60775983 vishal performance appraisal copy

PROJECT REPORT ON

“Analyzing Performance Appraisal System”

With Special Reference To

Maharashtra State Electricity Distribution Company

Limited (MSEDCL)

By

Vishal Shivasharan

SUBMITTED IN PARTIAL FULFILLMENT OF THE DEGREE

OF MASTERS OF BUSINESS ADMINISTRATION

UNIVERSITY OF PUNE

THROUGH

Pad. Dr. D. Y. Patil Institute of MCA, MBA

Akurdi, PUNE – 44

2011-2012

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ACKNOWLEDGEMENT

“Vital to every operation is co-operation”. We really agree to this

wonderful quotation put forth by Mr. Frank Tyger. This project was

successful due to the co-operation extended by people who have truly

contributed towards it. We gratefully acknowledge Prof. Sapma Ramani

who’s deep sharing and synergy has moved us many levels beyond our own

thinking. We want to thank the management of various companies who

gave us the permission to conduct research. We would also like to thank all

the employees and HR executives who empowered us with valuable

information. And finally to those whose lives and writings has come the

wisdom of the ages. We have tried to learn from your legacy”.

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ABSTRACT

Appraisal is a continuous process and done annually as a formal exercise

before completion of the financial year. Appraisal has tremendous

motivational impact on people through meaningful feedback and is a

powerful tool for recognition. This project explains performance appraisal

system and tries to find out how efficiently Performance Appraisal is

conducted. And if performance appraisal doesn’t meet its objective then,

what are the factors causing failure.

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Serial No.

Name Of Chapter Page No.

Introduction

Company Profile

Review of Literature

Research Methodology

Data Presentation, Analysis andInterpretation

Conclusion

INTRODUCTION

Understanding performance management

What is Performance?

How is Performance managed?

Need of Performance Appraisal

Statement of Problem

Objective of Study

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INTRODUCTION

In the business world investment is made in machinery, equipment and services. Quite

naturally time and money is spent ensuring that they provide what their suppliers claim. In

other words the performance is constantly appraised against the results expected.

When it comes to one of the most expensive resources companies invest in, namely people,

the job appraising performance against results is often carried out with the same objectivity.

Each individual has a role to play and management has to ensure that the individual’s

objectives translate into overall corporate objectives of the company. Performance

Management includes the performance appraisal process which in turn helps identifying the

training needs and provides a direction for career and succession planning.

1.1 Understanding Performance Management

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PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT

DETERMINE INDIVIDUAL OBJECTIVES LINKED TO CORPORATE GOALS

DETERMINE INDIVIDUAL OBJECTIVES LINKED TO CORPORATE GOALS

PERFORMANCE APPRAISALPERFORMANCE APPRAISAL

ENSURE RESPONSIBILITY AND ACCOUNTABILITY ENSURE RESPONSIBILITY AND ACCOUNTABILITY

PERFORMANCE LINKED INCREMENTS/ INCENTIVES/ REWARDS

PERFORMANCE LINKED INCREMENTS/ INCENTIVES/ REWARDS

CORPORATE GOALSCORPORATE GOALS

1.2 What is Performance?

Performance is synonymous with behaviour; it is what people actually do. Performance

includes those actions that are relevant to the organizational growth and can be measured in

terms of each individual’s proficiency (level of contribution). Effectiveness Performance

refers to the evaluation of results of performance that is beyond the influence or control of the

individual.

1.3 How is Performance managed?

Good performance by the employees creates a culture of excellence, which benefits the

organization in the long run. The activity includes evaluation of jobs and people both,

managing gender bias, career planning, and devising methods of employee satisfaction etc.

the efforts are to make to generate the individual’s aspirations with the objectives of the

organization. Organization has to clear the way of career advancements for talented and

hardworking people. Fear of any kind from the minds of the employees should be removed so

that they give best to their organization. Allow free flow of information. Communication

network should be designed in such a way no one should be allowed to become a hurdle. This

enables the managers to take correct decisions and that too quickly.

1.4 Need of Performance Appraisal?

Today’s working climate demands a great deal of commitment and effort from employees,

who in turn naturally expect a great deal more from their employers. Performance appraisal

is designed to maximize effectiveness by bringing participation to more individual level in

that it provides a forum for consultation about standards of work, potential, aspirations and

concerns. It is an opportunity for employees to have significantly greater influence upon the

quality of their working lives. In these times of emphasis on “quality”, there is a natural

equation: better quality goods and services from employees who enjoy better quality “goods

and services” from their employers.

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Performance appraisal must be seen as an intrinsic part of a manager’s responsibility and not

an unwelcome and time-consuming addition to them. It is about improving performance and

ultimate effectiveness.

Performance appraisal is a systematic means of ensuring that managers and their staff meet

regularly to discuss post and present performance issues and to agree what future is

appropriate on both sides.

This meeting should be based on clear and mutual understanding of the job in question and

the standards and outcomes, which are a part of it. In normal circumstances, employees

should be appraised by their immediate managers on one to one basis. Often the distinction

between performance and appraising is not made. Assessment concerns itself only with the

past and the present. The staff is being appraised when they are encouraged to look ahead to

improve effectiveness, utilize strengths, redress weaknesses and examine how potentials and

aspirations should match up.

It should also be understood that pushing a previously prepared report across and desk

cursorily inviting comments, and expecting it to be neatly signed by the employee is not

appraisal - this is merely a form filling exercise which achieves little in terms of giving staff

any positive guidance and motivation.

