perfornance apprisal (pom)

8/9/2019 PERFORNANCE APPRISAL (POM)

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PROJECT REPORT ON PERFORMANCE APPRISAL

GREAT EASTERN MANAGEMENT B-SCHOOL ,BANGALORE

PROJECTREPORT

August 25

2009STEEL AUTHORITY OFINDIASub :- Principles OfManagement

Performance

AppraisalSystemof SAILEmploy

ees


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PROJECT REPORT ON PERFORMANCE

APPRISAL

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ACKNOWLEDGMENT

I express thanks and gratitude to Miss.LAKSHMI, GREAT

EASTERN MANAGEMENT B-SCHOOL, Bangalore for her

encouraging support and guidance in carrying out the project.

I would like to express gratitude and

indebtedness to Miss.LAKSHMI Faculty member, for her valuable

advice and guidance without which this project would not have

seen the light of the day.

I thank Mr. SUNDAR, Project guide, SAIL forproviding us with an excellent project and guiding me in

completing our project successfully. I would like to thank all the

staff members of SAIL for their kind co-operation. I would like

to thank my parents for being supportive all the time, and I am

very much obliged to them.

GREAT EASTERN MANAGENENT B-SCHOOL 2


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Prepared By:-

Santhosh kumar GK

Reg no :( CC0058BK42AG23AAB)

Principles of Management

Great Eastern management B-school

Bangalore

EXECUTIVE SUMMARY



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The history of performance appraisal is quite brief. Itsroots i n the ear ly 20th century can be traced to Tay lor 's

pioneering Time and Motion studies. But this is not very helpful,

for the same may be said about almost everything in the field of

modern human resources management. As a distinct and formal

management procedure used in the evaluation of work

performance, appraisal really dates from the time of the Second

World War - not more than 60 years ago.

In many organizations - but not all - appraisal results are

used, e ither directly or directly , to help determine reward

outcomes. That is, the appraisal results are used to identify the

better performing employees who should get the majority of

available merit pay increases, bonuses and promotions.

By the same token, appraisal results are used to identify

the poorer performers who may require some form of counseling,

or in extreme cases, demotion, dismissal or decreases in pay.

(Organizations need to be aware of laws in their country that

might restrict their capacity to dismiss employees or decrease

pay.)

The purpose of this study has been to determine whether

the performance appraisal was used for employee development

and whether the appraisal was emphasized as an important part

of the performance appra isal process. A lso whether theperformance appraisal helps in increasing companys profitability.



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tool of management, a control process, an activity and a critical

element in human resources al location. Uses for performance

appraisal have included equal employment opportunity

considerations, promotions, transfer and salary increases .

Primarily performance appraisal has been considered an overall

system for controlling an organization. Performance appraisal has

also been called an audit function of an organization regarding

the performance of individuals, groups and entire divisions.

Performance appra isal may be def ined as a structured

formal interaction between a subordinate and supervisor, thatusually takes the form of a periodic interview (annual or semi-

annual) , in which the work performance of the subordinate is

examined and discussed, with a view to identifying weaknesses

and strengths as well as opportunities for improvement and skills

development.

Almost every organ izat ion in one way or another goes

through a per iodic r itua l, formally or informally, known asperformance appraisal . Performance appraisal has been called

many things. The formal performance appraisal has been called a

tool of management, a control process, an activity and a critical

element in human resources al location. Uses for performance

appraisal have included equal employment opportunity

considerations, promotions, transfer and salary increases .

Primarily performance appraisal has been considered an overall

system for controlling an organization. Performance appraisal hasalso been called an audit function of an organization regarding

the performance of individuals, groups and entire divisions.



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Objectives of performance appraisal

Employees would like to know from a performance appraisal system:

concrete and tangible particulars about their work; and

Assessment of their performance.

This would include how they:

o did;

o could do better in future;

o could obtain a larger share of rewards; and



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o Could achieve their life goals through their position.

