Introduction

Almost every organization in one way or another goes through a periodic ritual, formally or informally, known as performance appraisal. Performance appraisal has been called many things. The formal performance appraisal has been called a tool of management, a control process, an activity and a critical element in human resources allocation. Uses for performance appraisal have included equal employment opportunity considerations, promotions, transfer and salary increases. Primarily performance appraisal has been considered an overall system for controlling an organization. Performance appraisal has also been called an audit function of an organization regarding the performance of individuals, groups and entire divisions.

Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

Almost every organization in one way or another goes through a periodic ritual, formally or informally, known as performance appraisal. Performance appraisal has been called many things. The formal performance appraisal has been called a tool of management, a control process, an activity and a critical element in human resources allocation. Uses for performance appraisal have included equal employment opportunity considerations, promotions, transfer and salary increases. Primarily performance appraisal has been considered an overall system for controlling an organization. Performance appraisal has also been called an audit function of an organization regarding the performance of individuals, groups and entire divisions.

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Objectives
A) Primary Objectives 1) To study the performance appraisal system in different organization. 2) To study the transformation of performance appraisal form traditional to modern. 3) To get an insight into the relative importance of performance appraisal in organization. 4) To study the effectiveness of performance appraisal system in different organization. 5) To study the practical application of performance appraisal. 6) To compare appraisal system of different organization and find out the most common parameters for appraisal. 7) How can companies use performance appraisal as an effective tool to achieve organizational effectiveness and efficiency.

B) Secondary Objectives. 1) To observe the work environment in organization. 2) To get experience and expertise in making projects. 3) To enhance my communication skills. 4) To increase my confidence.

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Methodology
Basically there are two types of performance appraisal done on the basis of post of the employee. They are: 1. Executive performance appraisal system 2. Non-executive performance appraisal system

EXECUTIVE PERFORMANCE APPRAISAL SYSTEM

This system is for performance appraisal for executives of the level E-0 to E4 . The various steps involved are: A) Self Appraisal Performance Review & Planning
I. Appraise write his view over the actual achievement for the Key

performance area / Task and Target assigned to him for the year. II. Comments on fulfillment of KPA / Task and Target are written by the Reporting Officer , taking account of time frame also. III. Special Jobs other than tasks given and normal routine work are written by appraisee. B) Performance Review Discussion I. Both appraise and reporting officer sit together. II. Comment over Strengths and weaknesses and areas for development are written which is undersigned by both . III. Appraise can help the reporting officer by giving examples which shows his strength or weakness. He also tell what training he want to undergo .

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C)

Performance Assessment I. Rating between 1 to5 are given to the appraise by the Reporting Officer and Reviewing Officer individually on the basis of Performance Factors and Potential Factors.

Performance Factors : Quantity of output Quality of output Cost control Job Knowledge and Skill Team spirit and Lateral Coordination Discipline Development & Quality of assessing subordinates Special Relevant factor

Potential Factors : Communication Initiative Commitment and sense of Responsibility Problem Analysis and Decision making Planning and Organizing Management of Human resources II. Different weight age are given to each factor III. Final scores are calculated by multiplying rating and weight age. By adding these Total Factor Score is calculated. IV. Comments on Overall Performance And Potential are written by both Reporting and Reviewing Officers individually. D) Suggestions for Job Rotation and Job Enrichment I. Both reporting and reviewing officers write their suggestions whether the appraise should be transferred to other department. Either a good employee is transferred so that he can acquire knowledge of all the

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departments, or a worst performing employee is transferred so as to improve his performance. II. In some exceptional case Head of department give his comments on overall performance & potential of the employee. E) Final Assessment I. Total Factor Score by both Reporting and Reviewing officers is written and average is calculated. II. Final Grading between O / A / B / C is given . III. If Final Grade is C , indicate whether to promote or not to promote the appraise. IV. If not to promote give reasons. V. Meeting with non-promotable appraise.