THE APPRAISAL OF PERFORMANCE SHOULD BE GEARED TO:

Improving the ability of the jobholder;

Identifying obstacles which are restricting performance

Agreeing a plan of action, that will lead to improved performance.

It is widely accepted that the most important factor in organization effectiveness is the

effectiveness of the individuals who make up the organization. If every individual in the

organization becomes more effective, then the organization itself will become more effective.

The task of reviewing situations and improving individual performance must therefore be a

key task for all managers.

For appraisal to be effective, which means producing results for the company, each manager

has to develop and apply the skills of appraisal

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These are: -

Setting standards on the performance required, which will contribute to the

achievement of specific objectives

Monitoring performance in a cost –effective manner, to ensure that previously agreed

performance standards are actually being achieved on an ongoing basis

Analyzing any differences between the actual performance and the required

performance to establish the real cause of a shortfall rather than assume the fault to be

in the jot holder.

Interviewing having a discussion with the jobholder to verify the true cause of a

shortfall, a developing a plan of action, which will provide the performance, required

Appraisal can then become a way of life, not concerned simply with the regulation of rewards

and the identification of potential, but concerned with improving the performance of the

company. The benefits of appraisal in these terms are immediate and accrue to the appraising

manager, the subordinate manager/employee, and to the company as a whole

1.5 Statement of the Problem

Performance appraisal is a process of assessing, summarizing and developing the work

performance of an employee. In order to be effective and constructive, the performance

manager should make every effort to obtain as much objective information about the

employee's performance as possible. Low performance can push the organization back in

today’s tough competition scenario. The project is aimed at analyzing the performance

appraisal in companies.

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1.6 Objective of the Study

The various objectives of our research are as follows

To examine why an appraisal system is important.

To find the expectation of appraisee

To determine the satisfaction level of the appraisee

To reveal the various loopholes in the appraisal system if any

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COMPANY PROFILE

Company Introduction

Vision/Mission of the Organization

Major Achievements of Organization

Ongoing Projects

Structure of the Organization

HRM Dept in Organization

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2.1 Company Introduction

Maharashtra State Electricity Distribution Company Limited (MSEDCL) came into existence

on June 6, 2005 after unbundling the erstwhile Maharashtra State Electricity Board into four

companies. MSEDCL is also known as Mahavitaran or Mahadiscom. Mahadiscom is one of

the largest public sector company engaged in the business of electricity distribution with

annual turnover of Rs. 21,278 Cores. It serves 156.96 Lakh consumers in Maharashtra State

with a committed pool of over 75000 employees.

2.2 Mission statement

1. We, as professional company, rededicate ourselves to serve all our customers by

extending reliable and quality power supply at reasonable and competitive tariffs so as

to boost agricultural, industrial and overall economic development of Maharashtra.

2. We commit to Honesty, Integrity and Transparency in actions to achieve higher

standards of Consumers Satisfaction.

3. We aim at achieving technological excellence and financial turnaround for the overall

benefit of the customers.

4. We will strive hard for system improvement and stress upon preventive maintenance.

5. We will ruthlessly curb the theft of electricity.

6. We will encourage and support energy saving activities and Demand Side

Management thereby optimizing the use of electricity.

7. We will fulfill our commitment to society by improving quality of life.

2.3 Major Achievements of Organization

Mahavitaran for the first time registered a profit of Rs. 117 crore during the year

2007-08.

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The distribution loss in the system has been reduced by 3.16% in FY 2005-06 and

2.09% in FY 2006-07. It was reduced by whopping 5.41% in FY 07-08. The present

loss level of MSEDCL is 24.09%.

The collection efficiency has improved to the level of 98% in FY 2007-08 from 89%

three years back.

Six dedicated police stations have been established in Maharashtra to handle power

theft cases only.

A special power theft drive was launched from April- 2007. During FY 2007-08

about 90,000 cases of power thefts amounting to Rs. 55.41 Crore have been detected.

This is more than the thefts detected during FY 2006-07. More than 9000 FIRs have

been registered against the power theft accused. Presently this drive is implemented

consecutively for 15 days every alternate month. During April to September 2008 it

resulted in 36383 cases and recovery of Rs. 25 crore as penalties and FIRs against

3559 persons.

A special programme for regularization of unauthorized Ag Load extension (Krishi

Swabhiman Yojana 2007) was launched from 1st September 2007 to October 31,

2007. More than 3 Lakh HP load was regularized & Rs. 26.46 Crore collected. The

scheme contributed to increase in connected load, reduction in distribution losses and

increase in revenue.

Bhiwandi Circle with 44 % distribution losses and 68 % collection efficiency has

been franchised out to M/S Torrent Power on 26.01.2007 for ten years. The

experiment has been quite encouraging. It has reduced losses to 22.77%, improved

collection efficiency to 77.00% & earned Rs.4.27 Crorer profit per month for

Mahadiscom.

USAID/MOP, GOI aided Distribution, Reforms, Upgrade and Management (DRUM)

project work at Aurangabad Urban I Division (Rs. 161 Crores) has been started where

best practices in distribution will be introduced to showcase.

For customer satisfaction 24X7 hour operating 15 Call Centers have been

commissioned for redressing “no power” complaints of consumers.

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50 Customer Facilitation Centers have been commissioned at sub-division level for

redressing billing complaints of customers. The basic idea is to introduce single

window clearance for customers at sub-division level.

