Report

WEIR-BDK VALVES HUBLI
DECLARATION
I hereby declare that this r!"ect #!r$ e%titled as& 'St(dy !)
*er)!r+a%ce Araisal Syste+ a%d its E))ecti,e%ess- i% WEIR-BDK VALVES&
H(bli& is +y #!r$& carried !(t (%der the .(ida%ce !) /rs0 Kala%a Ra!&
/r0R0/(rli a%d +y )ac(lty .(ide *r!) Sh#eta /0
This re!rt is %either )(ll %!r i% art has e,er bee% s(b+itted
)!r a#ard !) a%y artial )(l)ill+e%t !) a%y !ther de.ree !) either this (%i,ersity !r
a%y !ther (%i,ersity0
U+ e Habiba *atel
KLES1s INSTITUTE O2 /ANA3E/ENT STUDIES AND RESEARCH HUBLI
ACKNOWLED3E/ENTS
Preparing a project of this nature is an arduous task and I was fortunate enough to get
support from a large number of people to whom I shall always remain grateful. It is proud
privilege for me to acknowledge with deep sense of gratitude, my indebtedness to my
reverted faculty guide Prof.Shweta.M for her valuable guidance, profound advice and
persistent encouragement that has lead to successful completion of my project.

My sincere thanks are given to each of WI!"#$% &'(&S members for their
participation in my efforts, through the time I have learnt from them and appreciated the
opportunity they have afforded me in undergoing my project. I am particularly thankful to
Mrs.%alpana !ao for her unfailing patience and guidance during the research and
preparation of this report.
Submitted by
)m e *abiba Patel
INDE4
'+ ,ecutive Summary
i. Introduction -f .he Project
ii. -bjectives
iii. Methodology
iv. 'nalysis
v. /onclusion
#+ Industry Profile
/+ 'n -verview -f Performance 'ppraisal System
i.$efinition 'nd Meaning -f Performance 'ppraisal System
ii.Performance 'ppraisal System and performance management system
iii..ypes -f Performance 'ppraisal System
$+ 'n -verview -f .he Project
i. -bjectives
ii. Methodology
iii. 'nalysis
iv. Suggestions
v. /onclusion
+ #ibliography
0+ 'nne,ure
EXECUTIVE SUMMARY
i5 INTODUCTION O2 THE *RO6ECT
.he whole study is divided into two parts. -ut of which first part contains the
organi1ation study and second part contains area undertaken for the study.
.he project was undertaken by to gain practical aspects of the working of an
organi1ation as a whole. .his project report has been e,ecuted entitling at Weir"#$% &alves
*ubli.
.he main objective of the project is 2.o study the performance appraisal system
and its effectiveness3.
.he project study is all about performance appraisal system followed in the
organi1ation. .he project is mainly concentrated on finding the effectiveness of performance
appraisal system followed in the organi1ation. .he collection of re4uired information is done
through personal interview, with the help of 4uestionnaire and secondary data that was
available in the company.

Need )!r the st(dy7
$ifferent industrial organi1ation will have different types of performance appraisal
system. In the strategic management the aims of the performance are based on
manufacturing process of the industry and the type of industrial organi1ation.
.he aims differ based on the performance norms decided by the top management.
#efore the ac4uisition of the organi1ation by WI! India was a public undertaking. .hus the
aims and intentions of performance appraisal differ compared to private sector organi1ation.
*ence, the aim of the project is to know performance appraisal system and its
process practiced before ac4uisition and to suggest changes if any, so that it would be
helpful for WI!"#$% &alves to carry forward with the performance appraisal system.

ii5 OB6ECTIVES O2 THE STUD8
a+ .o study the e,isting performance appraisal system followed in the
organi1ation.
b+ .o study the outcome5 result of the performance appraisal system that is
practiced by the organi1ation
c+ .o study the effectiveness of performance appraisal system with respect to
the employees of the company.
d+ .o suggest changes and improvements in the performance appraisal system if
re4uired.
Sc!e a%d be%e)it !) the st(dy7
.he project will help to evaluate the effectiveness of employee6s performance
appraisal system followed by the organi1ation.
.his study will help to collect the opinion of the employees about the
performance appraisal system of the organi1ation.
Li+itati!%s !) the st(dy7
$uring my internship study with the WI!"#$% &alves the difficulties I observed
was during the sample survey.
.here was difficulty in finding out the employees who knew about the
performance appraisal system.
.hus I categori1ed my survey into two parts i.e., 4uestionnaire and the
interview.
7uestionnaire was circulated to the white collar employees and interaction
and interview was done with the blue collar employees.
.he response of the respondents may not be accurate thinking that the
management might misuse the data.

iii5 /ETHODOLO38
Tye !) research7
.his is descriptive research method.
Sa+le si9e7
' sample si1e of 899 respondents was selected to undertake the study
:9" #lue collar
:9" White collar
S!(rce !) data c!llected7
*ri+ary data7
Primary data was collected by interacting with the organi1ation employees, various
departmental managers and through 4uestionnaire.
7uestionnaire was prepared and e,plained to the respondents so as to access them in
giving prompt and unbiased response.
Sec!%dary data;
.he secondary data was collected with the help of organi1ation manuals and from the
records of individual employees.
Sa+li%. /eth!d7
<on" probability convenience sampling method was used
i,5 2INDIN3S:thr!(.h ;(esti!%%aire5
Performance is not reviewed fre4uently.
Performance review takes place only once that is after completion of the
probation period of every individual employee.
=>? of the employee6s opinion was that the performance appraisal is conducted
only after completion of the probation period.
.his may not give realistic assessment of performance evaluation.