NON-EXECUTIVE PERFORMANCE APPRAISAL SYSTEM

Rating are given by both Reporting and Reviewing officers on the basis of performance of the appraisee depending upon factors: Performance on the Job Job Knowledge & skill Multi-skill Utilization Conduct & behavior Punctuality & availability on job Innovativeness Cost & Quality Consciousness Initiative & Capacity to assume higher responsibility Housekeeping & safety consciousness
I. II. III.

Weight age are given to various factors . Scores out of 100 are calculated by multiplying rating with weight age . O / A / B / C / C- Grades are given according to scores and attendance of the appraise.

IV.

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V.

If grade is C- , then appraise is interviewed by the Head of Department.

Limitation
1) To get contacts of HR Mangers for interviews was difficult. 2) Getting the views and opinion of the interviewee (HR Manager) was a difficult task.

3) Lack of knowledge and experience 4) Short of time. 5) Lack of sufficient privileges. 6) Lack of communication facilities

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Companies Overview
1. Square Textiles Ltd. Square Textiles Ltd. started its journey by establishing the first unit in 1997. One year later the second unit was established. Square Textile is a subsidiary company of Square Group .The Company was incorporated as a public limited company in the year of 1994. The operation was started in 1997.It was enlisted in Dhaka Stock Exchange & Chittagong Stock Exchange in 2002. Within a very short time of span the company achieved some significance success. Square Textile receives Oeko-Tex standard 100 and ISO-9002 certificates in the year 2000. Authorized capital of the company is tk. 1000 million. Its paid- up capital is tk. 251.90 million. 1,223 employees are working in this organization. The business lines of Square Textiles Limited are manufacturing and marketing of yarn.
Number of employees: more than 2000

2. Beximco Pharmaceuticals Ltd.

Beximco Pharmaceuticals Ltd. is a leading edge pharmaceutical company based in Dhaka, Bangladesh and is acclaimed for its outstanding product quality, world-class manufacturing facilities, product development capabilities and outstanding professional services. Beximco Pharma is the pioneer in pharmaceutical export from Bangladesh and has received National Export Trophy (Gold), the highest national accolade for export, for record three times.
Year of Establishment:

1976
Commercial Production:

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1980
Status:

Public Limited Company

Business Lines:

Manufacturing and marketing of Pharmaceutical Finished Formulation Products, Large Volume Parenterals, Small Volume Parenterals, Ophthalmic Preparations, Nebulizer Solutions and Active Pharmaceutical Ingredients (APIs)
Overseas Offices & Associates:

Australia, Bhutan, Cambodia, Chile, Ghana, Hong Kong, Indonesia, Jordan, Kenya, Kuwait, Malaysia, Myanmar, Nepal, Pakistan, Philippines, Saudi Arabia, Singapore, Sri Lanka, Vietnam and Yemen
Authorized Capital (Taka):

2,000 million
Paid-up Capital (Taka):

1,259.57 million
Number of Shareholders:

Around 66,000
Stock Exchange Listings:

Dhaka Stock Exchange, Chittagong Stock Exchange and AIM of London Stock Exchange
Number of Employees:

2,310

3.Grameen Phone: The company has so far invested more than BDT 10,700
crore (USD 1.6 billion) to build the network infrastructure since its inception in 1997. It has invested over BDT 3,100 crore (USD 450 million) during the first three quarters of 2007 while BDT 2,100 crore (USD 310 million) was invested in 2006 alone. Grameenphone is also one the largest taxpayers in the country, having contributed nearly BDT 7000 crore in direct and indirect taxes to the Government Exchequer over the years. Of this amount, over BDT 2000 crore was paid in 2006 alone. Since its inception in March 1997, grameenphone has built the largest cellular network in the country with over 10,000 base stations in more than 5700 locations. Presently, nearly 98 percent of the country's population is within the coverage area of the grameenphone network. Grameenphone was also the first operator to introduce the pre-paid service in September 1999. It established the first 24-hour Call Center, introduced value-added services such as VMS, SMS, fax and data transmission services, international roaming service, WAP, SMS-based push-pull services, EDGE, personal ring back tone and many other products and services. The entire grameenphone network is also EDGE/GPRS enabled, allowing access to high-speed Internet and data services from anywhere within the coverage area. There are currently nearly 3 million EDGE/GPRS users in the grameenphone network. Grameenphone nearly doubled its subscriber base during the initial years while the growth was much faster during the later years. It ended the inaugural year with 18,000 customers, 30,000 by the end of 1998, 60,000 in 1999, 193,000 in 2000, 471,000 in 2001, 775,000 in 2002, 1.16 million in 2003, 2.4 million in 2004, 5.5 million in 2005, 11.3 million in 2006, and it ended 2007 with 16.5 million customers.

