A PROJECT

REPORT ON
“TO STUDY THE PERFORMANCE APPRAISAL”
AT
“SBI LIFE INSURANCE”

SUBMITTED TO
SAVITRIBAI PHULE
PUNE UNIVERSITY
IN PARTIAL FULFILLMENT OF
REQUIREMENT OF
MASTEROF BUSINESS ADMINISTRATION (MBA)

SUBMITTED BY
RICHA PANKAJ MEHTA

DEPARTMENT OF MANAGEMENT STUDIES

SANDIP FOUNDATION’S

SANDIP INSTITUTE OF TECHNOLOGY AND

RESEARCH CENTRE, NASHIK-422213.
2019-2020
 STUDENT’S DECLARATION

I undersigned hereby declare that, the project entitled, “TO STUDY

PERFORMANCE APPRAISAL AT SBI LIFE INSURANCE” is
executed as per the course requirement of two year full time MBA
program of Savitribai Phule Pune University. This report has not been
submitted by me or any other person to any other University or Institution
for a degree or diploma course. This is my own and original work.

Place: ………………….

Date: ………………….. RICHA.P.MEHTA

 ACKNOWLEDGEMENTS
I take this opportunity to extend my sincere thanks to The Principle, Prof (Dr.)
S.T Gandhe and H.O.D Prof (Dr.) Rakesh Patil for offering a unique
platform to earn exposure and knowledge in the field of Marketing and in
learning the practical implementation of various tools and techniques in such
environment.

I am also thankful to my project guide PROF. SARIKA PATIL who helped

me at all stages during this project and whose suggestion were indispensable
throughout and played a great role in making this a useful project.

I wish to extend my sincere and heartfelt gratitude to my guide Ms. Shrutika

Gaikwad Relationship Manager, who guided and encouraged me during the
entire tenure of the project. I also thank Mr. Amol Joshi and Sandesh
Ballamwar, Branch Head, for their co-operation and valuable advice
throughout the course of the project. I am able to say with conviction that I
have immensely benefited from auspicious and prestigious association as
summer intern with SBI LIFE INSURANCE COMPANY, Nashik.

I also wish to thank the member of staff of company Vaibhav Saxena and
Bhavesh Tidke and the faculty of the college for their constant support and
help in accomplishing the project.
 CONTENTS

CHAPTER TITLE PAGE NO.

NO.
COLLEGE CERTIFICATE

COMPANY CERTIFICATE

STUDENT’S DECLARATION

ACKNOWLEDGEMENT

1. Executive Summary 1

2. Objectives of the Study 3

3. Company Profile 4

4. Theoretical Background 12

5. Research Methodology 19

6. Data Analysis and Interpretation 24

7. Findings 41

8. Suggestions / Recommendations 42

9. Conclusions 43

REFERENCES 44

APPENDIX 45
 LIST OF GRAPHS
Sr. No Graph No. Title Of Graph Page
No.
1. 6.1 Gender 24
2. 6.2 Age 25
3. 6.3 Occupation 26
4. 6.4 Annual Income 27
5. 6.5 Investment Preferred 28
6. 6.6 % of Income Invested 29
7. 6.7 Type of Mutual Fund 30
8. 6.8 Time Horizon 31
9. 6.9 Regular Investor 32
10. 6.10 Knowledge about Mutual Fund 33
11. 6.11 Reason to invest 34
12. 6.12 Schemes preferred 35
13. 6.13 Medium of Information 36
14. 6.14 Source of purchase 37
15. 6.15 Attractive Feature 38
16. 6.16 Company Preferred 39
 LIST OF TABLE
Sr. No Table No. Title Of Table Page No.
1. 5.1 Research Methodology 23
2 6.1 Gender 24
3 6.2 Age 25
4 6.3 Occupation 26
5 6.4 Annual Income 27
6 6.5 Investment Preferred 28
7 6.6 % of Income Invested 29
8 6.7 Type of Mutual Fund 30
9 6.8 Time Horizon 31
10 6.9 Regular Investor 32
11 6.10 Knowledge about 33
Mutual Fund

12 6.11 Reason to invest 34

13 6.12 Schemes preferred 35
14 6.13 Medium of Information 36
15 6.14 Source of purchase 37
16 6.15 Attractive Feature 38
17 6.16 Company Preferred 39
 LIST OF FIGURES

SR. Figure No. Title Of Figure Page No.

No

1. 4.1 Decision Making Process 13

2. 4.2 Working Of Mutual Fund 18

 CHAPTER 1

EXECUTIVE SUMMARY
 Project study report consists of brief description of company SBI LIFE
INSURANCE CO. LTD., NASHIK, the special focus on the human resources.
My topic was “PERFORMANCE APPRAISAL AT SBI INSURANCE
COMPANY” along with significant findings & suggestions that give idea how
many the employees in the company are satisfied and not satisfied with welfare
facility of the company.

, “Performance appraisal is the process of evaluating the performance and

qualifications of employees in terms of the requirements of the job for which he

is employed, for the purpose of administration including placements, selection

for promotions, providing financial rewards and other actions which require

different treatment among the members of the group as, distinguished from

actions affecting members equally.”

The study has helped to know the performance of the employees

better and also assisted in identifying the needs of the employees. This helps to

improve the effectiveness of the performance

Reason for selecting SBI LIFE INSURANCE COMPANY is, it is one of the

growing company. With a far reaching network of branches and other

distribution channels, ABSLMF is committed to deepening mutual fund

penetration in the country. The company is ceaselessly working to enhance the

appeal of mutual funds across a wider set of investors and advisors across India

and is ranked 3rd this year compared to the other AMCs.