@A? of the employee6s opinion was that there is no performance appraisal
conducted in the organi1ation, because they were not aware of the concept of
=>? of the employees stated that it is necessary to conduct performance appraisal
system.
0rom the study it was found that @B? of the employees received reward in the
form of salary increment, >9? of the employees received reward in the form of
bonus payment and CC? of the employees received reward in the form of
promotions.
Majority of the employees i.e., =9? felt that the present performance appraisal
system is ineffective.
2INDIN3S :thr!(.h i%ter,ie#5
8+ 0rom the study it is clear that the employeeDs performance have been
evaluated only once i.e., after their probation period.
C+ *aving evaluated the performance the employee is either provided with C
increments, @ increments or > increments.
@+ Monetary increment in /./ and promotions are also provided to the
employees.
>+ #ut the 8A?, @9? and 8E? of the employeesD performance hasnDt been
evaluated since 8 year, C years and more than C years respectively.
:+ .here are B? of the employees whose performance hasnDt been evaluated at all
since the date of their joining.
,5 SU33ESTIONS
Periodicity of the performance appraisal system must be increased to
4uarterly for a realistic assessment of the performance.
'long with performance punctuality, e,perience, creativity, loyalty must
also be considered while promoting an employee.
Performance appraisal format should be reliable, accurate and
measurable.
Performance appraisal reports must use SW-. techni4ues and provide
scope for further career development in the organi1ation.
.he superiors who evaluate the performance must provide feedback to the
employees to improve performance.
CONCLUSION7
.his study helped me to understand the performance appraisal system and the
effectiveness of it in an organi1ation.
In order for the employees to develop and learn they need to know what they
need to change, where Fspecifically+ they have fallen short, and what they need to
do.
If a manager assigns a 8 Funsatisfactory+ on a scale of :, it does not convey much
information to an employee. It just says the manager is dissatisfied with
something. In order to make it meaningful and promote growth, far more
information must be added to the appraisal process and the related information
should be transparently shared with the employee.
Most employees resist being classified at the low end of the scale. mployees
who are low rated are more likely to resist the evaluation of the superior and
argue, claiming that personal bias was involved in the ratings.
.hus from the study I think that the present system does not achieve the end
objective in an effective manner. *ence needs an improvement.
INDUSTRY PROFILE
INTRODUCTION
%eeping pace with the global growth, the #$% group was found in 8=EB by Shri.
#harat %himji. .he group has been guiding on a heritage of initiative G innovation, offering
along with its B associate companies H a wide spectrum of industrial valves designed for the
needs of chemical G petrochemical industries worldwide. 0or more than @ decades, #$%
valves G other products have enjoyed sustained G have lasting reputation in both domestic
G global markets.
Weir .r!( lc& UK through its Indian group company Weir I%dia *ri,ate
Li+ited having its registration office at C8=, 'nsal chambers"C, #hikaji /ama place, <ew
$elhi"8899AA completed ac4uisition 9f &alve #usiness of I#$% ngineering Industries
limited at *ubli, %arnataka with effect from 88
th
-ctober C989. .he unit at *ubli has been
renamed as 2WEIR BDK VAKLVES- A UNIT O2 WEIR INDIA *RIVATE
LI/ITED-0
With ac4uisition of weir #$% &alves" a unit of Weir in Indian Private (imited3 't
*ubli FIWI! #$%6+, the Weir group has now three units in India, with two units already
operating from #angalore, India.
/ANU2ACTURIN3 E4CELLENCE
Weir #$% pioneers in designs and manufacturing of
Jate valves
Jlobe valves
/heck valves
#all valves
P0' lined valves
$iaphragm valves
#utter fly valves
Plug valves
%nife gate valves
WI! #$% caters to major sectors like
<uclear5thermal power plants
-il gas
Steel G metallurgical plants
!efineries and petrochemicals
Pulp, paper G fibre industries
/hemical
Pharmaceuticals
Process and Sugar
Water treatment plants
0ertili1ers and agrochemicals
Sewage G effluent treatment plants
E4*ORTS
WI! #$% e,ports its products to various countries in the world like
'ustralia
<ew1ealand
Malaysia
.hailand
Singapore
Kapan
.aiwan
Philippines
Indonesia
)nited kingdom
$enmark
Jermany
0rance
Spain
'ustria
South 'frica
%enya
Middle east
)S'
/anada
CO/*AN8 *RO2ILE
<ame of unit5 company ; WEIR BDK VALVES <a unit of weir India private limited
/onstitution ; private limited company
Sales head 4uarters ; >E5>B, gokul road, hubli":B99@9 F%arnataka state+
.elephones ; F9B@A+ >C>B>>>5C@@@=@9
0a, ; F9B@A+ >C>B>B>5C@@9E==
"mail ; sales.weirbdkLweirgroup.com
!egistered office ; C8=, 'nsal chambers"II, #*I%'KI /'M' P('/ <W $(*I"
8899AA
.elephone ; F988+ CA8AC:>@
0a, ; F988+ >A9@CCC=A
0actory location ; >E5>B, J-%)( !-'$, *)#(I":B9 9@9 F%'!<'.'%'
S.'.+
.elephone ; F9B@A+ >C>B>>>5C@@@=@9
0a, ; F9B@A+ >C>B>B>5C@@9E==
NATURE O2 THE BUSINESS
#$% is engaged in manufacturing the valves G supplying them to the different re4uired industries
like chemical, processes, refineries, petrochemicals, fertili1er, pharmaceuticals, oil e,ploration,
thermal and nuclear plants, food and beverages, effluent treatment and sewerage, water treatment,
cooling plants, mining and water supply. .herefore they are into #C# i.e. business to business. .he
company is operating through its different branches which work in getting the indent from the
clients.
