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Project Report on "Performance Appraisal System

PROJECT REPORT

on

Performance Appraisal System

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

Master of Business Administration

CER!!CAE

This is to certify that this Project Report entitled Evaluation of Performance

Appraisal System is the result of research work carried out by Mr. __________ under

the guidance and superision of Professor _______________________.

!ignature

PROJECT REPORT ON PERFORMANCE APPRAISAL

SYSTEM AT BSNL

INTRODUCTION TOWARDS PERFORMANCE APPRAISAL

SYSTEM

Human Resource (or personnel) management, in the sense of getting things done through people,

is an essential part of every managers responsibility, but many organizations find it advantageous

to establish a specialist division to provide an expert service dedicated to ensuring that the human

resource function is performed efficiently.

eople are our most valuable asset! is a clich", #hich no member of any senior management

team #ould disagree #ith. $et, the reality for many organizations are that their people remain

under valued, under trained and under utilized.

erformance %ppraisal is the process of assessing the performance and progress of an

employee or a group of employees on a given &ob and his ' their potential for future

development. t consists of all formal procedures used in the #oring organizations toevaluate personalities, contributions and potentials of employees.


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PREFACE

*anaging human resources in todays dynamic environment is becoming more and more

complex as #ell as important. Recognition of people as a valuable resource in the

organization has led to increases trends in employee maintenance, &ob security, etc

*y research pro&ect deals #ith erformance %ppraisal as carried out at +hart anchar -igam

td. (+-/)!. n this report, have studied 0evaluated the performance appraisal process as it

is carried out in the company.

1he first section of my report deals #ith a detailed company profile. t includes the companys

history2 its activities and operations, organizational structure, etc. this section attempts to give

detailed information about the company and the nature of its functioning.

1he second section deals #ith performance appraisal. n this section, have given a brief

conceptual explanation to performance appraisal. t contains the definition, process and

significance of performance appraisal.

n the third section of my report, have conducted a research study to evaluate the process of

performance appraisal at +harat anchar -igam td.3 this section also contains my findings,

conclusions, suggestions and feedbac.

1he forth and final section of this report consists of extra information that related to the maincontents of the report. 1hese annexure include some graphs and diagrams relating to the

company, graphs relating to the research study and important documents upon #hich the pro&ect

is based.

RATIONALE OF THE STUDY

erformance %ppraisal is the important aspect in the organization to evaluate the employees

performance. t helps in understanding the employees #or culture, involvement, and

satisfaction. t helps the organization in deciding employees promotion, transfer, incentives, pay

increase.

INTRODUCTION TO HUMAN RESOURCE

MANAGEMENT




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team #ould disagree #ith. $et, the reality for many organizations are that their people remainunder valued, under trained and under utilized.

1he maret place for talented, silled people is competitive and expensive. 1aing on ne# staff

can be disruptive to existing employees. %lso, it taes time to develop 4cultural a#areness,

product ' process ' organization no#ledge and experience for ne# staff members.

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

5ollo#ing are the various functions of Human Resource *anagement that are essential for

the effective functioning of the organization2

6. Recruitment

7. election

8. nduction

9. erformance %ppraisal

:. 1raining 0 ;evelopment

Recruitment

1he process of recruitment begins after manpo#er re


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important rating of an employees excellence in matters pertaining to his present &ob and his

potential for a better &ob.!

CHARACTERISTICS

6. erformance %ppraisal is a process.

7. t is the systematic examination of the strengths and #eaness of an employee in

terms of his &ob.

8. t is scientific and ob&ective study. 5ormal procedures are used in the study.

9. t is an ongoing and continuous process #herein the evaluations are arranged

periodically according to a definite plan.

:. 1he main purpose of erformance %ppraisal is to secure information necessary for

maing ob&ective and correct decision an employee.

PROCESS

1he process of performance appraisal2

6. =stablishing performance standards

7. >ommunicating the tandards

8. *easuring erformance

9. >omparing the actual #ith the standards

:. ;iscussing the appraisal

?.1aing >orrective %ction

LIMITATIONS

6. =rrors in Rating

7. ac of reliability

8. -egative approach

9. *ultiple ob&ectives

:. ac of no#ledge

METHODS OF PERFORMANCE APPRAISAL

1he foregoing list of ma&or program pitfalls represents a formidable challenge, even

considering the available battery of appraisal techni


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pitfalls by doing a#ay #ith appraisals themselves is lie trying to solve the problems of life

by committing suicide. 1he more logical tas is to identify those appraisal practices that are

(a) most liely to achieve a particular ob&ective and (b) least vulnerable to the obstacles

already discussed.