Therefore an employee would desire that the appraisal system shouldaim at:

o their personal development;

o their work satisfaction; and

o Their involvement in the organization.

From the point of view of the organization, performance appraisalserves the purpose of:

o providing information about human resources and their

development;

o measuring the efficiency with which human resources are

being used and improved ;

o providing compensation packages to employees; and

o Maintaining organizational control.

Performance appraisal should also aim at the mutual goals of the

employees and the organization. This is essential because employees can

develop only when the organizations interests are fulfilled. The

organizations main resources are its employees, and their interest cannot be

neglected. Mutual goals simultaneously provide for growth and development

of the organization as well as of the human resources. They increase

harmony and enhance effectiveness of human resources in the organization.



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SCOPE OF PERFORMANCE APPRAISAL

To be instrumental in helping employees to better understand To help

each employee understand more about their role and become clear

about their functions;

Their strengths and weaknesses with respect to their role and

functions in the organization;

To help in identifying the developmental needs of employees, given

their role and function;



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To increase mutuality between employees and their supervisors so

that every employee feels happy to work with their supervisor and

thereby contributes their maximum to the organization;

To act as a mechanism for increasing communication between

employees and their supervisors. In this way, each employee gets to

know the expectations of their superior, and each superior also gets

to know the difficulties of their subordinates and can try to solve

them. Together, they can thus better accomplish their tasks;

To provide an opportunity to

each employee for self-reflection and individual goal-

setting, so that individuallyplanned and monitored

development takes place;

To help employees internalize the culture, norms and values of the

organization, thus developing an identity and commitment throughout

the organization;



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To help prepare employees for higher responsibilities in the future bycontinuously reinforcing the development of the behavior and qualities

required for higher-level positions in the organization;

To be instrumental in creating a positive and healthy climate in the

organization that drives employees to give their best while enjoying

doing so; and

To assist in a variety of personnel decisions by periodically generating

data regarding each employee.



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ERRORS OCCURRED

IN

PERFORMANCE APPRAISAL

One of the biggest problems with performance appraisal is the fact that

most people are not accurate raters of others performance. When anemployees performance rating does not reflect their true or actual

performance, we say a rater error has occurred. The most common rater

errors are:-

Halo / Horn Effect

Central Tendency

Recency

Leniency

Bias



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discovered that she could

only recall examples of

either positive or negative

performance for

The last two months.

Attribution

bias

The tendency to attribute

performance failings to

factors

under the control of the

individual

and performance successes to

external causes

Reema , attributes the

successes of her work group

to the quality of herleadership and the failings

To their bad attitudes and

inherent laziness.



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METHODOLOGY

Basically there are two types of performance appraisal done on the basis of

post of the SAILs employee. They are:

1. Executive performance appraisal system

2. Non-executive performance appraisal system

EXECUTIVE PERFORMANCE APPRAISAL SYSTEMGREAT EASTERN MANAGENENT B-SCHOOL 15


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This system is for performance appraisal for executives of the level E-0 to

E-4. The various steps involved are:

A) Self Appraisal Performance Review & Planning

I. Appraisees write his view over the actual achievement for the Key

performance area / Task and Target assigned to him for the year.

II. Comments on fulfillment of KPA / Task and Target are written by

the Reporting Officer, taking account of time frame also.

III. Special Jobs other than tasks given and normal routine work are

written by appraise.

B) Performance Review Discussion

I. Both appraise and reporting officer sit together.

II. Comment over Strengths and weaknesses and areas for development

are written which is undersigned by both.

III. Appraise can help the reporting officer by giving examples whichshows his strength or weakness. He also tells what training he wants

to undergo.

C) Performance Assessment



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I. Ratings between 1 to5 are given to the appraise by the ReportingOfficer and Reviewing Officer individually on the basis of

Performance Factors and Potential Factors.