Infrastructure distribution planning reports (DPRs) for 119 divisions are in-

principally approved by MERC. The cost of these DPRs is Rs.8918/- Crore out of

which financial tie up for 97 projects of Rs. 7192/- crore has been made available.

The work is in progress.

For load management, Single Phasing Scheme has already been completed due to

which 12011 villages in the state have been benefited . These villages get 10 hours of

single phase and 7 hours of 3 phase supply.

Gaothan Feeder Separation Scheme for 16231 villages has been planned and is under

implementation. The work of separate agriculture feeder for 4300 villages have been

completed at the end of September 2008. Balance work is in progress and will be

completed by March 2009. In this scheme separate 11/22 KV feeders are being laid

for Gaothan for assuring evening time supply for lighting in villages. The work is

carried out on turnkey basis.

MSEDCL has called for long term power purchase bids for 2000 MW under case I,

stage I, under which 1320 MW from M/s Adani’s Project at Gondia (Maharashtra )

and 680 MW from M/S Lanco’s Chattisgarh project will be made available from

2012 onwards. In addition, a competitive bidding process for 2000 MW under stage

II of case I and 1600 MW under case II as per Central Govt. directives is under

progress. Recently a PPA for 250 MW from NTPC’s Vindhyachal stage IV has also

been signed.

All time payment machines for bill payment (24X7 hours) have been installed in

major metros.

A novel scheme of photo meter reading of all domestic & commercial consumers has

been introduced. 1,01,41,575 consumers have been covered as on September-08.

AMR for over 8500 substation feeders has been planned on BOOT basis.

To reduce AT&C loss, APDRP Scheme has been introduced for 30 cities where work

is in progress.

Work in progress for Distribution SCADA for 12 cities.

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Project reports at the estimated cost of Rs. 716/- Corer have been submitted to REC

for Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) covering 5554 villages in 34

districts. The main aim of the scheme is to provide supply to BPL families. Scheme

for 4 districts is sanctioned by REC/GOI, where work is in progress

There are in all 256,793 Distribution Transformer Centers (DTCs) in operation. In a

project estimated to cost Rs. 82 crore, 134,591 DTCs have already been metered and

another 15000 DTCs will be metered during 2008-09. It has been decided to read all

these DTC meters by the Photo Meter Reading method. This will complete the

exercise of energy accounting at distribution transformer level.

Consumer indexing for 13 million customers is completed.

In order to provide better consumer services outsourcing of meter reading, billing and

collection for energy bill has been introduced.

Independent 11 Zonal Consumer Grievance Redressal Forums established for

redressing consumer complaints.

Energy bills of all metered consumers are available on website along with previous 12

months consumption data.

Employees are being deputed for All India level training programs (over 2000

engineers deputed under DRUM Training Programme).

Aurangabad DRUM training center for Technicians has been recognized by USAID

for linemen level (technicians) training (all India) center.

Centralized MIS system is being setup from subdivision to corporate office level for

better information flow.

Revenue collection has gone up from Rs. 1100 to Rs. 1800 Crores per month.

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2.4 Ongoing Projects

Gaothan Feeder Separation Scheme

1)To provide un-

interrupted power supply particularly to Rural/Semi urban consumers and thereby reducing the feeling of discrimination and discontent compared to urban consumers.2) Flattening of load curve in a judicial way.Therefore reducing the cost on Power purchase and reducing the penalty for unscheduled interchanges.

3) Better energy accounting for Ag consumption. 4) Reduction of T&D losses. 5) System strengthening by improving the infrastructure.

Gaothan Feeder Separation Scheme Phase-I

Program : No. of feeders - 1504 Nos 11KV Line . - 23011 Kms Total DTC’s - 9785 Nos No. of villages covered - 7437 Nos Load Management - 1976 MW

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Programme of Commissioning : March 2009.

Based at District : Nanded, Beed, Osmanabad, Latur, Nasik, Dhule, Jalgaon, Ahmednagar, Solapur, Kolhapur, Satara, Sangli, Pune, Aurangabad, Jalna, Parbhani, Amravati, Akola, Yavatmal,

Buldhana.

Estimated Cost : Rs.943 Crores

Finance : Loan Sanctioned from REC for Rs 714.55 Crores.

Progress as on 30th April 2009: No. of Feeder commissioned:1318 Nos 11KV line Charged: 19457 Kms DTCs Commissioned: 7238 Nos No. of villages benefited: 5185 Nos Load Management: 1592 MW

Gaothan Feeder Separation Scheme Phase II. To provide un-interrupted power

supply particularly to Rural / Semi urban consumers and thereby reducing the feeling of discrimination and discontent compared to urban consumers.

2) Flattening of load curve in a judicial way. Therefore reducing the cost on Power purchase and reducing the penalty for unscheduled interchanges.

3) Better energy accounting for Ag consumption. 4) Reduction of T&D losses. 5) System strengthening by improving the infrastructure.

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Program : No. of feeders - 1067 Nos 11KV Line - 27063 Kms Total DTC’s -13722 Nos No. of villages covered - 8491 Nos No. of wadies covered - 2020 Nos Load Management - 1646 MW

Programme of Commissioning : June - 2009.

Based at District : Nasik, Dhule, Jalgaon, Ahmednagar, Wardha, Bhandara, Chandrapur, Gadchiroli, Gondia, Nagpur, Solapur, Kolhapur, Satara, Sangli,, Pune Rural, Aurangabad, Jalna & Parbhani, Amravati, Akola, Buldhana, Yavatmal

Estimated Cost : Rs. 1446.07 Crores

Finance : Loan sanctioned from REC for Rs 1301.48 Crores.

