Jen Thomas

MBA (Human Resources)
Jean Thomas
PROJECT REPORT ON
PERFORMANCE APPRAISAL EFFECTIVENESS ANALYSIS
AT
CHAMPION VOYAGER DESIGNERS PVT LTD
SUBMITTED TO
THE UNIVERSITY OF PUNE
IN PARTIAL FULFILLMENT OF
MASTERS IN BUSINESS ADMINISTRATION
BY
JEAN THOMAS
MBA II
BANSILAL RASMNATH AGARWAL CHARITABLE TRUST S (BRACT)
VISHWAKARMA INSTITUTE OF MANAGEMENT, PUNE
(2005- 2006)
Performance Appraisal Effectiveness MBA (Human Resources)
ACKNOWLEDGEMENTS
Preparing a project of this nature is an arduous task and I was fortunate
enough to get support f rom a large number of people to whom I shal l

always remain grateful. I would like to express my gratitude to Champion
Voyager Designers Pvt Ltd for allowing me to undertake this project.
I would l ike to take this opportunity to thank Raj Utpal for providing me
with an opportunity to work for Champion Voyager Designers Pvt Ltd.
I am also desirous of ment ioning my profound indebtedness to Dr
Vandana Gote, Faculty member, Vishwakarma Inst itute of Management ,
for the valuable advice, guidance, precious time and support she offered.
I would be failing in my duty if I do not acknowledge my gratitude to Dr S.
J oshi, Director, Vishwakarma Inst itute of Management , who mot ivated me
a lot in carrying out this project.
Last but not the least , I would also l ike to thank al l the respondents for
giving me their precious t ime, relevant informat ion and advice without
which I would not be able to complete this project.
CONTENTS
Section Page No.
Company Prof i le . ..4
Importance and Purpose ...12
Performance Structure in the Organizat ion 16

Research Study 27 - 32
o Research Methodology
o Data Collection
o Tools of Data Collection
o Technique of Data Collection
Data Analysis . 33 - 49
Limitat ions ...50
Findings and conclusions 52
Annexure ..54
C CO OM MP PA AN NY Y P PR RO OF FI IL LE E
Champion Voyager Designers Pvt Ltd
Champion Voyager Designers Pvt Ltd is the leading pioneer in the large-scale
outsourcing of document creation services, with more than 80 years of graphics history. It
is also the world s largest and most experienced provider of artwork and embroidery
digitizing.
They cater to more than 2,000 clients worldwide with output-ready digital files for all
types of printing, computer-generated communications, stitched apparel and product
imprinting and work 24 hours / 7 days a week / 365 days a year.
Retail and quick printers, commercial printers, apparel and promotional products
suppliers/distributors, advertising agencies and corporations rely on Champion Voyager
Designers Pvt Ltd for customized digital graphics solutions that help them generate
higher profits, increase productivity and enhance competitive differentiation, without the
ongoing costs of equipment, labor, or technology.
Production Facility
Headquartered in Elgin, Illinois, Champion Voyager Designers Pvt Ltd maintains a large
Production Center in Pune, India, staffed by 350 highly skilled employees and operating
24/7/365.
Quality
Quality is the top priority at this facility. That s why they apply Six Sigma processes and
detailed quality control procedures for every client and every project.
Training
Because they understand how important quality and accuracy are to the customer s
business, Champion Voyager Designers Pvt Ltd has created a detailed, comprehensive
approach to training their document creation, artwork and digitizing specialists. Training
is ongoing with periodic reassessments, based on the customer s specific needs and
Affinity Express commitment to continuous improvement.

Technology
They offer a web-based order entry and management system for maximum
convenience and speed. Champion Voyager Designers Pvt Ltd supports PC
and Mac platforms and is certified in over 30 software packages to meet the
needs of clients.
Confidentiality and Security
Champion Voyager Designers Pvt Ltd takes great care to ensure uptime and protect the
clients data through an elaborate security system and set of backup procedures both on-
and off-site.
Support
Clients have a direct link to customer support 24/7/365 and can get fast answers on the
status of their projects, revisions, quotes and other questions. For any issues that require
escalation, the Account Services team is available Monday through Friday, from 8:00
A.M. to 6:00 P.M. Central Standard Time.
Graphic solutions
Champion Voyager Designers Pvt Ltd offers three categories of graphics services and the
function is the same for each: they format the graphics, photos and written copy that the
customers submit and produce digital, production-ready files. These files are then used by
the customer for printing, posting to web sites, presentations, embroidery on apparel or
screen-printing on ad specialty items.
Document Creation
Taking hard or soft copy input and returning digital files for production a term
originated by Champion Voyager Designers Pvt Ltd that is also known as desktop
publishing, digital pre-press or pre-flighting.
Artwork Creation and Layout
Embroidery Digitizing
Translating artwork into a series of commands to be read by an embroidery machine for
output on various items of apparel, bags, caps, etc.
The world-class, cost-effective document creation, artwork and digitizing services of
Champion Voyager Designers Pvt Ltd helps the customer to generate more revenue,
enhance profitability, improve productivity and increase focus on their core business.
Affinity Express customized solutions provide the specific capacity and services need by
the customer and when they need them. That s why Champion Voyager Designers Pvt
Ltd has a proven track record of success with some of the largest, most respected
companies in the world.
In just 1 month...
Over 350 design and digitizing professionals at Champion Voyager Designers Pvt Ltd
create more than 35,000 output-ready digital files using 30-plus software programs on a
network with a 99.99% uptime guarantee and backed by 24/7/365 support. They deliver
in 24 hours or less and reward clients with as much as 50% in cost savings
Outsourced graphics services

