1.

2. 3. 4. 5. 6. 7.

Pls go through the guidelines you have. Read about the topic from book to understand. Arrange all the text as per the guidelines (font. Spacing, all side margins) There are total eight chapters in the guidelines so do it accordingly. Give reference where ever you have given the charts , flow sheets etc No need to take this long theory. Just minimize it. How data is collected

PROJECT REPORT ON PERFORMANCE APPRAISAL FOR

SUBMITTED BY MANJU NAIR UNDER THE GUIDANCE OF PROF. NITESH BHARE SUBMITTED TO UNIVERSITY OF PUNE IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF ( MASTER IN PERSONNEL MANAGEMENT ) (2010-2012 BATCH) THROUGH INSTITUTE OF BUSINESS MANAGEMENT AND RESEARCH Wakad, Pune 411057. Institute of Science, Poonas Institute of Business Management And Research Wakad, Pune 411 057 Set this page as per the guidelines CERTIFICATE
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This is to certify that the project title Performance Appraisal is a genuine and bonafide Work prepared by Mrs. Manju S. Nair a student of institute of science, Poonas institute of Business Management & Research, Wakad, Pune, under my guidance and submitted to University of Pune as a partial fulfillment of Master Degree in Personnel Management To the best of my knowledge, the matter presented in this dissertation has not been submitted earlier.

Place: Wakad, Pune. Date:

ACKNOWLEDGEMENT I am having great pleasure to place this report into the hands of my readers and teachers. I would like to take this privilege, to specially thanks the Personnel Manager Mr. Anant Jadhav, who has given me opportunity to do this project and also for his kind support and valuable guidance which helped me to complete the project. The Success of this project has also been credited towards the kind support and cooperation of assisting staff of Personnel Department. They have devoted their valuable time and effort to answer my queries related to the project and providing the information and data necessary for the informative and efficient completion of the project. I would like to thank my Project Guide Prof. NITESH BEHARE for the encouraging and consistent support throughout the project and helping to foresee the correct path of working out the same.

Date: Place: Pune

Manju S. Nair MPM II Year

DECLARATION

The development of any organization depends upon the periodic development of its employees. Development of employees is directly proportional to the morale of the employee. Morale of the employee can be enhanced by the proper appraisal system in the organization. In my Project I have researched on the various aspects of the performance appraisal system of Trinity. I have got information as primary data from the methods such as personal interview, questionnaires, observation etc. I have got the information from books, records and personnel file of the employees etc as secondary data. I declare all the informations regarding performance appraisal system of Trinity by the primary data as well as secondary data is true to best of my knowledge.

Date: Place: Manju Nair

INDEX Sr. Sub Particulars No Section 1 CHAPTER I 1.1 1.2 1.3 1.4 2 2.1 2.2 3 3.1 3.2 3.3 4 4.1 4.2 5 5.1 Executive Summary Objective of the Study Scope of the Study Company Profile CHAPTER II Theoretical Background Research Methodology CHAPTER - III Data Interpretation and Analysis Observations and Findings Limitations CHAPTER IV Recommendations and Suggestions Conclusion Chapter V Bibliography Page No.

5.2

Annexure

1.1

EXECUTIVE SUMMARY

For growing economy it is vital that the human resources available at hand be utilized in the best possible manner so that such economies can compete effectively with their global counterparts. For this it is absolutely imperative that the quality of the human resources be updated (enhanced) through training, development and motivation of the work force. It is very necessary to evaluate the performance of the human resource. Performance Appraisal is the technique of evaluating the human resource in the organization. Performance Appraisal thus becomes an essential part of the management not only to keep track of the improvement of the work force but also to ensure job satisfaction and motivation of the workforce. So that they can perform to their best of capabilities while at the same time their capability are improved to higher levels for enhanced economic performance. I have chosen this company because I wanted to know that if the morale of the employees there can be improved by proper implementation of the Performance Appraisal System. I have collected my data for Research through Questionnaire, Observation, and direct Personal Interview in different Departments. So for the development of any organization the proper Performance Appraisal System should be implemented there so that the performance of the employees could be evaluated which will be good for the development of employees also.
Add some more details with respect to the topic and company.