Progress as on 30th April 2009: No. of Feeder commissioned:165 Nos 11KV line Charged: 1857 Kms DTCs Commissioned: 732 Nos No. of villages benefited: 545 Nos Load Management: 119 MW

2.5 HRM Dept in Organization

In Maharashtra State Electricity Distribution Company the Human Resource Department role

are vital and various rules and regulation were adopted out of them there are following three

important service regulation will be applicable in HR Dept.

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1) MSEDCL Employees Service Regulations 2005.

2) Classification and Recruitment Regulations 2005.

3) MSEDCL Employees Seniority Regulations 2005.

1) MSEDCL Employees Service Regulations 2005.

In exercise of the power conferred by Government of Maharashtra Vide Notification No.

1005/CR/9061(2)/Energy -5 dt.04.06.05 Rule No.6 (9), (10) & Reform – 1005/CR-

9061(4)/Energy -5 at. 28.06.5 Rule 1(3) under section 131,133 and 134 of the

Electricity Act,2003 (36 of 2003) Maharashtra State Electricity Distribution Company

Ltd. adopts the erstwhile MSEB Employees’ Service Regulations 1963, mutatis

mutandis as follows:-

* These Regulations called “The Maharashtra State Electricity Distribution Company Ltd.

Employees’ Service Regulations, 2005 shall replace the Maharashtra State Electricity Board

Employee’s Service Regulations 1963 by which the employees of the Maharashtra State

Electricity Distribution Company Ltd. (hereafter referred to in these Regulations as

“Company”) were hitherto governed .These Regulations came into effect from 06.06.2005 in

the Maharashtra state.

The above Regulation following chapters are there.

CHAPTER - I : GENERAL

CHAPTER - II : Definitions and interpretations.

CHAPTER - III :- General Conditions of Service.

CHAPTER - IV :- PAY ( Drawing of salary etc.)

CHAPTER - V :- LEAVE.

CHAPTER - VI :- TRAVELLLING ALLOWENCES.

CHAPTER - VII :- CONDUCT, DESCIPLONE AND PAAEAL

REGULATIONS.

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CHAPTER - VIII :- Regulation relating to work -charged staff & casual

workers.

CHAPTER- IX :- MISCELLANEOUS.

2) Classification and Recruitment Regulations 2005.


1005/CR/9061(2)/Energy -5 dt.04.06.05 Rule No.6 (9), (10) & Reform –

1005/CR-9061(4)/Engergy -5 dt. 28.06.5 Rule 1(3) under section 131,133 and 134 of the

Electricity Act,2003 (36 of 2003) Mahrashtra State Electricity Distribution Company Ltd.

adopts the erstwhile MSEB Classicificaion & Recruitment Regulations 1961,to regulate

classification and recruitment ot posts in various categories in its service.

In above regulation the following schedule are there.

A - I : Technical (Dist) cadre.

A – 2 : Non Tech. Cadre.

1) General Administration Department (HR)

2) Account & Finance .

3) Legal Department.

4) Industrial Relations.

A- 3 : Information Technology.

A- 4 : Store Cadre.

A- 5 : Security & Vigilance Cadre.

A- 6 : Public Relations Cadre.

A – 7 : Selection Posts and Non-Selection Posts.

3) MSEDCL Employees Seniority Regulations 2005.


1005/CR/9061(2)/Energy -5 dt.04.06.05 Rule No.6 (9), (10) & Reform –

1005/CR-9061(4)/Energy -5 dt. 28.06.5 Rule 1(3) under section 131,133 and 134 of the

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Electricity Act,2003 (36 of 2003) Mahrashtra State Electricity Distribution Company Ltd.

adopts the erstwhile MSEB Employees’ Seniority Regulations 1961, to regulate the seniority

of the employees in its service .

Seniority shall be based on the length of continuous service in the particular category.

For the purposes of fixing seniority, length of shall be counted from the date of the order of

appointment or of promotion and not the date of joining the post.

2.6 Structure of Organization

The organization structure of MSEDCL is very wide through Maharashtra and

deeply rooted so as to serve the clients and to fulfill the set targets by the management. If

we go through the organizational chart of MSEDCL, we can understand the structure,

components and way of administration. For the benefit of study, one has to see the

organizational chart with meticulous thinking.

2.7 Man power

Pay Group Tech

Section

GAD

( HR)Section

Account

Section

Informaion

Technology

Section

Vigilance

Department

Pay GR-I 21 01 02 02 0

Pay GR-II 173 05 09 05 01

Pay GR-III 164 51 165 0 03

Pay GR-IV 923 48 01 01 0

Total 1281 105 177 08 04

Operators Dy.Operators Assistant Operator Junior Operator

Pay Gr- III 35 67 95

APPRENTICS 50

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M.S.E.D.C.L ORGANISATION STRUCTURE

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M.D.