 The project was conducted in Nasik city for a period of 2 months i.e. 15
May to 15 July.
 PHASE 2- I communicated with them about the performance appraisal
system
 PHASE 3-Questionnaire was prepared and observation was done.
 PHASE 4- Questions were asked and Questionnaire was filled by the
employees.
 The data was collected and analyzed.

RESULT: The study has helped to know the performance of the employees

better and also assisted in identifying the needs of the employees. This helps to

improve the effectiveness of the performance appraisal that in turn leads to better

productivity from the employees.

CHAPTER 2
OBJECTIVES
OBJECTIVE OF THE STUDY

1. To study the performance appraisal system of SBI Life insurance Co Ltd.

2. To study the need and importance of performance appraisal at sbi life
insurance
3. To evaluate effectiveness of performance appraisal system in sbi life
insurance.

4. To summarize and find certain suggestion for the importance of

performance appraisal system at company.
 CHAPTER 3
COMAPANY PROFILE
  COMPANY NAME:-SBI LIFE INSURANCE,NASHIK

 Mission

“To emerge as the leading company offering a comprehensive range of life insurance

and pension products at competitive prices, ensuring high standards of customer satisfaction

and world class operating efficiency, and become a model life insurance company in India in

the post liberalization period.”

 Values

 Trustworthiness

 Ambition

 Innovation

 Dynamism

 Excellence

 Vision
To be the most trusted and preferred life insurance provider.

 LOCATION:-NASHIK
PRODUCT RANGE
 UNIT LINKED PRODUCTS:
Horizon 11
Unit plus 11
Unit plus child plan
Unit Plan Elite
Smart Ulip

 PENSION PRODUCTS:
Horizon 11 Pension
Unit Plus 11 Pensions
Lifelong Pension
Immediate Annuity

 MONEY BACK SCHEME PRODUCTS:

 Money Back
 Sanjeevan Supreme

 PURE PROTECTION PRODUCTS:

 Swadhan
 Shield
 Keyman

 PROTECTION CUM SAVINGS PRODUCT

 Sudarshan
 Scholar ll
 Setubandhan
GROUP EMPLOYEE BENEFIT PRODUCTS
RETIREMENT SOLUTIONS:
Cap Assure Gratuity
Cap Assure Superannuation
Cap Assure Leave Encashment
Group Immediate Annuity
SBI Life Golden Gratuity
PROTECTION PLAN:
Sampoorn Suraksha
SBI Life Group Term Life Scheme In Lieu of EDLI

SPECIALIZED TERM INSURANCE:

SBI Life Keyman Insurance

GROUP LOAN PROTECTION PRODUCTS

DHANARAKSHA PLUS:
Dhanaraksha Plus SP
Dhanaraksha plus LPPT
Dhanaraksha plus RP

GROUP SAVINGS PROTECTION PLAN:

Nidhi Raksha RP

GROUP MICRO INSURANCE:

Grameen Shakti and Super Suraksh
 LIST OF COMPETITORS

1. Bajaj Allianz Life Insurance

2. Birla Sun Life Insurance
3. HDFC Standard Life Insurance
4. ICICI Prudential Life Insurance
5. ING Vysya Life Insurance
6. Max New York Life Insurance
7. Met Life Insurance
8. Om Kotak Mahindra Life Insurance
9.TATA AIG Life Insurance
10.Reliance Life Insurance(AMP Sanmar AssuranceCo. Ltd.)
11.Dabur CGU Life Insurance
12.AVIVA Life Insurance
13.Sahara Life Insurance
14.Shriram Life Insurance
15.Bharti AXA Life Insurance
16.Future Generali Life
17.IDBI Forlis Life Insurance
18.Canara HSBC Oriental Bank Of Commerce
19.AEGON Religare Life Insurance
20.DLF Parameria Life Insurance
21.Star Union Dai-ichi Life Insurance
COMPANY LOGO

BRANCH OFFICE:- 1st floor,bhandari avenue above bhandhari

jewellery,near kalika mata mandir,Mumbai naka nashik-
422001

Ph:0253-6685500
Email: sachin.sonawane@sbi-life.com
Website: www.sbilife.co.in
HISTORIC DEVELOPMENT OF SBI LIFE INSURANCE
SBI Life Insurance Company Limited (SBI Life) established in 2001 is a joint
venture between State Bank of India (SBI) and BNP Paribas Cardif S.A. and is
one of the leading life Insurance companies in India. SBI has an unrivalled
strength of over 22000 branches across the country making it the largest banking
group in India. BNP Paribas Cardif S.A. is the life and property & casualty
insurance arm of BNP Paribas one of the strongest banks in the world. SBI Life
offers a comprehensive range of life insurance and pension products.
The company offers individual and group products which include savings and
protection plans to address the insurance needs of diverse customer segments.
SBI Life has a multi-channel distribution network comprising of an expansive
Bancassurance channel with SBI and agent network comprising of 1.13 lakh
agents as on September 30 2018. The company's other distribution channels
include direct sales and sales through corporate agents brokers insurance
marketing firms and other intermediaries. As on September 30 2018 the
company had a widespread network of 848 offices across the Country.SBI Life
Insurance Company Limited was incorporated as a public limited company at
Mumbai on October 11 2000 and received certificate of commencement of
business from the RoC on November 20 2000.
The Company is registered with the IRDAI for carrying out business of life
insurance pursuant to the registration certificate dated March 29 2001. During
financial year 2002-03 SBI Life launched Bancassurance channel. It also paid its
first claim during the year. During financial year 2004-05 SBI Life's Assets
Under Management (AUM) crossed Rs 1000 crore mark. In January 2005 SBI
Life launched unit linked product. During financial year 2005-06 SBI Life
became the first new generation private life insurance company to make profit;
the company registered profit after tax of Rs 2.03 crore for the year.During
financial year 2007-08 SBI Life's Gross Written Premium (GWP) crossed the
milestone of Rs 5000 crore and AUM crossed the milestone of Rs 10000 crore.
The company also achieved cumulative breakeven during the year wiping out all
accumulated losses. During the year the company's share capital increased by Rs
500 crore to Rs 1000 crore. During financial year 2009-10 SBI Life's GWP
crossed the milestone of Rs 10000 crore. During financial year 2010-11 SBI
Life's branch network crossed the milestone of 500 branches.
ABOUT THE COMPANY