Artwork creation and layout
Embroidery digitizing
Document creation
Professional services
System integration
Custom website creation (for order management)
Consulting
Project types
Announcements
Booklets
Brochures
Business Cards
Newsletters
9
Postcards
Presentations
Programs
Certificates
Resumes
Embroidery Digitizing
Sales Sheets/Flyers
Envelopes
Signs/Banners
Forms
Tables, Charts and Graphs
Invitations
Table Tents
Letterhead
Tabs
Logos
Tickets
Mailing Labels
Vector Art
Manuals
Word Processing
Menus
Software Proficiencies
Champion Voyager Designers Pvt Ltd designers are certified in more than 30 software
packages, including:
Adobe Acrobat
Macromedia Dreamweaver
Adobe GoLive
10
Macromedia Freehand
Adobe Illustrator
Microsoft Excel
Adobe InDesign
Microsoft PowerPoint
Adobe PageMaker
Microsoft Publisher
Adobe Photoshop
Microsoft Word
AutoCAD
Microsoft Visio
CorelDRAW
Punto
Gunold
Pulse
HTML
QuarkXPress
Wilcom
Partners
Apparel and Promotional Products Suppliers/Distributors
Champion Voyager Designers Pvt Ltd provides a streamlined, cost-effective process and
reliable partnership to enable better focus on selling and supporting customers, as well as
higher profit margins.
Printers
In the highly competitive printing industry, outsourcing document creation to Champion
Voyager Designers Pvt Ltd lets clients drive print revenue, lower fixed costs, improve
margins, deploy internal teams on sales and support and leverage the revenue opportunity
offered by ancillary services.
11
Advertising Agencies
As clients demand lower costs, greater value and faster turn times from their agencies,
Champion Voyager Designers Pvt Ltd provides a means to better apply highly-talented
and costly internal resources to creative projects and client interaction, while handing off
straightforward execution and excess demand resulting in higher profit margins.
Corporations
Outsourcing (either off-site or a combination of on- and off-site) to Champion Voyager
Designers Pvt Ltd lets internal personnel to focus on their core business, exercise greater
control over branding and improve support for internal departments and clients.
12
I IM MP PO OR RT TA AN NC CE E A AN ND D P PU UR RP PO OS SE E
O OF F P PE ER RF FO OR RM MA AN NC CE E
A AP PP PR RA AI IS SA AL L
13
Introduction to Performance Appraisal
Once the employee has been selected, trained and motivated, he is then appraised for his
performance. Performance Appraisal is the step where the Management finds out how
effective it has been at hiring and placing employees. If any problems are identified, steps
are taken to communicate with the employee and remedy them.
Performance Appraisal is a process of evaluating an employee s
performance in terms of its requirements.
Performance Appraisal can also be defined as the process of evaluating the
performance and qualifications of the employees in terms of the requirements of the
job for which he is employed, for purposes of administration including placement,
selection for promotions, providing financial rewards and other actions which
require differential treatment among the members of a group as distinguished from
actions affecting all members equally.
14
Importance and Purpose
Performance Appraisal has been considered as the most significant an indispensable tool
for an organization, for an organization, for the information it provides is highly useful in
making decisions regarding various personnel aspects such as promotion and merit
increases. Performance measures also link information gathering and decision making
processes which provide a basis for judging the effectiveness of personnel sub-divisions
such as recruiting, selection, training and compensation. Accurate information plays a
vital role in the organization as a whole. They help in finding out the weaknesses in the
primary areas.
Formal Performance Appraisal plans are designed to meet three needs, one of the
organization and the other two of the individual namely:
o They provide systematic judgments to back up salary increases, transfers,
demotions or terminations.
o They are the means of telling a subordinate how he is doing and
suggesting needed changes in his behavior, attitudes, skills or job
knowledge. They let him know where he stands with the Boss.
o Superior uses them as a base for coaching and counseling the individual.
On the basis of merit rating or appraisal procedures, the main objectives of
Employee Appraisal are:
o To enable an organization to maintain an inventory of the number
and quality of all managers and to identify and meet their training
needs and aspirations.
o To determine increment rewards and to provide reliable index for
promotions and transfers to positions of greater responsibility.
o To suggest ways of improving the employee s performance when
he is not found to be up to the mark during the review period.
15
o To identify training and development needs and to evaluate
effectiveness of training and development programmes.
o To plan career development, human resource planning based
potentials.
16
P PE ER RF FO OR RM MA AN NC CE E A AP PP PR RA AI IS SA AL L
S ST TR RU UC CT TU UR RE E I IN N T TH HE E
O OR RG GA AN NI IZ ZA AT TI IO ON N
17
Summary of the Performance Analysis System
Setting performance standards, observing and providing feedback, and conducting
appraisals enables the Team Leader to achieve the best results through managing
employee performance.
To begin the process, the Team Leader and the employee collaborates on the
development of performance standards. The Team Leader then develops a performance
plan that directs the employee's efforts toward achieving specific results, to support
organizational growth as well as the employee's professional growth. Discussion of goals
and objectives throughout the year provides a framework to ensure that employees
achieve results through One on One and mutual feedback. At the end of the rating period,
the Team Leader appraises the employee's performance against existing standards, and
establishes new goals together for the next rating period.
As the immediate supervisor, the Team Leader plays an important role; his closest
interaction with the employee occurs at this level.
There are four key elements in the appraisal system:
1. Set objectives - Decide what the Team Leader wants from the employees and
agree these objectives with them.
2. Manage performance - Give employees the tools, resources and training they
need to perform well.

3. Carry out the appraisal - monitor and assess the employees' performance,
discuss those assessments with them and agree on future objectives.
4. Provide rewards/remedies - Consider pay awards and/or promotion based on the
appraisal and decide how to tackle poor performance.
18
Performance Standards
How does the Team Leader decide what's acceptable and what's unacceptable
performance? The answer to this question is the first step in establishing written
standards.
Performance expectations are the basis for appraising employee performance. Written
performance standards let the Team Leader to compare the employee's performance with
mutually understood expectations and minimize ambiguity in providing feedback.
Having performance standards is not a new concept; standards exist whether or not they
are discussed or put in writing. When the Team Leader observes an employee's
performance, he usually makes a judgment about whether that performance is acceptable.
Standards identify a baseline for measuring performance. From performance standards,
the Team Leader can provide specific feedback describing the gap between expected and
actual performance.
Guiding Principles
Effective performance standards:
Serve as an objective basis for communicating about performance.

Enables the employee to differentiate between acceptable and unacceptable
results.
Increase job satisfaction because employees know when tasks are performed well.
Inform new employees of your expectations about job performance.
19
Key Responsibility Areas (KRA)
The Team Leaders in association with the Project Manager write performance standards
for each key area of responsibility on the employee's job description. The employee
actively participates in its development. Standards are usually established when an
assignment is made, and they are reviewed if the employee's job description is updated.
The discussions of standards include the criteria for achieving satisfactory performance
and the proof of performance (methods the Team Leader will use to gather information
about work performance).
20
Characteristics of Performance Standards
Standards describe the conditions that must exist before the performance can be rated
satisfactory. A performance standard should:
Be realistic, in other words, attainable by any qualified, competent, and fully

trained person who has the authority and resources to achieve the desired result
Describe the conditions that exist when performance meets expectations
Be expressed in terms of quantity, quality, time, cost, effect, manner of
performance, or method of doing
Be measurable, with specified method(s) of gathering performance data and
measuring performance against standards
21
Expressing Standards
The terms for expressing performance standards are outlined below:
Quantity: Specifies how much work must be completed within a certain period of
time.
Quality: Describes how well the work must be accomplished. Specifies accuracy,
precision, appearance, or effectiveness.
Timeliness: Answers the questions, by when? , How soon? , Or within what
period?
Effective Use of Resources: Used when performance can be assessed in terms of

utilization of resources: money saved, waste reduced.
Effects of Effort: Addresses the ultimate effect to be obtained; expands
statements of effectiveness by using phrases such as: so that, in order to, or as
shown by.
Manner of Performance: Describes conditions in which an individual's personal
behavior has an effect on performance, e.g., assists other employees in the work
unit in accomplishing assignments.
Method of Performing Assignments: Describes requirements; used when only
the officially prescribed policy, procedure, or rule for accomplishing the work is
acceptable.
22
Performance Measurements
Since one of the characteristics of a performance standard is that it can be measured, the
Team Leader identifies how and where evidence about the employee's performance will
be gathered. Specifying the performance measurements when the responsibility is
assigned will help the employee keep track of his progress, as well as helping the Team
Leader in the future performance discussions.
There are many effective ways to monitor and verify performance, the most common of
which are:
Direct observation
Specific work results (tangible evidence that can be reviewed without the
employee being present)
Reports and records, such as attendance, safety, inventory, financial records, etc.
Commendations or constructive or critical comments received about the
employee's work.
23
Observation and Feedback (One on One)
Once performance objectives and standards are established, the Team Leader observes
the employees' performance and provides feedback. The Team Leader has a
responsibility to recognize and reinforce strong performance by an employee, and
identify and encourage improvement where it is needed. The Team Leader provides
informal feedback almost every day.
By observing and providing detailed feedback, the Team Leader plays a critical role in
the employee's continued success and motivation to meet performance expectations.
One On One Sessions
One on One is a method of strengthening communication between the Team Leader and
the employee. It helps to shape performance and increase the likelihood that the
employee's results will meet expectations. One on One sessions provide the Team Leader
and the employee the opportunity to discuss her progress toward meeting mutually
established standards and goals. A One on One session focuses on one or two aspects of
performance, rather than the total review that takes place in a performance evaluation.
Guiding Principles
Effective One on One can:
Strengthen communication between the Team Leader and the employee
Help the employee attain performance objectives
Increase employee motivation and commitment
Maintain and increase the employee's self-esteem
Provide support
24
Key Elements of One on One
To make One on One sessions effective, the Team Leader keeps the following key
elements of One on One in mind while conducting such a session:
Observe the employee's work and solicit feedback from others.
When performance is successful, take the time to understand why.