EX.DIR (PROJECT)

EX.DIR (FINANCE)

EX.DIR (HR) EX.DIR (COMM)

AURANGABAD

BHANDOOP

KOLHAPUR LATUR

CGM (P)

GENERAL MANAGER (P)

NANDED BARAMATI

SUPRITENDING ENGINEER CIRCLE OFFICE SOLAPUR

ASSITANT MANAGER (P)

MANAGER (P)

EX.DIR (OPERATION)

CHIEF ENGINEER

AMRAVATI

KOKAN

NAGPUR NASHIK PUNE

KALYAN

REVIEW OF LITERATURE

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Introduction:

Appraising the performance of individuals, groups and organisations is a common

practice of all societies. While in some instance these appraisal processes are structures and

formally sanctioned, in other instances they are an informal and integral part of daily

activities. Thus, teachers evaluate the behavior of their children, and all of us, consciously or

unconsciously evaluate our own actions from time to time. In social interactions, performance

is conducted in a systematic and planned manner to achieve widespread popularity in recent

years.

Meaning:

Performance appraisal is a method of evaluating the behavior of employees in the

work spot, normally including both the quantitative aspects of job performance.1

Performance here refers to the degree of accomplishment of the tasks that make up an

individual’s job. It indicates how well an individual is fulfilling the job demands. Often the

term is confused with effort, but performance is always measured in terms of results and not

efforts. A student, for example, may exert a great deal of effort while preparing for the

examination but may manage to get a poor grade. In this case the effort expended is high but

performance is low. In order to find out whether an employee is worthy of continued

employment or not, and if so, whether he should receive a bonus, a pay rise or promotion, his

performance needs to be evaluated from time to time.2 When properly conducted

performance appraisal not only let the employee know how well he is performing but should

also influence the employee’s future level of effort, activities, results and task direction.3

Under performance appraisal we evaluate not only the performance of a worker but also his

potentials for development. For some of the important features of performance appraisal may

be captured thus.

Need for Performance Appraisal

Performance appraisal is need in order to:

1) Provide information about the performance ranks basing on which decision regarding salary

fixation, confirmation, promotion, transfer and demotion are taken.

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2) Provide feedback information about the level of achievement and behavior of subordinate.

This information helps to review the performance of the subordinate, rectifying performance

deficiencies and to set new standards of work, if necessary.

3) Provide information which helps to counsel the subordinate.

4) Provide information to diagnose deficiency in employee regarding skill, knowledge,

determine training and developmental needs and to prescribe the means for employee growth

provides information for correcting placement.

5) To prevent grievances and in disciplinary activities.

Purpose

Performance appraisal aims to attaining the different purposes. They are:-

1) To create and maintain a satisfactory level of performance.

2) To contribute to the employee growth and development through training, self and

management development programmers.

3) To help the superiors to have a proper understanding about their subordinates.

4) To guide the job changes with the help to continuous ranking.

5) To facilitate fair and equitable compensation based on performance.

6) To facilitate for testing and validating selection tests, interview techniques through

comparing their scores with performance appraisal ranks.

7) To provide information for making decisions regarding lay off, retrenchment etc.

8) To ensure organizational effectiveness through correcting employee for standard and

improved performance, and suggesting the change in employee behavior.

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Content of Performance Appraisal:

Every organization has to decide upon the content to be appraised before the

programmed is approved. Generally content to be appraised is determined on the basis of job

analysis. Content to be appraised may be in the form of contribution to organizational

objectives (measure) like production, cost saving, return on capital, etc. other measures are

based on:

1) Behavior which measure observable physical actions, movements.

2) Objectives which measure job related results like amount of deposits mobilized.

3) Traits which are measured in terms of personal characteristics observable in employee’s job

activities. Content to be appraised may vary with the purpose of appraisal and type and level

of employees.

Who Will Appraise?

360 °Performance Appraisal

The appraiser may be any person who has through knowledge about the job content,

contents to be appraised, standards of contents, and who observes the employee while

performing a job. The appraiser should be capable of determining what is more important and

what is relatively less important. He should prepare reports and make judgments without bias.

Typical appraisers are: supervisors, peers, subordinates, employees themselves, users of

service and consultants. Performance appraisal by all these parties is called “360 Performance

appraisals.”

Supervisors:

Supervisors include superiors of the employee, other superiors having knowledge

about the work of the employee and department head or a manager. General practice is that

immediate superiors appraise the performance which in turn is reviewed by the departmental

head/manager. This because supervisors are responsible for managing their subordinates and

they have the opportunity to observe, direct and control the subordinate continuously.

Moreover, they are accountable for the successful performance of their subordinates.

Sometimes other supervisors, who have close contact with employee work also appraise with

a view to provide additional information.

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On the negative side, immediate supervisors , any emphasis certain aspects of

employee performance to the neglect of others. Also, managers, have been known to

manipulate evaluations to justify their decisions on pay increases and promotions. However,

the immediate supervisors will continue to evaluate employee performance till a better

alternatives is available. Organizations, no doubt, will seek alternatives because of the

weaknesses mentioned above and a desire to broaden the perspective of the appraisal.

Peers:

Peers appraisal may be reliable if the work group is stable over a reasonably long

period of time and performs tasks that require interaction. However, little research has been

conducted to determine how peers establish standards for evaluating others or the overall

effect of peer appraisal on the group’s attitude. Whatever research was done on is topic was

mostly done on military personnel at the management level( officers or officers candidates )

rather that on employees in business organizations . more often than not in business

organizations if employees were to be evaluated by their peers, the whole exercise may

degenerate into a popularity contest, paving the way for the improvement of work

relationship.