1.2 OBJECTIVE OF THE STUDY

Objective of the Project: 1. The primary objective of the project is to gain an in-depth practical exposure in the field of Performance Appraisal system as an important function of Human Resource Management. 2. To study the employees satisfaction with the performance appraisal. 3. To study whether employees are getting any benefit from the Performance Appraisal system.
Reframe the objectives of the projects and add some more objectives

1.2

SCOPE OF THE STUDY Scope of the project :

The scope of performance appraisal system is vast in any organization and Trinity Engineers Pvt. Ltd. is no exception. The performance of the employees matters a lot for any organization to develop and the development of the employees of it. It has a great cover and if it is executed in a proper way then it can be used in many areas such as merit-rating, promotions, transfers, demotions etc. Extend this scope

1.4

COMPANY PROFILE

Introduction to Trinity Engineers Pvt. Ltd. Company Mission. Companies Details. Human Resource Policy. Organization Structure/ HR Department Chart

Introduction to Trinity Engineers Pvt Ltd:

M/S TRINITY ENGINEERS PVT. LTD was established in August 1973 by Mr. A.K. Pasrisha along with its first Board of Directors, with a dream of making it one of the leading companies in forging and today has it is one of the leading Forging Company producing non-ferrous forging products up to 13 Kg. Trinity Engineers Pvt. Ltd., is ranked amongst the top automobile forging companies in India, exemplified High Quality, Quest for perfection and Innovative approach. Over the three decades, it has forged ahead to become a ONE-STOP SOLUTION PROVIDER, from forging machined automotive components to production of subassemblies as required by the automotive industry. The regional officers in the Northern and Southern India are fully geared-up to serve the clientele in their respective zones in Automotive Forgings, for Mining and Earth Moving sectors of Indian industry. Liaison offices in Italy and the UK service the overseas clientele.

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The company has been exporting its products to countries like Germany, USA, England, Canada and Italy. The companies client list includes prestigious, reputed and big banner companies, like, BAJAJ AUTO, TELCO-Pune, M.P.P.F.-Indapur, BAJAJ TEMPO, AXIES Ltd.-Dharwad, Z.F. STEERING, SANDVIK ASIA, SPIECE (I) ..to name a few. M/S Trinity Engineers Pvt. Ltd., has got the Quality certificate of ISO 9002. At the company Quality is the way of all manufacturing process conform to TS16949 Standards to ensure compliance of product Customers specifications. In the near future, the company has plans to diversify into specialized product range to meet the forged parts requirements of the petrochemical and Food processing Industry among others.

Company Mission: Building and Expanding relationship with customers partners & associates to create win-win business opportunities. Speed and Flexibility in the organization. Continuous up gradation of Knowledge & Skill. Creating an environment, which inspires learning and performance. In achieving the above, we shall guide by our core values integrity frugality, Respect, Harmony and one concern for environment and society

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COMPANIES DETAILS: BOARD OF DIRECTORS Mr. A. K. Pasricha, Mr. Asheet Pasricha, Mr. Sanjeev Kanwar, Chairman and Managing Director. Joint Managing Director. Joint Managing Director.

EXECUTIVE COUNCIL Name Mr. R.N.Sensharma Mr. S.K. Rane Mr. M.N. Ugran Mr. Mr. A.S. Jadhav Mr. Toji Mathew Mr. T. Radhakrishnan Mr. P.P. Ghule Dr. Burute Mr. Mr. Gunake Department Production Maintenance Quality Control Product Design Human Resource Marketing Purchase Accounts Medical Material Advance Quality Process Management Control Product Asst. Manager AVP Sr. Manager Finance Consultant Medical Officer Inventory Sr. Manager Position AGM AVP & Head AGM DGM

Mile Stones/ Award

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Milestones: 1973: 1980: Incorporated in Pune with Hammer Forging facilities. Introduced Upset Forging to cater to the requirements of Upset Forged parts. 1984: Commissioned Machining Division that enabled Trinity to offer ready to fit Rear Axle shafts for tractors as well as Heavy Commercial Vehicle Industry requirements. Commenced operations for the manufacturing of Machined Engine gears and Transmission gears for the Automobile industry. 1990: Ventured into Press Forging Technology by adding Forging Presses, Induction Heating and online CAD/CAM facilities to handle Die & Tool Designs and manufacture of forging dies with high level of accuracies. 1994: Augmented machining capacity to address requirements of a wide range of machine components involving Hobbing, Broaching and Induction Hardening processes. 2001: Launched full-fledged production of Finished Gears. Diverse Production Capability.

QUALITY

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AT TRINITY ENGINEERS QUALITY IS A WAY OF LIFE All manufacturing processes conform to TS16949 Standards to ensure compliance of product quality to the customer's specifications. The centralized 'in-house' Standards Room takes care of the calibration needs of all the Measuring Instruments and Testing facilities used in the company. This facility is extended to Machining vendors as well. Quality Assurance at all stages of manufacture is implemented through an experienced team of qualified engineers. A cross functional team (CFT) carefully chosen from the various operational disciplines conducts a thorough scrutiny of customer's requirements and undertakes an exhaustive Contract Review before preparing Process Flow Diagrams (PFD) and evolving Advance Product Quality Plans (APQP). This team also makes Control Plans (CP) and Technical Data Sheets (TDS) for purchase of input materials. Likewise a dedicated team of experienced engineers is formed to address all the problem areas through Threadbare analysis and evolution of effective Corrective and Preventive Action Plans (CPAP). Adopting '8-D' approach to conclusively resolve the issues. Engaging advanced problem solving tools like DOE (Design of Experiments).