Advise the employee ahead of time on issues to be discussed.
Discuss alternative solutions.
Agree on action to be taken.
Schedule follow-up meeting(s) to measure results.
Recognize successes and improvements.
Document key elements of One on One session.
Questions to Consider during One on One
To provide effective feedback the Team Leader must understand the elements of
performance and analyze marginal performance. These questions are kept in mind:
How is the employee expected to perform?
Does the employee understand these expectations? If not, why not?
Does the employee know what successful results look like? How does the Team
Leader know?
Does the employee know the performance is marginal? How does the Team
Leader know?
Are there obstacles beyond the employee's control? Can the Team Leader remove
them?
Has the employee ever performed this task satisfactorily?
Is the employee willing and able to learn?
Does satisfactory performance result in excessive work being assigned?
25
Does unsatisfactory performance result in positive consequences such as an
undesirable task being reassigned?
During the One on One Session
When the Team Leader conducts a One on One session to provide positive feedback to
the employee, he keeps the following points in mind:
Describe the positive performance result or work habit using specific details.
Ask the employee's opinion of the same product or behavior.
Ask the employee to identify elements that contributed to success (adequate time
or resources, support from management or other employees, the employee's talent
and interest in the project).

Discuss ways in which the Team Leader and the employee can support continued
positive results.
Reinforce for the employee the value of the work and how it fits in with the goals
of the work unit or department.
Show your appreciation of the positive results and your confidence that the
employee will continue to perform satisfactorily.
If appropriate, document your discussion for the employee's file.
When the Team Leader conducts a One on One session to improve performance, he uses
the following format:
Describe the issue or problem, referring to specific behaviors.
Involve the employee in the problem-solving process.
Discuss causes of the problem.
Identify and write down possible solutions.
Decide on specific actions to be taken by each of the Team Leader.
Agree on a follow-up date.

Document key elements of the session.
26
Follow-Up Discussion
During a follow-up discussion, the following steps are followed:
Review the previous discussion(s).
Discuss insufficient improvement and ask for reasons why.
Indicate consequence of continued lack of improvement.
Agree on action to be taken and set a follow-up date, if appropriate.
Convey confidence in the employee.
Document the discussion.
27
R RE ES SE EA AR RC CH H S ST TU UD DY Y
28
Aim of the Research
To ascertain the effectiveness of Performance Appraisal methodology used by the
Organization.
Objectives of the study
The following are the objectives of the study -
To develop my understanding of the subject.
o Performance Appraisal System implemented in various Organizations
varies according to the need and suitability. Through my research, I have
tried to study the kind of Appraisal used in the Organization and the
various pros and cons of this type of system.
To conduct a study on social behavior.
o Social behavior is a very unpredictable aspect of human life but social
research is an attempt to acquire knowledge and to use the same for social
development.
To enhance the welfare of employees.
o The Appraisal system is conceived by the Management but mostly does
not take into consideration the opinion of the employees. This can lead to
adverse problems in the Organization. Therefore by this study I have
attempted to put forth the opinion of the employee with respect to the
acceptability of the Performance Appraisal System.

To exercise social control and predict changes in behavior.
o The ultimate object of my research is to make it possible to predict the
behavior of individuals by studying the factors that govern and guide
them.
29
Research Design
A research design is a type of blueprint prepared on various types of blueprints available
for the collection, measurement and analysis of data. A research design calls for
developing the most efficient plan of gathering the needed information. The design of a
research study is based on the purpose of the study.
A research design is the specification of methods and procedures for acquiring the
information needed. It is the overall pattern or framework of the project that stipulates
what information is to be collected from which source and by what procedures.
30
Sampling
An integral component of a research design is the sampling plan. Specifically, it
addresses three questions
Whom to survey (The Sample Unit)
How many to Survey (The Sample Size) &