Subordinates:

The concept of having supervisors rated by subordinates is being used in most

organizations today, especially in developed countries. Such a novel method can be useful in

other organizationally settings too provided the relationships between superiors and

subordinates are cordial. Subordinates’ rating in such cases can be quite useful in identifying

competent superiors . the rating of leaders by combat soldiers is an example. However, the

fear of reprisal often compels a subordinate to be dishonest in his ratings. Though useful in

universities and research institutions, this approach may not gain acceptance in traditional

organizations where subordinates practically do not enjoy much discretion.

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Self Appraisal:

If individuals understand the objectives they are expected to achieve and the standards

by which they are to be evaluated, they are to a great extent in the best position to appraise

their own performance. Also, since employee development means self development,

employees who appraise their own performance may become highly motivated.

Performance Evaluation To Performance Analysis And Development:

Performance appraisal was formerly used for the purpose of evaluating the employee

performance and controlling the performance against the set standards. This technique was

used to control the employee ignoring the human aspect. But, with the emergence of human

resource concept, organisations are using this technique to analyses employee performance

and to further improve or develop it. Thus, this technique is now used as an enabling and

motivating to improve the performance.

The performance analysis and development helps the oraganisation to meet the

following challenges.

Create a culture of excellence that inspires every employee.

Match organisational objectives to individual aspirations.

Equip people with the skills necessary to perform their duties.

Clear growth paths for specially talented individuals.

Provide new challenges to rejuvenate plateauing careers.

Forge partnerships with people for managing their careers.

Empowers employees to take decisions without fear of failing.

Embed teamwork in all operational processes.

Allow the voices of workers closet to the customer to be heard.

Debureaucratise the structure for free flows of information.

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System of Performance Appraisal:

Performance appraisal is a seven-stege process.

At the first stage, performance standards are established based on job description and job

specification. The standards should be clear, objectives and incorporate all the factors.

The second stage is to inform this standard to all the employee including apprises.

The third stage is following the instruction given for appraisal measurement of employee

performance by the appraises through observation, interview, records and reports.

Fourth stage is finding out the influence of various internal and external factors on actual

performance. The influence of these factors may be either inducing or hindering the

employee performance. The measured performance may be adjusted according to the

influence of external and internal factors. The performance derived at this stage may be taken

a actual performance.

Fifth stage is comparing the actual performance with that of other employees and previous

performance of the employee and others. This gives an idea where the employee stands. If

performance of all the employees is ranked either too high or too low, there may be

something wrong with the standards and job analysis.

Sixth stage is comparing the actual performance with the standards and finding out

deviations. Deviations may be positive or negative. If employee’s performance is more than

the standards, it is positive deviation and vice versa is negative deviation.

Seventh stage is communicating, the actual performance of the employee and other employee

doing the same job and discuss with him about the reasons for positive or negative deviations

from the pre-set standards as the case may be.

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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 system. Appraisal system, to be effective, should possess the following essential

characteristics:

1. Reliability and Validity: Appraisal system should provide consists, reliable and valid

information and data, which can be used to defend the organization-even in legal challenges.

If two appraisers are equally qualifies and competent to appraise an employee with the help

of same appraisal technique satisfies the conditions of inter-rater reliability. Appraisals must

also satisfy the condition of validly be measuring what they are supposed to measure. For

example, if appraisal is made for potentials 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.

2. Job Relatedness: The appraisal techniques should measure the performance and provide

information in job related activities/areas.

3. Standardization: Appraisal forms, procedures, administration of techniques, rating etc.

should be standardized as appraisal decisions affect all employees of the group.

4. Practical Viability: The techniques should be practically viable to administer, possible to

implement and economical regarding cost aspect.

5. Legal sanction: It should have compliance with the legal provisions concerned of the

country.

6. Training and Appraisers: Because appraisal is important and something difficult, it

would be useful to provide training to appraises viz., some insights and ideas on rating,

documenting appraisals, and conducting appraisal interview. Familiarity with rating errors

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can improve rater errors can improves rater performance and this may inject the needed

confidence in appraisers to look into performance ratings more objectively.

7. Open Communications: Moist employees want to know how well they are performing

on 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 further. 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 future.

8. Employee Assess to Results: Employees should know the rules of the game. They

should receive adequate feedback on their performance. If performance appraisals are meant

for improving employee’s performance, then withholding appraisal results would not serve

any purpose. Employees simply could not perform better without having access to this

information. Permitting employees to review the results of their appraisal allows them to

detect any errors that may have been made. If they degrees with the evaluation, they can even

challenges the same through formal channels.

9. Due Process: It follows then that 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

resource. 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 from or which method is used.

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Use of Performance Appraisal:

1. The use of performance appraisal is that it enables the management to make effective

decision and/or correct or modify their earlier decisions relating to the following issues of

HRM.

a) Organizational planning based on potentialities of its human resources.

b) Human Resource Planning based on weakness, strengths and potentialities of human

resources.

c) Organizational effectiveness through performance improvement.

d) Fixation and refixation of salary, allowances, incentives and benefits.

e) Original placement or placement adjustment decisions.

f) Identifying training and development needs and toi evaluate effectiveness of training

and development programmers.

g) Career planning and development and movement of employees.

2. The another use of performance appraisal is that it helps to evaluate the existing plans,

information system, job analysis, internal and external environmental factors influencing

employee performance like relations with supervisors, working conditions, personal

problems of the worker like family, financial and health. This evaluation suggests and

results in improvement in plans, information system, job analysis, creating the conductive

work environment and controlling the controllable environmental variables.

3. It helps the employee to improve his performance and for his self-development.

4. Further it improves superior-subordinates relations through close interaction and proper

understanding.