SBI Life Insurance Company Ltd

SBI Life Insurance is a joint venture between State Bank of India and BNP
Paribas Assurance SBI owns 74% of the total capital and BNP Paribas
Assurance the remaining 26%. SBI Life Insurance has an authorized capital
of Rs.2,000 crore and a paid up capital of Rs.1,000 crore. State Bank of
India enjoys the largest banking franchise in India. Along with its 6
Associate Banks, State Bank Group has the unrivalled strength of over
16,000 branches across the country, arguably the largest in the world. BNP
Paribas is the 1st largest French company and ranks 5th in the banking
industry worldwide, 1st bank in Euro Zone as per Global 2000 Forbes’ 2008.
It is 6th most valuable international banking brand as per Brand Finance
2008.

BNP Paribas Assurance is the insurance arm of BNP Paribas - Euro Zone’s
leading Bank. BNP Paribas, part of the worlds top 10 groups of banks by
market value and part of Europe top 3 banking companies, is one of the
oldest foreign banks with a presence in India dating back to 1860. BNP
Paribas Assurance is the fourth largest life insurance company in France,
and a worldwide leader in Creditor insurance products offering protection to
over 50 million clients. BNP Paribas Assurance operates in 41 countries
mainly through the Bancassurance and partnership model.
Multi-distribution Model

SBI Life has a unique multi-distribution model encompassing vibrant

Bancassurance, Retail Agency, Institutional Alliances and Corporate
Solutions distribution channels.

SBI Life extensively leverages the State Bank Group relationship as a

platform for cross-selling insurance products along with its numerous
banking product packages such as housing loans and personal loans. SBI’s
access to over 100 million accounts across the country provides a vibrant
base for insurance penetration across every region and economic strata in the
country, thus ensuring true financial inclusion. Agency Channel, comprising
of the most productive force of over 68,000 Insurance Advisors, offers door-
to-door insurance solutions to customers.
ACHIEVEMENTS IN 2018-2019
1.SBI life insurance company limited wins life insurer of the year 2018-india by insurance
asia news awards for excellence 2018.
2.SBI life insurance company limited has been declared as the winner of golden peacock
award for risk management for year 2018.
3.SBI life won a 2nd runner up in the category of improvement and innovation at the 30th
4.SBI life company limited received the smart insurer award in the life insurance –largely
category at ET insurance summits 2018.
5.SBI life won silver category for life insurance provider of the year 2018 by outlook money.
6.SBI life insurance was recognised as the economic times best brands 2019 by the economic
times.

ACHIEVEMENTS IN 2017-2018
1.SBI life wins TISS leapvault CLO awards 2017 for L and D team of the year in the
insurance category.
2.SBI life was conferred the 3rd HR excellence business world award in order of merit for
excellence in HR technology.
3.SBI life once again adjudged as one of the most trusted brand 2017 for the seventh
consecutive year by the economic times brand equity.
4.SBI life wins the brand of the year 2017-2018 award in the insurance category by WCRC.
SWOT ANALYSIS

STRENGTHS:
• Since the tribe of life insurers has grown from 12 to 16, but SBI still
leads the private sector pack. SBI life is the Ranks among Global Top
Three at Million Dollar Round Table.
• Product innovation is a focus area for them. To stay relevant to the
consumer they work hard for innovating and developing new
products.
• Even today after it has rolled out so many campaigns, SBI remains
among the most trusted brand.
• SBI Life is fundamentally strong and the prospect of meeting its
policyholder's obligations as highest.

WEAKNESSES:

• Allocation charges are very high.

• Product awareness.

• Less awareness about SBI Life insurance in rural areas.

OPPORTUNITIES:

• Market is booming. Insurance companies are fast emerging as one of

the most prominent players in the govt. securities market.

• Lack of awareness about insurance is one of major opportunity for

SBI Life Insurance. It can create market for itself by making masses
aware about insurance and its need.

• Policies of govt. of India are favorable for the growth of the company.

THREATS:
• Capital requirement for setting up a life insurance company is very
high. The intensity of rivalry among private players is very high.
• Increased competition in the insurance sector.
 CHAPTER 4
THEROTICAL BACKGROUND
Performance Appraisal

Meaning-

A performance appraisal is a regular review of an employee's job performance

and overall contribution to a company. It is also known as performance rating,
performance evaluation, employee assessment, performance review, merit rating,
etc.

It is also known as performance rating, performance evaluation, employee

assessment, performance review, merit rating, etc.