+efore relating the specific techni


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1o avoid, or to deal #ith, the feeling that they are being &udged by unfairly high standards,

employees in some organizations are being ased to set @ or help set @ their o#n performance

goals. Cithin the past five or six years, *+D has become something of a fad and is so

familiar to most managers that #ill not d#ell on it here.

RAN'ING METHODS

5or comparative purposes, particularly #hen it is necessary to compare people #ho #or for

different supervisors, individual statements, ratings, or appraisal forms are not particularly

useful. nstead, it is necessary to recognize that comparisons involve an overall sub&ective

&udgment to #hich a host of additional facts and impressions must someho# be added. 1here

is no single form or #ay to do this.

1he best approach appears to be a raning techni


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*any firms have expanded the idea of up#ard feedbac into #hat the call 8?E@degree feedbac.

1he feedbac is generally used for training and development, rather than for pay increases.

*ost 8?E ;egree 5eedbac system contains several common features. %ppropriate parties F

peers, supervisors, subordinates and customers, for instance F complete survey,


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*otivates the employee through achievement and feedbac.

5acilitates assessment and agreement of training needs.

Helps in identification of personal strengths and #eanesses.

lays an important role in ersonal career and succession planning.

>larifies team roles and facilitates team building.

lays ma&or role in organizational training needs assessment and analysis.

mproves understanding and relationship bet#een the employee and the reporting

manager and also helps in resolving confusions and misunderstandings.

lays an important tool for communicating the organizations philosophies, values, aims,

strategies, priorities, etc among its employees.

Helps in counseling and feedbac.

R.tin/ Errr0 in Per1rm.nce A22r.i0.l0

erformance appraisals are sub&ect to a #ide variety of inaccuracies and biases referred to as

Arating errorsA. 1hese errors can seriously affect assessment results. ome of the most common

rating errors are2 @

Lenienc3 r 0e-erit34 & eniency or severity on the part of the rater maes the assessment

sub&ective. ub&ective assessment defeats the very purpose of performance appraisal. Ratings are

lenient for the follo#ing reasons4

a) 1he rater may feel that anyone under his or her &urisdiction #ho is rated

unfavorably #ill reflect poorly on his or her o#n #orthiness.

b) He'he may feel that a derogatory rating #ill be revealed to the rate to detriment

the relations bet#een the rater and the ratee.

c) He'he may rate leniently in order to #in promotions for the subordinates and

therefore, indirectly increase his'her hold over him.

Centr.l ten!enc34 & 1his occurs #hen employees are incorrectly rated near the average or

middle of the scale. 1he attitude of the rater is to play safe. 1his safe playing attitude stems from

certain doubts and anxieties, #hich the raters have been assessing the rates.

H.l errr4 & % halo error taes place #hen one aspect of an individualAs performance influences

the evaluation of the entire performance of the individual. 1he halo error occurs #hen an

employee #ho #ors late constantly might be rated high on productivity and


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overall rating. Rating employees separately on each of the performance measures and

encouraging raters to guard against the halo effect are the t#o #ays to reduce the halo effect.

R.ter e11ect2 @1his includes favoritism, stereotyping, and hostility. =xtensively high or lo# score

are given only to certain individuals or groups based on the raterAs attitude to#ards them and noton actual outcomes or behaviors3 sex, age, race and friendship biases are examples of this type of

error.

Prim.c3 .n! Re/enc3 e11ect04 & 1he raterAs rating is heavily influenced either by behavior

exhibited by the ratee during his early stage of the revie# period (primacy) or by the outcomes, or

behavior exhibited by the ratee near the end of the revie# period (regency). 5or example, if a

salesperson captures an important contract'sale &ust before the completion of the appraisal, the

timing of the incident may inflate his or her standing, even though the overall performance of the

sales person may not have been encouraging. Dne #ay of guarding against such an error is to as

the rater to consider the composite performance of the rate and not to be influenced by one

incident or an achievement.