5. Performance Improvement: Performance feedback allows the employee, manager, and

personnel specialists to intervene with appropriate actions to improve performance.

6. Compensation Adjustments

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7. Performs Evaluations help decisions makers determine who should receive pay raises. Many

firms grant part or all of their pay increases and bonuses based upon merit, which is

determined mostly through performance appraisals.

8. Placement decisions: Promotions, transfers, and demotions are usually based on past or

anticipated performance. Often promotions are a reward for past performance.

9. Training and Development Needs: Poor performance may indicate the need for retraining.

Likewise , good performance may indicate untapped potential that should be developed

10. Career Planning and Development: Performance feedback guides career decisions about

specific career paths one should investigate.

11. Staffing Process Deficiencies: Good or bad performance implies strengths or weakness in

the personnel department’s staffing procedures.

12. Informational Inaccuracies: Poor performance may indicate errors in job analysis

information, human resources plans, or other parts of the personnel management information

system. Reliance or inaccurate information may have led to inappropriate hiring, training, or

counseling decisions.

13. Job Design Errors: Poor performance may be symptoms of ill-conceived job designs.

Appraisals help diagnose these errors.

14. Equal Employment Opportunity: Accurate performance appraisals that actually measure job-

related performance ensure that internal placement decisions are not discriminatory.

15. External Challenges” Sometimes performance is influenced by factors outside the work

environment, such as family, financial, health, or other personal matters. If uncovered

through appraisals, the human resource department may be able to provide assistance.

16. Feedback to Human Resources: Good/Bad performance throughout the organization

indicates how well the human resource function is performing.

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Problems of Performance Appraisal:

The major problem in performance appraisal is-

1. Rating Biases:

The problem with subjective measures (is that rating which is not verifiable by others)

has the opportunity for bias. The rater biases include hale effect, the error of central tendency,

the leniency and stretchiness biases, personal prejudice, and the regency effect.

a) Halo Effect: It is the tendency of the raters to defend excessively on the rating of one trait or

behavioral consideration in rating all other or behavioral considerations. One way of

minimizing the halo effect is appraising all the job and person he is rating or least interest in

his job.

b) The Leniency and Strictness: The leniency bias crops when some raters have a tendency to be

liberal in their rating by assigning higher rates consistently. Such ratings do not serve any

purpose. Equally damaging one is assigning consistently low rates.

c) Personal Prejudice: If the rater dislikes any employee or any group, he may rate them at the

lower end, which may distort the rating purpose and affect the career of these employees.

d) The Regency Effect: The raters generally remembers the recent actions of the employees at

the time of rating and rate on the basis of these recent action- favorable or unfavorable –

rather than on the whole activities.

2) Failure of the superiors in conducting performance appraisal and post performance appraisal

interviews.

3) Most part of the appraisal is based on subjectivity.

4) Less reliability and validly of the performance appraisal techniques.

5) Negative rating effect interpersonal relations and industrial relations systems.

6) Influence of external environment factors and uncontrollable internal factors.

7) Feedback and post appraisal interview \may have a setback on production.

8) Management emphasis open punishment rather than development of an employee in

performance appraisal.

9) Some rating particularly about the potential appraisal is purely based on guess work.

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The other problems of performance appraisal reported by various studies are:

Relationships between appraisal rates and performance after promotions were not

significant.

Some superiors completed appraisal reports within a few minutes.

Absence of inter-rater reliability.

The situation was unpleasant in feedback interview.

Superiors lack that tact of offering the suggestions constructively to subordinates.

Supervisors were often confused due to too many objectives of performance appraisal.

However, some of these problems of performance appraisal can be averted by

appraising performance through computers.

Advantages of Performances Appraisal through Computers:

1) There will be an objective analysis of traits of both the superior and sub-ordinate.

2) There will be chance to subordinate to express his views even after performance appraisal.

3) An employee shall express his emotional needs and his value systems which is considered

taboo till today.

4) It overcomes the communication barrier.

5) It will remove the inherent weakness of the appraisal system i.e., subjective assessment of

vague and abstract performance targets, unclear guidelines for appraisal etc,

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RESEARCH METHODOLOGY

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Research Methodology :

Research methodology refers to the scientific procedure for the acquisition of

knowledge based on the empirical observations and logical reasoning scientific method

consist of systematic observation, classifications and interpretation of data. Research

methodology consists of procedure for obtaining the knowledge on imperial observation and

logical reasoning.

Method of research –

1. Case study method

2. Survey method.

3. Other method.

A case study refers to the studying a phenomenon through an intensive study of the

case. The survey research method is a technique of investigation by direct observation of the

phenomenon or by systematic gathering of data from population.

Other methods may include historical and experimental method. Following are the necessary

steps involved in research.

1. Statement of problem.

2. Setting up objectives.

3. Review of literature.

4. Formulation of hypothesis.

5. Preparation of research design.

6. Determining sample design.

7. Data collection.

8. Analysis and interpretation of data.

9. Report writing

Sampling design :-

It deals with the method of sampling and the size of sample. There are different

methods used for sampling like random sampling, judgment sampling, stratified random

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sampling, systematic sampling, and convenience sampling etc. For this project work is the

Random sampling method is used.

Sample size :-

This means number of respondents considering for collecting data. Size of sample

should not be too small which will be insufficient as well it should not be too large which

may create complication. The size of sample decided for these 50 unit respondents.