QUALITY CERTIFICATE

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INFRASTRUCTURE

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Diverse Production Capability Over the years, we have acquired 'state-of-the-art' technology and created inhouse capabilities to emerge as a ONE-STOP SOLUTION PROVIDER to effectively address diverse requirements of forged parts for supply as Forgings, Machined components as well as sub-assemblies as may be called for by the customers. The facilities are divided in four separate divisions: 1] Drop Forge Division 2] Upset Forge Division 3] Press Forge Division 4] Machining Division We practice 'Kaizen' and 'TPM' as tools for optimum resource utilization and enhanced productivity

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Diverse product profile encompasses a variety of high quality forgings with varying degree of intricacies for applications in the Automotive as well as other Engineering industries.

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PRODUCTS OF COMPANY

18

Also

Include

Important market

financial/statistical etc),

data

(sales, chart,

turnover,

Share

organization

departments, new' projects, awards won etc

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Human Resource Policy: An Organization succeeds ....

Not because of the kind of investments it has Not because of the time it has been into business It Succeeds Because of the People Who Dream About Reaching New

Horizons and Who Strive Hard to Make Those Dreams Come True. Trinity remains totally committed to its employees, who it believes are its life force. We, at Trinity dare to dream about setting new standards and reaching new horizons. To translate our dreams to reality, all the members of the Trinity Family look ahead to the opportunities for the challenging future and use the past only as a staging post on the way forward. We provide a stimulating environment for enquiring minds, restlessly searching for newer and better ways of advancing the organization. Concentrate on the core tasks of the business and justify every activity by the value it adds to the products and services we sell. Functional autonomy helps us in making speedier decisions. These decisions are readily adapted as the Organization is made of individuals whose success translates itself into achievement of organizational goals.

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HR Departmental Chart.

MANAGING DIRECTOR

JT. MANAGING DIRECTOR

SR. MANAGER (HRM)

TIME OFFICE PERSONNEL ASSISTANT

PERSONNEL OFFICER ASSISTANT

PERSONNEL & ADMIN. Sr.OFFICER

CHIEF SECURITY OFFICER

RECEPTIONIST

SECURITY GUARD .

OFFICE BOY

??????

GARDENER

Give reference from where this chart is taken

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THEORETICAL BACKGROUND

Introduction of performance appraisal Features of performance appraisal Objective/purpose of performance appraisal Process of performance appraisal Methods of performance appraisal Traditional methods Modern methods

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Introduction to Performance Appraisal: People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Performance appraisals of the employees are necessary to understand each employees abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance. Performance appraisals are widely used in the society. The history of performance appraisal can be dated back to the 20th century and then to the second world war when the merit rating was used for first time. An employer evaluating their employees is a very old concept. Performance appraisals are an indispensable part of performance measurement. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims. The latest mantra being followed by organizations across the world being - get paid according to what you contribute the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. If the process of performance appraisal is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and

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give direction to the individuals performances with the organizational goals and also review their performance. Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees. It is also the judgment of an employees performance in the job based on considerations other than productivity alone. It is systematic way of evaluating both work related behavior and potential of employees. This process involves determining and communicating to an employee how he or she is performing the job and ideally, establishing a plan of improvement. Except title of the topic no needs to bold anything in the text part

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Features of Performance Appraisal: The main characteristics of performance appraisal may be listed thus: The Appraisal is a systematic process involving three steps: 1. Setting work standards 2. Assessing employees actual performance relative to these standards 3. Offering feedback to the employee so that he can eliminate deficiencies and improve performance in course of time. It tries to find out how well the employee is performing the job and tries to establish a plan for further improvement. The appraisal is carried out periodically, according to a definite plan. It is certainly not a one shot deal. Performance appraisal is not past-oriented activity, with the intention of putting poor performers in a spot. Rather, it is a future oriented activity showing employees where things have gone wrong, how to set everything in order, and deliver results using their potential in a proper way.

Performance appraisal is not job evaluation. Performance appraisal refers to how well someone is doing an assigned job. Job evaluation, on the other hand determines how much a job is worth to the organization and therefore, what range of pay should be assigned to the job.