VISION7 .o be the most admired company in the production of valves industry.
/ISSION7 .o design, .o manufacture, .o market, 7uality products at competitive prices to the
entire satisfaction of the customer G attain market leadership through continual improvement.
*RODUCTS7
Diahra.+ Val,e B(tter)ly Val,e 3ate Val,e 3l!be Val,e
Chec$ Val,e Ball Val,es *l(. Val,e
*(+s7
Process Pumps
#$% H <S slurry Pumps
Multi H stage Pumps
'utomatic self cleaning 0ilters.
AREA O2 O*ERATION
#$% is operating at the international level. .here are many clients inside G outside
India for #$% valves. 's the 4uality of the product is superior so there is good demand. .he
company has the following associate companies G overseas customers.
CO/*ETITORS7 -
.here are many players in &alve industryM #$% has maintaining its position in the
competitive market through various strategies. .he following are the competitors for the
company.
8. ')$/- valves
C. %S# valves
@. M&( *ubli
>. 0ouress #angalore
:. (G. Mumbai
8. <ilton
AWARDS = ACHIEVE/ENTS :CERTI2ICATION57
/ertification is an integral and an ongoing process at #$%, besides being approved
for all government compliances they are also approved by most consulting and contracting
companies.
.hey are IS-, 'PI, /, MS, -*S'S G /!< approved.
'merican Petroleum Institute /ertification
/ /ertification " .)& /ertification #ody for Pressure 4uipment of !W.)&
Systems Jmb*.
IS- /ertificate " .)& /ertification #ody for 7M Systems off !W.)& Systems
Jmb*
IS-"8>998;C99> /ertificate " .)& /ertification #ody for nvironmental
Management System.
#S"-*S'S 8B998;C99E /ertificate " .)& /ertification #ody for -ccupational
*ealth and Safety.
WORK 2LOW /ODEL7 -
*r!ced(re7
8. .he company will make an offer suitable for the customer.
C. ' purchase indent or letter is sent to the company by the customer G a copy is sent to
the sales co"ordination department.
@. .his department will send back an en4uiry or re4uest to #$% which sends a
purchase order G offer to the head of the sales co"ordination.
>. Sales co"ordination will prepare the contract review. .he objective of the review is to
prepare an order assurance after understanding the customers6 re4uirements
thoroughly G ascertaining the capability of #$%.
:. Si, copies of the work order prepared are sent to planning department, marketing
department, 1onal office, customer, master file G to the engineering file.
A. 7uality assurance plan is prepared by the sales co"ordination department G sent
production planning G control assurance department G customer if applicable.
E. Status of the product is given to the customer, an inspection by the customer is been
arranged if the customer needs to have look at the product manufactured.
DE*ART/ENTS7 -
1. Acc!(%ts Deart+e%t7
.he dept plays vital role by providing and maintaining details of every financial activities
of the company.
Ob"ecti,es7
.o provide accurate and complete systematic information of financial activities.
.o maintain all the books of accounts and financial documents.
.o prepare periodic financial statements of the company like profit G loss account, trial
balance G balance sheet pertaining to the company.
2(%cti!%s7
Preparation of daily cash G bank book.
!eceipt G payments.
Maintenance of sales G purchase register
Preparation of sales ta, returns.
Preparations of central e,cise duty returns G income ta, returns.
WEIR-BDK deals #ith the )!ll!#i%. ba%$s7
Syndicate bank located in *ubli for domestic transactions.
/anara bank located in *ubli for e,port transactions.
I/I/I bank.
2. Desi.% = De,el!+e%t7
2(%cti!%s7
8. $esign and development of new products, e,istence of e,isting proven range and
standard e,isting product with some additional feature as per customer re4uirement.
C. Preparation, release, revision and control of manufacturing drawing, sales drawing,
materials list, general assembly drawing and technical signification and directions.
@. 'ssisting department for their re4uirement of fi,ture, gauges G other tooling when
re4uested.
>. $isposal of design concession margin non conformity review committee.
:. Maintenance G updating of national, international standards.
A. 'ttending customer complaints, technical discussion with customer whenever
referred to.
E. /o"ordination with other department for development activities.
B. .o continuously improve the 4uality of the products.
Res!%sibilities7
8. .o design reliable products to meet customer6s specification through design review
design verification and design validation.
C. Issue of drawings and technical6s specification for facilitating procurement,
processing and verification for conformance of products to specified re4uirements.
@. .o perform and control design changes.
>. <on conformance review, disposition, corrective G preventive.
:. .o maintain 4uality documents G records.
A. .o identify training needs and to plan G organi1e for the same.
3. Trai%i%. Deart+e%t7
.his department is headed is meant to provide training to the personnel performing
activity effecting 4uality. .his department is maintained by the officials of the
personal department.
*r!ced(re7
8. .he *-$ identifies the annual training needs of the personnel in their
department, which unless provided will affect the 4uality of work.
C. Personnel performing special process are trained G given certificates on the
basis of appropriate education, training G e,perience re4uired.
.he training needs which are identified are communicated to the *-$ training so
that he can prepare for the annual training programme and co"ordinate for providing
training either internally or e,ternally. )nscheduled programmes are conducted as G
when re4uired according to the needs.
Res!%sibility !) HOD Trai%i%. Deart+e%t7
8. .o organi1e training for identified participants pertaining to common topics.