Performance Appraisal is carried out to identify the abilities and competencies of

an employee for future growth and development. It is aimed at ascertaining the
worth of the employee to the organization, in which he/she works.

Definition:Performance Appraisal is defined as a systematic process, in which the

personality and performance of an employee is assessed by the supervisor or
manager, against predefined standards, such as knowledge of the job, quality and
quantity of output, leadership abilities, attitude towards work, attendance,
cooperation, judgment, versatility, health, initiative and so forth.

Needs-

 Providing information about the performance ranks on which decision

regarding salary fixation, promotion, etc. are taken.

 To assess the training &development needs of the employees

 Review of the performance of the subordinates.

 Providing information that helps to counsel the subordinates.

 Getting information to diagnose deficiency in employees regarding skills,

knowledge, etc.

 To prevent grievance and in disciplinary activities.

Importance-

 Determination of Compensation:
Performance appraisal tells about how well employees have performed their
job responsibility. It helps to evaluate their performance and determine their
compensation fairly. If employees are compensated appropriately, they will
be motivated accordingly. If the compensation is not determined in
accordance to their performance, employees may be dissatisfied with their
job and the organization.

 Training and development planning:

Performance appraisal helps to identify the work performance level of
employees. This provides information about the actual capability, skill and
expertise. This also helps to know the weaknesses of employees based upon
which, training and development planning can be done. By providing
training and development, resources will be utilized optimally which will
facilitate to the increment of effectiveness of organization.

 Reward management:
To motivate employees, appropriate reward provision have to be managed
which should be linked with performance appraisal. Employees will be
displeased if they don't receive appropriate reward for their better
performance. Similarly, if employees receive reward despite of their poor or
weak performance, employees won't be motivated to improve their
performance and this only increase the burden of the organization.
Performance appraisal helps to match the reward with the performance.

 Motivation:
Performance appraisal itself serves as a means of motivation. Employees
who give their best performance will be evaluated and treated as valuable
and reliable employees. This sort of response will motivate the employees to
perform better. It further tells about the types of motivation to be provided to
employees based upon their performance.

 Proper control:
Through performance appraisal, appropriate feedback regarding the job
performance, effectiveness and productivity can be provided to the
 employees. This will help to know where the control is required and
improve the things. Performance appraisal provides an opportunity to learn
from the mistakes and helps to take corrective measures.

Career planning:

Employees greatly concern with their career development. To address their

career goals and create career paths, an organization requires appropriate
basis for career planning. For this, performance appraisal plays a vital role
by providing the information regarding the employee's current capabilities
and their potentiality.

 Policy formulation:
Performance appraisal provides information about employees and their
performance that serves as an input for training and development programs
as well as career development and motivational programs. This provides
suggestion in formulating appropriate human resource policy for the overall
development of the organization.

Methods-
 Traditional Method:
 Ranking Method:
It is the oldest and simplest formal systematic method of performance
appraisal in which employee is compared with all others for the purpose of
placing order of worth. The employees are ranked from the highest to the
lowest or from the best to the worst.

In doing this the employee who is the highest on the characteristic being
measured and also the one who is L lowest, are indicated. Then, the next
highest and the next lowest between next highest and lowest until all the
employees to be rated have been ranked. Thus, if there are ten employees to
be appraised, there will be ten ranks from 1 to 10.

 Paired Comparison:
In this method, each employee is compared with other employees on one- on
one basis, usually based on one trait only. The rater is provided with a bunch
of slips each coining pair of names, the rater puts a tick mark against the
employee whom he insiders the better of the two. The number of times this
 employee is compared as better with others determines his or her final
ranking.

 Grading Method:
In this method, certain categories of worth are established in advance and
carefully defined. There can be three categories established for employees:
outstanding, satisfactory and unsatisfactory. There can be more than three
grades. Employee performance is compared with grade definitions. The
employee is, then, allocated to the grade that best describes his or her perfor-
mance.

Such type of grading is done is Semester pattern of examinations and in the

selection of a candidate in the public service sector. One of the major
drawbacks of this method is that the rater may rate most of the employees on
the higher side of their performance.

 Forced Distribution Method:

This method was evolved by Tiffen to eliminate the central tendency of
rating most of the employees at a higher end of the scale. The method
assumes that employees’ performance level confirms to a normal statistical
distribution i.e., 10,20,40,20 and 10 per cent. This is useful for rating a large
number of employees’ job performance and promo ability. It tends to
eliminate or reduce bias.

It is also highly simple to understand and easy to apply in appraising the

performance of employees in organisations. It suffer from the drawback that
improve similarly, no single grade would rise in a ratings.

 Forced-Choice Method:
The forced-choice method is developed by J. P. Guilford. It contains a series
of groups of statements, and rater rates how effectively a statement describes
each individual being evaluated. Common method of forced-choice method
contains two statements, both positive and negative.

 Check-List Method:
The basic purpose of utilizing check-list method is to ease the evaluation
burden upon the rater. In this method, a series of statements, i.e., questions
with their answers in ‘yes’ or ‘no’ are prepared by the HR department. The
check-list is, then, presented to the rater to tick appropriate answers relevant
to the appraisee. Each question carries a weight-age in relationship to their
importance.
 When the check-list is completed, it is sent to the HR department to prepare
the final scores for all appraises based on all questions. While preparing
questions an attempt is made to determine the degree of consistency of the
rater by asking the same question twice but in a different manner

 Graphic Rating Scale Method:

The graphic rating scale is one of the most popular and simplest techniques
for appraising performance. It is also known as linear rating scale. In this
method, the printed appraisal form is used to appraise each employee.