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 Performance appraisal focus is on employee development. It forces managers to become coaches rather than judges. The appraisal process provides an opportunity to identify issues for discussion, eliminate any potential problems, and set new goals for achieving high performance.

Performance appraisal may be formal or informal. The informal evaluation is more likely to be subjective and influenced by personal factors. Some employees are liked better than other and have, for that reason only, better chances of receiving various kinds of rewards than others. The formal system is likely to be more fair and objective, since it is carried out in a systematic manner, using printed appraisal forms.

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Objectives/Purpose of Performance Appraisal: The objectives and purpose of Performance appraisal are as under: The Performance appraisal is carried out to review the performance of the employee for the given period of time. To judge the gap between the actual and desired performance. To help the management in exercising the organizational control. To diagnosis the training and development needs of the employee for the future. Provide information to assist in decisions regarding promotions, transfers etc. Provide clarity of expectations and responsibilities of the function to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees

Helps to strengthen the relationship and communication between superior subordinates and management employees.

Performance appraisal can serve as a basic for pay rises. Managers need performance appraisal to identify employees who are performing at or above expected levels. This approach to compensation is at the heart of the idea that raises should be given for merit rather than for seniority. Under merit systems, employee receives raises based on performance.

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 Performance appraisal enables the employee to know how well he is doing on the job. It tells him what he can do to improve his present performance and to up the organizational ladder. Performance appraisal can help reveal the causes of good and poor employee performance. Through discussions with individual employees, a line manager can find out why they perform as they do and what steps can be initiated to improve their performance. Performance appraisal motivates the employee to do better in his or her present job by giving the work knowledge of results, recognition of merits and the opportunity to discuss work with his or her manager. According to recent survey the percentage of organizations using performance appraisal for the various purposes are as shown in the diagram below

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Give reference of this data The most significant reasons of using performance appraisals are

Making payroll and compensation decisions 80 % Training and development needs 71% Identifying the gaps in desired and actual performance and its causes 76% Deciding future goals and course of action 42 % Promotion ,demotions, transfers 35 % Other purposes 6 % (Including job analysis and providing superior support ,assistance and counseling)

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Process of Performance Appraisal

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Establishing Performance Standards

Communicating the Standards and Expectations

Measuring the Actual Performance

Comparing With Standards

Discussing Results (Providing Feedback)

Decision Making taking Corrective Actions

Give reference of this flow sheet

Establishing performance standards:

The first step in the process of the performance appraisal is the setting up of standards which will be used as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standard set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.

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 Communicating the Standard and Expectations: Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to them. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feed back from the employees or the evaluators. Measuring the actual performance: The most difficult part of the performance appraisal process is measuring the actual performance of the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that the personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. Comparing the actual with the desired performance: The actual performance is compared with the desired or the actual performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling evaluating and analysis of data related to employees performance.

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 Discussing the result: The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. Decision making: The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfer etc.

Methods of Performance Appraisal : The performance appraisal methods may be classified into two categories as under

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1. Traditional Methods 2. Modern Methods

1.

Traditional Methods : Confidential Method Essay Evaluation Method Critical Incident Technique Method Checklist and Weightage Method Graphic Rating Scale Forced Choice Description Method Ranking Method Paired Comparison Method Forced Distribution Method Field Review Method Group Appraisal Method

2.

Modern Methods : Behaviorally Anchored Rating Scale (B.A.R.S ) Method 360 Degree Feedback System Method Appraisal by Results or Management by Objectives(M.B.O) Method Human Resource Accounting Method Assessment Centers Method

1. Traditional Methods of performance appraisal

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Confidential Report: It is mostly used in government organizations. It is descriptive report prepared, generally at the end of every year, by the employees immediate superior. The report highlights the strengths and weakness of the subordinate are merely recorded there. It does not offer any feedback to the appraisee. The appraisee is not very sure about why his ratings have fallen despite his best efforts, why others are rated high when compared to him, how to rectify his mistakes, if any; on what basis he is going to be evaluated next year, etc. since the report is generally not made public and hence no feedback is available, the subjective analysis of the superior is likely to be hotly contested. In recent years, due to pressure from courts and trade unions, the details of a negative confidential report are given to the appraisee. Essay Appraisal Method: This traditional form of appraisal, also known as Free Form Method involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. Limitations A major drawback of the method is the inseparability of the bias of the evaluator.