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From the very beginning, grameenphone placed emphasis on providing good after-sales services. In recent years, the focus has been to provide after-sales within a short distance from where the customers live. There are now more than 600 GP Service Desks across the country covering nearly all upazillas of 61 districts. In addition, there are 81 grameenphone Centers in all the divisional cities and they remain open from 08:00am08:00pm every day including all holidays. GP has generated direct and indirect employment for a large number of people over the years. The company presently has more than 5,000 full, part-time and contractual employees. Another 100,000 people are directly dependent on grameenphone for their livelihood, working for the grameenphone dealers, retailers, scratch card outlets, suppliers, vendors, contractors and others. In addition, the Village Phone Program, also started in 1997, provides a good income-earning opportunity to more than 280,000 mostly women Village Phone operators living in rural areas. The Village Phone Program is a unique initiative to provide universal access to telecommunications service in remote, rural areas. Administered by Grameen Telecom Corporation, it enables rural people who normally cannot afford to own a telephone to avail the service while providing the VP operators an opportunity to earn a living.

4.Banglalink GSM Ltd.: Banglalink GSM Ltd. provides mobile

telephony services in Bangladesh. It offers prepaid and post-paid mobile connection services. The company also provides various value-added services, such as call forwarding/divert, call waiting/call holding, call barring, caller line identification presentation, voice mail, short messaging, ring tone and logo downloads, conference call, picture messages, and instant recharge. The company was founded in 1998 and is based in Dhaka, Bangladesh. Banglalink GSM Ltd. operates as a subsidiary of Orascom Telecom Holding S.A.E. Banglalink GSM Ltd. was formerly known as Sheba Telecom Pvt Ltd. As a result of acquisition of Sheba Telecom Pvt Ltd. by Orascom Telecom Holding S.A.E., Sheba Telecom Pvt Ltd.'s name was changed. As of September 2, 2004, Banglalink GSM Ltd. operates as a subsidiary of Orascom Telecom Holding S.A.E.
Number of employees: more than 4000

5. ACI: ACI was established as the subsidiary of Imperial Chemical Industries (ICI) in the then East Pakistan in 1968. After independence the company has been incorporated in Bangladesh on the 24th of January 1973 as ICI Bangladesh Manufacturers Limited and also as Public Limited Company. This Company also obtained listing with Dhaka Stock Exchange on 28 December, 1976 and its first trading of shares took place on 9 March, 1994. Later on 5 May, 1992, ICI plc divested 70% of its shareholding to local management. Subsequently the company was registered in the name of

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Advanced Chemical Industries Limited. Listing with Chittagong Stock Exchange was made on 22 October 1995. Advanced Chemical Industries (ACI) Limited is one of the leading conglomerates in Bangladesh, with a multinational heritage. The company has diversified into three major businesses. Number of employees : more than 6000

5. RAK Ceramics: RAK Ceramics (Bangladesh) Limited, a UAE-Bangladesh joint venture company, was incorporated in Bangladesh on 26 November, 1998 as a private company limited by shares under the Companies Act 1994. The name of the Company was thereafter changed to its name from RAK Ceramics (Bangladesh) Private Limited to RAK Ceramics (Bangladesh) Limited as per resolution passed in extraordinary general meeting on 10 June 2008, certificate issued by the Registrar of Joint Stock Companies dated 11 February, 2009. It is engaged in manufacturing and marketing of ceramics tiles, bathroom sets and all types of sanitary ware. It has started its commercial production on 12 November, 2000. The commercial production of new sanitary ware plant was started on 10 January, 2004. Further expansion of the existing facilities of ceramics tiles plant took place in year 2004, and for tiles and sanitary plant were in year 2007. RAK Ceramics (Bangladesh) Limited, 90% held by RAK Ceramics PSC and its nominees, a company incorporated under the laws of UAE and remaining 10% owned by local investor Mr. S.A.K. Ekramuzzaman. RAK Ceramics PSC, UAE is presented by Dr. Khater Massaad as Chairman. With an annual turnover of over BDT 3248 million, within the short span of 11 years RAK has firmly established itself as one of the leading manufacturer of high quality ceramic wall, floor tiles, gres porcellanato and sanitary wares products in Bangladesh.