Per1rm.nce !imen0in r!er4 & 1#o or more dimensions on a performance instrument follo#

each other and both describe or rotate to a similar


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J ;iscuss #ith the reporting managers on the behavioral traits of all the

employees for #hom he ' she is the revie#er

J Chere re


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o /R%s2 1he 5our erspectives.

o Ho# is the /R% score calculated for an employee on the basis of the targets

sets and targets achievedB

J BEHA%IORAL TRAITS4 ome of the


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+ !pots and anticipates proble,s:

i,ple,ents solutions

+ !ees and e-ploits opportunities

+ 9eliers ahead of ti,e

+ !ees the wider picture5i,pacts across

business

+ 3ocuses on what;s good for the business

+ !een as role ,odel by others

+ Recogni


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PROJECT REPORT ON =PERFORMANCE APPRAISAL=

LITERATURE RE%IEW AND CONCEPT FORMULATION






team #ould disagree #ith. $et, the reality for many organizations are that their people remain

under valued, under trained and under utilized.

5ollo#ing are the various functions of Human Resource *anagement that are essential for

the effective functioning of the organization2

6. Recruitment

7. election

8. nduction

9. erformance %ppraisal

:. 1raining 0 ;evelopment

OBJECTI%ES OF THE STUDY

1o carry out the study of +-, #e framed the follo#ing ob&ectives

6. dentification of the techni


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RESEARCH DESIGN4

Research ;esign refers to Gframe#or or plan for a study that guides the collection and analysis

of dataG. % typical research design of a company basically tries to resolve the follo#ing issues2

a) ;etermining ;ata >ollection ;esign

b) ;etermining ;ata *ethods

c) ;etermining ;ata ources

d) ;etermining rimary ;ata >ollection *ethods

e) ;eveloping Luestionnaires

f) ;etermining ampling lan

8(5 E>2lr.ti-e Re0e.rc? De0i/n4

=xplorative studies are undertaen #ith a vie# to no# more about the problem. 1hese studies

help in a proper definition of the problem, and development of specific hypothesis is to be tested

later by more conclusive research designs. ts basic purpose is to identify factors underlying a

problem and to determine #hich one of them need to be further researched by using rigorous

conclusive research designs.

8onclusive Research tudies are more formal in nature and are conducted #ith a vie# to eliciting

more precise information for purpose of maing mareting decisions.

1hese studies can be either2

a) ;escriptive or

b) =xperimental

1hus, it #as mix of both the tools of Research ;esign that is, =xplorative as #ell as >onclusive.

SAMPLING PLAN4

ample ize M :E =mployees

ample %rea M ahara %irlines td, ;elhi,

;r opaldas +uilding.

;uration M 1#o (7) *onths.

DATA COLLECTION4


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Data Sources:

(i) econdary ;ata through nternet

(ii) rimary ;ata through Luestionnaire

(iii) >ontact *ethod

(iv) ersonal nteraction

DATA PRESENTATION AND ANALYSIS4

6. +ar graphs

7. ie ;iagrams

8. ;oughnuts


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!#$!#%S A#$ A#A&'S!S

Employees (pinion as to the Purpose of Performance Appraisal

Perfor,ance standards 8 yardsticks

Dptions Response

$es N9

-o 6?

Awareness of techni)ue of Performance Appraisal being followed at BS#& among

Employees

Dptions Response

$es O7

-o 7N

#umber of Employees being appraised during their ser*ice period

Dptions Response

$es ?N

-o 87


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Employees+ opinion as to the present appraisal system

Dptions Responses (in P)

5ully atisfied 7

atisfied 79

>ant ay 99

;issatisfied 8E

Employee perception as to the fre)uency of appraisal

O2tin0 Re02n0e 8in @5

Dnce ;uring 1he

ervice eriod

7

>ontinuous Q7

-ever E


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>ant ay ?

I1 cntinuu0 .22r.i0.l 7?.t 0?ul! 6e t?e /.2 6et7een t7 .22r.i0.l 2eri!

O2tin0 Re02n0e 8in @5

Luarterly 7E

Half $early 99

$early 8?

,ow Performance Appraisal affects the producti*ity of the employees

Mti-.te! In!i11erent Demti-.te!