The form lists traits (such as quality and reliability) and a range of job
performance characteristics (from unsatisfactory to outstanding) for each
trait. The rating is done on the basis of points on the continuum. The
common practice is to follow five points scale.

The rater rates each appraisee by checking the score that best describes his
or her performance for each trait all assigned values for the traits are then
totaled.

 Essay Method:
Essay method is the simplest one among various appraisal methods
available. In this method, the rater writes a narrative description on an
employee’s strengths, weaknesses, past performance, potential and
suggestions for improvement. Its positive point is that it is simple in use. It
does not require complex formats and extensive/specific training to
complete it.

However, essay method, like other methods, is not free from drawbacks. In
the absence of any prescribed structure, the essays are likely to vary widely
in terms of length and content. And, of course, the quality of appraisal
depends more upon rater’s writing skill than the appraiser’s actual level of
performance.

Moreover, because the essays are descriptive, the method provides only
qualitative information about the employee. In the absence of quantitative
data, the evaluation suffers from subjectivity problem. Nonetheless, the
essay method is a good start and is beneficial also if used in conjunction
with other appraisal methods.

 Field Review Method:

When there is a reason to suspect rater’s biasedness or his or her rating
appears to be quite higher than others, these are neutralised with the help of
 a review process. The review process is usually conducted by the personnel
officer in the HR department.

The review process involves the following activities:

(a) Identify areas of inter-rater disagreement.

(b) Help the group arrive at a consensus.

(c) Ensure that each rater conceives of the standard similarity.

However, the process is a time-consuming one. The supervisors generally

resent what they consider the staff interference. Hence, the method is not
widely used.

 Modern Method:

 360-degree appraisal:
Any person having through knowledge about the job contents can appraise
an employee. According to this method all parties related to an organization
will be rating an employee. Thus, performance appraisal by supervisors,”
peers, subordinates, customer employees themselves, other users of service,
and consultants is known as 360-degree appraisal. 360-degree appraisal is a
systematic assessment of an employee regarding his present job, organi-
zational expectations and his potentialities for a better job.

 Supervisor appraisal:
While appraising the performance, supervisors include superiors of
employee from the same department, departmental head or managers.
Usually, immediate superiors appraise the performance, which in turn is
reviewed by the departmental head or manager.

 Peer appraisal:
Peer appraisal is experimental with military personnel so far. Peer Appraisal
is a method of evaluating the employee performance by his co-employees
rather than by his manager as they have sufficient opportunity to review the
performance on a daily basis.

 Subordinates appraisal:
This is a novel method in which subordinates may be asked to evaluate the
superiors. This rating is quite useful in identifying competent superiors.
 Self-appraisal:
If individuals understand the objectives, they are expected to achieve the
standards by which they are to be evaluated, they are to a great extent in the
best position to appraise their own performance. Since employees are
interested in the self-development, they appraise systematically and may
become highly motivated also.

 Customer and other related parties:

Employee performance a service organization relating to their behaviour,
promptness, speed in doing the job, and accuracy can be judged by
customers and suppliers

Process of performance appraisal:

 Establish performance expectations and standards:

Appraisal processes start with establishing standards and expectations. The

essence of this is to make it easy for you to identify particular output, skills,
and accomplishments that will be assessed.
 This first step is basically about setting the specific criteria that will assist
you as a manager to determine whether or not the performance of the
employees are satisfactory as well as the levels of contribution towards
goals and objectives of the organization.

 Providing regular feedback:

This is simply about establishing effective communication between you and

the employees in regards to standards and expectations. It is an important
aspect because it helps in ensuring that employees perform their roles by the
goals and objectives of the organization. Feedback can be provided formally
or can be communicated informally.

Feedback should also be consistently given to help employees in keeping

tabs on particular activities that they are doing as well as performing them in
the right manner. Feedback should never be a preserve for special occasions
but rather need to be given instantly; whether positive or negative provided
that it helps the employee in performing better.

 Measure actual performance:

This stage incorporates measuring of employees’ actual performance based

on information obtained from different reports such as written, oral and
statistical as well as through personal observation. This is the stage that calls
for a careful choice of the ideal methods that are used in measuring
performance.

It is of utmost significance to ensure that you do not make appraisal

judgment based on what you feel towards the employee. It is only
appropriate to make a sound measurement of findings, facts, and objectivity.
The essence of this is that what is measured supersedes the manner in which
it is measured hence the need for ensuring that objectivity is adhered to.

 Compare actual performance with standards:

The next thing you need to do is comparing the actual performance with the
anticipated or standard performance. This comparison is essential because it
makes it possible for you as the manager or evaluator to identify the
deviations of your employees from the established standards.
 The results of the comparison may be depicted positive or negative results
that would call for appropriate action depending on how you deem the
results to be. Some of such actions include recalling, assessing and
scrutinizing data concerned with the performance of employee among many
others.

 Discuss results of appraisal:

Process of Performance Appraisal is a continuous process that takes time.

As a manager, the next thing you need to do is to ensure that you
communicate the feedback of appraisal to your employees on a one-on-one
basis.

It is always challenging for managers to present truthful appraisal to the

employees and enable them to constructively accept the results, especially if
it reflects more negatives than positives. But what you need to know is that
discussing feedback together is a better approach of allowing them to
understand their strengths and weaknesses. This ultimately has an impact on
how they will perform in future depending on how you communicate the
feedback whether positive or negative.

