MT-1

Final Report

On

Impact of performance appraisal system on productivity of

Employees of Sonalika.

SUBMITTED BY SUBMITTED TO
(Sunny kumar) Mrs. Vibha
8NBJL011
 MANAGEMENT THESIS
ON

Impact of performance appraisal system on productivity of

employees of ITL.

By
Sunny kumar
8nbjl011
Under the guidance of
Ms. Vibha
(Faculty Supervisor)
A report submitted in partial fulfillment of
the requirement of
THE MBA PROGRAM
(The class of 2008-2010)

INDEX
CHAPTER NO. TOPIC PAGE NO.
1. ACHNOWLEDGEMENT 4
2. EXECUTIVE SUMMARY 5
3. INTRODUCTION TO THE 6
 INDUSTRY
4. OBJECTIVE 7
5. PERFORMANCE 10
APPRAISAL
6. METHODS 11-16
7. PERFORMANCE 17-24
APPRAISAL SYSTEM ON
ITL
8. RESEARCH 25
METHODOLOGY
9. SIGNIFICANCE OF 26-28
STUDY
10. DATA ANALYSIS 29-33
11. LIMITATION 34
12. INTERPERTATION 35-46
13. FINDINGS
14. RECOMMENDATIONS
15. QUESTIONNAIRE
16. BIBLIOGRAPHY

ACKNOWLEDGEMENT

Education becomes more meaningful when its theoretical aspects are combined
with practical experience. This provides an opportunity to the students to improve
their understanding of the studies.
MBA is a course, which combines both its theory and application as its content of
study in the field of management as a part of this course, every aspirant has to
submit a Dissertation. The purpose of this Dissertation is to expose the students or
management sciences to real business situation and to use theoretical knowledge
into practical experience. In order to use the theoretical knowledge I have done
Dissertation on the concept of Performance appraisal & its impact on the
productivity of employees. I am very thankful to my HR faculty Ms. Vibha.

EXECUTIVE SUMMARY

My research is based on manufacturing company as I am taking

these company to find out the impact of performance appraisal on
productivity .In this project I am doing research on the basis of
these variables like :

The employees are satisfied with these appraisal, appraisal

increase productivity or not.
 For such I am collecting knowledge of company through
internet and by visiting their company. Till this time I framed
questionnaire to do my research.

After that my further plan is to visit their organization

meeting employee, filling questionnaire to find out the response of
the employee about the performance appraisal.

INTRODUCTION

Established in 1969, Sonalika group from the very beginning has tried to understand customer
need so that they get better value for their money, hard earned. Sonalika has state of
manufacturing, spread in acres, located at Hoshiarpur and tax free zone at Amb in Himachal
Pradesh. Sonalika is the one of the top 3 tractor manufacturing companies in India, other
products include of multi utility vehicles, engines and various farm equipments. Today the group
stands tall with an approximate turnover of 3200 crores INR. An average growth of 30% makes
it one of the fastest growing corporate in India. It is also one of the few debt free companies.
Group has strength of about 2000 employees & technocrats. History reveals that innovation is
the key to continue progress and when applied to technology that touches human life, it can
unfold a whole new economic phenomenon that has the power to change the world. With unique
initiatives like the thought leadership
forum, it has been able to create a unique platform for learning through success stories of
industry leaders.

No doubt that the Sonalika Products has created a niche for themselves not only in India but also
in foreign market. To maintain quality have any detect even at Micro level is been taken care of
and rectified. The technology for painting, which they use, is of the high Quality and they have a
paint shop with world class quality standards.

The success saga of Sonalika group, a business conglomerate having prime interest in agricultural & auto
machinery goes back to nearly 5 decades. The corporate philosophy embedded in trust, quality and
commitment has helped the group to carve out a niche for itself in the highly competitive world of
machinery.

Sonalika is the fastest growing tractor company registering growth over growth since its
inception has crossed 1.80 lakh merely in 10 years & has attained one of the positions in top
three in India.

Competitors: M&M-Punjab Tractors, Escorts, Ford

Customers: Farmers

Sonalika Group
Pic: (From left) Managing Director Mr. Deepak Mittal, Chairman L.D. Mittal and Vice-
Chairman A.S. Mittal of Sonalika Group

Vision
 To become the world’s leading company for agricultural machinery and a major player in
automotive products and services.

 Continuously maintaining competitive edge by developing innovative new products and

services.

 Ensuring quality and quick responsiveness of customer services.

 To grow at faster rate through backward / forward integration and venturing into new
opportunities.

Mission
We Are A Global Family With A Proud Heritage Passionately Committed To Development Of
Agricultural Mechanization And Providing Personal Mobility For People Around The World.
We anticipate consumer’s Need and Deliver outstanding Products and Services that Improve
people’s lives.

1. Group Companies:

 Sonalika Agro Industries Corporation.

• Agricultural Machinery

 International Tractors Limited.

• Tractor Division

• Engine Division

 International Cars and Motors Ltd.

• Power train – 2L CRDFi

• Engine /Transmission and MUV

manufacturing
 International Autotrac Finance Ltd.

• Non Banking Financing Company

2). History of the Group Companies

2. 1) International Tractors Limited

International Tractors Limited was incorporated on October 17, 1995 for manufacturing of
tractors and has since then built a distinct position for itself in the Tractor Industry. ITL is
manufacturing various tractors of Sonalika Brand between 30-90 HP range in 2WD and 4WD
version. The installed capacity is about 80,000 tractors per annum. The tractors manufactured by
ITL have secured a reputation of performance, quality and reliability in the market because of
their maximum pulling power, minimum fuel consumption and low emission. All this makes ITL
one of the top 3 tractor manufacturer in India. These tractors are also exported to various
countries including South Africa, Australia, Zimbabwe, Sri Lanka, Canada, Bangladesh, Algeria,
Zambia, Senegal, Gana, etc.

2.2) International Cars and Motors Limited

International Cars & Motors limited (ICML), is a group company of the Rs 1200 Crores Sonalika
group. The company is promoted by Mr. L.D. Mittal, Chairman, Mr. A.S. Mittal, Vice Chairman
& Mr. Deepak Mittal, Managing Director, who is having a vast experience in manufacturing of
tractors, farm machines & automobiles. ICML is a project of its kind and is the ‘pride of
Himachal Pradesh’. The company is having its state-of-the-art production facility, with centrally
air-conditioned, dust & pollution free environment, to manufacture multi-utility vehicles / sports
utility vehicles, in Amb, Himachal Pradesh. The company is a ‘mother unit’ as its establishment
shall attract many other ancillary & small units for meeting the raw material requirements
yielding manifold employment avenues, revenue & industrialization in the state.