Critical Incident Technique Method:

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Under this method, the manager prepares lists of statements of every effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. It include both negative and positive points. The manager maintains logs on such employees, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers performance. The method provides an objective basis for conducting a through discussion of an employees performance. This method avoids recently bias (most recent incident get too much emphasis). Limitations It is difficult to identify critical factors. Negative incidents may be more noticeable than positive incidents. The supervisors have a tendency to unload a series of complaints about incidents during an annual performance review session. It results in very close supervision which may not be liked by the employee. The recording of incidents may be a chore for the manager concerned, who may be too busy or forget to do it. Most frequently, the critical incidents method is applied to evaluate the performance of the superiors. Checklists and Weightage Method: Another simple type of traditional method is the checklist. A checklist represents, in its simplest form, a set of objectives or descriptive statements about the employee and his behavior. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item:: otherwise, he leaves the item blank. A more recent variation of the checklist method is the
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weighted list. Under this, the value of each question may be weighted equally or certain questions may be weighted more heavily than others. A rating score from the checklist helps the manager in evaluation of the performance of the employee. Limitations: It is difficult to construct a good checklist. The rater may be biased in distinguishing the positive and negative questions. He may assign biased weights to the questions. Another limitation could be that this method is expensive and time consuming. Finally, it becomes difficult for the manager to assemble, analyses and weigh a number of statements about the employees characteristics, contributions and behaviors.

Graphic Rating Scale: Under this method, a printed form, is used to evaluate the performance of an employee. A variety of traits may be used in these types of rating devices, the most common being the quantity and quality of work. The rating scales can also be adapted by including traits that the company considers important for effectiveness on the job. From the graphic rating scales, experts can be obtained about the performance standards of employees. For instance, if the employee has serious gaps in technical professional knowledge (knows only rudimentary phases of job); lacks the knowledge to bring about an increase in productivity; is reluctant to make decisions on his own, declines to accept responsibility, fails to plan ahead effectively, wastes and misuses resources, etc. Then it can safely be inferred

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that the standards of performance of the employees are dismal and disappointing. The rating scale is the most common method of evaluation of an employees performance today. One positive point in favour of the rating scale is that it is easy to understand, easy to use and permits a statistical tabulation of scores of employees. When ratings are objective in nature, they can be effectively used as evaluators. For example a trait like job knowledge may be judged on the range of average, above average, outstanding or unsatisfactory. Limitations The graphic rating scale may, be arbitrary and the rating may be subjective. Another pitfall is that each characteristic is equally important in evaluation of the employees performance and so. Forced Choice Description Method: This method was developed to eliminate bias and the preponderance of high ratings that might occur in some organizations. The primary purpose of the forced choice method is to correct the tendency of a rater to give consistently high or low ratings to all the employees. This method makes use of several sets of pair phrases, two of which may be positive and two negative and the rater is asked to indicate which of the four phrases is the most and least descriptive of a particular worker. Actually, the statement items are grounded in such a way that the rater cannot easily judge which statements applies to the most effective employee. The favorable qualities earn a plus credit and unfavorable ones earn the reverse. The workers get an overall plus rating, when the positive factors override the negative once or when one of the negative phrases is checked as being insignificantly rated. The overall objective is increased by using this method in evaluation of employees performance, because the rater does not know how
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high or low he is evaluating the individual as he has no access to the scoring key. Limitations In preparation of sets of phrases trained technicians are needed and as such the method becomes very expensive. Managers may feel frustrated rating the employees in the dark. The result of forced choice method may not be useful for training employees because the rater himself does not know how he is evaluating the worker. In spite of these limitations the forced choice technique is quite popular. Ranking Method : This is relatively easy method of performance evaluation. Under this method, the ranking of an employee in a work group is done against that of another employee. The relative position of each employee is expressed in terms of his numerical rank. It may also be done by ranking a person on his job performance against another member of the competitive group. The quintessence of this method is that employees are ranked according to their relative levels of performance. While using this method, the evaluator is asked to rate employees from highest to lowest on some overall criterion. Through it is relatively easier to rank the best and the worst employees, it is very difficult to rank the average employees. Generally, evaluators pick the top and bottom employees first and then select the next highest and next lowest and move towards the average employees. Limitations It is highly subjective Comparison of various components of a persons performance is not done. People are compared as whole
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It is difficult in large groups when the rater cannot compare several people simultaneously.