How to select them (The Sampling Procedure)
Making a census study of the whole universe will be impossible on the account of
limitations of time. Hence sampling becomes inevitable. A sample is only a portion of the
total employee strength. According to Yule, a famous statistician, the object of sampling
is to get maximum information about the parent population with minimum effort.
Methods of Sampling
Probability Sampling is also known as random sampling or chance sampling .
Under this sampling design every individual in the organization has an equal
chance, or probability, of being chosen as a sample. This implies that the section
of sample items is independent of he persons making the study that is, the
sampling operation is controlled objectively so that the items will be chosen
strictly at random.
Non Probability Sampling is also known as deliberate sampling , purposeful
and judgmental sampling. Non-Probability Sampling is that which does not
provide every individual in the Organization with a known chance of being
included in the sample.
31
Data collection method
Collection of data is the first step in statistics. The data collection process follows the
formulation for research design including the sample plan. The data can be secondary or
primary.
Collection of Primary Data during the course of the study or research can be
through observations or through direct communication with respondents on one
form or another or through personal interviews. I have collected primary data by
the means of a Questionnaire. The Questionnaire was formulated keeping in mind
the objectives of the research study.
Secondary data means data that is already available i.e., they refer to data, which
has already been collected and analyzed by someone else. When a secondary data
is used, the researcher has to look into various sources from where he can obtain
data. This includes information from various books, periodicals, magazines etc.
32
Research Methodology Adopted
Research Design : Descriptive research
Research Instrument : Structured Questionnaire
Sampling Plan
i) Sample Method : Non-Probability Sampling
(Convenience Sampling)
ii) Sample Size : 50
iii) Sample Unit : Employees who do not hold a
supervisory position
Sampling Design
Convenience Sampling, as the name implies, is based on the convenience of the
researcher who is to select a sample. Respondents in the sample are included in it merely
on account of their being available on the spot where the survey was in progress.
Source of Data
a) Primary Data : Structured Questionnaire
b) Secondary Data : Journals, Booklets, Company Data, etc.
33
D DA AT TA A A AN NA AL LY YS SI IS S
34
Median Age Analysis
0.05
0.1
0.15
0.2
0.25
0.3
0.35
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49
The above graph is a logarithmic representation of the employee age data and clearly
shows the median age of the sample population taken for the survey as 29. This is mainly
due the expansion policy of the company that has taken on board a large number of new
and young employees to fuel its growth plans.
Due to this a large group of creative employees have been inducted into the Organization.
This helps in maintaining the creative talent in the Organization, as the job profile
requires them to be creative.
Champion Voyagers Designers Pvt Ltd will be continuing their expansion plans in the
coming months and this will lead to a further decease in the average age of the employees
in the Organization.
35
Male / Female ratio within the selected sample
Male Female
Data
Males 24
Females 26
Analysis
There is equality in terms of the ratio between males and females in Champion Voyager
Designers Pvt Ltd. This can also be ascertained from the fact that the same ratio is
present among the total strength of 350+ employees in the company. The sample was
carefully chosen to ensure that the study gave an equal opportunity to both the sections to
voice their opinion and there gain a truer picture of the conclusions derived by the study.
The balance of both the genders in the Organization also gives rise to a good work
atmosphere and better understanding between the employees. This trend can also be
witnessed in the supervisory ranks of Champion Voyager Designers Pvt Ltd. This helps
to remove many barriers that may exist due to various reasons.
The Management of Champion Voyager Designers Pvt Ltd strives to be an equal
opportunity employer and therefore does not try to discriminate on the basis of Gender.
36
Years of Experience within the Organization
10
12
14
16
18
20
12345
Yrs
Data
1) Less than a Year 5 2) One Year 19 3) Two Years 14
4) Three Years 5 5) Four + Years 7
Analysis
Most of the employees in the Organization are relatively new because a majority of them
(i.e. 66%) have between one and two years of experience in the Organization. This is
mainly due to the fact that the Organization is in a constant mode of growth and is
therefore recruiting in a big way. The expansion plans are done keeping in mind the
proposed growth in business in the near future.
Another reason is the fact that finding new talent for the required skills is a tough task
because market awareness about the career growth in this sector is very limited. Due to
this, Champion Voyager Designers Pvt Ltd has inducted a lot of employees after
providing them with training to ensure that their Human resource requirements are met.
37
1) Have you worked in any other Company prior to joining this
Organization?
10
15
20
25
30
35
12
Data
1) Yes 32
2) No - 18
Analysis
Thirty-two employees (i.e. 64%) have some amount of prior work experience before
joining Champion Voyager Designers Pvt Ltd. Most of them are diploma holders in
animation and were not aware of the existence of such an industry. They came to know
about the same only after seeing the advertisements of the company in the newspaper.
This also means that even though most of them have worked prior to joining Champion
Voyager Designers Pvt Ltd, they do not have any hands-on experience of the kind of
work carried out by Champion Voyager Designers Pvt Ltd.
This fact can also be interpreted as having no valid work experience at all prior to joining
the Organization.
38
2) Were you informed about the Performance Appraisal model, used in
the Organization, during your induction?
21
22
23
24
25
26
27
12
Data
1) Yes 27
2) No - 23
Analysis
Due to the fact that most of the employees have got no experience in this sector before,
they did not ask about the Performance Appraisal model used in the Organization. The
respondents that said that they were informed of the model during the interview were told
so at the discretion of the interviewer.
The company has however made it a point to inform the employee about the model
before he signs the acceptance letter. This prevents any ambiguities and
misunderstanding about what is expected of the employee before he joins the
Organization.
39
3) How do you find the Performance Appraisal Model in this
Organization? (Mark all the relevant options)
10
15
20
25
30
35
40
123456
Data
1) Simple 37 2) Complicated 13 3) Objective - 17
4) Subjective - 33 5) Efficient - 32 6) Inefficient - 18
Analysis
From the above chart it can be inferred that, a majority of the sample respondents have
found the Appraisal Model to be simple and efficient on one hand but also subjective on
the other hand. The Appraisal model has been thoroughly dealt with during the training
so the employees know exactly what is expected of them. The HR department follows an
open door policy which ensures that any queries regarding the policy can be clarified
to the employee s satisfaction. But the employees are of the opinion that the subjective
nature of the Appraisal system is one of the main disadvantages. The fact remains that
due to the kind of work carried out by Champion Voyager Designers Pvt Ltd, it becomes
quite irrelevant to appraise on an objective basis.
40
4) In your opinion, does the Performance Appraisal System give a
proper assessment of your contribution to the Organization?
21
22
23
24
25
26
27
12
Data
1) Yes 27
2) No - 23
Analysis
About 54% of the respondents say that the Performance Appraisal System does give a
true and fair view of their contribution to the Organization. This does include employees
who think that their rating does not always turn up to be correct as per their opinion.
The group of respondents who have replied in the negative, also include candidates who
say that the appraisal does not turn out to be right most of the times but do show a fair
view sometimes. Since the appraisal is done o a quarterly basis and most of the
candidates have not gone through more than 2-3 rounds of appraisals, the data may not be
entirely sufficient to reach any conclusions.
41
5) How often does your Performance assessment match to your
expectations?
10
12
14
16
18
20
12345
Data
1) Never - 2 2) Rarely - 8 3) Sometimes 13
4) Often - 20 5) Every time - 7
Analysis
This question was purposely put into the questionnaire to validate the answers for the
previous question. The breakup of the data clearly shows that 4% of the entire sample
state that their appraisal have never shown a fair view of their performance. If this can be
combined with those who are of the opinion that their appraisal rarely matches up to their
expectations, this figure goes up to consist about 20% of the population. That shows that
80% are satisfied with the present system even though this includes satisfaction in
varying degrees like the appraisal matches up to the respondents expectations sometimes,
often or every time.
This does show that the satisfaction level of the employees in this system is quite high
and that there is a general feeling of likeability among the respondents.
42
6) According to you, how often should the Performance Review take
place?
8
10
12
14
16
18
12345
Data
1) Once in a week - 14 2) Once a month - 17 3) Every 3 months 12
4) Every 6 Months - 3 5) Once a Year - 4
Analysis
Performance appraisal review is a constant process and lesser the frequency between the
appraisals, the better. The majority want (i.e. 86% which includes the first 3 options only)
the frequency of the appraisal to less than 3 months. The employees say that the longer
the frequency between appraisals, the more the chances of the appraisal not matching up
to their expectations because many performances get overlooked. If the appraisal is done
on a more frequent basis, the employee has a chance to find out the gaps in his / her
performance on a more regular basis which will help them to improve more on their
performance and thereby eliminate waste. The appraisal does not necessarily have to be a
formal one. Even informal performance appraisals done between formal appraisals but on
a more frequent level will most certainly help and go a long way in improving
performance.

43
7) What is your Satisfaction level with the current Appraisal System?
10
15
20
25
30
12345
Satisfacton level
No of People
Data
1) Very Low - 0 2) Low - 4 3) Average 13
4) High - 28 5) Very High - 5
Analysis
The satisfaction level of the Appraisal system is quite high as can be seen from the graph.
This is a good sign as increased level of satisfaction is the main emphasis of any appraisal
system. The curve tops at the rating of high and this includes about 56% of the
population. The bell curve shows that 92% have rated the Appraisal system as average ,
high or very high . The high Satisfaction level in the System could also be due to
various reasons like monetary or non-monetary incentives or growth parameters.
The satisfaction level also brings to light the efficiency of the management in devising an
acceptable Appraisal system.
44
8) Which are the areas that should be improved upon?
10
15
20
25
1234
Data
1) Standards - 12 2) Monetary Incentives - 25 3) Freq of Appraisal 23
4) Appraiser - 3
Analysis
This question breaks up the different phases of the appraisal system and tries to come to
derive a conclusion as to the areas of improvement in the process of evaluation. Fifty
percent of the respondents say that there should be a change on the aspect of monetary
incentives. This does not refer to an increase in the monetary incentives but a more
reasonable incentive structure that will properly reward increased and efficient
performance. The frequency of appraisal is another aspect that needed review. The
present system is a quarterly one and the general opinion is that informal appraisals
should be held on a more regular basis. Standards of performance (i.e. benchmarks)
should be improved according to 24% of the respondents. Only 6% have stated the there
should be change in the appraiser, which is an inevitable sign of the operational
efficiency of the system.
45
9) How important do you think is Performance Appraisal to your
Performance?
Productivity Analysis
10
15
20
25
12345
Data
1) Not Important - 0 2) Less Important - 2 3) Important 14
4) Very Important - 22 5) Most Important - 12

Analysis
This question was put in to find out and analyze the importance of the Appraisal system
to the productivity of the employee. The data clearly shows that the recognition of the
employee s performance does have a direct impact on his / her efficiency.
A vast majority of the respondents (i.e. 68% which includes ratings of very important
or most important ) affirm that their performance is directly influenced by recognitions
of their performance by the appraisal system. None of the respondents have stated that
the appraisal system had no effect on their productivity.
This points out to the fact that the Appraisal system goes a long way in determining the
productivity of the employees in an Organization. Therefore it is very important for any
Organization to devise their Performance Appraisal System carefully.
46
10) Do you think the One on One sessions are effective in ironing out
problems in the work environment?
21
22
23
24
25
26
27
12
Data
1) Yes 23
2) No - 27
Analysis
One on one sessions are conducted by Champion Voyager Designers Pvt Ltd during the
appraisal system phase to tell the employee on an individual level as to the rating given to
him / her. Each session lasts between 10
30 minutes. The team leader tries to justify his
reasons on why he had given a particular rating to an employee. Sixty four percent of the
employees responded by saying that the one on one sessions are not efficient in ironing
out problems mainly because since they are done on a formal basis so most employees
consider it just as a formality which the appraiser uses to impose the rating he has already
given to an employee. The employee therefore does not expect the rating to change after
a one on one session with the supervisor.
47
11) Transparency Rating of the Performance Appraisal system
Transperancy Rating
2
4
10
12
14
16
18
123456
Data
1) 4 Points 10 2) 5 Points 16 3) 6 Points 9
4) 7 Points 8 5) 8 Points 5 6) 9 Points - 2
Analysis
This question is an attempt to analyze the perceived transparency of the rating among the
employees of the Organization. A majority of the employees have given a transparency
rating of 5. The perception of the employees is since the appraisal is done on a quarterly
basis, the employee is not in a position to actually evaluate the basis of the rating he / she
has received. This causes a lot of ambiguity in the ratings. This is the primary concern
due which almost 70 % have given a rating of 6 and below. The respondents who have
given a rating of 7 and above have mostly given this rating because they have got good
ratings in the past and feel that there is not much required in terms of transparency as
long as they get good ratings themselves.