 Come up with corrective measures:

This is the final stage in appraisal processes. Initiating some effective

corrective measures should be executed according to the results of the
appraisal. Carefully examine the results and identify areas that require
improvement and then come up with corrective action that will make it
possible for employees to improve performance.

Advantages of Performance Appraisal

1. It helps the supervisors to chalk out the promotion programs for

efficient employees. In this regards, inefficient workers can be
dismissed or demoted in case.

2. It helps in chalking out compensation packages for employees.

Merit rating is possible through performance appraisal. PA tries to
 give worth to a performance. Compensation packages which
include bonus, high salary rates, extra benefits, allowances and
pre-requisites are dependent on performance appraisal. The
criteria should be merit rather than seniority.

3. The systematic procedure of PA helps the supervisors to frame

training policies and programs. It helps to analyze strengths and
weaknesses of employees so that new jobs can be designed for
efficient employees. It also helps in framing future development
programs.

4. It helps the supervisors to understand the validity and importance

of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection
procedure. Future changes in selection methods can be made in
this regard.

5. For an organization, effective communication between employees

and employers is very important.

Disadvantages of Performance Appraisal

1. Performance appraisals are very time consuming

and can be overwhelming to managers with many employees.

2. They are based on human assessment and are subject to rater

 errors and biases.

3. Can be a waste of time if not done appropriately.

4. They can create a very stressful environment for everyone involved.

5. Not done right, they can create a negative experience.

 PERFORMANCE APPRAISAL SYSTEM IN SBI LIFE INSURANCE

In SBI LIFE INSURANCE they have the system of performance appraisal of their

employees. The main objective of this performance appraisal system is to evaluate

the performance, promote their employees and to arrange for their various training

programmes if they require for enhancing their skills in their respective areas and in

contribution enhancement..

Employees are evaluated by how well they accomplish a specific set of objectives

that have been determined to be critical in the successful completion of their job.

This approach is frequently referred to as . Management by objectives. Management

by objectives is a process that converts organizational objectives into individual

objectives. It can be thought of as consisting of four steps: goal setting, action

planning, self- control, and periodic reviews. In goal setting, the organization's overall

objectives are used as guidelines from which departmental and individual objectives

are set. In action planning, the means are determined for achieving the ends

established in goal setting. That is, realistic plans are developed to attain the

objectives. Self-control refers to the systematic monitoring and measuring of

performance. Finally, with periodic progress reviews, corrective action is initiated

when behavior deviates from the standards established in the goal-setting phase. SBI

LIFE INSURANCE uses very constructive performance appraisal process while

evaluating its employees. Its evaluation is based on quantitativewise and

objectivewise.

Company set goals to its employee by properly reporting with its employees and then

evaluating them upto what extent it has been achieved and if there is failure in

reaching the target what are the causes or reasons behind it.

Every evaluator has his or her own value system which acts as a standard against

which appraisals are made. Relative to the true or actual performance an individual

exhibits, some evaluator~ mark high and others low. The former is referred to as

positive leniency error and the latter as negative leniency error. When evaluators are

positively lenient in their appraisal, an individual's performance becomes over- stated;

that is, rated higher than it actually should. Similarly, a negative leniency error

understates performance, giving the individual a lower appraisal. As such there is no

scope of error as far as the SBI LIFE INSURANCE company is concerned, but sometimes

over estimation of target brings

about a description in the evaluating criteria. Thus, though chances are less, positive

leniency errors have been stated to be committed.

Outcome of Performance Appraisal

As far as SBI LIFE INSURANCE company is concerned, there are four outcomes possible:

a. Outstanding -If the performance evaluated by the management turns out to be

outstanding. If the employee performs in such a way as to collect 3 consecutive

 outstanding performance into his/her credit) he / she gets promoted.

b. Excellent -If the performance evaluated by the management turns out to be

excellent. If the employee performs in such a way as to collect 3 consecutive

excellent performance into his/her credit, he/she gets promoted.

c. Good -If the performance evaluated by the management turns out to be good.

The management sends the employee to the training programme to improve

his/.her skill to perform form.

d. Below average -If the performance evaluated by the management turns out to

be below average. And, if the employee collects 3 below average to his/her

credit, then he/she dismissed

Duration of Appraisal System

The time constraints enables the employee to show or project his/her capabilities in

term of performance as per the duration allowed. In SBI LIFE INSURANCE, the

performance appraisal system is carried out annually.

Feedback

The company provides the annual feedback to its employees and thus, in term bring

out the highlights of the self assessment programmed. This enables the better

communication between the management and employees ad thus, helps in promoting

the business future.

 CHAPTER 5

 RESEARCH METHODOLOGY
Statement of the Problem

 Every business organization large or small spend huge amount of money on

Human Resource. It is necessary therefore to find out how they are

performing in order to design their future of the organization. It may be to

develop the employees or to correct the employees or to utilize employee’s

strength.

 This study is directed towards probing Performance Appraisal system as

tool for employees at SBI LIFE INSURANCE.

 DURATION OF THE RESEARCH STUDY:

This study was carried out for duration of 2 month.

 DEFINITION OF RESEARCH METHODOLOGY:

 Research is a careful, systematic and objective investigation conducted to obtain
valid facts, draw conclusions and established principles regarding an identifiable
problem in some field of knowledge.

 STAGE 1 – Gathering information and inputs to frame the necessary questions

for the survey.

 STAGE 2 – Collecting data using the survey method, by getting the sample
employees fill the questionnaire.