Paired Comparison Method: A better technique of comparison than the ranking method, this method compares each employee with all others in the group one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. For instance, when there are five employees to be compared, the As performance is compared with that of Bs and decision is arrived at as to whose is better or worse. Next, B is also compared with all others. Since A is already compared with B, this time B is to be compared with only C, D and E. By this method, when there are five employees, fifteen decisions are made (comparisons). The number of decisions to be made can be determined with the help of formulae n (n-2). Limitations This method is not logical if it is applied when the group is large. For instance if n = 100, comparisons to be made are 100 (100-2) = 100 (98) = 9800. Forced Distribution Method: To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion. The raters bias is sought to be eliminated here because workers are not placed at a higher or lower end of the scale. Normally, the two criteria used here for rating are the job performance and promotional merits. Further, a
40

five point performance scale is used without any mention of descriptive statements. Workers are placed between the two extremes of good and bad performance. For instance, the workers of outstanding merit may be placed at the top 10% of the scale. The rest may be placed as 20% good, 40% outstanding, 20% fair and 10% poor. To be specific, the forced distribution method assumes that all the top grade workers should go to the highest 10% grade, 20% employees should go to the next highest grade and so on. Apart from job performance as the criterion, another equally important factor in this method is promotional merit. Employees may be classified according to the promotional merits. The scale for this purpose may consist of three points namely quite likely promotional material, may/may not be promotional material and quite unlikely promotional material.

Field Review Method: Where subjective performance measures are used, there is scope for raters biases influencing the evaluation process. To avoid this, some employees use the field review method. In this method, a senior member or a trained skilled representative of the human resource department goes into the field and assists line supervisors with their ratings of their respective subordinates. The HR specialist discusses and interviews the supervisors to evaluate and rate their respective subordinates. Based on this information, the expert prepares reports which is sent to the supervisor for review, changes, approval and discussion with the employee who is being rated. The ratings are done on standardized forms.

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Since an expert is handling the appraisal process, in consultation with the supervisors, the ratings are more reliable. This method helps to reduce the superiors personal bias. Limitations A major drawback of this method is that it is a very time consuming method. Because of use of HR experts make this approach costly and impractical for many organizations. Group Appraisal Method : In this method, an employee is appraised by a group of appraisers. This group consists of the immediate supervisor of the employee, other supervisors who have close contact with the employees work, manager or head of the department and consultants. The head of the department or manager may be the chairman of the group and the immediate supervisor may act as the coordinator for the group activities. This group uses any one of multiple techniques discussed earlier. The immediate supervisor enlightens other members about the job characteristics, demands, standards of performance etc. Then The group appraises the performance of the employee, compares the actual performance with standards, finds out the deviations, discusses the reasons therefore, suggests ways for improvement of performance, prepares an action plan, studies the need for change in job analysis and standards and recommends changes, if necessary. This method eliminates personal bias to a large extent.

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Modern Methods Of Performance Appraisal : Behaviorally Anchored Rating Scale (B.A.R.S Method): This is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for eg. the qualities like inter personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents. In this method, an employees actual job behavior is judged against the desired behavior by recording and comparing the behavior with BARS. Developing and practicing BARS requires expert knowledge. 360 Degree Performance Appraisal Method: 360 degree feedback also known as multi rater feedback is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job. 360 degree respondents for an employee can be his/her peers, managers (that is superiors), subordinates, team members, customers , suppliers/vendors anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the on the-job performance of the employee 360 degree appraisal has four integral components: Self appraisal Superiors appraisal Subordinates appraisal

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 Peers appraisal Self Appraisal gives a chance to the employee to look at his/her strengths and weakness, his achievements, and judge his own performance. Superiors appraisal forms the traditional part of the 360 degree performance appraisal where the employees responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superiors ability to delegate the work, leadership qualities etc. also known as internal customers, the correct feedback given by peers can help to find employees abilities to work in a team, co-operation and sensitivity towards others .

Reference of the chart

Self Assessment is an indispensable part of 360 degree appraisals and therefore 360 degree performance appraisals have high employee involvement and also

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have the strongest impact on behavior and performance. It provides a 360 degree review of the employees performance and is considered to be one of the most credible performance appraisal methods. 360 degree performance appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc. Management By Objective (M.B.O Method): The concept of Management by Objectives (MBO) was firs given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

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THE MBO PROCESS

Unique Features and Advantages Of MBO The principle behind Management by Objectives is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. Some of the important features and advantages of MBO are

Clarity of Goals with MBO, came the concept of SMART goals that is goals that are Specific Measurable Achievable
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 Realistic and Time Bound The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of employees. The focus is on future rather on past. Goals and standards are set for the performance for the future and periodic reviews and feedback.

Motivation Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Better communication and coordination - Frequent reviews and interactions between superiors and subordinates help to maintain harmonious relationship within the enterprise and also solve many problems faced during the period.

However, setting clearly measurable goals is not an easy task. MBO demands a great deal of time to set verifiable goals at all levels of an organization. In the race to define everything rigidly, some of the qualitative aspects might be ignored (such as employee attitudes, job satisfaction etc. ) often the superior may set goals at a frustratingly high level, whereas subordinates may wish to have it at a comfortable level. At times, the short term goals may take precedence over long term goal. The only way to overcome these problems is to allow managers at all levels to explain, coordinate and guide the programme in a persuasive, democratic way. The jointly set targets must be fair and attainable. Both the superiors and the subordinates must be taught how to set realistic goals and be familiarized with the results for which they are finally held responsible.