The company has entered into technical collaboration agreement with mg rover of UK, with the
technical know – how from MG Rover, UK. The company has manufactured MUV with the
name of Rhino RX & the same MUV boasts of rover engines. The company is in-process of
developing its own common rail direct injection (CRDI) engines.

2.3) Sonalika Agro Industies Corporation

Sonalika agro was established in 1971 to support the Indian farmers with mechanization
technology to facilitate persistence of green revolution. Sonalika agro Industries Corporation, the
group’s maiden venture is one of the foremost farm equipments and implements manufacturing
companies in India with 80% share in threshers alone. Its product line includes combine
harvesters, tractor/self driven straw reapers, potato planters, maize seller –cum-Dehuskers, seed
–cum- fertilizers drills, various kinds of threshers, etc. Sonalika agro is a pioneer in
manufacturing tractors mounted combine harvester, which is not popular in India, but also in
various others countries across the globe. Today, the company is supporting the farmers with
world class farming equipment to ease the process of making the green revolution ii, a dream
come true. In the light of the company's mission, highly qualified and experienced staff is
working as a family in the manufacturing facility at Hoshiarpur (Punjab).

2.4) International Autotrac Finance Limited

International Autotrac finance limited is a non banking finance

company approved by RBI. IAFL provide finance to customers
of international cars & motors limited in rural & semi- urban
areas across India through customer friendly schemes. Its parent
company Sonalika group ranks among the largest tractor & farm equipment manufacturer in
India.

3). Current Status

• With net sales of 3.53lac Tractors, the Indian tractor industry grew by 20.4%
during FY07 on the back of higher demand growth, improvement in realizations
and easy and cheaper availability of finance
• M&M-Punjab Tractors, Escorts, TAFE and Sonalika are the leading players
• The Indian tractor industry has been growing at a healthy pace of 19.7% CAGR
since FY03. Tractor demand is expected to maintain its momentum:

All India Tractor Sales

400
353
350
290
300
255 261
248
250 236
217
192
200 172

150

100

50

Fig-1: All India Tractor sales of International Tractors Ltd for the period of 1999-2007

• Besides farming, rising infrastructure activities are enhancing the use of tractors for

construction materials transportation.

• Tractor financing qualifies as priority sector lending. Banks and NBFCs now have a greater
focus on tractor financing due to reasonable ticket size and higher resale value.

• Almost all of the tractors sold in India are financed due to relatively low interest rates, easy
repayment norms and longer tenure of finance, thereby translating the sales growth rates
into the tractor financing business growth.
4). ITL Organization Structure

Fig-2: Hierarchy level at ITL

Mr. L.D. Mittal, Founder and Chairman, holds the highest position of the Sonalika Group. Mr.
A.S. Mittal, Co-founder and Vice-Chairman, brother of Mr. L.D. Mittal holds the second highest
position. Mr. Deepak Mittal, son of Mr. L.D. Mittal is the Managing Director. Mr. Raman Mittal,
son of Mr. Deepak Mittal is the Executive Director holding the fourth highest position.

Mr. L.R. Yadav is the Chief Operating Officer who is responsible for International Tractors Ltd,
International Autotrac Finance Ltd and Sonalika Agro Industies Corporation

Mr. Ashok Kapoor is the Joint Chief Operating Officer who is also responsible for International
tractors Ltd.
5). Human Resource Department Hierarchical structure

Fig-3: Hierarchy structure of Human Resource Department at ITL

Mr. S.K. Dutta, Deputy General Manager, Human Resource Department and Personnel and
Administration reports to both Chief Operating Officer and Joint Chief Operating Officer.

Ms. Tina Ugale, Deputy Manager is responsible for the Recruitment and Selection process at
International Tractors Limited.

Ms. Manika, Deputy Manager is responsible for the Performance Management process.

Dr. Gurvinder Singh, Deputy Manager is responsible for the Training and Development of
employees and college students working part-time or on training at ITL.
 PERFORMANCE APPRAISAL

Performance appraisal can be defined as the process of evaluating the performance of an

employee & communicating the result of the evaluation to him for the purpose of rewarding &
developing the employee. According to Michael Armstrong “Performance appraisal is a formal
assessment & rating of individual by their managers at usually at annual review meeting.”
Performance can be defined as the degree of accomplishment of tasks by an employee in his job.
In some organizations it is measure of the result achieved & target accomplished whereas in
others, it is a measure of employee efforts & behavior. However most organizations use a
combination of both efforts & results. Performance appraisal is also termed as performance
review, annual review & annual appraisal.

Chapter 1

INTRODUCTION: CONCEPTUAL FRAMEWORK

I. Background:
1. The concept of Performance Appraisal dates back to the First World War and was
then called “Merit Rating Programmed”. Over a period of time, this concept has been
through an ocean of change. The areas of evaluation have also changed.

2. Once an employee has been selected, trained and embarked on his duties, it is time
for performance appraisal. What is performance appraisal? Why do companies need
to take up this task?

3. According to Carl Heyel, author/editor on management, philosopher and

teacher, “it is the process of evaluating the performance and qualifications of the
employees in terms of job requirements, for administrative purposes such as
placement, selection and promotion, to provide financial rewards and other actions
which require differential treatment among the members of a group as distinguished
from actions affecting all members equally”.
 II. An integral part of performance management system:

1. Effective performance management requires a good deal of face-to-face supervisor-

employee interaction. By knowing the subordinates, a supervisor can steer them onto
a path of greater productivity and optimized output. Long-term successful business
owners view performance appraisal as a process of getting to know the people who
work for them. It is the most significant and indispensable tool for an organization. It
provides information, which helps in taking important decisions for the development
of an individual and the organization.

2. Thus, one phase of the annual performance management cycle is performance

appraisal, the process of reviewing employee performance vis-à-vis the set
expectations in a realistic manner, documenting the review, and delivering the review
verbally in a face-to-face meeting, to raise performance standards year over year
through honest and constructive feedback. In the process management expects to
reinforce the employee’s strengths, identify improvement areas so that one can work
on them and also set stretched goals for the coming year.

3. It is composed of the following two processes both of which are qualitative subject to
human bias –
a. observation and
b. judgment

4. The parameters of performance are a combination of technical expertise and

behavioral attributes. The latter scores a high degree of relevance with regard to
potential appraisal.

III. Concept Of Performance Appraisal:

The concept of Performance Appraisal can be explained with the analogy illustrated
below:
 → The head of the key represents the uniqueness of the employee. No two employees
are alike.

→ The ring represents the management’s requirement -the job content.

→ The shaft represents the communication between the employee and the company, the
transmission of the task and the response from the performer.