C. Maintenance of 4uality documents and records.
>. Ti+e O))ice
.his department is headed is by Shri. Murali
Personnel mean the relation between management and workers. Personnel department
is also known as 2.IM -00I/3
Ti+e O))ice Deart+e%t7
It is a branch of personnel departments F*!$+. .ime office is a key to personnel
office. .ime office performers the basic function of the personnel department. It maintains
the arrival and departure time of all the staff members. .he person who looks after the
records of the records of the time office is timekeeper. .he company issues an attendance
card Fpunch card+ to every worker before going to the work placeM the worker gets the
attendance card signed in the office. .he workers are also re4uired to sign the attendance
register to avoid the misrepresentation or escaping tricks of workers while going out of the
department. Workers are re4uired to insert their punch card in the factory. .he time office
sends these records to the personnel department. .hese records will help in wage fi,ation,
salary fi,ation, salary fi,ation, granting of leave and allowances to workers.
Atte%da%ce; .his department records the time Fi.e. the time of workers in and out of the
company+ through punch card system right at the entrance by the time officer.
5. /aterial = St!res Deart+e%t7
Ob"ecti,es7
8. .o plan and procure materials and services confronting to specified re4uirements
through continual improvements.
C. Store G preserve materials till they are issued for use.
In purchase department purchasing activity is carried on which is made after the
order is accepted by the planning department. It maintains the bill of the materials list
to know re4uirement of raw materials. 'ccording to technical specifications of the
companies selected vendors.
Tyes !) ,e%d!rs7
8. /asting vendors
C. #ought vendors.
/ompany procures @C types of raw materials from 899 suppliers. Who are evaluated
G selected to their performance G product 4uality.
Suppliers supply the materials according to the given delivery date.
6. *r!d(cti!%& *la%%i%. a%d C!%tr!l Deart+e%t7
.he department is concerned with the planning for the production process. It
plans what is to be produced, what are the re4uirements to be fulfilled for the process
of production. 'nd also controls the production process.
Ob"ecti,es7
8. .o plan G meet the production targets as per the customer specifications.
C. Plan for the manpower G e4uipment.
@. .o organi1e the layout of machine shops G assemblies for effective operations.
/ontract review is prepared as per the client6s product catalogue G the
engineers plan. 'ccording to the contract details the production of the product is
carried out at the end of each month.
7. Sales c!-!rdi%ati!% deart+e%t7
.his department helps in collecting orders from the customers through agents,
dealers G salesmen. .his department also attends to the complaints G suggestions
given by the customers. It has 89 1onal offices throughout India known as #$%
marketing services Pvt. (td.
.he associated manufacturing concerns of WI!" #$% in *ubli are;
8. Nenith Machines G tools Pvt.(td.
C. .P Pumps G &alves Pvt.(td.
@. S ( 0low /ontrol
>. &alves Pvt (td
:. Perfect 'ctuators G /ontrol Pvt (td
*r!ced(re7
8. .he company will make an offer suitable for the customer.
C. ' purchase indent or letter is sent to the company by the customer G a copy
is sent to the sales co"ordination department.
@. .his department will send back an en4uiry or re4uest to #$% which sends a
purchase order G offer to the head of the sales co"ordination.
>. Sales co"ordination will prepare the contract review. .he objective of the
review is to prepare an order assurance after understanding the customers6
re4uirements thoroughly G ascertaining the capability of #$%.
:. Si, copies of the work order prepared are sent to planning department,
marketing department, 1onal office, customer, master file G to the
engineering file.
A. 7uality assurance plan is prepared by the sales co"ordination department G
sent production planning G control assurance department G customer if
applicable.
E. Status of the product is given to the customer, an inspection by the customer
is been arranged if the customer needs to have look at the product
manufactured.
B. In case of any missing of details a forwarding letter is sent to #$% G a copy
of the letter to the customer.
?0 @(ality Ass(ra%ce Deart+e%t7
Ob"ecti,es7
8. .o maintain consisting G correct appraisal of 4uality of the product at all the stages
of manufacturing till the product is dispatched such that the re4uired product 4uality
is achieved, maintained G improved.
C. .o develop necessary competence in the department for meeting specific 4uality
re4uirements.
Res!%sibilities7
8. .o draw 4uality plans or inspection plans.
C. Inspection of incoming G in process production.
@. 0inal product inspection G testing.
>. Identification G traceability of products.
:. Inspection G test status.
A. /alibration G control of inspection, measuring G test e4uipment to maintain
identification G traceability for the same.
E. .o plan for inspection G test resources.
B. <on conformance review, disposition, corrective and preventive action.
=. Maintenance of 4uality documents G records.
89. .o identify training needs G to plan G organi1e wherever re4uired.
88. .o fi, G remove 'PI monogram is re4uired.
SWOT ANAL8SIS
Stre%.ths7
#$% provides 4uality at affordable prices prompt delivery and the unflinching
commitment to e,cel.
#$% is large scale supplier of valves G pumps.
.he group6s product has been enjoying a sustained presence in the national O
international markets in the chemical G process industries.
#$% follows standard system for all their activities.
In the market the company is recogni1ed by their 4uality.
.his is IS- standardi1ed company.
Wea$%ess7
$ue to lack of suppliers they are unable to provide proper accessories.
/ost of maintenance standard is more.
O!rt(%ities7
.hey have many competitive manufacturers in the market.
.hey have an opportunity to increase their supply to no. of industries.
.here is no restriction for movement of products in the world due to globali1ation
.here are many foreign countries still to be covered.
/ompany has an opportunity to diversify its business to 0M/J market due to its
e,perience
Threats7
.heir main raw material is casting G foundries for which they have to heavily
depend on outsiders which may affect their yield during recession.
AN OVERVIEW OF THE PERFORMANCE
APPRAISAL SYSTEM
i5 I%tr!d(cti!% t! *er)!r+a%ce Araisal
-nce the employee has been selected, trained and motivated, he is then appraised for his
performance. Performance 'ppraisal is the step where the Management finds out how
effective it has been at hiring and placing employees. If any problems are identified, steps
are taken to communicate with the employee and remedy them.