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Human Resource Accounting Method: Human resources are valuable assets for every organization. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added ( in monetary terms). The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of employees should be greater than the cost incurred on them. When qualified, competent people leave the organization , the value of human assets goes down. In this method, employee performance is evaluated in terms of cost and contributions of employees. Assessment Centre Method: This method of appraising was first applied in German Army in 1930. Later business and industrial houses started using this method. This is not a technique of performance appraisal by itself. In fact it is a system or organization where assessment of several individuals is done by various experts using various techniques. The assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics.

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The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centers are also an effective way to determine the training and development needs of the targeted employees. Problems in Performance Appraisal The problems inherent in performance appraisal may be listed thus;

Judgment errors

Poor forms of appraisal forms

Problems in performance appraisal Lack of rater preparedness

Ineffective org. policies

1. Judgment Errors: People commit mistakes while evaluating other people and performance. Biases and judgment errors of various kind may spoil the show. Bias here refers to distortion of a measurement. These are various types.

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First impressions (primary effect):

The appraisers first impression of a candidate may color his evaluation of all subsequent behavior. In the case of negative primary effect, the employee may seem to do nothing right. In the case of positive primacy effect, the employee can do no wrong.

Halo effect:

The halo effect occurs when one aspects of the subordinates performance affects the raters evaluation of other performance dimensions. If a worker has few absences, his supervisor might give the worker a high rating in all other areas of work. Similarly, an employee might be rated high on performance simply because he has a good dress sense and come to office punctually. Horn effect :

The raters bias is in other direction, where one negative quality of the employee is being rated harshly. For example, the rate rarely smiles, so he cannot get along with people.

Leniency:

Depending on raters own mental make up at the time of appraisal raters may be rated very strictly or very leniently. Appraisers generally find evaluating others difficult, especially where negative ratings have to be given. A professor might hesitate to fail a candidate when all other students have cleared the examination. The leniency error can render an appraisal system ineffective. If every one is to be rated high, the system has not done anything to differentiate among employees.

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Central Tendency:

An alternative to the leniency effect is the central tendency, which occurs when appraisers rate all employees as average performers. For example a professor with a view to play it safe might give class grades nearly equal to B, regardless of the differences in individual performance.

Stereotyping:

Stereotyping is a mental picture that an individual holds about a person because of that persons sex, age, religion, caste etc. by generalizing behavior on the basis of such blurred images, the rater grossly overestimates or underestimates a persons performance. For example, employee from rural areas might be rated poorly by raters having a sophisticated urban background, if they view rural background negatively.

Recency Effect:

In the case, the rater gives greater weightage to recent occurrences than earlier performance. For example, an excellent performance that may be six or seven months old is conveniently forgotten while giving a poor rating to an employees performance which is not so good in recent weeks. Alternatively, the appraisal process may suffer due to a spill over effect which takes place when past performance influences present ratings.
2.

Poor Appraisal Forms :

The appraisal process might also be influenced by the following factors relating to the forms that are used by raters The rating scale may be quite vague and unclear. The rating form may ignore important aspects of job performance.
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 The rating form may contain additional, irrelevant performance dimensions. The forms may be too long and complex. Lack of Rater Preparedness :

3.

The raters may not be adequately trained to carry out performance management activities. This becomes a serious limitation when the technical competence of a rate is going to be evaluated by a rater who has limited functional specialization in that area. The raters may not have sufficient time to carry out appraisals systematically and conduct through feedback sessions. Sometimes the raters may not be competent to do the evaluations owing to a poor self image and lack of self confidence. They may also get confused when the objectives of appraisal are somewhat vague and unclear. Ineffective Organizational Policies and Practices :

4.

If the sincere appraisal effort put in by a rater is not suitably rewarded, the motivation to do the job thoroughly finishes off. Sometimes, low ratings given by raters are viewed negatively by management as a sign of failure on the part of rater or as an indication of employee discontent. So, most employees receive satisfactory ratings, despite poor performance. Normally, the raters immediate supervisor must approve the ratings. However, in actual practice, this does not happen. As a result, the rater goes off the hook and causes considerable damage to the rating process.

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Essential Characteristics of an Effective Appraisal System Performance appraisal system should be effective as a number of crucial decisions are made on the basis of score or rating given by the appraiser, which in turn, is heavily based on the appraisal systems. An appraisal system, to be effective, should possess the following essential characteristics.
1.