IV. Change:

1) A few decades ago, the employee used to be appraised by his department head. The
department head used to communicate his feedback and comments only to the
immediate superior of the employee. Thus the feedback was kept confidential in
nature. As time passed by, the immediate superior started appraising his subordinate’s
performance and sending his confidential report to the department head. These were
the periods when the employee was not included in his appraisal process. The
decisions used to be taken by his superiors relating to his pay hike, promotion etc.
Thus the system was non-transparent.

2) The current process of performance appraisal is much more open and gives some
scope for self-appraisal by the employee. The self-appraisal is followed by a joint
discussion with superior and then a decision is taken by the department head on his
promotion, pay hike etc. The feedback relating to his performance is directly given to
the employee. Thus performance appraisal process has gone through the phase of
non-transparency to transparency.
 3) In this transparency phase, a performance appraisal can be defined as a structured
formal interaction between a subordinate and supervisor, that usually takes the form
of a periodic interview (annual or bi-annual), in which the work performance of the
subordinate is examined and discussed, with a view to identifying weaknesses and
strengths as well as opportunities for improvement and skills development.

4) Whether an organization accepts or not the usefulness of Performance Appraisal,

whether it adopts a formal appraisal system or not, top management is constantly
appraising the performance of its subordinate managers in day-to-day interaction.
The latter are doing the same to their own subordinates. They are doing so because
Performance Appraisal, formal or informal, lies at the heart of art of managing.

5) Managing is a dynamic process, concerned almost entirely with the present and the future,
whereas Performance Appraisal, as generally used has been a static rating of an employee
related almost entirely with the past. Recently, as some managements were recognizing that
“rating” by itself had very limited utility, they began to appreciate that managing had evolved
into an art. They saw that “management by hunch” could not longer be tolerated, and that
measurements-no matter how vague – were essential for the future development of the art of
managing.

6) The need for measurements gave birth to several “systems” of managing which attempted to
apply measurements of various sorts to the different aspects and elements of the manager’s
job. A number of these systems leaned on the better Performance Appraisal methods for their
measuring devices or at least for a starting point for measurement. In some instances, these
systems expanded or broadened the meaning of Performance Appraisal from a mere rating to
include the whole concept of management with all its elements.

What set’s the foundation of Performance Appraisal? The same has been covered in the
following Chapter 2.
 Chapter 2

FOUNDATIONS OF PERFORMANCE APPRAISAL

Performance Appraisal assesses how well people have been doing their jobs and what they must
do to be better in their jobs. It deals with the content of the job and what they are expected to
achieve in each aspect of their work. Following are the foundations in Performance Appraisal
process:

I. Job Profile:

Job description concentrates more on the definition of tasks the jobholder has to
accomplish. It includes details of reporting relationship and normally covers the overall
purpose of the job. It indicates how an individual’s job will contribute to the achievement
of objectives of a team or a department and, ultimately the mission of the organization.

II. Objectives:

An objective describes something, which has to be accomplished. Objectives define what

organizations, functions, departments, teams and individuals are expected to achieve.

There are two types of objectives:

i. Work or Operational Objectives:

It refers to the results to be achieved or the contribution to be made to the
accomplishment of team, departmental and corporate objectives.

ii. Developmental objectives:

It is concerned with what individual should do and learn to improve their
performance and/or their knowledge, skills and competencies (training and
personal development plans).
III. Competencies:

Competencies refer to the behavioral dimensions of a role. It is the behavior required of

people to carry out their work satisfactorily. Competencies are what people bring to a job
in the form of different types and levels of behavior. They govern the process aspects of
job performance.

IV. Values:

Increasingly, organizations are setting out the core values that they think should govern
the behavior of all their employees. Value statements may be prepared which define core
values in areas such as care for customers, concern for people, competitiveness,
excellence, growth, innovation.

What are the essential steps that set the foundation for an effective Performance
Appraisal? These steps have been covered in Chapter 3.

Chapter 3

THREE ESSENTIAL STEPS FOR EFFECTIVE PERFORMANCE

APPRAISAL

The process of getting to know the people who work for the organization involves three essential
steps viz. training, evaluation and review.

I. Training:

Successful training is the implementation of a system in which everyone in the workplace is

geared towards improvement. It involves a hands on approach in which the employee is
encouraged to evaluate himself or herself under the guidance of the appraiser.

How it works?
First, the appraiser includes the employee in the appraisal process. When an employee knows
that his or her opinion of other workers is taken into account, he or she also realizes that
everyone else’s opinion matters just as much. This not only empowers the employee and
improves relations in the workplace, but it encourages higher productivity as well. This
interactive approach is made complete with the leadership of the appraiser. Carefully
administering praise coupled with constructive criticism keeps the workforce on its toes.

II. Evaluation:

The best methods for employee evaluation are based on results and behavior. While conducting
performance appraisal based on employees’ characteristic traits is quite common, the results are
often subjective and unsatisfactory. A results-based approach to performance appraisal is by far
the cleanest, most objective method of tackling the complex task of evaluation. It uses a rating
system to measure productivity within a given timescale. If an employee makes a certain number
of sales in a certain week, he or she can be rated by sheer worth as well as ranked against other
employees. The study of behavior is closely tied to productivity. The pace of work, willingness
to put in overtime and ability to work with others all contribute to overall productivity.

III. Review:

The review process should, again, employ the techniques of interactivity. Before sitting down
together, the appraiser should give the employee a chance to review himself or herself. This not
only empowers the employee, but also saves a lot of time and possible contention during the
actual discussion. Initially the appraiser should walk the employee through the process. The
successful supervisor starts out with an overview of why the review session is needed. Then the
supervisor takes the employee down a point-by-point list of every aspect of the job. In each case,
the employee should be given a chance to describe his or her achievements and shortcomings.
The supervisor should always supplement this with added insight. While praising and applying
criticism, the supervisor maintains authority throughout the review and indeed, the entire
appraisal process.

How this entire interaction and review process is beneficial to the organization as a whole and
what are the objectives of performance appraisal? These have been jotted down in the
succeeding Chapter 4.

Chapter 4
 OBJECTIVES AND BENEFITS

The objectives and benefits of Performance Appraisal system can be summarized as under:

Objectives:
Data relating to Performance Appraisal of employees are recorded, stored and used for
several purposes like:

•Let the employees know where they stand in so far as their performance is concerned
and to assist them with constructive criticism and guidance for the purpose of their
development.
•Assessment of skills within an organization.
•Set targets for future performance.
•Effect promotions based on competence and performance.
•Strengthen relationship between superior and subordinate.
•Assess the training and development needs of employees.
•Identify the strengths and weaknesses of employees.
•Decide upon a pay raise (increments).
•Improve communication as it not only provides a system for dialogue between the
superior and the subordinate, but also improves understanding of personal goals and
concerns. This can also have the effect of increasing the trust between the appraiser
and appraise.
• Determine whether human resource programs such, as selection, training and transfers
have been effective or not.
Benefits:
The following are the benefits of a successful appraisal system:

1. For the Organization:

♦ Improved performance throughout the organization due to:
− Effective communication of organization’s objectives and values.
− Increased sense of cohesiveness and loyalty.
− Managers are better equipped to use their leadership skills and to develop
their staff.
♦ Improved overview of tasks performed by each member of a group.
♦ Identification of ideas for improvement.
♦ Creation and maintenance of a culture of continuous improvement.
♦ Communication to people that they are valued.