'*er)!r+a%ce Araisal is a r!cess !) e,al(ati%. a% e+l!yee1s er)!r+a%ce i% ter+s
!) its re;(ire+e%ts3.
Performance 'ppraisal can also be defined as the r!cess !) e,al(ati%. the er)!r+a%ce
a%d ;(ali)icati!%s !) the e+l!yees i% ter+s !) the re;(ire+e%ts !) the "!b )!r #hich he
is e+l!yed& )!r (r!ses !) ad+i%istrati!% i%cl(di%. lace+e%t& selecti!% )!r
r!+!ti!%s& r!,idi%. )i%a%cial re#ards a%d !ther acti!%s #hich re;(ire di))ere%tial
treat+e%t a+!%. the +e+bers !) a .r!( as disti%.(ished )r!+ acti!%s a))ecti%. all
+e+bers e;(ally0
I+!rta%ce a%d *(r!se
Performance 'ppraisal has been considered as the most significant an indispensable tool for
an organi1ation, for an organi1ation, for the information it provides is highly useful in
making decisions regarding various personnel aspects such as promotion and merit
increases. Performance measures also link information gathering and decision making
processes which provide a basis for judging the effectiveness of personnel sub"divisions
such as recruiting, selection, training and compensation. 'ccurate information plays a vital
role in the organi1ation as a whole. .hey help in finding out the weaknesses in the primary
areas.
0ormal Performance 'ppraisal plans are designed to meet three needs, one of the
organi1ation and the other two of the individual namely;
.hey provide systematic judgments to back up salary increases, transfers, demotions
or terminations.
.hey are the means of telling a subordinate how he is doing and suggesting needed
changes in his behavior, attitudes, skills or job knowledge. .hey let him know where
he stands with the #oss.
Superior uses them as a base for coaching and counseling the individual.
-n the basis of merit rating or appraisal procedures, the main objectives of
mployee 'ppraisal are;
.o enable an organi1ation to maintain an inventory of the number and 4uality of all
managers and to identify and meet their training needs and aspirations.
.o determine increment rewards and to provide reliable inde, for promotions and
transfers to positions of greater responsibility.
.o suggest ways of improving the employee6s performance when he is not found to
be up to the mark during the review period.
.o identify training and development needs and to evaluate effectiveness of training
and development programmes.
.o plan career development, human resource planning based potentials.
.here are four key elements in the appraisal system;
8. Set !b"ecti,es " $ecide what the .eam (eader wants from the employees and agree these
objectives with them.
C. /a%a.e er)!r+a%ce " Jive employees the tools, resources and training they need to
perform well.
@. Carry !(t the araisal " monitor and assess the employeesD performance, discuss those
assessments with them and agree on future objectives.
>. *r!,ide re#ardsAre+edies " /onsider pay awards and5or promotion based on the
appraisal and decide how to tackle poor performance.
*ER2OR/ANCE A**RAISAL AND *ER2OR/ANCE
/ANA3E/ENT
It is sometimes assumed that performance appraisal is the same thing as performance
management. #ut there are significant differences. Performance appraisal can be defined as
the formal assessment and rating of individuals by their managers at, usually, an annual
review meeting. In contrast performance management is a continuous and much wider, more
comprehensive and more natural process of management that clarifies mutual e,pectations,
emphasi1es the support role of managers who are e,pected to act as coaches rather than
judges and focuses on the future.
Performance appraisal has been discredited because too often it has been operated as
a top"down and largely bureaucratic system owned by the *! department rather than by line
managers. It was often backward looking, concentrating on what had gone wrong, rather
than looking forward to future development needs. Performance appraisal schemes e,isted in
isolation. .here was little or no link between them and the needs of the business. (ine
managers have fre4uently rejected performance appraisal schemes as being time consuming
and irrelevant. mployees have resented the superficial nature with which appraisals have
been conducted by managers who lack the skills re4uired, tend to be biased and are simply
going through the motions.
*er)!r+a%ce araisal c!+ared #ith er)!r+a%ce +a%a.e+e%t
Performance appraisal Performance management
.op"down assessment Koint process through dialogue
'nnual appraisal meeting /ontinuous review with one or more
formal reviews
)se of ratings !atings less common
Monolithic system 0le,ible process
0ocus on 4uantified objectives 0ocus on values and behaviors as well as
-bjectives
-ften linked to pay (ess likely to be a direct link to pay
#ureaucratic H comple, paperwork $ocumentation kept to a minimum
-wned by the *! department -wned by line managers
TRADITIONAL /ETHODS O2 A**RAISAL
Some of the traditional methods of appraisal are e,plained below;
1. Ranking
In this, the superior ranks his5her subordinates in order of their merit, from best to
worst.
" It is done in a competitive group.
" It is done by placing the appraisee on numerical scales i.e. 8
st
, C
nd
, @
rd
etc. in the
total group.
" !anking of an appraisee on his job performance5traits against that of another
member.
2. Person-to-Person/Paired Comparison
)nder this method the appraiser compares each employee with every other employee,
one at a time.
" /ertain key performance areas5traits are developed. .g.; (eadership, /reativity,
Initiative etc.
" ' scale for each factor is designed.
" ' scale of people is also created for each factor.
" ach 'ppraisee is compared to every other person on the scale.
" /ertain scores for each factor are awarded to the appraisee.
3. Grading
" /ertain categories of traits5performance criteria, which are worth of appraising,
are established. .g. cooperativeness, self"e,pression, dependability, job
knowledge etc.
" .he actual performance F%ey performance area+ of an employee is then compared
to the predetermined grade definitions.
