating only after confirmation but with effect from their
date of joining.

38
 MANAGERIAL PERFORMANCE APPRAISAL PROCESS

OBJECTIVE:
To identify and categorize employees of managerial cadre, in three distinct contributory
levels based on performance review against last year’s KRAs and assessment of competencies.

HOW TO FILL APPRAISAL FORM:

The managerial appraisal form consists of the following sections.

Section A: Review of goals achieved against KRA’s

Section B: Feedback on managerial competencies.

Section C: Development Needs

Section A: Review of goals achieved against KRAs

This section consists of 70 points. In this section appraisee is required to fill details of
KRAs, objectives and achievements and assign weightages against each KRA, agreed in the
beginning of the review period. Appraiser is required to capture his/her observations and score
each KRA.

Section B: Feedback on managerial competencies

This section consists of 30 points. In this section appraiser is required to give feedback on
the listed managerial competencies indicating the performance factor that best describes the
appraisee, substantiating it with actual events/behaviour.

Section C: Development needs

39
 In this section the appraiser is required to fill in the strengths/areas of improvements
relevant to appraisee in carrying out his current job or higher responsibilities.

REVIEW PROCESS:

The review discussion should take place on a one-to-one basis in an uninterrupted

manner and it is expected that typically such a meeting would last for about 60 to 120 minutes.
This discussion would be based on performance plan documents (KRA’s) agreed last year.
Sequence of the process would be as described below:-

Step 1: Appraiser to gather adequate data on the appraisee’s performance against predefined
KRAs.

Step2: Appraiser to schedule a meeting for performance review with the appraisee.

Step3: Appraiser to give feedback to appraisee based on his observations with emphasis on
performance aspects where appraisee can improve. Appraiser should avoid loaded /
judgmental terms that may lead to emotional setbacks.

Step4: Towards conclusion, the appraiser should complete the form. This would form the
summary of discussions that took place between appraisee and appraiser.

Step5: The performance against KRAs is to be quantified and scored out of a maximum of 70
points. In addition, the appraiser needs to give score against competencies defined out a
maximum of 30 points. Thus each appraisee will have a total score received out a
maximum of 100 points.

Important
Since the subject under discussion is highly sensitive, the details of the discussions
should remain confidential between the two.

40
Step6: The completed format with total score assigned based on the review may be forwarded to
the reviewer for his concurrence.

Step7: Reviewer to review appraisals of all manager’s in his/her area to ensure that a fair process
has taken place and no biases have crept into the assessment.

Step8: Thereafter, the data is to be collected at DMG / Department level for each area. If the
strength is less, appropriate aggregation at Divisional / Functional level may be done. For
example, in R&D center, aggregation may be done at a divisional level. All managers’
have to be ranked from top to bottom on a relative basis to arrive at the final ratings at
this level as defined below. Concerned HR manager would help the DGM / MANCOM
member in finalizing the ratings.

Step9: HR would summarize the data for whole of AMG and present before business head for
his concurrence before issuing letters to individuals.

PERFOMANCE RATING:

The three performance rating categories and expected distribution pattern, as a percentage
is as under.
Rating Category %age Distribution Description
Cat-1 20% top 20 percentile
Cat-2 70% next 70 percentile
Cat-3 10% bottom 10 percentile

41
 CHAPTER - 4

DATA COLLECTION
&
ANALYSIS

42
 TABLE 1

Awareness of performance appraisal system in employees

AWARE NOT AWARE

Number of employees 40 0
aware of performance
appraisal system in 100% 0%
escorts.

AWARENESS OF APPRAISAL SYSTEM

YES
NO

From above it is clear that all the employees of the escorts ltd. are aware of
appraisal system

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TABLE 2
BY WHOM APPRAISAL IS DONE

HOD Immediate Any other

Appraisal is done by: superior
15 12 3

52% 43% 5%

BY WHOM APPRAISAL IS DONE

Thus, we can say that mostly performance appraisal is done by Immidiate

superior

HOD
IM
Any other

44
TABLE 3

Objectives of performance appraisal

Pay hikes Promotion Training needs Any other

Objectives of 15 15 11 9
performance
appraisal in Co. 30% 30% 22% 18%

Objectives of performance appraisal

PH
P
ITN
AO

PH- Pay Hikes, P- Promotion

ITN- Identify training needs, AO- Any Other
Therefore it can be concluded that according to employees the main objective of
appraisal system is to increase their pay and to increase their promotion.