Comparative study of performance appraisal & Findings

List of visited company:

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1. Square Textile Ltd.

2. Beximco Pharmaceuticals Ltd.

3. Grameen Phone
4. Banglalink GSM Ltd. 5. ACI

6. RAK Ceramics How do these companies define Performance Appraisal? Table 1 Company Option A B C D E F G 1 2 3 4 5 6

A) A regular activity conducted periodically to rate an employee. B) An activity to identify the developmental need of the employee. C) An activity to keep a check on the performance of employees. D) A system to help employees identify his own strengths and weakness with respect to his job. E) An instrument to control employees behavior through rewards, punishment and threats. F) A system to assist a variety of personnel decisions by generating data about each employee periodically.

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G) A means to improve communication between the superior and subordinate.

1)Square Textile Ltd. This company considers appraisal just a regular

activity to rate an employee and to control the behavior through a carrot and stick approach 2)Beximco Pharmaceuticals Ltd.6) RAK Ceramics: Appraisal in this company is based in the premise that it is an activity carried out periodically to rate an employee coupled with the fact that it is also a system where in employees need to make an introspection to find out their strengths and weakness. Performance appraisal also facilitates in making various personnel decisions like identifying the areas for training 3)Grameen Phone For them appraisal is an periodic activity to identify the development need of the employees and to facilitate communication between the supervisors and subordinates. 4)Banglalink GSM Ltd. They consider appraisal as a regular activity to check on the performance of the employees and to facilitate communication between the supervisors and subordinates. 5) ACI: They see performance appraisal as that of Beximco Pharmaceuticals Ltd but it also includes regular activity to keep a check on the performance of the employees and to facilitate communication between the supervisor and subordinates.

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Objectives of Performance Appraisal Table 2 Company Option A B C D 1 2 3 4 5 6

A) To make decisions regarding salary increase. B) To identify the training and developmental needs of the employees C) To make decisions regarding transfers or promotions. D) To facilitate communication between the superior and his subordinates. 1) Square Textiles Ltd. The aim of their objective is to make decision regarding salary increase, transfers or promotions and facilitate communication between the superior and his subordinates. 2) Beximco Pharmaceuticals Ltd. The appraisal system serves the purpose of to identify the training needs and also to facilitate communication between the superior and his subordinates. It also considers it a process to achieve the overall performance of employees would directly link with the Business Results. 3)Grameen Phone They have appraisal system based on making decisions regarding salary increase (yearly) and identifying training needs (regularly). 4) Banglalink GSM Ltd. Gives equal weight age to the objectives of making decision regarding salary increase (Customer Service Representatives) 5) ACI 6) RAK Ceramics: The objective of performance appraisal in the company is for salary increase, training and development, transfers or

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promotions and facilitate communication between the superior and subordinates.

For which class of employees

Table 3

Company 1 2 3 4 5 6

Class of Employees
Executive and supervisory staff, new employees Management and Non- management Executive, clerical and supervisory staff Executive and Customer Service Representative Executive, clerical, supervisory staff, new employees All white collar jobs

The above table shows the classification of appraisal for different classes of employees. Most of the organizations have different appraisal systems for every class of employees. This is because the factor on which a person is rated differs as per the nature of the job. For example, a manager is rated on factors like the ability to take decisions, ability to delegate work, leadership qualities, communication skills etc. whereas an officer or worker is rated on different parameters like job knowledge, accuracy and neatness of job, reliability, team spirit etc. Most

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of the companies have appraisal system one for the executives level and the other for the middle level and lower level management. Many organizations have a separate appraisal for the new employees who are on probation. This is mainly to make decision regarding confirming them. Almost all the companies have their appraisals half-yearly and/or yearly.