Performance Factors: Quantity of output

Quality of output

Cost control

Job Knowledge and Skill

Team spirit and Lateral

Coordination

Discipline

Development & Quality of assessing subordinates

Special Relevant factor

Potential Factors: Communication

Initiative

Commitment and sense of Responsibility

Problem Analysis and Decision making

Planning and Organizing



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Management of Human resources

II. Different weight age are given to each factor

III. Final scores are calculated by multiplying rating and weight age

.By adding these Total Factor Score is calculated.

IV. Comments on Overall Performance and Potential are written by

both Reporting and Reviewing Officers individually.

D) Suggestions for Job Rotation and Job Enrichment

I. Both reporting and reviewing officers write their suggestions

whether the appraise should be transferred to other department.

Either a good employee is transferred so that he can acquire

knowledge of all the departments, or a worst performing employee istransferred so as to improve his performance.

II. In some exceptional case Head of department give his comments on

overall performance & potential of the employee.

E) Final Assessment

I. Total Factor Score by both Reporting and reviewing officers is

written and average is calculated.



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II. Final Grading between O / A / B / C is given.

III. If Final Grade is C, indicate whether to promote or not to promotethe appraise.

IV. If not to promote give reasons.

V. Meeting with non-promotable appraise.

NON-EXECUTIVE PERFORMANCE APPRAISAL SYSTEM

I. Rating are given by both Reporting and Reviewing officers on the basis of

performance of the appraise depending upon factors:



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Performance on the Job

Job Knowledge & skill

Multi-skill Utilization

Conduct & behavior

Punctuality & availability on job

Innovativeness

Cost & Quality Consciousness

Initiative & Capacity to assume higher

responsibility

Housekeeping & safety consciousness

II. Weightage are given to various factors.

III. Scores out of 100 are calculated by multiplying rating with weight age.

IV. O / A / B / C / C- Grades are given according to scores and attendance of

the appraise.

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



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METHODS OF PEFORMANCE APPRAISAL



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Once the employees has been selected, trained and motivated, he is then

apprised for his performance. Performance appraisal is the step where

the management finds out how effective it has been hiring and placing

employees. If any problem is identified, steps are taken to communicate

with the employees and to remedy them. So so a performance appraisal

is a process of evaluating an employees performance of a job in terms ofits requirement

Several methods and techniques of appraisal are available for

measurement of the performance of the employee. The methods and



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scales differ for obvious reason. First they differ in sources of traits

and qualities to be apprised. The quality may differ because of

difference in job requirements. Second they differ because of different

kinds of workers who are being rated .third the variation may be caused

by the degree of precision attempted in an evaluation. Finally they differ

because of the method used to obtain weighting for various traits.

The performance appraisal method is divided into three categories these

are

Trait-based method

Behavioral method

Comparative method

Result oriented method

The part concerned with me is the comparative methods

There are so many methods which are include in comparative method but

the most important and most popular are

Straight ranking method

Grading method

Graphing rating method

Forced choice description method

Forced distribution methods

Check list method

Critical incident method



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Free from easy method

Straight ranking method

It is the oldest and simplest method of performance appraisal, by which

the man and his performance are considered as an entity by the rater. No

attempted is to made to fractionalize the rate; the whole man comparedwith the whole man; that is the ranking of a man in a work group is done

against that of another. The relative position of each man is tasted in

terms of his numerical rank.

Limitation-

This is the simplest method of separating the most efficient from the

least efficient and relatively easy to develop and use. But the greatest

limitation of his method is the

In practice it is very difficult to compare a single individual with human

beings having various behavior traits

The method only tell us how a man stands in relation to the others in the

group but does not indicate how much better or worse he is than another

It is difficult task when large number of person are rated

It does not eliminate snap judgment.

Grading method-

Under this system, the rater consider certain feature and marks them

accordingly to the scale, train categories of worth are first established



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and carefully defined. The selected feature may be analytical ability,

cooperativeness, dependability, self-expression, job knowledge,

leadership, etc they may be

A-out standing B-very good C-average D-fair E-poor

These are used in the selection of candidates by the public service

commission

Limitation- in this method we cant get the actual performance of the

employee. for example if consider that those employee who got 50 to 60

point is in average then the who got 50 point may be de motivated andwho got 51 point may be happy with that appraisal .