2. For the appraiser:

♦ Opportunity to develop an overview of individual jobs.
♦ Opportunity to identify strengths and weaknesses of appraises.
♦ Increased job satisfaction.
♦ Opportunity to link team and individual objectives with department &
organizational objectives.
♦ Opportunity to clarify expectations that the manager has from teams and
individuals.
♦ Opportunity to re-prioritize targets
♦ Means of forming a more productive relationship with staff based on mutual
trust and understanding.
♦ Due to all above Increased sense of personal value

3. For the appraise:

 ♦ Increased motivation and job satisfaction.
♦ Clear understanding of what is expected and what needs to be done to meet
expectations.
♦ Opportunity to discuss aspirations and any guidance, support or training needed
to fulfill these aspirations.
♦ Improved working relationships with the superior.
♦ Opportunity to overcome the weaknesses by way of counseling and guidance
from the superior
♦ Increased sense of personal value as he too is involved in the appraisal process

In line with the objectives of Performance Appraisal, to reap it’s benefits, this system has to be
effective failing which it may mar the very purpose of performance appraisal.

How to make the appraisal process effective is what has been covered in the subsequent
Chapter.

Chapter 5 Chapter 5

EFFECTIVE APPRAISAL PROCESS

When it comes to performance appraisal, managers and employees agree about one thing: They
hate going through them. Employees, managers and HR experts agree that fear, guilt,
responsibility and resentment are the real reasons why most employees dread the appraisal
process. Besides some think that it is a ritual that is mandatory to follow.

An effective review process helps organizations in three areas:

1. evaluation and improving personnel selection and training systems;
2. preventing wrongful termination; and
3. increasing real employee diversity

I. Good appraisals start with information from multiple sources, and they evaluate
employees at all levels from top to bottom.
 II. This system requires both the appraisee and appraiser to jointly assess the employee’s
ability to complete the duties and achieve the goals set forth in the previous appraisal.

III. HR professionals should consider the following steps and make the appraisal process
simple yet effective:

• The performance Appraisal form should reflect the strategic objectives of the
company. Many organizations use a form that contains several sections.

• The results and impact section should address accomplishments related to job
responsibilities, goals and projects. It is a review of past performance

.
• A skills and abilities section should discuss the ways those results were
accomplished. By listing the core competencies for each job classification – and for
the entire organization – this section can address the kinds of behavior that are critical
for success.

IV. Appraisal results, either directly or indirectly, determine reward outcomes. The better
performing employees may get the majority of available merit pay increases, bonuses and
promotions, while the poorer performers may require some form of counseling or in
extreme cases no increases in pay. The assignment and justification of rewards and
penalties through performance appraisal is a very uncertain and controversial matter and
conveys both satisfaction as well as dissatisfaction with an employee’s job performance.
Whatever is the case, organizations should foster a feeling that performance appraisals are
positive opportunities that provide for overall development of the employee, in order to
get the best out of the people and the process. Hence performance appraisals should be
positive experiences and it should never be used to handle matters of discipline.

Performance review needs goals to be set first. Identification of Key Result Areas i.e. Goal
Setting has been explained in the Chapter 6.

Chapter 6
 IDENTIFICATION OF KEY RESULT AREAS (KRAS) –
GOAL SETTING

Setting of Key Result Areas i.e. goals is one of the various parameters of performance
evaluation. These are also known as the Targets or Performance Indicators (PI). Target setting is
the first step in the appraisal process, based on which the employee is appraised.

The Purpose or Objective of Target Setting

• Ensure that each individual is working towards clearly stated objectives that tie into the
division goals.

• Provides a sound basis to improve performance.

• Encourages open communication concerning expected results and progress towards

results.

• Helps the individual know “How he/she is doing” compared to what his/her manager
expects.

• Encourages comparison on individual objectives to identify overlapping or omitted

objectives.

• Helps in salary review, and self-development.

The recent trend from a focus on traits or behavior to a results-oriented approach has seen the
emergence of objectives setting as a key issue. However, managers should attempt to agree
objectives with their staff rather than setting them themselves for the forthcoming period during
appraisal discussion. These objectives or targets should comply with the mnemonic SMART i.e.
Specific, Measurable, Achievable, Realistic and Time-bound.

I. SMART criteria for performance goals

SMART Performance
Criteria Checklist
Goals
Specific
States in clear terms what • Does it specify
outcome, result or behavior
is to be achieved. -Improved level of quality, quantity, time or use of
resources

- A new/innovative result, faster time line, or

-An improved behavioral outcome?

• Does it have a clearly stated singular result?

Measurable
Includes measurable results
or a description of the
desired outcome.
• Will you know from information, data or
observation when it is achieved?
• Does it specify-What? How much? How well?

SMART Performance Goals Criteria Checklist

Achievable
 A realistic expectation, given • Are resources, authority level, and requisite
time and resources skills in place?

• Does it require a stretch of effort?

Realistic
There is a clear tie to goals of • Will it matter when it is done?
the department, division etc.
• Does the objective support relevant goals?

• Does it deal with a key aspect of the job?

Time Bound
There is a time limit or deadline • When are the goals to be completed?
by which the objective must be
achieved and there may be a • Is there a timetable for milestones or
time frame to track phases of checkpoints?
completion in an action plan.

II. Type of Goals:

One may have to set multiple goals combining goals at different levels viz. the long-term
goal, the short-tem goal and the minimum or standard goal.

1. The long-term goal:

The long-term goals are the level of performance sought over a period of one to two
years. Usually this level is significantly better than current performance. In some
cases, the long-term goals are the ultimate level of performance, such as “zero defects”
or “zero absenteeism”. Unlike the other two goals (described below), the long-term
goals can be dictated by management without regard to past performance or to whether
the long-term goals is currently perceived as attainable.

2. The short-term goal:

The short-term goals is the level of performance desired and perceived as being
attainable with some effort within a period ranging from three months to one year. At
the end of that time, short-term goals are re-evaluated based upon performance. The
 expectation is that when the short-term goal is consistently being met, it will be moved
closer to the long-term goal.