48
12) Do you feel comfortable discussing any difference of opinion about
your Performance Rating with your appraiser?
10
15
20
25
30
12
Data
1) Yes 21
2) No - 29
Analysis
The major reason for the decreased transparency rating might be due to the fact that 58 %
of the respondents did not feel free to express their displeasure, if any, to the rating given
to them. This can be due to decreased comfort levels with the appraiser. The appraisal
system can only be efficient if it takes into consideration the employee s side of the
appraisal. There might be various aspects that the appraiser might have accidentally
overlooked or certain circumstances misinterpreted which can be clarified if the
employee is more open and comfortable with the employer.
49
13) Performance Appraisal Model Rating
Overall Rating
10
12
14
16
18
12345
Data
1) 5 Points 2 2) 6 Points 6 3) 7 Points 14
4) 8 Points 16 3) 9 Points - 12
Analysis
The respondents were specifically told to rate the Appraisal system by setting aside any
kind of human intervention present in it by just evaluating its inherent structure and not
efficiency in its execution. This helps to ascertain whether there are any flaws in the
Performance Appraisal system. About 80 % of the sample has given a rating of 7 points
and above. This shows the system is generally acceptable to the employees and is a good
sign for Champion Voyager Designers Pvt Ltd. The concern of the Organization should
be to find out why the remaining 20 % are not very highly satisfied with the system and
find out ways and means to increase their acceptability of the system.
50
L LI IM MI IT TA AT TI IO ON NS S
51
Limitations
The following are the limitations faced by me during the course of the study
The sample consisted only of employees in the day shift. Employees of the night
shift were not considered for the purpose of study.
There is no concrete basis to prove the response given is a true measure of the
opinion of all the employees as a whole.
Convenient sampling was used as the mode of conducting the research.

The questionnaire contained mostly multiple-choice questions; therefore many
respondents may not have given a proper thought before answering the questions.
The response of the respondents may not be accurate thinking that the
management might misuse the data.
Almost all of the questionnaires had the open-ended question no. 11, left
unanswered.
Sensitive company information cannot be displayed in the project report.
Most respondents might be influenced by their peers in answering the questions.
Due to the fact that most of the respondents were young, the questions might not
have been answered with due sincerity.
52
F FI IN ND DI IN NG GS S A AN ND D
C CO ON NC CL LU US SI IO ON NS S
53
Findings and Conclusions

The following are the suggestions and conclusions derived from this particular
research study
Objectivity
One manager's idea of "self-starting ability" can be quite different than
another's idea. The question then arises as to how does one objectively
evaluate "creativity ? If greater amount of objectivity can be infused into the
Appraisal system, it can help to bring more transparency.
Effective Communication
One function of performance appraisals is to help employees develop so they
can contribute more effectively. In order for the employees to develop and
learn they need to know what they need to change, where (specifically) they
have fallen short, and what they need to do. If a manager assigns a 1
(unsatisfactory) on a scale of 5, it does not convey much information to an
employee. It just says the manager is dissatisfied with something. In order to
make it meaningful and promote growth, far more information must be added
to the appraisal process and the related information should be transparently
shared with the employee.
Fairness
Most employees resist being classified at the low end of the scale. Employees
who are low rated are more likely to resist the evaluation of the superior and
argue, claiming that personal bias was involved in the ratings.

Managerial Efficiency
The implementation of a Performance Appraisal System rests on the shoulders
of the manager and he must ensure that it is done properly. A good manager
can make an average appraisal system work and vice-versa.
54
A AN NN NE EX XU UR RE E
55
Performance Appraisal Form
56
57
58
59
60
61
62
63
64
65
66
67
68
Q QU UE ES ST TI IO ON NN NA AI IR RE E
Dear Respondent,
I would be grateful if you could spare some of your time to respond to the following
questions. Your response will be treated as confidential and would only be used for
the purpose of study.
Gender - Male Female
Age 21-25 25-30 30-35 35+
Yrs of experience in this Organization
Less than a Year 1 yr 2 yrs 3 yrs 4 yrs+
1) Have you worked in any other Company prior to joining this Organization?
Yes No
2) Were you informed about the Performance Appraisal model, used in the
Organization, during your induction?
Yes No
3) How do you find the Performance Appraisal Model in this Organization? (Mark all the
relevant options)
Simple Complicated Objective
Subjective Efficient Inefficient
4) In your opinion, does the Performance Appraisal System give a proper assessment of
your contribution to the organization?
Yes No
5) How often does your Performance assessment match to your expectations?
Never Rarely Sometimes
Often Every time
6) According to you, how often should the Performance Review take place?
Once a week Once a month Every 3 months
69
Every 6 months Once a year
70
7) What is your Satisfaction level with the current Appraisal System?
Very low Low Average
High Very High
8) Which are the areas that should be improved upon? (Mark all the relevant options)
Standards Monetary incentives
Frequency of Appraisal Appraiser
9) How important do you think is Performance Appraisal to your Performance?
Not Important Less Important
Important Very Important
Most Important
10) Do you think the One on One sessions are effective in ironing out problems
in the work environment?
Yes No
11) If you were given an opportunity to rate the transparency of the Appraisal System,
what marks would you give? (On a scale of 1 to 10 with 1 being the lowest and 10
being the highest)
12) Do you feel comfortable discussing any difference of opinion about your
Performance Rating with your appraiser?
Yes No
13) How do you rate the Performance Appraisal System in your Organization? (On a
scale of 1 to 10 with 1 being the lowest and 10 being the highest)
14) Any Suggestions
71
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Performance
Appraisal
for Teams:
An Overview
Workforce
Compensation
and Performance
Service
United States
Office of
Personnel
Management
PMD-14
August 1998This page intentionally left blank.Performance Appraisal for Teams: An Overview
TABLE OF CONTENTS
Concept ................................................................... 1
Performance Elements ........................................................ 2
Team-Related Performance Measurement ................................... 3
Team-Related Measures Matrix ........................................... 4
Individual Level ....................................................... 4
An Individual’s Contribution to the Team: Behaviors or Results ............. 4
1. Individual Behavior ............................................ 5
2. Individual Results ............................................. 7

Team Level .......................................................... 8
The Team’s Performance .......................................... 8
3. The Team’s Processes .......................................... 9
4. The Team’s Results ........................................... 11
Sources of Input ........................................................... 12
Questions & Answers ....................................................... 13Performance Appraisal for Teams
USOPM:PMIAD 1
CONCEPT
Agencies are required by the Government Performance and Results
Act of 1993 to establish program goals and report organizational
performance to stakeholders, including the Office of Management
and Budget and the Congress. This creates pressure to use methods
that improve organizational performance and maximize goal
achievement. Using teams to accomplish the work— and effectively
managing team performance— is one of the methods that many
Federal organizations have chosen. Increasing levels of employee
involvement in deciding how work gets done has improved customer
service and the bottom-line results for many organizations.
One of the first human resources programs affected by moving to
teams is performance management, which includes appraisal and
recognition processes. Organizations that only measure and recog-
nize individual performance have found that team development and
performance are jeopardized because they appear to be ignored. By
balancing the measurement of individual and team performance,