 RESEARCH DESIGN: The research design used is descriptive and the

information collected through personal interaction and observation and analyzing
the result.
 DIFFERENT METHODS OF DATA SOURCES
 PRIMARY DATA
 Primary Data is the information collected during the course of an experiment
through the-
 Questionnaire method

 It can also be obtained through, Observations

 Survey interviews-Direct communication with the customer by performing
surveys or descriptive research.

 Definition of primary data

 Primary Data is that data which is collected fresh and for the first time. It is also
called basic data or original data.
 Primary Data is also defined as, “the data, researcher collects to address the
specific problem at hand – the research questions”.
 Primary sources mean original works of research or raw data without
interpretation or pronouncements that represent an official opinion or position.
Primary sources include, memos, letters, complete interviews or speeches, law,
regulations, court decisions and government data including, census, economic and
labor data as the most authoritative of all sources.

METHODS OF COLLECTING PRIMARY DATA

 Observation method:
 Definition:
 Observation means viewing or seeing. We go on observing something or other
while we are awake. Most of such observations are just casual and have no
 specific purpose. But observation as a method of data collection is different from
such casual viewing.

 Interview method:
 Definition:
 A somewhat formal discussion between a hirer and an applicant or candidate
typically in person , in which information is exchanged, with the intention of
establishing the applicant’s suitability for a position

 2. SECONDARY DATA
 There are various methods of data gathering which involves the use of specific
recording forms. These are called tools or instruments of data collection.

 During the course of conducting research, a researcher has to collect the data
through adopting one or the other method.

 Definition of Secondary Data:

 Secondary data pertains to those data that is already available on websites,
magzines, books etc. Also, it is that data, which has been used previously for some
research and is now in use for second time. In short, the data presented in research
reports when used again for further research is called “Secondary Data”.

 SOURCES OF SECONDARY DATA:

 Websites
 Books
 Magazines
 Brochures etc.

 Sample size:-
 50 respondents
 Method of research:–
 An observational study. Probability sampling is more reliable. It is more time and
money consuming. The sample size of consumers surveyed was 50 respondents.

 TYPE OF RESEARCH  DESCRIPTIVE

 SAMPLING UNIT  RESPONDENTS FROM
NASHIK
 SAMPLING AREA  NASHIK CITY
 SAMPLING SIZE  50 RESPONDENTS
 SAMPLING METHOD  SIMPLE RANDOM
SAMPLING
 TYPE OF DATA  PRIMARY AND
SECONDARY
 RESEARCH  QUESTIONNAIRE
INSTRUMENT
 DATA COLLECTION  STRUCTURED
METHOD QUESTIONNAIRE

 Limitations-
 Results are just an indication of the present scenario and may not be applicable in
the future.
 As the study was conducted only in Nashik area, so it can be said that the study
was regional biased.
 Since sampling was done under the simple random sampling method, where easily
approachable respondents were picked up. So this may not represent the whole
universe.
 Respondent may fill the partially correct information in questionnaire.
DATA ANALYSIS AND
INTERPRETATION
 1. Are you aware about the organization performance appraisal system?

a) YES b) NO
OPINION NO. OF PERCENTAGE
RESPONDENTS
50 100
YES
0 0
NO
50 100
TOTAL

YES
NO

From the above it is evident that 100% of the employees feel that
performance appraisal is quit essential for any organization.
 2. Do you think that performance appraisal is essential?

a) YES b) NO

OPINION NO.OF PERCENTAGE

RESPONDENTS

YES 48 96
NO 2 4
TOTAL 50 100

YES
NO

From the above data it is evident that 96% of the respondents feel that
performance appraisal is very essential in the organization, where as 45
employees feel it is not essential in organization.
3. Does appraisal system of your organization facilities career growth &
learning?

a) YES b) NO

OPINION NO.OF PERCENTAGE

RESPONDENT

YES 42 84

NO 8 16
TOTAL 50 100

From the above data it shows that 84% of employees feel that organization
facilitate growth & learning due to performance appraisal, where as 16% of
employees feel that organization does not provides growth & learning of
employees.
4. Is the current performance appraisal system really assesses the quality of
an employee.
Do you agree?

a) YES b) NO
OPINION NO.OF PERCENTAGE
RESPONDENTS

YES 46 92
NO 4 8
TOTAL 50 100

YES
NO

From the above data it is evident that 92% of the employees feel that the
performance appraisal system really assesses the quality of an employee,
where as 85 feel that it does not assesses the quality of an employee.
 5. Periodicity of performance appraisal should be on

a) Quarterly basis b) Half-yearly basis

c) Annual basis

OPINION NO.OF PERCENTAGE

RESPONNDENTS

A 8 16

B 12 24
C 30 60
TOTAL 50 100

A
B

From the above data it is evident that 60%of the employees feel that
performance appraisal should be done on annual basis & 24% of the
employees feel should be in done on half yearly basis 165 of the employees
feel should be done in quarterly basis.
6The present performance appraisal of your organization distinguishes the
performers & non performers?

a) Strongly agree b) Agree

c) Disagree d) Strongly disagree

OPINION NO.OF PERCENTAGE

RESPONDENTS
A 5 10
B 37 74
C 8 16
D 0 0
TOTAL 50 100

A
B
C

From the above data it is evident that 74% of the employees „agree‟ that
performance appraisal system of the organization distinguishes performs &
non performers, where as 105 strongly agree and 16% disagree doesn‟t
distinguishes performers & non-performers.
7 A monthly performance appraisal of employee is required for
maintaining efficiency of individuals &l organization?