" 'ppraisee is allotted with the grade, which describes his performance in the best
possible manner.
" 'ny grade that is selected should be well defined.
4. Graphic Scales
" ' printed form, one for each person to be rated is used.
" .he factors included in the form are mployee characteristics such as leadership,
cooperativeness, enthusiasm, loyalty etc. or mployee contribution which
includes 4uantity and 4uality of work, specific goals achieved, regularity of
attendance, responsibility assumed etc.
" .he traits can be evaluated on continuous scale H the appraiser places a mark
along a continuum Frange+.
" .he best method to use is the 2multiple3 type of scale wherein one has to 2tick
off3 the bo,, which suits the description of an appraisee6s performance.
" /ertain types of graphs are prepared based on these derived ratings.
5. Checklist
" ' series of 4uestions are presented concerning an appraisee6s behavior.
" .he appraiser has to reply to the 4uestions in either negative or positive tone"
FPes5<o+.
" .he value of each 4uestion may be weighted i.e. one can have predetermined
scale and scoring to those 4uestions.
. !ssa"
" ' blank form is given to the appraiser.
" .he form contains main heading such as employees6 characteristics, attitudes, job
knowledge, potential etc.
" .he appraiser is asked to put in words his impressions about the employee.
" It contains factual and concrete knowledge.
" It gives specific information about the employee.
#. Confidential Reporting
" It is the most traditional way of appraising employee6s performance. .he basic
assumption here is that since the superior is in direct contact he knows his
subordinates better than any other and hence his appraisal would be more
appropriate.
" .he superior writes a paragraph or so about his subordinate6s strengths,
weaknesses, intelligence, attitude to work, attendance, conduct and character,
work efficiency, etc.
$. Critical %ncident &ethod
" Initially a set of noteworthy Fgood or bad+ on"the"job behaviors is prepared. .his is
usually in the form of incidents.
" .hese incidents are given to a group of e,perts who assign scale values depending
upon the degree of desirability for the job.
" .his checklist is used by superiors for evaluating the employees.
" .his method helps in identifying the key areas where the employees are weak or
strong.
" It emphasi1es rating on objective evidence and helps in counseling.
'. (orced Choice )echni*+e
" In forced choice system the appraiser is forced to choose one from among a
group of > statements that best fits the individual being rated and one which least
fits him.
" ach statement is given a value or a score.
" .he evaluator does not know the score value of statementsM hence he cannot show
any favor towards the appraisee.
" .he method of arranging the traits involves a long process from getting the
description of 2good3 or 2bad3 employees to establishing their validity and
reliability.
1,. -eha.iorall" /nchored Rating Scales 0-/RS1
" #ehaviorally 'nchored !ating Scales F#'!S+ are anchored with descriptive
alternative behaviors.
" 0or every given category of behavior or performance, statements are ordered in
an ascending or descending order of e,cellence.
" 'lthough these scales represent job"relevant dimensions of performance, they
still pose problems in determining which actually, observed behaviors match
with specifically anchored performance scales.
" $espite this difficulty, #'!S are a significant improvement, since they re4uire
less inference on the appraiser6s part as against traditional rating approaches.
NEW 2RONTIERS TO *ER2OR/ANCE A**RAISAL
In recent years the system of performance appraisal is becoming more and more transparent
wherein the employee, who is being appraised, is involved in the process. .he objectives or
targets are set with mutual understanding between the appraisee and his immediate superior.
.he feedback regarding his performance is given to the appraisee with areas of improvement
by disclosing his strengths and weakness and the opportunities available. I will take you into
details of these new frontiers to Performance 'ppraisal vi1;
I0 /a%a.e+e%t by Ob"ecti,es :/BO5
II0 Bala%ced Sc!recard
III0 BCDE 2eedbac$
I0 /ANA3E/ENT B8 OB6ECTIVES
8. Management by -bjectives is basically a process whereby the superior and the
subordinate managers of an enterprise jointly identify its common goals, define
each individual6s major areas of responsibility in terms of the results e,pected of
him and use these measures as guides for operating the unit and assessing the
contribution of each of its members. Management by -bjectives is primarily to
change the behavior and attitude towards getting an activity or assignment
completed in a manner that it is beneficial for the organi1ation. Management by
objectives is a result"oriented process, wherein emphasis is on results and goals
rather than a prescribed method. ' number of companies have had significant
success in broadening individual responsibility and involvement in work
planning at the lowest organi1ational levels.
C. .he concept rests on a philosophy of management that emphasi1es integration
between e,ternal control Fby managers+ and self"control Fby subordinates+. It can
apply to any manager or individual no matter what level or function, and to any
organi1ation, regardless of si1e.
0or instance, the number of 4uality articles to be churned out in a week at a
publishing house is, let6s say, five. .his is the goal of the organi1ation. .his
goal has to be set in coordination with the writers. .he emphasis here again
would be on accomplishing this task flawlessly over the week rather than the
setting of a method to accomplish the same. Pou are giving them a free hand to
decide as to how they want to work in order to accomplish target. .his gives the
employee both responsibilities as well as authority to do a job. .he employees
are now responsible for its success or failure and it is their baby. It is a &!P
SM'!. M'<'JM<. .--( where the employee is involved in the
decision making process.
@. Management by -bjectives is a five"sutra process having following basic steps;
i. Set Organizational oal!"
.his envisages that organi1ational goals and business strategies are e,pressed
clearly, concisely and accurately. .hey are periodically reviewed. .hey
should be challenging enough to motivate the employee. /lear and attainable
goals help channel energies towards desired behavior and let the employee
know the basis on which he will be rewarded. 't this time, any appropriate
changes in the organi1ation structure should be made; changes in titles, duties,
relationships, authority, responsibility, span of control and so forth.
ii. #oint oal Setting"
.his step establishes short"term goals, which are performance oriented,
between the management and the employee. .he responsibilities are clarified
to the employees through organi1ational charts and job description. .he goals
decided by the employee need to complement the goals of the management.