Reliability and Validity: Appraisal system should provide consistent, reliable and valid information and data, which can be used to defend the organization even in legal challenges. If two appraisers are equally qualified and competent to appraise an employee with the help of same appraisal technique, their ratings should agree with each other. The technique then demonstrably satisfies the conditions of inter rater reliability. Appraisals must also satisfy the condition of validity, by measuring what they are supposed to measure. For example, if appraisal is made for potential of an employee for promotion, it should supply the information and data relating to potentialities of the employee to take up higher responsibilities and carry on activities at higher level. Job Relatedness: The appraisal technique should measure the performance and provide information in job related activities/areas. Standardization: Appraisals forms, procedures, administration to techniques, ratings etc., should be standardized as appraisal decisions affect to all employees of the group. Practical Viability: The techniques should be practically viable to administer, possible to implement and economical to undertake continuously.

2.

3.

4.

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5.

Legal Sanction : Appraisal must meet the laws of the land. They must comply with provisions of various statues relating to labour. Training to appraisers: Because appraisal is important and some times difficult, it would be useful to provide training to appraisers viz., some insights and ideas on rating documenting appraisals and conducting appraisal interviews. Familiarity with rating errors can improve raters performance and this may inject the needed confidence in appraisers to look into performance ratings more objectively. Open communication: Most employees want to know how well they are performing the job. A good appraisal system provides the needed feedback on a continuing basis. The appraisal interviews should permit both parties to learn about the gaps and prepare themselves for future. To this end, managers should clearly explain their performance expectations to their subordinates in advance of the appraisals period. Once this is known it becomes easy for employees to learn about the yardsticks and if possible, try to improve their performance in the future. Employees access to results: employee should know the rules of the game. They should receive adequate feedback on their performance. If performance appraisals are meant for improving employee performance, then withholding appraisal result would not serve any purpose. Employees simply cannot perform better without having access to this information. Permitting employees to review the result of their appraisal allows them to detect any error that may have been made. If they disagree with the evaluation, they can even challenge the same through formal channels.
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6.

7.

8.

9.

Due Process: it follows then the formal procedures should be developed to enable employees who disagree with appraisal results (which are considered to be inaccurate or unfair). They must have the means for pursuing their grievances and having them addressed objectively.

Performance appraisal should be used primarily to develop employees as valuable resources. Only then it would show promising results. When management uses it as a whip or fails to understand its limitations, it fails. The key is not which form or which method is used.

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Existing Performance Appraisal system at The Trinity Engineers Private Ltd.

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RESEARCH METHODOLOGY The very common meaning of research is a search for knowledge. Whatever unknown fact confronts us, we try to find the meaning of and causes of that fact. This feeling of human being is the mother of all knowledge and method, which he employs for obtaining the knowledge of whatever the unknown, called as research. The purpose of research is to discover the answer to the question through the application of scientific procedure. The main aim of research is to find out the truth, which is hidden and has not discovered yet also to get familiarity with a phenomenon or achieve new insight into it. Various definitions of research are as follows According to Clifford Woody the research is defined as the process which includes defining and redefining problems, formulating hypothesis or suggested solutions; collecting organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusion to determine whether they fit the formulating hypothesis. According to D. Slesinger and M. Stepheson research is the manipulation of things, concepts or symbols for the purpose of generalizing to extent, correct or verify knowledge aids in construction of theory or in the practice of art. Objectives of Research To verify and to test the existing facts an theories To improve theories, concepts or tools for study of unknown phenomenon. Data Used 1. 2. Primary data. Secondary data.

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Primary Source of Data: Primary data is basically the data that is obtained directly through source itself. Such data are original in character and generally in large number of survey conducted by researchers. The primary source of data used during this research was: HR department of Trinity The HR team of Trinity helped me into analyzing the functioning of their Appraisal procedure and gave me an opportunity to work with them. The team member of HR department consists of Mr. A.S. Jadhav

Trinity Employee: An interview with the Trinity employee also helped me in knowing about the actual employment procedure conducted while employing them.

Secondary Source of Data: Data that are not originally collected but rather obtained from published or unpublished sources are known as secondary data. The published sources used under my research study were through Trinity magazines and the official website along with the other websites where the general information of the company was published. HR manual: HR manual was another important source from where I could collect the relevant information. HR manual is nothing but general information of the organizations HR department and terms of employment and organization structure of Trinity this was also very helpful in knowing the employment procedure at Trinity.
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SAMPLE SIZE: What is the number of respondents? The sample size of the project extends to the whole of HR Department of Trinity Engineers Pvt. Ltd,. The project includes a comprehensive study and feedback from the employees regarding the procedure conducted during their performance appraisal.

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3.1 DATA ANALYSIS AND INTERPRETATION

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