Graphic Rating Method

This is the most commonly used method of performance appraisal. Under

it a printed form one for each person to be rated. The factors which are

including in this method are employee characteristics and employee

contribution. In employee characteristics are included are leadership,

attitude, enthusiasm, locality creative ability, analytical ability, co-ordination. In the employee contribution are include the quantity and

quality of work, the responsibility assumed, specific goal achieved,

regularity of attendance. These traits then evaluated on continuous scale

where in the rather place a mark somewhere along a continuum

Limitation-

However this method also not free from limitation

The rating is generally subjective often the rating cluster on the high

side when this method is used

Another severe limitation is that it assume that each characteristics is

equally important for all jobs



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Trait:

Ranking.

The term ranking has been used to describe an alternative method of

performance appraisal where the supervisor has been asked to order his or

her employees in terms of performance from highest to lowest.

Forced choice description method

it attempts to correct a rater tendency to give consistently high or low

rating to all the employees under this method the rating elements are

several sets of pair phrases or adjective relating to job proficiency and

personal qualification the following statement are illustrative of the type

of statement that are used

Organize the work well

Lacks the ability to make people feel at ease

Has a cool even temperament

Is punctual and careful

Is a hard worker and co-operative

Limitation-

Trained technicians are required prepare sets of series for each

occupational group



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Most of the raters become irritated with the test because they are not

being trusted

The result of evaluation dont prove useful for training purposes because

the rate is ignorant of how he is evaluating the individual

Forced distribution method

This system is used to eliminate or minimize raters bias so that all the

personnel may not be placed at the higher end or lower end of the scale.

It requires the rater to apprise an employee according to a

predetermined distribution scale under this system it is performance andpromo ability. For this purpose a five point performance scale is used

without any descriptive statement. Employees are placed between the

two extreme good or bad job performances. For ex 10% given to

outstanding, 20% given to good and 40% given to satisfactory.

Limitation-

This method use in wage administration leads to low morale and low

productive

Paired Comparison.

The term used to describe an appraisal method for ranking employees.

First, the names of the employees to be evaluated have been placed on

separate sheets in a pre-determined order, so that each person has been



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compared with all other employees to be evaluated. The evaluator then

checks the person he or she felt had been the better of the two on the

criterion for each comparison. Typically the criterion has been the

employees over all ability to do the present job. The number of times a

person has been preferred is tallied, and the tally developed is an index of

the number of preferences compared to the number being evaluated.

Graphic Rating Scale.

The term used to define the oldest and most widely used performanceappraisal method. The evaluators are given a graph and asked to rate the

employees on each of the characteristics. The number of characteristics can

vary from one to one hundred. The rating can be a matrix of boxes for the

evaluator to check off or a bar graph where the evaluator checked off a

location relative to the evaluators rating.

Behavioral Anchored Rating Scales.

The term used to describe a performance rating that focused on specific

behaviors or sets as indicators of effective or ineffective performance,

rather than on broadly stated adjectives such as "average, above average, or

below average". Other variations were:

Behavioral observation scales

Behavioral expectations scales



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Numerically anchored rating scales

Checklist method

Under this method the rater does not evaluate employee performance; he

supplies report about it and the final rating is done by personnel

department. A series of question are presented concerning an employee

to his behavior. The rater then checks to indicate if the answer to a

question about an employee is positive or negative. The value of each

question may be weighed equally or certain question may be weighed more

heavily then others.