• It must be less than or equal to the long-term goal

• It cannot be better than the best performance ever achieved; and

• It must be better than the current average or typical performance. Short-term

goals are negotiated. Usually employees and lower level managers recommend
and develop short-term goals subject to approval by management.

3. The Minimum or Standard goal:

The minimum or standard goal is the cut-off point for signaling the existence of or
potential for a performance problem. Like short-term goals, minimum standards are set
for a limited period but for longer duration – perhaps one to two years.
Minimums/standards are negotiated like short-term goals and must conform to the
following criteria:

• They must be less than or equal to current average/typical performance; and

• They cannot be worse than the worst performance for any previous period.

4. To aid goal setting the following steps may be adopted:

1. Consider the job on the following areas:
-Routine responsibilities
-Problem solving responsibilities
-Innovative responsibilities
-Development responsibilities

2. Locate key tasks in each of the above areas.

3. Periodic Progress Review

The intent of this review is to provide a reconfirmation of direction to maintain
commitment for the balance year. Targets, though should be stable over the
 performance period, should be flexible enough for revision when changes in priorities
or responsibilities lead to the expectation of different results.

5. Key Steps to Goal Setting:

The appraiser should:

• In advance, review notes on employee’s performance;

• Discuss targets, praise achievements and identify causes of targets not being met;

• Discuss performance skills, reinforce good performance and identify causes for skills not
being met;
• Agree on the plan for corrective actions to be taken by both;

• where necessary, revise targets;

• create a non-threatening climate and express confidence.

Joint Accountability:
Management must recognize that most results are achieved through the corporate efforts of two
or more people. Therefore, the management style must encourage maximum individual
contribution in co-operation with others.

Decision on pay hike, promotion and development is outcome of target achievement and
the same has been detailed in following Chapter 7.
 Chapter 7

PERFORMANCE, PAY AND DEVELOPMENT

The outcome of the appraisal is either in the form of reward by way of increase in pay, additional
bonus or incentive and/or promotion, or by way of not effecting any increase in pay, denying
promotion etc. This gives emergence to the concept of Performance Related Pay (PRP).

Performance related pay is not an easy option. Before embarking on its introduction the
following factors should be taken into account.

1. Matching the Culture:

Successful PRP schemes need to match the culture and core values of the organization. It is only
by understanding and working with the culture that it is possible to develop schemes.

Linking PRP to the Performance Management process:

The focus when relating pay to performance needs to be one of the issues which emerge from the
business planning process such as profitability, productivity, cost control, research initiatives,
product and market development and generally increasing stakeholder value.

Balancing performance measures:

The performance measures used as a basis for rating must include a balanced mix of both input
factors (skills and competences) and output factors (performance and contribution). The
assessment upon which pay decisions are made should be based not only on performance in
achieving objectives, contribution to organizational success and the levels of skill and
competence achieved, but also on the degree to which the behavior of individuals support
corporate values in such areas as teamwork, total quality management, customer services,
innovation, etc.
Flexibility:

PRP arrangements should allow for some flexibility in the criteria for reward and the method of
payment.

1. Teamwork:
Poor PRP schemes can produce a lot of single-minded individuals.
The importance of teamwork should be recognized in structuring
the scheme and in defining critical success factors and performance
indicators. Individuals should be aware that achieving their targets
at the expense of others is not considered competent performance.

2. Avoiding Short-termism:
To avoid the danger of PRP focusing attention on short-term results at the expense of more important
longer-term objectives, long-term as well as short-term goals should be set wherever appropriate and
short-term objectives should be discussed in their overall context.
 3. Involvement in the design process:
THE APPRAISAL PROCESS

1. The first step in the appraisal performance process is the determination of standard of
performance based on the organizational objectives & job descriptions.

2. The next step of performance appraisal is the measurement of employees performance

against the pre-determined goal & standards.

3. The next step is the actual process of measurement. Performance appraisal has to be a
continuous process & feedback should be given to the employee at regular intervals.

4. The next step is the very critical step & involves communicating the result of the
appraisal to the employee concerned.

5. Once appraisal is finalized after discussing it with the employees, it have to

be put effective use.

THE APPRAISER

The appraiser is that person who access the performance of a person or an employee. In more
recent concept like 360 degree feedback, the peer/colleagues of the employee, his supplier, his
customer, & even his subordinate play a role in assessing his performance.

SELF-APPRAISAL

As has been discussed earlier self appraisal is the common practice today, with the employee
being given a role in evaluating their own performance. The employee himself is best equipped
to evaluate his performance because he understands his strengths & weaknesses the best.

SUPERVISOR
It is the responsibility of the supervisor to ensure that his subordinate perform their jobs well.
Hence the authority to evaluate the employees’ performance has traditionally been with the
supervisor.

PEERS

Peer evaluation is very sensitive area as it may lead to false & unhealthy appraisal because of
competition among peers. The organization has to reach an advanced stage of development
before it can handle peer appraisal.

CUSTOMERS

The performance of an employee has a direct & immediate impact on his customer either internal
or external. In service organization like banks & hotels customer feedback has become the most

important tool in evaluating the employee’s performance .

SUBORDINATES

The concept of subordinate evaluating the performance of his supervisor yet to gain acceptance
in most Indian companies. The Indian culture does not encourage the idea of subordinate
appraisal.
PERFORMANCE APPRAISAL METHODS

1. Management by objective or goal setting.

2. Graphic rating scale.

3. Work standard approach.

4. Essay appraisal.

5. Critical incidence method.

6. Forced choice rating method.

7. Point allocation method.

8. Ranking method.

9. Check list.

10. Behavioral anchored rating scale.(BARS)

11. 360 degree performance appraisal.

12. Team appraisal.

13. Balanced scorecard method.

MANAGEMENT BY OBJECTIVE (MBO)

The main aspect of MBO is clear & well defined goals, a definite time span to achieve the goals,
action plan & finally, timely & constructive feedback. It is also called a goal setting approach;
MBO is more commonly used for managers & professionals.

GRAPHIC RATING SCALE

This method of appraisal requires the rater to rate the employee on factors like quantity & quality
of work, job knowledge, dependability, punctuality, attendance etc. This method is also used for
performance appraisal of employees. They check their employees daily by using this method.

WORK STANDARD APPROACH

This method of appraisal is more suitable in a manufacturing scenario, where the goals are pre
determined work standard. These work standards can be set based on the average output of a
typical employee in the organization or by bench marking against the work standard of a
competitor in a similar business.

ESSAY APPRAISAL

In the essay appraisal method, the appraiser prepares a document describing the performance of
the employees. Questions or guidelines are provider to the appraiser based on which analyses &
describes the employees’ performance.