45
 TABLE 4

Methods of performance appraisal

Superior 360 degree MBO Any other

Methods of appraises
performance 37 0 13 0
appraisal used in
escorts. 74% 0% 26% 0%

Methods of performance appraisal

SA
360
MBO
AO

SA- superior appraises, 360- 360 degree, AO- any other

Maximum number of employees agrees with the method of superior appraisal.
As a tool for performance appraisal of employees.

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 TABLE 5

Understanding of objectives of management & performance

appraisal

SA A N D SD
Clarity about objectives of performance 19 26 3 1 1
appraisal to employees
38% 52% 6% 2% 2%

19 23 5 2 1
view of employees towards the scope
for communicating top management 38% 46% 10% 4% 2%
objectives in appraisal system

Provision of opportunity to employees 48% 44% 2% 2% 4%

to have a clear understanding of what is
expected from them.

47
Understanding of appraisal objectives

SA
A
N
D
SD

Majority of employees agree that the objectives of performance appraisal are clear
to them.
Understanding of management objectives

Maximum number of employees agrees with the fact that Appraisal system has
scope for communicating topmanagement objectives with employees.

SA
A
N
D
SD

48
Clear understanding of the expectations

SA A N D SD

Therefore maximum number of employees strongly agrees that appraisal system

provides an opportunity to them to have a clear understanding of what is expected
from them.

49
 TABLE 6

Effectiveness of counseling

SA A N D SD
Counseling provides an opportunity to
communicate the support employee 19 28 0 1 2
need with their superior to perform
their job well
38% 56% 0% 2% 4%

Counseling provides opportunity for 19 29 1 1 0

discussion between employee & their
appraiser on the expectations,
achievements and the area of
improvement required

38% 58% 2% 2% 0%

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Counseling provides opportunity for communicating the support
needed

SA
A
N
D
SD

From above we can conclude that many employees agrees that counseling
provides an opportunity to communicate the support employee need with their
superior to perform their job well.

51
Counseling provides opportunity for discussion on the expectations,
achievements and the area of improvement required

SA
A
N
D
SD

Maximum number of employees agrees that counseling provides opportunity for

discussion between them & their appraiser on the expectations, achievements and
the area of improvement required

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 TABLE 7

Feedback helps to get insight into weaknesses & strengths

SA A N D SD
Appraisal system gives the
clear understanding of job & 22 24 3 1 0
factors affecting employee’s
performance to appraiser
&appraisee. 44% 48% 6% 2% 0%

Feedback helps employees to

get insight into their 18 25 5 1 1
weakness and strengths.
36% 50% 10% 2% 2%

Clear understanding of job

SA
A
N
D
SD

53
48% of employees agree that appraisal system gives the clear understanding of
job & factors affecting their performance to appraiser &appraise.
Insight into weaknesses & strengths

SA
A
N
D
SD

Maximum number of employees agrees with the fact that feedback helps them to
get insight into their weakness and strengths.

54
CHAPTER – 5
FINDINGS
&
CONCLUSION

55
Findings of the Study

Finding of the study on the basis of collection and analysis of the data are as
follows-

1) All the employees at junior manager level in the company have the
awareness of the performance appraisal system.

2) Most of the employees say that their immediate superior does their
appraisal, 60% of the respondents says this. Performance appraisal is done
annually in Escorts. In actual MBO method of performance appraisal is
used but 70% of the respondents said that their immediate superior does
the appraisal. Only 26% of the employees said that the method of
performance appraisal in Escorts is MBO.

3) 80% of the employees have the clear understanding of the objectives of

the performance appraisal. 80% of the employees were strongly
agree/agree with the statement “objectives of performance appraisal are
clear to you”.

4) 30% of the respondents said that the pay hikes (annual increments) is the
main objective of performance appraisal. While other 30% respondents
said the objective of performance appraisal is promotion. 22% said that the
identification of training needs is the main objective. But in actual all of
these three and many more the objectives of the appraisal.

5) The immediate superiors do appraisal in Escorts. Assessment centers are

also used in Escorts but for promotions only.

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6) Appraisal system in the company has the grate scope for communicating
top management objectives to the employees. 84% of the respondents
were strongly agree/agree that appraisal system helps in understanding top
management objectives.

7) 90% of the respondents were strongly agree/agree with the statement,

which state that appraisal system provides an opportunity for
understanding what is expected from the employees.