organizations have been able to address individual development as
well as focus on achieving team goals. In addition to balancing
employee and team measures, effective team performance manage-
ment processes are aligned with organizational goals. In particular,
by aligning and linking employee performance plans with the goals
established in the agency’ s performance plan, an organization is more
likely to achieve its goals because its employees’ efforts are chan-
neled in that direction. As a result, performance management be-
comes a useful tool for clarifying individual, team, and organizational
goals and for pointing everyone in the right direction. Such efforts
support and produce goal achievement.
Managers, supervisors, team leaders, and team members can use the
performance appraisal process to:
C plan team and individual performance;
C set team and individual goals that are aligned with organizational
goals;
C establish performance expectations;
C measure actual team and individual performance against desired
performance;
C determine developmental and training needs;
C provide feedback on performance; andPerformance Appraisal for Teams
2 August 1998
C provide a basis for recognizing team and individual performance.
The Federal appraisal process uses performance elements and stan-
dards as the building blocks of employee performance plans. This

overview will begin by defining critical, non-critical, and additional
performance elements. Then, to fully understand how team perfor-
mance can be addressed through such elements in the appraisal
process, a discussion of team-related performance measurement will
explore what is meant by “ team performance.” That measurement
discussion will include examples of “ team” elements and standards.
Finally, the method of assessing elements will be discussed, including a
brief description of multi-rater (360-degree) assessment methods.
NOTE: Readers should remember that different agency appraisal
programs have different requirements and may not use all the types
of performance elements described below. Please check with your
human resources office to find out how your specific program oper-
ates.
PERFORMANCE ELEMENTS
In the context of performance management, elements are work
assignments, responsibilities, or dimensions of work that can
address individual, team, group, or organizational performance.
Three types of elements can be used in the performance appraisal
process:
C A critical element is a work assignment or responsibility of such
importance that unacceptable performance on the element would
result in a determination that an employee’ s overall performance is
unacceptable. Critical elements must address individual perfor-
mance for which the employee can be held individually accountable.

C A non-critical element can be a dimension or aspect of individual,
team, or organizational performance that is used in assigning a
summary level. With the deregulation of employee performance
appraisal in 1995, even though consideration of non-critical elements
cannot result in assigning a Level 1 summary performance rating
(“Unacceptable” ), programs can be designed so that non-critical
elements have as much weight or more weight than critical
elements in determining summary levels above Level 1. Because
non-critical elements must affect the summary level, they cannotPerformance Appraisal for Teams
USOPM:PMIAD 3
be used in appraisal programs that summarize performance at
only two levels (i.e., “ pass/fail” ).
C An additional performance element addresses a dimension or
aspect of individual, team, or organizational performance not
used in determining summary levels, but used for various other
purposes, such as setting goals, providing feedback on individual
or group performance, and recognizing individual or group
achievements.
By using critical elements, non-critical elements, or additional
elements, team performance can be factored into employee perfor-
mance plans, and can be planned, monitored, and rewarded through a
combination of individual and group measures.
Team-Related Performance Measurement.
Measures, or “ yardsticks,” should be used to determine how well
each element is performed. Standards are points or ranges on the

“ yardstick” that define performance at those specific levels. Each
one of the three types of elements and their related measures and
standards can address team-related performance.
Measuring performance related to work done by a team can be
approached in at least four ways. Two of these approaches measure
performance at the individual level and two measure performance at
the team level.Performance Appraisal for Teams
4 August 1998
INDIVIDUAL LEVEL
Team-Related Measures Matrix
Behaviors/Process Mea-
sures
Results Measures
Individual Level:
An employee’ s
contribution to the
team
ìWhether or how well the
employee: cooperates with team
members, communicates ideas
during meetings, participates in
the team’ s decision-making pro-
cesses.
íThe quality of the written
report, the turnaround time

for the individual’ s product,
the accuracy of the advice
supplied to the team, the
status of the employee’ s
case backlog.
Team Level:
The team’ s
performance
îWhether or how well the
team: runs effective meetings,
communicates well as a group;
allows all opinions to be heard,
comes to consensus on deci-
sions.
ïThe customer satisfaction
rate with the team’ s prod-
uct, the percent decline of
the case backlog, the cycle
time for the team’ s entire
work process.
In most cases, work assignments at the team level (quadrants î and
ï) and their related measures and standards can only be addressed
through non-critical and/or additional performance elements, and can
only be factored into the summary level through non-critical ele-
ments. However, it is possible to develop a critical element and

standard that holds a supervisor, manager, or team leader responsible
for the team’ s performance— as long as that person has the leader-
ship responsibility for the team and can reasonably be
expected to command the resources and authority necessary to
achieve the team’ s results.
An Individual's Contribution to the Team: Behaviors or Results.
Work assignments, measures, and standards at the individual level of
performance can be established in the employee’ s performance plan
using critical, non-critical, or additional performance elements.Performance Appraisal for Teams
USOPM:PMIAD 5
ì Individual Behavior. Employees can be appraised on how
well they work with team members. Examples of measures used to
appraise “ team-supportive” behavior could include the degree to
which: the employee participates in team meetings, the employee
volunteers for team projects, the employee communicates with mem-
bers in a constructive and nonthreatening manner, and/or the em-
ployee is perceived by other members as pleasant to work with and
cooperative. Examples of work assignments (elements) and stan-
dards (a point or range along the measurement yardstick) that repre-
sent individual behaviors contributing to good team performance
include the following:
Element: Interpersonal Skills.
Fully Successful Standard:
C with few exceptions, interacts effectively, tactfully, and

cooperatively with all levels of the organization;
C routinely expresses support for the value of diverse opinions;
C routinely establishes rapport in initial contacts with others at
all levels;
C routinely gains support for ideas or suggestions through
effective negotiation skills;
C spends sufficient time cultivating contacts with peers to get
timely information or resolve issues outside formal channels;
and
C routinely keeps superiors, team members, and other appropri-
ate parties informed of significant developments.
Outstanding Standard:
Meets Fully Successful standard plus:
C consistently wins the support and confidence of others in
one-on-one as well as group situations;
C presents positions with force and diplomacy, achieving agree-
ment despite initial opposition; and
C handles confrontations and hostile reactions calmly, in a way
that defuses the situation.
Element: Ability to Deal with People.
C routinely deals with others in a professional manner; and
C routinely keeps superiors, team members, and other appro-
priate parties informed of significant developments.Performance Appraisal for Teams
6 August 1998
C is calm and courteous, even when dealing with irate or rude
people;
C gets a point across in difficult situations without hurting
feelings;
C is highly effective in obtaining needed cooperation or support
to complete a job; and
C negotiates effectively in delicate situations.
Element: Team Participation.
C routinely assumes an appropriate amount of work/responsi-
bility for group projects;
C usually demonstrates a willingness to assume other responsi-
bilities as needed; and
C generally shares knowledge of office procedures/equipment
with other members of the team.
C in times of crisis or high workload, is always willing to “ jump
in” and lend a hand to accomplish “must do” work;
C in joint efforts, is always available for a full share of the load;
and
C always insures that appropriate people or offices within the
agency are made aware of significant changes in procedures.