CRITICAL INCIDENT METHOD

In this method of performance appraisal, the appraiser makes a note of all the critical incident
that reflect the performance & behavior of the employee during the appraisal period. These are
recoded as & when they occur & can demonstrate either positive or negative traits or
performance.
FORCED CHOICE RATING METHOD

In this method the appraiser is required to assign ranks to different attributes are all seemingly
positive, but have different weights which are unknown to the appraiser. Once the employees’
attributes are ranked the human resource department applies the weights & arrives at a score
which is the final appraisal score.

POINT ALLOCATION MATHOD

In this method of appraisal, the appraiser has to allocate points to different members in his team.
He has at disposal , a specific number of points which he has to distribute among his team
members, based on their performance during the appraisal period.

RANKING METHOD

There are three commonly used methods of ranking namely alternation, paired comparison &
forced distribution. The first two methods are used when there are only a few employees to be
ranked, whereas forced distribution method is used in large companies which have thousands of
employees.

CHECKLIST

In this method the rater has to respond ‘yes’ or ‘no’ to a set of questions which assess the
employee’s performance & behavior. Normally weights are attached to each of these questions
based on which the final appraisal score of the employee is calculated.

BEHAVIOR ANCHORED RATING SYSTEM (BARS)

BARS concentrates on the behavioral traits demonstrated by the employees instead of his actual
performance. Some of the other methods like graphic rating scale & checklist also measure the
behavior based on the assumption that desirable behavior result in effective performance.

360 DEGREE PERFORMANCE APPRAISALS

A 360 degree appraisal system aims at a comprehensive & objective appraisal of employee
performance. In a 360 degree appraisal system the employees’ performance is evaluated by his
supervisor, his peers, his internal external customers, his internal external suppliers & his
subordinates. This system reduces the subjectivity of a traditional supervisor appraisal.

TEAM APPRAISAL

In the new economy era, where team work is essential for any venture to succeed, team appraisal
has emerged as one of the best tool for the performance management. In the team appraisal
method the individual team member evaluates their colleagues in the team & provides feedback.

BALANCED SCORECARD

The balanced scorecard as a method of measuring performance channelizes the efforts of people
to achieve organizational goals. The implementation of balanced scorecard involve formulating a
strategy & deciding what each employee needs to do to achieve the objectives based on strategy.

PERFORMANCE APPRAISAL SYSTEM AT ITL

Performance appraisal report is an index of an employee’s work performance over a given period
of time. It is crucial for his or her career growth as it indicates the strengths, weaknesses, training
needs, nature of job being performed and problems faced in work situation.

The objectives of the performance appraisal system at ITL are:

• To set norms and targets of work performance, as well as, to monitor the work progress
of employees.
• To facilitate placement of employees in accordance with their suitability for different
types of assignments.
• To provide an objective basis for determination of merit, efficiency and suitability for the
purpose of promotion.
• To identify areas requiring exposure for training and development.

The performance appraisal system seeks to evaluate:

• The work performance of an employee on the present job in relation to the expected
levels of performance, both qualitative and quantitative.
• The extent of development achieved by the employee during the period under review.
• Evaluation of behavioral attributes, attitudes and abilities.
• Evaluation of potentials for assuming higher responsibility.
The appraisal covers:

• Performance check after 3 month.

• All regular employees of the company.

a) Non Executives.
b) Executives

The appraisal form PAR/ACR is filled in respect of all such employees who have served for a
period of at least four months in the organization during the relevant year.

Procedure

PAR/ACR in respect of an employee is required to be assessed by levels indicated below:

 By the reporting officer under whom employee is working.

 By the reviewing officer.

 The reporting officer for writing PAR of an employee of class III/IV and E-0 level
category will be the executive under whose control the employee is working. The
reviewing officer will be of one grade above the grade of reviewing officer. The PAR’s in
respect of class III/IV employees duly reviewed is maintained at
Region/Institute/Headquarters group wise in the concerned establishment section/PAR
sections.

 The PAR in respect of E-0 to E-6 level executives is being maintained in PAR
departments at headquarters of R&P division.
  As regards E-7 and above all such reports which are received from
Regions/Institutes/Headquarters are maintained at Chairman-cum-managing Director’s
office. The reviewing officer will be the officer to whom the executive reports for his day
to day work. Review of the PAR will be done by the executives to whom the reporting
officer is responsible for his functions. Accepting authority will be the executive higher
than the reviewing officer at different levels depending upon the nature of the grades as
per delegation of powers in PAR rules.

• The performance appraisal reports of executives of E-6 level i.e. Deputy general
manager and above will be submitted to concern functional Director for final review
and acceptance.

• The performance appraisal reports of executives of E-5 level i.e. chief manager and
equivalent will be reviewed by the RD/ED/Nominee of the Director concerned.

• The performance appraisal of the executive upto E-4 level i.e. manager and equivalent
would be reviewed by the functional head/GM/CGM not less than E-7.

Performance Appraisal Format for Executives

I. Personal Data

This includes personal details of the individual being appraised.

II. Self Appraisal

 In this section the appraisee is required to mention the tasks achieved in the appraisal
period including enabling and constraining factors. These achievements are then rated by
the individual itself and the appraiser.

III. A. Performance Appraisal

Performance appraisal is done on the basis of Key Result Areas and a certain weightage
is assigned to each. Following are the Key Result Areas:

Performance in respect to volume 40

Quality of output 30
Timeliness of jobs completed 30

The total of the score gained by the individual is noted and termed as P.

B. Potential Appraisal

Potential of the candidate is appraised on the scale of 1 to 5 keeping the existing role as
well as future positions in perspective.

Scale 1 to 5 is given for (1-poor, 2-fair, 3-good, 4-very good, 5-excellent)

Potential is appraised on the basis of following traits:

• Result oriented approach

• Willingness to accept challenges
• Diligence and reliability
• Initiative
 • Professional competence
• Communication skills
• Commitment and dedication
• Personal conduct and discipline
• Leadership
• Inter personal relationship

Total of score gained by an individual in this section is again noted and termed as Q.

C. Work done for HINDI

D. Overall Grade

Total score(S) is calculated as

S=a*P+b*2*Q

Where a & b are weightages for performance and potentials. This weightages is as per the
level.

Level a b
E1 0.9 0.1
E2 0.8 0.2
E3 0.7 0.3
E4 0.6 0.4
E5 0.5 0.5
E6 0.4 0.6
 The grading system

A+ 95 and above

A 85 and above but less than 95

A- 75 and above but less than 85

B+ 65 and above but less than 75

B 55 and above but less than 65

C 45 and above but less than 55

D less than 45

IV. A. Assessment by Reviewing Officer

B. Training Needs

The appraise himself mentions the training requirements which are then remarked by the
appraiser.