8) Counseling part of the appraisal system is good enough in Escorts. 94% of

the respondents were strongly agree/agree with the statement which states
that counseling provides an opportunity to communicate the support
needed from superior to perform the job well.

9) Most of the respondents were satisfied with the counseling done by the
superiors. They said that counseling facilitates discussion between
appraiser and appraisee, by which appraisee come to know about their
areas where they need improvements, what is expected from them, what is
their job all about and what factors affect their performance.

10) 86% of the respondents were satisfied with the feedback given to them and
they also accepted that true feedback helps to get insight into their
weaknesses and strengths.

57
58
CONCLUSIONS

Based on the analysis, through the observation process, through the questionnaire responses,
following in the conclusions of the study:-

 The employees are up to some extent is satisfied with the existing performance
appraisal system process.
 Performance appraisal system in escorts ltd is highlighting employee needs and
opportunities for personal growth and development.
 Promoting understanding between the supervisor and his subordinates.

 Counseling facilitates discussion between appraiser and appraisee, by which

appraisee come to know about their areas where they need improvements, what is
expected from them, what is their job all about and what factors affect their
performance.
 It has identified training and development needs and to evaluate effectiveness of
training and development programmes.

 This has encouraged the innovativeness of employees through unique contribution.

To conclude we can say that performance appraisal system in Escorts Limited is an effective
method. Most of the employees are satisfied with the appraisal process and the criteria of the
appraisal. Counseling associated with the appraisal is the most motivating factor for the
employees to give their best.

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SUGGESTIONS

The purpose of performance appraisal is to reward the employees, give them recognition, and
help them in career growth.
o The production managers or the personnel managers should interact more directly with
their subordinates and try to know their needs, their problems and help or suggest them to
overcome those difficulties.

o The feedback process should be made more sound and effective so that the employees
could know the areas where their performance is low so that they could make it better in
the future.

o Special training sessions should be organized besides regular training programmes for
low performance areas.
o There should be more transparency in awarding marks to the employees. It should be
effectively based on the merit and performance of the employees and not on the basis of
any personal contacts, blood relation or any affection.

o A small committee should be found that will keep a close watch on the whole exercise
and make ensure that it should be a fair process.

60
QUESTIONNAIRE
&
BIBLIOGRAPHY

61
 QUESTIONNAIRE

Q.1 Are you aware of the employees appraisal system in Escorts Limited system.
a) Yes b) No

Q.2 Who does the appraisal?

a) HOD b) Immediate supervisor
c)Any other, specify…

Q3. What are the objectives of performance appraisal in Escorts Limited?

a) Pay hikes b) Promotion
c) Identify training need d) Any other, specify…

Q4. What methods of performance appraisal are used?

a) Superior appraises the employee.
b) 360 Degree
c) MBO

Strongly Agree Neutral Strongly Any other,

Agree Disagree specify
Q5. Are objectives of
performance appraisal clear to
all employees

Q6.Do you think that appraisal

system has scope for
communicating top
management objectives to

62
 the employees.?

Q7.According to you does

appraisal system provides
an opportunity to you to
have a clear understanding
of what is expected from
you.

Q8. Is Counseling an affective

measure to get a boost from the
superiors?
Q9.Does Counseling provides
opportunity for discussion
between you & your appraisal
on the area of improvement
required?
Q10. Is appraisal system giving
the clear understanding of job
and factors affecting your
performance to appraiser and
appraisee?

Q11. Does Feedback helps you

to get insight into your
weaknesses & strengths?

63
BIBLIOGRAPHY

 GUPTA, C.B., HUMAN RESOURSE MANAGEMENT, SULTAN CHAND &

SONS, NEW DELHI-2006.

 ASHWATHAPA, K.-HUMAN RESOURSE & PERSONNELMANAGEMENT,

TATA MC GRAW HILL CO. LTD,NEW DELHI-2005.

 DESSLER ,GARY -HUMAN RESOURSE MANAGEMENT, I0 EDITION,

TATA MCGRAW HILL CO. LTD., NEW DELHI.

 STEPHEN P. ROBINSON- MANAGING HUMAN RESOURCES, 4TH

EDITION, TATA MC GRAW HILL CO. LTD., NEW DELHI.

OTHER RESOURCES:-
WEBSITES;-

 www.google.com
 www.escortsgroup.com
 www.wikipedia.com

MANUALS:-
 PERSONNEL MANUAL, ESCORTS LIMITED, CORPORATE HR & IR,
FARIDABAD


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