Element: Oral Communication.
C usually conveys information and ideas understandably;
C routinely asks for clarification if the meaning isn’ t clear;
C usually relays telephone messages accurately with few
exceptions; and
C usually explains any need for information or input from oth-
ers.
C has an excellent command of English, and expresses ideas
with ease;Performance Appraisal for Teams
USOPM:PMIAD 7
C is highly articulate with all levels of employees; and
C is unusually persuasive, one-on-one or with groups.
í Individual Results. The results of employee work that
contribute to the team’ s final product or service can be assessed and
verified. Examples of measures that could be used to assess work
results include: the ratio of correct to incorrect actions; the timeli-
ness of the employee’ s product; the number of suggestions for
improvement the employee made; or the accuracy of the data the
employee provided to the team. Examples of elements (work
assignments) and standards (a point or range along the measurement
yardstick) that represent individual results contributing to team
performance include the following:

Element: Professional Advice and Recommendations.
C provides expert advice to team members and customers that
is usually accurate and timely; and
C advice is usually meaningful and contributes to the success of
the team.
C advice contains innovative approaches/solutions to problems;
C improved accomplishment of team objectives results from
employee’ s unusual initiative and effective work habits;
C clients and team members seek out employee for advice and
expertise; and
C voluntarily completes a significant amount of additional work
or special assignments.
Element: Completed Cases.
(This type of standard could apply when the case inventory is
within the control of the employee.)
C completes 10-25 cases of simple or average difficulty per
month and 2-5 difficult cases per month. Cases are com-
pleted using established procedures and effective case plan-
ning, prioritization, and development;Performance Appraisal for Teams
8 August 1998
TEAM LEVEL
C handles preliminary investigations in a timely manner, with
rare exceptions; and
C case inventory declines by at least one case per month.
C applies innovative procedures that improve effective case
planning, prioritization, and development;
C teaches innovative casework procedures to other team mem-
bers; and
C completes more that 35 cases of simple or average difficulty
per month and completes more than 7 difficult cases per
month.
Element: Written Reports.
C with few exceptions, written products include accurate data,
detailed information, and are in the correct format, with only
minor errors; and
C written reports are produced as requested, usually within the
time frames established, and routinely meet the customers’
needs.
C written products are error free, reflect great attention to
detail, and completely review all aspects of the subject mat-
ter.
The Team's Performance. Work assignments, measures, and

standards for the team as a whole can be incorporated into the
employee’ s performance plan through non-critical elements and
additional performance elements. Using non-critical elements is the
only way that the team’ s performance as a whole can affect the
summary level. Non-critical elements cannot be used in two-level
appraisal programs because they would have no effect on the sum-
mary rating level and, by definition, they must affect the summary
level. (That is, in a two-level program, failure of non-critical ele-
ments cannot bring the summary level down to Unacceptable andPerformance Appraisal for Teams
USOPM:PMIAD 9
assessments of non-critical elements cannot raise the summary level to
Fully Successful if a critical element is failed.) Additional performance
elements are the only elements that a two-level appraisal program
can use to include team performance in the employee’ s performance
plan.
î The Team's Processes. The team can be appraised on its
internal group processes. Work assignments and performance
measures could include how well: the team works together as a
group; meetings are planned and run, and if they’ re on time; the team
reaches consensus; and/or the team uses successful problem-solving
techniques. Specific examples of non-critical or additional elements
(work assignments) and standards (specific points or ranges on the
measurement yardstick) that address the team’ s performance on its
group processes are listed below.
NOTE: The Outstanding standard for each of the î examples below

is the same: “The team is used as an example for other teams in the
organization due to its exceptionally successful group work. Because of
its outstanding performance as a team, team members are asked to
assist other developing teams to improve internal group processes.”
Element: Open and Honest Communication.
Fully Successful Standard: The supervisor, team leader, and
team members are generally satisfied that:
C team members communicate openly and honestly with each
other without fear of telling the truth;
C team members provide feedback on each other’ s performance;
C team members express their opinions and everyone’ s opinion
is heard;
C the team works together to solve destructive conflicts rather
than ignoring conflicts;
C the team encourages every member to be open and honest,
even if people have to share information that goes against
what the team would like to hear; and
C the team recognizes that everyone on the team has something
to contribute— such as knowledge, skills, abilities, and
information— that is of value to all.Performance Appraisal for Teams
10 August 1998
Element: Effective Meetings.
C team meetings are planned and each meeting has an agenda;

C team members are prepared, give the meeting their full atten-
tion, and the team accomplishes what it set out to
accomplish during the meeting;
C meetings have a facilitator who is responsible for keeping the
meeting focused and moving;
C designated team member takes notes of the key subjects,
main points raised, and action items; and
C at the end of the meeting, the team sets an agenda for the
next meeting and conducts a 1-minute evaluation.
Element: Team Mission.
C each person on the team knows exactly why the team exists
and what it contributes to the organization;
C members understand and can explain how the team fits into
the organization;
C members know exactly why the team does what it does and
agree on the team’ s mission, or they work together to resolve
disagreement;
C members know and understand the team’ s priorities and
goals and they progress steadily toward those goals; and
C everyone on the team is working toward accomplishing the
same thing.
Element: Clearly Defined Roles.

C team members understand their duties and know who is
responsible for specific issues and tasks;
C team members have the skills they need to accomplish their
roles within the team;
C each team member’ s role is known and makes sense to the
whole team;
C team members clearly understand the team’ s rules of how to
behave within the group;Performance Appraisal for Teams
USOPM:PMIAD 11
C team members understand which roles belong to one person
and which are shared, and how the shared roles are switched;
and
C the team uses each member’ s talents, and involves everyone
in team activities so no one feels left out or taken advantage
of.
Element: Decision-Making Procedures.
C the team discusses how decisions will be made, such as when
to take a poll or when to decide by consensus;
C the team explores important issues by asking members to
vote or state an opinion verbally or in writing;
C the team tests for a consensus;
C the team uses data as the basis of decisions; and

C the team can reach a decision and support that decision.
ï The Team's Results. The team can be appraised on the
results of its work products or services. Measures used to appraise
the team’ s performance could include: the number of cases com-
pleted correctly; the ratio of satisfied customers to unsatisfied cus-
tomers; the number of customer requests for a team report; the total
cost of a team project; the percent of customer needs filled; and/or
the subscription rate of a team newsletter. Below are examples of
non-critical or additional elements (work assignments) and standards
(specific points or ranges along the measurement yardstick) that
represent the team’ s work results.
Element: Case Backlog.
C any case backlog decreases from 1 to 9 cases each month
during the appraisal period.
C any case backlog decreases by 12 or more cases per month.Performance Appraisal for Teams
12 August 1998
Element: Customer Service.
C fifty to seventy-five percent of customers say they are “ satis-
fied” or “ highly satisfied” with the team’ s services.
C eighty-five percent or more of the customers say they are
“ satisfied” or “ highly satisfied” with the team’ s services.

SOURCES OF INPUT
As you can see from the measures used in the elements and standards
described above, there may be situations when multiple sources of
information are needed in order to fully appraise performance. There
are no prohibitions in law or regulation against using a variety of
sources of information for performance appraisals. A team environ-
ment lends itself to including team members in the appraisal process.
A team member’ s peers have a unique perspective on his or her job
performance. Experience has shown that employees on teams are
generally very receptive to the concept of appraising each other, or
at least providing feedback on performance.
A multi-rater appraisal and/or development process can be designed to
fit the work climate, technology, and development of the team.
Some organizations use a computerized process that calculates
appraisal averages and assigns those averages to summary levels for
ratings of record. Other organizations use the information for devel-
opmental purposes only and do not use the data for assigning sum-
mary levels. Still other organizations with highly-developed, mature
self-directed teams use face-to-face feedback and/or peer panels to
determine summary levels. There are many issues to consider when
designing multi-rater appraisal programs. You may call us at 202-
606-2720 or email performance-management@opm. gov for more
information.Performance Appraisal for Teams
USOPM:PMIAD 13
QA
This section presents some common questions and
answers about appraising team performance.
UESTIONS &
NSWERS
Can an agency appraise employees entirely and
exclusively on team performance?
Usually no. The regulations require that each
employee have at least one critical element, which
must be based on individual performance. This re-
quirement ensures that an appraisal program estab-
lishes individual accountability, as the performance
appraisal law intended by providing for the demotion
or removal of an employee on the basis of unaccept-
able performance. However, it is possible to develop
a critical element and standard that holds a supervi-
sor, manager, or team leader responsible for a team’ s
performance (taking into account their level of lead-
ership responsibilities for the team).