Example-

Is the employee really interested in job? Yes/no

Is he regular on his job? Yes/no

Is his equipment maintained in order? Yes/no

Does he ever make mistake? Yes/no

Does he follow instruction properly? Yes/no

Limitation-

This method suffers from bias on the part of the rater because he can

distinguish positive or negative question

Process can be expensive and time consuming

Separate checklist must be developed



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Free essay method:

Under this method the supervisor makes a free form, open ended

appraisal of an employee in his own words and put down its impression

about the employee. He takes note of these factors

Relation with fellow supervisor

General organization and planning ability

Job knowledge and potential

Employee characteristics and attitude

Production, quality, and cost control

Physical condition and

Development needs

Limitation-

It contains a subjective evaluation of the reported behavior of an

individual may affect such employment decision as promotion, lay-off.

Etc.



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Some appraisal may not write a descriptive report

The appraisal may be loaded with flowery language about the quality ofrate than the actual evaluation

Critical incident method

The essence of this system is that it attempts to measure workers

performance in terms of certain events and episode that occur in the

performance rates job. These events are known as critical incident

method. The supervisor keeps a written record of the event that can

easily recalled and used at the time of performance appraisal

Limitation

Negative incident are generally more noticeable than positive onesThe supervisor may be put off and easily forgotten

Very close supervision may be required and it may not be like by the

employee

Management by Objectives.



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SAIL wins 'India's Employers of Choice Award-2007' in thePublic Sector

SAIL's Q4 net profit Rs.1902 crore up 72%

President Kalam presents prestigious Corporate Social

Responsibility award to SAIL

SAIL has been a pioneer in promulgating a firm policy

on safety in the workplace.

SAIL has been an active participant in the National RCH

programme across all since 1995. All SAIL hospitals have

participated in the National RCH program.



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In all SAIL Plants, Mahila Samities have been formed since

inception. The members of the Samities are spouses of theemployees. Spouses of MDs, EDs etc are also a member of

Mahila Samities . A lot of work is being done for the

society by these Samities.

o Al l these fac ts shows that SAIL is constant ly

increasing and becoming famous in public sector .This

impl ies employees are working efficient ly which is

possib le when employees are happy with company s

performance appraisal system.

OBSERVATIONS



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In the present performance appraisal system of SAIL we found

the following loop holes:

If the appraise has good terms with the reviewing officer and

does not have a smooth relationship with the reporting officer,

in such case the reporting officer is sometimes forced by the

reviewing officer to give better score to the appraise.

RECOMMENDATIONS

The reporting officer should keep the performance data of

each subordinate.



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The reporting officer should give monthly feedback to the

subordinates regarding their performances and thereby givingsuggestions to improve.

BIBLIOGRAPHY

Websites :- www.sailindia.co.in

www.wikipedia.org

http://www.sailindia.co.in/http://www.wikipedia.org/http://www.sailindia.co.in/http://www.wikipedia.org/


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www.performance-appraisal.com/intro.htm

www.telecollege.dcccd.edu/contents/evaluate.

htm

Books:-

i . Personnel Human Resource Mgmt

By David A Decenzo

ii. Human Resource Mgmt

By Gary Dessler

CERTIFICATE

This is to certify that by Mr. SANTHOSH KUMAR GK

bearing roll no: (CC0058BK42AG23AAB) a Bonfide

http://www.performance-appraisal.com/intro.htmhttp://www.telecollege.dcccd.edu/contents/evaluate.htmhttp://www.telecollege.dcccd.edu/contents/evaluate.htmhttp://www.performance-appraisal.com/intro.htmhttp://www.telecollege.dcccd.edu/contents/evaluate.htmhttp://www.telecollege.dcccd.edu/contents/evaluate.htm


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student of MBA, Ist Trimester, GREAT EASTERN

MANAGEMENT B-SCHOOL, BANGALORE has

successfully completed his project work titled

PERFORMANCE APPRISAL in partial fulfillment

For of the requirement for the award of the MBA

Degree of GEMS, Principles of Management under the

guidance of Miss.LAKSHMI faculty member

GREAT EASTERN MANAGEMENT B- SCHOOL,

BANGALORE

perfornance apprisal (pom)

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