Data collection :-

The collection of data means a purposive gathering of the information .Relevant to the

subject for the units of population.

There are two types of data -

1] Primary data:-

If the researchers collect the data originally from the investigation, the data is called

as primary data. Primary data can be collected with the help of interview, questionnaire and

observation. In this questionnaire is used to collect the primary data.

2] Secondary data:-

If the researcher do not collect the data originally but uses data collected by others,

already published then its called secondary data. Secondary data is collect from the different

sources like books, journals, magazines, Confidential Reports (CR), websites etc. In this

project websites are the used for collecting secondary data.

Methods of data collection :-

Following are the methods for collecting primary data -

1] Interview method.

2] Questionnaire method.

For this study Questionnaire, method is used.

Questionnaire was framed to collect data, which is attached in annexure.

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DATA ANALYSIS AND

INTERPRETATION

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Table no. 1

Performance appraisal system helps employee for their future planning

Particular No of Employees In percentage

Helpful 38 76 %

Not Helpful 5 10 %

Cant Say 7 14 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 76% employee think that appraisal system is helpful for them.

While 10% employee say that appraisal system is not helpful for them. And 14% employee

are not sure that whether appraisal system is helpful for them or not.

Table no. 2

Satisfaction of employees with performance appraisal system


Satisfied 41 82 %

Unsatisfied 5 10 %

Can’t say 4 8 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 82% employee think that they are satisfied with appraisal

system. While 10% employee say that they are not satisfied with appraisal system. And 8%

employee are not sure that whether they are happy with appraisal system or not.

Table no. 3

Awareness about performance rating


Yes 46 92 %

No 4 8 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 92% employee are aware about performance rating system.

While 8% employee are not aware about performance rating system

Table No. 4

Credibility of appraiser’s affect the performance appraisal system


Yes 43 86 %

No 7 14 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 86% employee think that credibility of appraiser’s affect the

performance appraisal system. While 14% employee say that credibility of appraiser’s not

affect the performance appraisal system.

Table No. 5

Standards followed for performance appraisal system


Yes 45 90 %

No 5 10 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 90% employee think that standards are followed for

performance appraisal system. While 10% employee think that standards are not followed for

performance appraisal system

Table No. 6

Clear view of objectives to the employees


Yes 41 82 %

No 9 18 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 82% employee think that they have clear view of objectives.

While 18% employee think that they have not clear view of objectives.

Table No. 7

Good communication between top-management plans & business goals to the staff below due

to appraisal system


Yes 34 68 %

No 16 32 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 68% employee think that there is a good communication

between top-management plans & business goals to the staff below due to appraisal system.

While 32% employee think that there Is no good communication between top-management

plans & business goals to the staff below due to appraisal system.

Table No. 8

Comments and suggestion by employee to be taken into consideration during appraisal


Yes 48 96 %

No 2 4 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 96% employee think that comments and suggestion by them to

be taken into consideration during appraisal. While 4% employee think that comments and

suggestion by them not to be taken into consideration during appraisal.

Table No. 9

Post appraisal interview of employee conducted


Yes 0 0 %

No 50 100 %

Total 50 100 %

Interpretation:-

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From pie chart it is clearly understand that post appraisal interview of employees not

conducted.

Table No. 10

Action taken by employees about performance appraisal system result


Yes 19 38 %

No 31 62 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 38% employee take action on basis of performance appraisal

system result. While 62% employee do not take action on basis of performance appraisal

system result.

Table No. 11

Performance appraisal system helps employee to understand your strength and weaknesses.


Yes 26 52 %

No 24 48 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 52% employee think that performance appraisal system help

them to understand their strength and weaknesses. While 48% employee think that

performance appraisal system do not help them to understand their strength and weaknesses.

Table No. 12

Desire of employee about training facility by company after performance appraisal


Yes 33 66 %

No 17 34 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 66% employee think that they want to get training by company

after performance appraisal. While 34% employee think that they don’t want training by

company after performance appraisal

Table No. 13

Employees thinking that they should be given an opportunity to rate their own performance


Yes 44 88 %

No 6 12 %

Total 50 100 %

Interpretation:-

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From pie chart it is seen that 88% employees think that they should be given an opportunity

to rate their own performance. While 12% employees think that they should not be given an

opportunity to rate their own performance.

ANNEXURE

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1. Is the Performance Appraisal helping you to plan your work well?

a. Yesb. Noc. Can’t say

2. Satisfaction of employees with performance appraisal system

a. Satisfiedb. Unsatisfiedc. Can’t say

3. Are you aware about performance rating?a. Yesb. No

4. Credibility of appraiser’s affect the performance appraisal system?a. Yesb. No

5. Does the credibility of Appraiser affect the Performance Appraisal System?a. Yesb. No

6. Do you think that that standards are followed by the organization for performance

appraisal system?

a. Yesb. No

7. Do you think that there is a good communication between top-management plans & business goals to the staff below due to appraisal system?

a. Yesb. No

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8. Do you think that comments and suggestion by you to be taken into consideration

during appraisal?

a. Yesb. No

9. Does your post appraisal interview of employee conducted?a. Yesb. No

10. Do you take any action after performance appraisal system result?a. Yesb. No

11. Does performance appraisal system helps you to understand your strength and weaknesses?

a. Yesb. No

12. Do you want training facility by company after performance appraisal?

a. Yes

b. No

13. Do you think that you should be given an opportunity to rate their own performance?

a. Yes

b. No

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60775983 vishal performance appraisal copy

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