a) YES b) NO

OPINION NO.OF PERCENTAGE

RESPONDENTS
YES 48 96
NO 2 4
TOTAL 50 100

YES
NO

From the above it shows that 96% of the employees feel that periodic
performance appraisal of the employee is required for maintaining efficiency
of individual and organization and above 4% of the employees feel that it is
not required to maintained.
8Are you aware of the basis or attributes on which your performance is
appraised?

a) YES b) NO

OPINION NO.OF PERCENTAGE

RESPONDENTS
YES 41 82
NO 9 16
TOTAL 50 100

YES
NO

From them above data it shows that 82% of the employees are aware on
which their performance is appraised but 16% of the respondents feel that
they are not aware of the basis on which their performance is appraised.
9Performance appraisal should be based upon

a) Seniority b) Performance c) Recommendations & Trade Union

influence d) Both a & b

OPINION NO.OF PERCENTAGE

RESPONDENTS
A 2 4
B 27 54
C 3 6
D 18 36
TOTAL 50 100

A
B
C

From the above data it shows that 54% of the employees feel that
performance appraisal in railways is based upon performance 36% feel that
it based on both performance and recommendation 7 trade union.
10Performance appraisal is useful to the contributor to encourage people to
perform better on their jobs?

a) YES b) NO

OPINION NO.OF PERCENTAGE

RESPONDENTS
YES 46 92
NO 4 8
TOTAL 50 100

YES
NO

From the above data it shows that 92%of the employees feel that
performance appraisal is contributor to encourage better job, but 8% of the
employees feel that it is not a contributor for job.
11The existing appraisal system is helping each employee to discover his/her
potential & make their short comings?

a) Agree b) Disagree c) Strongly Agree

c) Strongly Disagree

OPINION NO.OF PERCENTAGE

RESPONDENTS
A 38 76
B 6 12
C 5 10
D 1 2
TOTAL 50 100

A
B
C

From the above data it shows that 76% of the employees feel that appraisal
system discovers potential and make their short comings and 125 employees
feel that it does not discover potential.
FINDINGS AND
RECOMMENDATION:

Findings:

 It has been found that most of the employees think that the
performance appraisal is essential and they think it is used as a
tool to improve performance, to determine organization needs,
and to basis for pay increase, promotions, and transfer.
 The appraisal system facilitates growth & learning of employees
and it is used to distinguish performers.
 The existing appraisal system helps the management to identify
potentiality of employees as well as useful for maintaining
efficiency of the individual & organization.
 Some employees that they do not know which basis their
performance is appraised and most of the employees feel that it
help them discover their potential and enables to know their
short coming.
 Organization provides training & development programs to
overcome the short comings identified in performance appraisal.
 The employees that their promotions match their contributions
and new performance appraisal technique should be adopted in
the organization and the short comings are informed to them.
 The performance appraisal supports to experiment with new
ideas as basis for promotion.
RECOMMENDATION:
 The performance appraisal system should facilitate career growth
& learning of employees.
 The short coming of employees should be informed to them
after performance appraisal promptly.
 Promotion should be based on performance rather than seniority or
any other factors.
 Performance appraisal should be appraised by granting awards/
merit certificate.
 New performance appraisal techniques such as 360 degree
performance appraisal system should be used.
 The performance appraisal should not be assessed by biased mind
and personal grudge.
 Feedback should not be given to the employees more frequently.

 On what basis performance appraisal should be informed to

the employees.
 The extent of communication with the top & middle level management.
 The feedback to performance appraisal shouldn‟t only be given to
those employees who are rated „below average‟ but also to all the
employees as is would motivate the employees to perform even
better.
 Gauge the potential for performance of each employee.
QUESTIONNAIRE FOR A STUDY ON
PERFORMANCE APPRAISAL SYSTEM.

Name (Optional):_
Age:
Gender:
Department/ Role:

1. Are you aware about the organization Performance Appraisal?

a) Yes b) No

2. Do you think that quarterly Performance Appraisal is essential?

a) Yes b) No

3. Does the Appraisal System of your organization facilitiate career growth

& Learning of employees?

a) Yes b) No

4. Performance Appraisal System really assesses the quality of an

employee. Do you agree?

a) Yes b) No

5. Periodicity of Performance Appraisal should be on

a) Quarterly b) Half-yearly basis

c) Annual basis

6. The present Performance Appraisal of your

organization distinguishes the performer & non
performers?

a) Strongly agree b) Agree

 c) Disagree d) Strongly disagre

The Periodical Performance Appraisal of employee is required for

maintaining efficiency of individual & organization?

a) Yes b) No

7. 8Are you aware of the basis or attributes on which your performance is

appraised?

a) YES b) NO

9Performance appraisal should be based upon

a) Seniority b) Performance c) Recommendations & Trade Union

influence d) Both a & b

10Performance appraisal is useful to the contributor to encourage people to

perform better on their jobs?

a) YES b) NO

11The existing appraisal system is helping each employee to discover his/her

potential & make their short comings?

a) Agree b) Disagree c) Strongly Agree

c) Strongly Disagree
Conclusion
Performance appraisal is the systematic observation and evaluation
of employees’ performance. Some of the most commonly used
performance appraisal methods include the judgmental approach,
the absolute standards approach, and the results-oriented approach.
Ideally, performance appraisal should be completely accurate and
objective. However, the performance appraisal process is far from
accurate and objective, sometimes resulting in rating errors. Common
rating errors include strictness or leniency, central tendency, halo
effect, and recency of events.

References
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