.hey also need to be fle,ible to accommodate new ideas without losing
individual responsibilities. Moreover they should be easily 4uantifiable. 0or
e,ample;
.o prepare process and transfer to the office superintended, all account
payable vouchers within three working days from the receipt of the
voucher.
.o hold weekly meetings with all employees.
.o use program evaluation and review techni4ue Fpert+ for all new plant
layouts.
iii. Per$or%an&e Re'ie(!"
.his step suggests fre4uent performance reviews between the manager and
the employees. $uring the initial stages the meetings be held once a month
and later could be 4uarterly. 0or ma,imum benefit these meetings should be
scheduled for more than once a year.
i.. Set &)e&* +o!t!"
stablishment of major check posts to measure progress. .his is merely to
check that the employee surges towards his premeditated Fplanned+ goal
without any disruptions. .hese check levels should be higher in the initial
stages and then gradually reduce. .his demands that the manager should be
on constant alert and e,ercise sound judgment.
.. Fee,-a&*"
.he employees who receive fre4uent feedback about their performance are
highly motivated than those who do not. *owever, one has to ensure that the
feedback is relevant and specific. .his helps the employee and the manager
understand where they stand.
II. BCD 2EEDBACK
With the movement in the eighties to find new strengths and productivity through
employee empowerment came the idea of performance appraisals from subordinates,
their superiors, their peers and themselves H 2BCD E )eedbac$s.3
AN OVERVIEW OF THE PRO#ECT
i5 OB6ECTIVES O2 THE STUD8
.o study the e,isting performance appraisal system followed in the
organi1ation.
.o study the outcome5 result of the performance appraisal system that is
practiced by the organi1ation
.o study the effectiveness of performance appraisal system with respect to
the employees of the company.
.o suggest changes and improvements in the performance appraisal system if
re4uired.
ii5 /ETHODOLO38
Tye !) research7
.his is descriptive research method.
Sa+le si9e7
' sample si1e of 899 respondents was selected to undertake the study
:9" #lue collar
:9" White collar
S!(rce !) data c!llected7
*ri+ary data7
Primary data was collected by interacting with the organi1ation employees, various
departmental managers and through 4uestionnaire.
7uestionnaire was prepared and e,plained to the respondents so as to access them in
giving prompt and unbiased response.
Sec!%dary data;
.he secondary data was collected with the help of organi1ation manuals and from the
records of individual employees.
Sa+li%. /eth!d7
<on" probability convenience sampling method was used
ANALYSIS
F0 A.e7
'nalysis; 0rom the above diagram it is clear that @9? of the employee6s age lies
between 8B"C: years, >A? of the employee6s age lies between C:"@9 years, B? of
the employee6s age lies between @9"@: years and 8A? is above @: years.
G0 @(ali)icati!%7
'nalysis; .he figure above depicts that @9? of the employees are graduates and the
remaining E9? are diploma holders.
B0 W!r$ EHerie%ce7
'nalysis; 0rom the above figure we can say that @C? of the employees e,perience lies
between C"@ years, @A? are working from more than @ years and 8A? of the employees
e,perience lies between 9"8 year and 8" C years.
Interpretation; .his shows that people are working from long period of time but the
performance has not been evaluated fre4uently, which would affect their efficiency level.
>0 *ractice !) er)!r+a%ce araisal syste+
'nalysis; It is clear that =>? of the employees have stated that the performance
appraisal system is conducted in the organi1ation but A? of the employees stated that
there is no performance appraisal conducted.
Interpretation; .his shows that A? of the employees are not aware of the concept of
I0 Necessity !) er)!r+a%ce araisal syste+
'nalysis; 0or this parameter the answer of the employees was same as the above one,
i.e., =>? of the employees feel that performance appraisal is important and A? feel
that it is not important or not re4uired.
C0 Ki%d !) re#ard recei,ed7
'nalysis; <ow this figure shows a clear picture of the rewards received by the
employees. i.e., CC? received promotion
>9? received bonus payment
@B? received salary increment
Interpretation; we can easily interpret that rewards are given to all the employees in
one or the other form though there is no proper performance appraisal system carried
out.
J0 2re;(e%cy !) er)!r+a%ce araisal syste+
'nalysis; 0rom the figure it is clear that =>? of the employees have stated that
performance appraisal is conducted after completion of the probation period and only
A? stated that it is conducted yearly.
Interpretation; .his analysis says that employees who have joined before one year
have undergone performance appraisal once after completion of their probation
period and they think that it is carried out every year.
?0 Reas!% )!r c!%d(cti%. er)!r+a%ce araisal syste+ i% y!(r
!r.a%i9ati!%
'nalysis; *ere A9? of the respondents stated that the reason for performance
appraisal system in the organi1ation is to provide increments5 decrements and >9?
stated that it is conducted to facilitate promotions, transfer and termination decisions.
K0 Satis)acti!% )r!+ the er)!r+a%ce araisal a%d re#ard syste+7
'nalysis; 0rom the study it is clear that BA? of the employees are not satisfied and
8>? of the employees are satisfied with the reward and performance appraisal
system.
Interpretation; 8>? of the employees are not satisfied because they do not get
rewards and promotions on the basis of their performance, instead it is just generic
method followed.

FD0EHte%t !) the iss(es c!,ered i% the er)!r+a%ce araisal syste+7
'nalysis; It can now be analy1ed that majority of the issues covered under the
performance appraisal system are personality behavioral.