How is appraisal done?

Pie cart 1

F a orm l Inform l a C bina om tion

The above Pie chart 1 shows that a majority of the organizations have a formal method of appraisal. Formal method refers to method where appraisal is carried out in a more systematic manner and after a specific period of time (once a year or twice a year). The main aim here is

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employee evaluation. Informal method of appraisal is followed whenever the appraiser feels the need to communicate something to the appraise. It is a non-formal discussion between the appraiser and the appraise. This can be simply for the reason of acknowledging outstanding performances of the appraise during the daily course. Formal method of appraisal is followed by 57% of the organizations. 43% of the organizations follow a combination of both formal and informal method of appraisal. The reason for this could be: In an informal method, the appraise is likely to be more open and would discuss his problem in a candid way, in a formal method of appraisal, the appraise might come under pressure during the appraisal process. He is also likely to be unsatisfied if only a formal appraisal process appraises him. However it is not feasible to appraise a person only on an informal basis, as this would not show the true position of the employees competency over a period of time. 0% respondents follow only informal appraisal.

Appraisal Methods
Table 4

Company 1 2 3 4 5

Methods of appraisal
Checklist and interview and discussions Rating, Checklist and interview and discussions Rating, critical incidents, MBO, 360o appraisal Rating, force distribution method Critical incident, confidential,

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interview or discussion Rating

Table 4 gives the various methods applied by organization in their appraisal system. By observing this table we can easily note that the Rating method is the most popular method in the organizations. It is also seen that most of the companies have interviews and discussion as part of their appraisal system. This is because form the organizational view point it helps to understand the employee in a better manner and covers up the drawback and mistakes (if any) in the appraisal system. It also helps the organization to communicate its goals, views, feedback, and opinion to the employees. From the employees viewpoint if there are any thing that the employee feels dissatisfying, he can communicate to the appraiser. He can also understand his goals, responsibilities and his current performance.

Bases of appraisal
Table 5 Company 1 2 3 4 5 6 Traits Result Job Behavior Combination

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1)Square Textiles Ltd. 2)Beximco Pharmaceuticals Ltd. 5) ACI 6) RAK Ceramics: An employee of these companies is appraised on 3 parameters i.e., the qualities he possesses, the results he achieves and also his behavior during the course of achieving these results. 3) Grameen Phone: Result combined with the process of achieving those results i.e., job behavior is the foundation of the appraisal system in this company. 4) Banglalink GSM Ltd: Here the emphasis is on the results that are achieved by the employees. From the above table we can infer that nowadays companies are focusing more on overall performance of the employee i.e., Traits, Job Behavior and Results. The Attitude of the employees at the work place plays an important role in the overall development of the organization.

Goal setting a part of appraisal

Table 6 Company 1 2 3 4 5 6 Yes No

This is the most important aspect for any organization as here the goal of the company is communicated to the employees and they understand what is their role or part in achievement of the goals. Here all the companies use performance appraisal to set goal for the employees. This shows the importance appraisal in any company. 1)Square Textiles Ltd.: This company first sets yearly goals and then breaks it down to monthly basis. The head of the department sets the goal. 2) Beximco Pharmaceuticals Ltd. : This company has half yearly goal setting by the top management. 3) Grameen Phone: Here the process of MBO is followed in this company. First the Top management decides the goal of the company then they are broken down for different departments and then to employees.

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4) Banglalink GSM Ltd. Here the managerial staff decides the goals annually and for each employee it is decided monthly 5) ACI: Goal setting is done at the beginning of every financial year. The Head of the Department or immediate supervisor usually does it. 6) RAK Ceramics: This company has yearly goal setting by the immediate supervisor.