C. Co- Review

V. Moderation

VI. Assessment by accepting officer

Final grade with score

 VII. Communication to executive

VIII. Counseling

The final grade given by the accepting authority after detailed and due consideration to the rating
by the 1st and 2nd appraisers, will be the decisive grade of the appraisee executive. In case this
final rating is different from those of the 1st and 2nd appraiser, adequate justification must be
mentioned by the accepting authority. There must be adequate explanation by the 1st and 2nd
appraisers and the accepting authority for any grade assigned to the appraisee. In the absence of
adequate explanation the report will be considered incomplete and returned back to the
appraisers for confirming to the directives contained in the instructions.

RESEARCH METHODOLOGY

The approach used for the study was Survey Method. For this Literature and Diagnostic Survey
were carried out:

LITERATURE SURVEY

Secondary sources were referred to get the basic culture and working pattern of ITL. All the
required information was collected from the in-house journals, magazines, reference books,
manuals and the other related sources.

DIAGNOSTIC SURVEY
It was done with the help of a questionnaire to check the efficiency and effectiveness of the
system.

PROJECT TITLE

“Performance Appraisal System on the productivity of employees of ITL .”

SIGNIFICANCE OF STUDY

Human Resource Development is the basis of success of any organization. HRD helps to
enhance employee’s effectiveness and helps to achieve organizational goals. Now with the
emergence of so-called “NEW ECONOMY”, the increasing role of knowledge in industry is
becoming obvious. In the emerging knowledge age, incessant learning by employees through
effective Training and Development is going to be a key to survival and growth for
organizations. Without effective Training and Development no enterprise can claim to be giving
due importance to HRD. Performance appraisal in the real sense can be carried out only when
the employees are provided with the required amount of training. In the unfolding economic
scenario it is increasingly being realized that employees are the most precious assets of any
company. Any investment in introducing performance appraisal techniques is worth only when
the above mentioned criterion is fulfilled. Every organization nowadays is using various methods
for appraising the performance of the employees so that the real potential of the human asset can
be known and utilized in the proper way. Performance appraisal not only evaluates the work
done by the employees but also tries to boost the morale and motivate them to do their best. The
methods used by the organization should be communicated to all the employees who come under
its purview. They should be satisfied with the procedure and if they are not then it should be
looked upon that what are the reasons behind it and what changes are to be brought about.
Performance appraisal has a very important aspect to it and that is development of the
employees.

RESEARCH METHODOLOGY

RESEARCH DESIGN

The present investigation is descriptive type of study undertaken to estimate the effectiveness of
the performance appraisal system of ITL. The present study identifies views of employees of
different levels and disciplines.

I have divided the whole sample into various groups on various criterions like age, experience,
discipline, and management level.

To do the better analysis these groups are further incised as

Age

• Age less than 40 years

• Age between 40-50 years
• Age above 50 years
• Age not provided

Experience
 • Experience less than 10 years
• Experience between 10-20 years
• Experience between 20-25 years
• Experience between 25-30 years
• Experience more than 30 years

Discipline

• Finance
• Geo Sciences
• HR
• Production
• Technical and Engineering

Managerial Level

• Junior Management(E0 - E2)

• Middle Management(E3 – E4)
• Senior Management(E5 and above)

Scope of the Study

The scope of the study is limited to Jalandhar.

Population of the Study

All those persons who are working in ITL are the population of this study.

Sample Size

The sample size is 200.

METHOD OF DATA COLLECTION

PRIMARY DATA

The primary data to be selected was based upon the response of the respondents to the
questionnaire designed. The questionnaire consists of closed ended questions.

A part of Questionnaire was targeted to know the personal details of the respondents. Second
part consists of closed ended questions on the scale of 1 to 5. Third part comprised of questions
to be answered in Yes or No.
SECONDARY DATA

The secondary data was collected by referring through manuals, journals and intra net, web sites,
and the final data was analyzed systematically to achieve the desired result.

Tools of Data Analysis

The collected data has been analyzed keeping in view the objectives of the study.
The statistical tool used is Chi-square test in this study.

Collected data glance at a

Significant variables YES NO

appraisal Motivate you

Its beneficial for your future

development

your productivity increases after

appraisal?

After appraisal have your working

hour increased?

Performance appraisal is beneficial

for your future development?

official environment and working

style affects your productivity or
performance?

you like to initiative in addition to

assigned responsibilities only
because of good appraisal system
of the company?
Performance appraisal system
helps you to realize your strengths
and weakness regarding your job
profiles?

Performance appraisal systems of

the company motivate you to
maintain long term relationship
with the company?

Your performance being checked

regular by your superior?

Are you satisfied with appraisal

system or not?
 CHI-SQUARE

Attribute Yes No Total

Motivated 177 23 200

Future Develop 180 20 200

Increase 177 23 200

productivity

Work Hard 175 25 200

Responsibilities 150 50 200

Total 859 141 1000

O(OBSERVED) E(EXPECTED) O-E (O-E)2 (O-E)2/E

177 171.8 5.2 27.04 0.15

180 171.8 8.2 67.24 0.39
177 171.8 5.2 27.04 0.15
175 171.8 3.2 10.24 0.059
150 171.8 -21.8 475.24 2.76
23 28.2 -5.2 27.04 0.95
20 28.2 -8.2 67.24 2.38
23 28.2 -5.2 27.04 0.95
25 28.2 -3.8 14.44 0.51
50 28.2 21.8 475.24 16.85
Total (CH1) 25.14

Degree of freedom = (row-1)(column-1)

= (5-1)*(2-1)

= 4*1

=4

Row = 5

Column = 2
Significance = 0.05

Table value = 14.9

Chi- square = 25.14

Variables:

• Performance appraisal,Productivity.

Hypothesis

There is a significant impact of performance appraisal system in ITL on the productivity of

employees.

Value is accepted.

LIMITATIONS

 Due to time constraint and hectic schedule of ILT employees some time I found
difficulty in interaction with employees.
  Organization being very large an effort was made to do the tasks effectively and
efficiently but more detailed study could have done by having large sample size.

 Employees delayed in submitting the feedback form so it effected the time in compiling
and analyzing data for findings and suggestions.

 Many questions were responded as “Cannot Say” due to the subjectivity of the topic and
some information was not revealed due to certain reasons like being confidential in
nature.

 Time was the most relevant factor to make a handle to complete to proper and diagnostic
survey.

 Sincerity of answering the questions can not be judged.

 The employees were busy in their work.

(Response in YES or NO only)

Q1. Appraisal system motivates to you for work hard?

Responses

YES - 178

NO - 22
 Q.2 0%
Yes No
11% 0%

89%

89% employee of sonalika are favors of motivation. they said that appraisal system motivate to
do work hard. And 11% employees are not favor of it,

Q.2 your productivity increases after appraisal?

Responses

YES - 178

NO - 22
Q.3 After appraisal have your working hour increased?