FF0I%cre+e%ts recei,ed till date7
'nalysis; .he increments received by the employees are depicted in the figure above,
vi1; :A.AE?" received monetary increment in /./
CB?" received C increments
89?" received @ increments
:?" received > increments
2INDIN3S :thr!(.h i%ter,ie#5
?of employees whose
performance is evaluated
?of employees whose performance is not
evaluated since the following years
? of employees
whose
performance is
not evaluated at
all
Increments
provided
Promotions
provided
8year C years More than C
years
C increments
" >?
89? of the
employees
have been
promoted
after the
performance
evaluation.
8A? of
employees6
performance
is not been
evaluated
since 8 year
@9? of
employees6
performance
is not been
evaluated
since C
years
8E? of
employees6
performance
is not been
evaluated
from more
than C
years
.here are B? of
employees whose
performance
haven6t been
evaluated.
@ increments
" B?
Monetary
increment in
/./ " :>?
,i5 SU33ESTIONS
Periodicity of the performance appraisal system must be increased to
4uarterly for a realistic assessment of the performance.
'long with performance punctuality, e,perience, creativity, loyalty must
also be considered while promoting an employee.
Performance appraisal format should be reliable, accurate and
measurable.
Performance appraisal reports must use SW-. techni4ues and provide
scope for further career development in the organi1ation.
.he superiors who evaluate the performance must provide feedback to the
employees to improve performance.
CONCLUSION7
.his study helped me to understand the performance appraisal system and the
effectiveness of it in an organi1ation.
In order for the employees to develop and learn they need to know what they
need to change, where Fspecifically+ they have fallen short, and what they need to
do.
If a manager assigns a 8 Funsatisfactory+ on a scale of :, it does not convey much
information to an employee. It just says the manager is dissatisfied with
something. In order to make it meaningful and promote growth, far more
information must be added to the appraisal process and the related information
should be transparently shared with the employee.
Most employees resist being classified at the low end of the scale. mployees
who are low rated are more likely to resist the evaluation of the superior and
argue, claiming that personal bias was involved in the ratings.
.hus from the study I think that the present system does not achieve the end
objective in an effective manner. *ence needs an improvement.
E5 BIBLIO3RA*H8
#--%S;
*uman !esource Management H Subba !ao
H(+a% Res!(rce /a%a.e+e%t < Ash#ataa
/-MP'<P $-/)M<.S;
C!+a%y r!)ile
C!+a%y br!achers
C!+a%y r!sect(s
25 ANNE4URE
*ER2OR/ANCE A**RAISAL SURVE8
$ear Sir5Madam,
I am pleased to introduce myself as )m"e"*abiba Patel student of
%(6s IMS! /ollege *ubli. 's part of our curriculum I have undertaken a study on
2P!0-!M'</ 'PP!'IS'( SPS.M3 't your esteemed organi1ation. %indly spare
your time to fill the following information re4uired. I assure you that the information
provided by you will be kept confidential.
<ame; $epartment;
$esignation;
@UESTIONNAIRE
8+ What is your age groupQ
a+ 8B"C: b+ C:"@9 c+ @9"@: d+ 'bove @:
C+ What is your 4ualificationQ
a+ $iploma b+ Jraduate c+ Post graduated+ $octorate
@+ *ow long have you been in present jobQ
a+ 9"8 year b+ 8"C years c+ C"@ years d+ 'bove @ years
>+ Is performance appraisal conducted in your organi1ationQ
a+ PesR S b+ <o R S
:+ Is it necessary to conduct performance appraisalQ
a+ Pes b+ <o
A+ Which kind of reward did you get from the superior for your performanceQ
a. Salary Increment R S b. 'ppreciation R S
c. Promotion R S d. #onus Payment R S
E+ 're you able to achieve your target set by the Performance 'ppraisal SystemQ
a+ Pes R S b+ <oR S
B+ *ow fre4uently performance appraisal is doneQ
a+ Pearly b+ *alf yearly c+ 7uarterly
d+ 'fter completion of the probation period
88+ Why do you have Performance 'ppraisal System in your -rgani1ationQ
FPlease tick as many bo,es as appropriate+
a. !etention Strategy R S b. !eward 'llocation R S
c. Identification of .raining G $evelopment needs R S
d. Provide increments5decrements R S
e. 0acilities Promotions G .ransfers G .ermination $ecisions R S f. /areer Planning R S
8C+ 're you satisfied with Performance 'ppraisal System of this companyQ
a+ Pes R S b+ <oR S
=+ 're you satisfied with reward system of this companyQ
a+ Pes R S
b+ <o R S
89+ .o what e,tent were the following issues covered in the Performance 'ppraisal System in
your -rgani1ation.
a. Pour achievement of work objectives b. Pour Personality and #ehavior
$iscussed R S $iscussed R S
<ot discussed R S <ot discussed R S
c. Pour .raining G $evelopment need d. Pour career aspirations G Plans
$iscussed R S $iscussed R S
<ot discussed R S <ot discussed R S
8@+ 'fter the evaluation of your performance how many increments have you receivedQ
a+ -ne increment b+ .wo increments c+ .hree increments
d+ More than three increments
THANK 8OU
Existing Format
Performance & Potential Appraisal
Name of the employee: Designation:
To be rated on a 10 point scale
1 2 3 4 5 6 7 8 9 10
Functional excellence
Customer
Focus(Internal/external
Integrity
ea!ers"i#
$eam %or&
'otential to "an!le "ig"er role
()erall 'er*ormance
Performance highlights/ example for demonstrated potential
Strengths
Development/ Training need
Name of the Spervisor : Signatre:
Designation :


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