Fee!6.c

8N67

@

& Fee!6.c

67

6E

7N

Neutr.l

79

76

:

-ho should do the appraisal.

O2tin0 Re02n0e 8 in @ 5


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uperior 79

eer E

ubordinate E

elf %ppraisal N

>onsultant 9

%ll of the above 9N

uperior eer 6?

.$oes appraisal help in polishing s/ills and performance area.


$es O9

-o 6E

ome#hat 6?

#f the process of appraisal does not lead to the i,proe,ent of the skills and

proficiency of the e,ployees: the ery purpose of appraisal beco,es illogical. #n

the surey conducted it was obsered that nearly =6 1 of the respondents agree

that Perfor,ance %ppraisal does leads to polishing the skills of the e,ployees.

$early /4 1 of the respondents iew that it does not sere this purpose and

around /> 1 were not able to respond as to whether it sere any such purposes

or not.

$oes personal bias creeps0in while appraising an employee



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$es N7

-o 6N

#n the process of appraising: both the parties are hu,an being: that is: the one

who is being apprised and the other who is appraising. Thus: there bound to be

sub?ectiity inoled: be it an ob?ectie way of appraising.

Thus: when asked fro, a,ong the sa,ple siant ay 79

Appropriate method of conducting the performance appraisal

(


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A00e00ment Centre

*+, De/ree


Raning *ethod 67

aired >omparison E

>ritical ncidents 7E

*+D :N

%ssessment >entre 9

8?E degree ?

$oes performance appraisal leads to identification of hidden potential


$es Q?

-o 9

M#T%T#O$! O3 TBE !T(9

% few li,itations and constraints ca,e in way of conducting the present study: under

which the researcher had to work are as followsD

%lthough all atte,pts were ,ade to ,ake this an ob?ectie study: biases

on the part of respondents ,ight hae resulted in so,e sub?ectiity.

Though: no effort was spared to ,ake the study ,ost accurate and useful:

the Fsa,ple !i


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S2%%ES!(#S A#$ C(#C&2S!(#

%fter haing analy


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#deally in the present day scenario: appraisal should be done: taking the iews of

all the concerned parties who hae so,e bearing on the e,ployee. 'ut: since a

change in the syste, is reuired: it cannot be a drastic one. #t ought to be gradual

and a change in the ,indset of both the e,ployees and the head is reuired.

a) 5ully atisfied b) atisfied

c* Can;t !ay d* 9issatisfied

>. !hould the appraisal process beD

a) Dnce during the service period b) >ontinuous

c) -ever d) >ant ay

=. hat in your opinion should be the ti,e period of conducting continuous

%ppraisalK

a* Luarterly b* Balf early c* early

%ny specific reason

@. 9oes Perfor,ance %ppraisal helps in i,proing the productiity of the e,ployeesK

Mti-.te! In!i11erent Demti-.te!

Fee!6.c

& Fee!6.c

Neutr.l

N. ho in your opinion should appraise the e,ployeeK

a* !uperior b* Peer


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c) ubordinates d) elf %ppraisal

e) >onsultant f) %ll of the above

/4. 9oes the appraisal syste, helps in polishing the skills or perfor,ance areaK

a) $es b) -o c) ome#hat

//. 9o you think personal bias creeps in while appraising an indiidualK

a) $es b) -o

/A. #f gien a chance or an opportunity would you like that the current appraisal

procedure should be reiewedK

a) $es b) -o c) >ant ay

/H. hat according to you should be the appropriate ,ethod for conducting

perfor,ance appraisalK

a* Rating the e,ployee on nu,ber of traits along with the range of perfor,ance

for each by the superisor.

b* 3or eery trait: each subordinate is paired with and co,pared to eery other!ubordinate.

c* Reiewing e,ployees on the basis of identified specific e-a,ples of good

Or poor perfor,ance.

d* !etting specific ,easurable goals with each e,ployee and periodically

reiewing the progress ,ade.

e* Reiewing perfor,ance through case studies: presentations: role playing:

etc. for future perfor,ance.

f* Receiing feedback fro, people whose iews are considered helpful and

releant including the appraise hi,self.

/6. 9oes Perfor,ance %ppraisal leads to identification of hidden potential of the

e,ployeesK

a) $es b) -o

/0. !uggestions and iews...............................


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Thank you: 9ate 55855855

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