Problems in appraisal
Table 7
Company

Administrativ e Problems Tedious task Time consuming Casual approach

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of the Appraiser Implement ation problems Untrained Appraisers Resistance from appraises. Assessmen t problems Bias attitude of the appraiser Difference of opinion between the appraiser and the appraise

The main problem in many companies is the difference of opinion between the appraiser and the appraise. This is solved by interviews and discussion. The second main problem in appraisal is that it is time consuming in nature . A lot of time is taken for the appraisal process, starting form training the appraisers regarding the use of appraisal, followed by target setting for the year, followed by review of performance, then finding out the facilities and the hindering factors, then the discussion and finally make the decision. Lack of training is also a major problem faced by companies like Square Textiles and Grameen phone. Appraisers need to be trained properly for the use of the appraisal system. Very often, companies have appraisal forms, which are supposed to be self-explanatory. However, this could lead to incorrect interpretation, which poses a problem that could go unnoticed. Due untrained appraisers, the objective of the Appraisal system is likely to go haywire.

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There are also other problems like tedious task faced by Beximco pharmaceuticals.

Link with Incentive and Reward:

Table 8
Company 1 2 3 4 5 6 Yes No

Appraisal can be a motivating factor when it is linked with increased pay packets. Financial incentives pay an important role in inducing employees to perform better. That is the reason a majority of organizations has incentives linked with appraisal. Performance related pay allows good performance to receive material recognition for their good performance. The appraisal is likely to be taken more seriously when the employees are directly affected by it.

Attitude of the employees towards performance appraisal

a) Do employees work hard to get a better appraisal

Company 1 2 3 4 5 6

All

Some

Very few

None

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1)Square Textiles Ltd. 2) Beximco Pharmaceuticals Ltd. 4) Banglalink GSM Ltd.5)ACI: All employees from these companies work
towards getting a better appraisal. 3)Grameen Phone 6) RAK Ceramics: Some employees work hard to get better appraisal.

b) Do employees talk freely about their developmental need during the

counseling session

Company 1 2 3 4 5 6

All

Some

Very few

None

1) Square Textiles Ltd. 4) Banglalink GSM Ltd. 6) RAK Ceramics : The respondents felt that almost all of their employees talk freely about their developmental needs. 2) Beximco Pharmaceuticals Ltd. 3) Grameen phone & 5)ACI : Only some employees speak about their developmental need.

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Recommendatio n
Performance appraisal should not be perceived just as a regular activity but its importance should be recognized and communicated down the line to all the employees. There should be a review of job analysis, job design and work environment based on the performance appraisal.
It should bring more clarity to the goal and vision of the organization.

It should provide more empowerment to the employees. New methods of appraisal should be adopted so that both appraiser and the appraise take interest in the appraisal process. The employees who have excellent performance should be used as a mentor for other employees which would motivate others to perform better. will help them to improve on their weak areas.

Employees should be given feedback regarding their appraisal. This

Financial and non-financial incentives should be linked to the annual appraisal system so that employees would be motivated to perform better. New mechanisms should be evolved to educe the time factor involved in the procedure of appraisal. Introducing online-appraisal can do this. The frequency of training program for the appraiser should be increased and these sessions should be made interactive. The awareness sessions for the employees/appraises should be made more interactive and the views and opinion of the appraises regarding appraisal should be given due consideration.

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 Assistance should be sought from specialists for framing a proper appraisal system that suits the organization climate. Constant monitoring of the appraisal system should be done through discussions, suggestions, interactions. Combining the different methods of appraisal can minimize the element of biasness in an appraisal. Like the Rating method combined with assessment center method would give an evidence of poor/unfavorable or outstanding behavior of the appraise, if any.
Use of modern appraisal techniques like 360o appraisal, assessment

centers which are more effective. More transparency should be brought about in the appraisal system. The appraisal system should cover all employees in the organization both white collar and blue-collar jobs. Recognizing the good performers i.e., appraises who have accomplished the targets for the year can help in getting more commitment from the employees. Information regarding the performance of the employees should be kept in proper manner.
Some of the performance appraisals should be conducted by the top

management so that they can understand the employees and their needs, behavior better and to find out the loopholes. Performance appraisal should be effectively link to the performance management system of the organization. Our companies still follow the traditional methods of appraisal that should be transformed into the modern one.

References
www.Scribd.com www.performance-appraisal.com

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