Responses

YES - 86%

NO - 14%
 Q.2
Yes No
0% 0%

30%

70%

86% of the respondents responded as YES. This thing may appear to be very small but the fact is
that this thing helps an individual to give its best. A small token of appreciation or just a pat on
the back is enough to keep that individual motivated for the next week atleast. Praise is such a

Q.4 Performance appraisal is beneficial for your future development?

Responses

YES - 87%

NO - 13%
Again the majority is in the favour of the statement. Most of the respondents find appraisal
counseling beneficial for the future developments. But here I disagree. Not that I don’t consider
that the counselings are beneficial. No doubt they are beneficial for the future development,
rather they should be. But the thing is that the system of providing counseling in ITL is very rare
phenomenon. I have already mentioned that it is provided only and only if the appraisal result
falls in extreme limits either very low or very high ratings.

Q.5 official environment and working style affects your productivity or performance?

Responses

YES - 67%

NO - 33%
 Q.6 you like to initiative in addition to assigned responsibilities only because of good
appraisal system of the company?

Responses

YES - 37%

NO - 63%
Majority of the respondents don’t agree with the above statement. According to them they are
not provided with the opportunity to respond to the appraisal feedback. However 37%
respondents says that they can respond to the feedback.

Q.7 Performance appraisal system helps you to realize your strengths and weakness
regarding your job profiles?

Responses

YES - 72%

NO - 28%
Q.8 Performance appraisal systems of the company motivate you to maintain long term
relationship with the company?

Responses

YES -

NO -
Q.9 Your performance being checked regular by your superior?

Responses

YES -

NO -
Q.10 Are you satisfied with appraisal system or not?

Responses

YES - 77%

NO - 23%
MAJOR FINDINGS

• Performance Appraisal System in ILT is not transparent.

• Appraisers are usually unbiased.
• Employees are not able to know their actual position after the appraisal.
• The management is serious about the appraisal process.
• The appraisal process provides them an opportunity for development and growth.
• Relations with the superior affect the evaluation.
• Greater weight age is given to the recent performances.
• There are fixed standards to evaluate the performance but those are not clear due to the
subjectivity of the topic.
• Raters know how to conduct the appraisal.
• Raters are not that much concerned about the varied needs of people at levels of
experience and background.
• Superior-subordinate relations are good. Superior helps them set and achieve meaningful
goals. This makes the environment amiable and congenial.
• Performance appraisal sheet is lucid and easy to understand and fill.
• The parameters used to appraise the potential are ample.
• The system being not so transparent, employees are unable to identify the performance
gaps in order to prepare for the future.
• Individual feedback is not provided.
• The management helps provide an atmosphere where all are encouraged for comradeship
and teamwork.
• Appreciation is provided for the good job done.
• The appraisers are generally aware about their subordinates and their talents and
potential.
• Most of the raters have the ability to give constructive criticism in a friendly, firm and
positive manner.
• Employees don’t have the opportunity to respond to the appraisal result.
• Employees are being rated on their knowledge and skills.
• Majority of people want that there should be some incentives based on performance.
• Employees are not provided with the genuine feedback.
• Appraisal counseling is considered beneficial for future developments.
• Management doesn’t bother much about the training requirements mentioned in the
appraisal sheet.
• Most of the employees want that 90o feedback system should be introduced.
RECOMMENDATIONS

The performance appraisal system of ITL is of good quality. With the introduction of new e-PAR
system, the PMS system is refined further. On the basis of the analysis of responses and findings
I have reached to some conclusions. So taking them into consideration few steps may be
considered to strengthen the performance appraisal system.

 The system should be made more transparent. This can be achieved by creating
awareness among the employees regarding each and every aspect of the appraisal
process. They should be made aware about the standards and the criterions for evaluation.
Further they should be shown the appraisal result.

 The appraiser and appraisee should sit together and then the appraiser should rate the
appraisee for his performance and should state the reason for the same. This will increase
the level of transparency and the employee will feel satisfied as he will have an
opportunity to respond at that very moment itself.

 The genuine feedback should be provided to the employees. So that they may be in a
position to know where they stand exactly. So that they can identify their performance
gaps and prepare accordingly for the future.

 The general belief among employees is that the relations with the superior affect the
evaluation process. This is not good as this creates a sense of favoritism in the
organization. No doubt one should be in pleasing terms with the superior but that should
not affect the evaluation at all. For this the raters should always consider the performance
as the only measure for the evaluation.
 The raters should take note of the critical performance incidents of an individual so that
at the end of the year it should not be that only the recent performances are given more
weight age.

 Raters should consider the specific requirements of the people to do the job. They should
help them out by providing necessary skill set to do the job more efficiently. They
should set the goals as per the potential and caliber of the individual.

 Employees should have the opportunity to respond to the appraisal result. For this
individual feedback should be provided.

 Management should take serious note of the training requirements shown by the
individual in the appraisal sheet. Training plays a vital role in the development of an
individual and helps improve the performance.

 Some incentives should be introduced on the performances basis. This thing creates a
sense of healthy competition among employees which boost up the growth of the
individual as well as the organization.
 QUESTIONNAIRE

Name:- Phone No:-

Q.1 Appraisal system motivates to you for work hard?

Yes No

Q.2 your productivity increases after appraisal?

Yes No

Q.3 After appraisal have your working hour increased?

Yes No

Q.4 Performance appraisal is beneficial for your future development?

Yes No

Q.5 official environment and working style affects your productivity or

performance?

Yes No

Q.6 you like to initiative in addition to assigned responsibilities only because of

good appraisal system of the company?

Yes No
Q.7 Performance appraisal system helps you to realize your strengths and
weakness regarding your job profiles?

Yes No

Q.8 Performance appraisal systems of the company motivate you to maintain

long term relationship with the company?

Yes No

Q.9 Your performance being checked regular by your superior?

Yes No

Q.10 Are you satisfied with appraisal system or not?

Yes No

Suggestions’

1. Work should be equally divided.

2. Try to reduce more paper work.

3. For promotion you use seniority principle, but if you will use promotion as a tool for
promotion then it can also be helpful to motivate the Employees.

4. you should try to improve your supervision and should try to keep an eye on the employees
that they properly completing their targets in time.

5. You keep watch on employees that what are their requirements and should provide them
proper resources so that they can achieve their target without any excuse.

6. You should try to give more stress on training and development of your Employees.

7. You should try make your employees so much authorized that they can implement few of their
innovative thoughts.

8. You should try to make more congenial and friendly relationship with your Employees, so
they never hesitate to share their views with you.

BIBLIOGRAPHY

• Internet

• www.google.com
• http://www.sonalica.com/

• Take Book from library(Quantitative Method, Marketing

Management.)