When deriving a rating of record above Unac-
ceptable, can an agency assign greater weight to
non-critical elements that describe team perfor-
mance in order to emphasize their importance?
Yes. An agency can design procedures for deriving
a rating of record that assign greater weight to non-
critical elements (which may be used to measure team
performance and may affect the rating of record) than
to critical elements. If desired, in summarizing over-
all performance at or above the Fully Successful
level, agencies can make distinctions on the basis of
team performance alone.
Can an agency use critical elements that address
team performance?
Usually no, not as team performance is defined in
this overview. Critical elements are the only basis
for determining that an employee’ s performance is
unacceptable. The law intends that they be used toPerformance Appraisal for Teams
14 August 1998
establish individual accountability. Consequently,
critical elements generally are not appropriate for
identifying and measuring team performance, which

by its definition involves shared accountability.
This restriction is clearest for rank-and-file employ-
ees who may be serving as team members, but a
supervisor or manager can and should be held
accountable for seeing that results measured at the
group or team level are achieved. Critical elements
assessing group performance may be appropriate to
include in the performance plan of a supervisor,
manager, or team leader who can reasonably be
expected to command the resources and authority
necessary to achieve the results (i.e., held individu-
ally accountable).
However, agencies can use other ways to factor
team performance into ratings of record or other
performance-related decisions such as granting
awards. One approach to bring team performance
into the process of deriving a rating of record, and
certainly to the process of distributing recognition and
rewards, is to establish team performance goals
within the team members' performance plans as
either non-critical or additional performance
elements.
Could the individual critical element that every
employee performance plan must include simply
appraise the individual's contribution to the

team?
Yes. The individual critical element required by the
regulations must describe performance that is
reasonably measured and controlled at the individual
employee's level. Such performance includes individual
contributions to the team, but does not include team
performance. This means that agencies have the
option of making individually-oriented decisions
about an employee's job retention as well as reduc-
tion-in-force retention standing, eligibility for within-
grade increases, and eligibility for individually-based
awards exclusively on the basis of the individual'sPerformance Appraisal for Teams
USOPM:PMIAD 15
contributions to the team, rather than team
performance.
Why doesn’ t the Office of Personnel
Management permit ratings of record based
entirely on team performance?
The principal reason is that it would violate the intent of
the appraisal statute. Allowing a non-performer to
“ ride” the efforts of other team members and accrue all

the entitlements that Fully Successful performance
conveys would violate the fundamental principle of
individual accountability on which the statute and merit
system principles rest.
A second reason is that a fundamental principle of
compensation policy and practice is that adjustments
to basic pay operate at an individual level. Within
the Federal compensation system, periodic within-
grade pay increases are granted on the basis that the
employee, not the employee's team, is performing at
an acceptable level of competence as reflected in a
rating of record.
Finally, no Federal system can be viewed as credibly
managing performance in the eyes of Congress or the
American public without making it possible to
identify and deal with poor performers. As noted in
answers to other questions in this paper however,
summary levels (or other performance distinctions)
above Unacceptable can be based largely on team
performance. Alternatively, a determination that
performance is Fully Successful can still be based
solely on an individual's contribution to the team.
What options does an agency have for
emphasizing the importance of teams to the
organization when it does not necessarily want to

base appraisal-related decisions (such as within-
grade increase eligibility determination) on the
team’ s performance?
One option is to establish an individual's
contributions to the team as critical or non-critical
elements in employee performance plans and usePerformance Appraisal for Teams
16 August 1998
them in deriving the rating of record or as awards
eligibility criteria. Another option is to establish
team goals as additional performance elements in the
employee’ s performance plan and use them as the
basis for team awards.
How else might an agency emphasize the
importance of team performance, without
necessarily using critical or non-critical elements?
The importance of team performance can be
emphasized through the creation of appropriate
awards. Where goals are reasonably stable,
measurable, and achievable, agencies may wish to
establish incentive awards that are granted on the
basis of achieving team performance objectives or
sharing savings from gains in team efficiency and
productivity among team members.

Performance Appraisal
Ben Dattner, Ph.D.© 2010 Dattner Consulting, LLC
Performance appraisal
Setting goals for the appraisal system
Developing criteria for successful performance
Creating metrics for evaluating performance
Selecting reviewees and reviewers
Considering the timing of feedback
Organizing logistics for the report and meeting
Giving candid and constructive feedback
Following up to ensure that the system works© 2010 Dattner Consulting, LLC
Setting goals
? Setting goals
• Developing criteria
• Creating metrics
• Selecting reviewees
and reviewers
• Considering timing
• Organizing logistics
• Giving feedback
• Following up
Well-designed Performance Appraisal systems:
• Recognize and record an employee’s contributions

• Give employees useful performance feedback
• Enable a more effective and equitable reward system
• Develop the professional capabilities of employees
• Communicate the organization’s values and culture
• Help the organization make evidence-based, legally
defensible personnel decisions© 2010 Dattner Consulting, LLC
Setting goals
? Setting goals
and reviewers
• Giving feedback
• Following up
Evaluation
• Prediction of future performance based on past
performance
• Retention decisions and succession planning
• Compensation
Development
• Assessment for training and development
• Career planning© 2010 Dattner Consulting, LLC

5
Developing criteria
• Setting goals
? Developing criteria
and reviewers
• Giving feedback
• Following up
Criteria should be:
• Aligned with organizational goals
• Relevant to given roles
• Specific and measurable
• Under employees’ control
• Understood and accepted by participants© 2010 Dattner Consulting, LLC
Developing criteria
• Setting goals
? Developing criteria
and reviewers
• Giving feedback
• Following up
Criteria can be based on:
• Quantitative and/or qualitative factors
• Competencies and/or performance
• Effort and/or results
• Frequency of behaviors© 2010 Dattner Consulting, LLC
Creating metrics
• Setting goals
? Creating Metrics
and reviewers
• Giving feedback
• Following up
Ratings can be on the basis of:
• General or specific standards or expectations
• Improvement on past performance
• Rankings or comparison to others© 2010 Dattner Consulting, LLC
Creating metrics
• Setting goals
? Creating Metrics
and reviewers
• Giving feedback
• Following up
Rating scales differ in terms of:
• Definition of ratings
• Number of possible ratings
• Presence or absence of a midpoint© 2010 Dattner Consulting, LLC
Creating metrics
• Setting goals
? Creating Metrics
and reviewers
• Giving feedback
• Following up
Types of rating scales:

• Graphic Rating Scales
• Ranking
• Forced Distribution
• Behaviorally Anchored Rating Scales (BARS)© 2010 Dattner Consulting, LLC
10
Selecting reviewees and reviewers
• Setting goals
? Selecting reviewees
and reviewers
• Giving feedback
• Following up
Reviewees can be:
• Everyone in the organization
• Assigned by managers
• Selected by level
• Selected by division or department
• Self-selected© 2010 Dattner Consulting, LLC
11
Participants (Continued)
• Setting goals
and reviewers
• Giving feedback
• Follow up
Reviewers can be designated by:
• Manager
• Human Resources
• Reviewee© 2010 Dattner Consulting, LLC
12
Participants (Continued)
• Setting goals
and reviewers
• Giving feedback
• Follow up
Reviewers can include:
• Reviewee
• Manager
• Peers
• Subordinates
• Clients or customers© 2010 Dattner Consulting, LLC
13
Considering timing
• Setting goals
and reviewers
? Considering timing
• Giving feedback
• Following up
Performance can be appraised:
• After each project is completed
• After a milestone is reached
• Quarterly
• Semi-annually
• Annually© 2010 Dattner Consulting, LLC
14
Organizing logistics
• Setting goals
and reviewers
? Organizing logistics
• Giving feedback
• Following up
Data can be gathered by or in:
• Written surveys
• Intranet or internet
• Individual discussions
• Group meetings© 2010 Dattner Consulting, LLC
15
Organizing logistics
• Setting goals
and reviewers
? Organizing logistics
• Giving feedback
• Following up
The process can be coordinated by:
• Employee
• Manager
• Human Resources
• An outside vendor© 2010 Dattner Consulting, LLC
16
Giving feedback
• Setting goals
and reviewers
? Giving feedback
• Following up Feedback reports can include:
• Attributed ratings and comments
• Anonymous ratings and comments
• Statistics and comparisons
• Weighted or unweighted ratings
• By competency
• By reviewer
• Competencies necessary for advancement© 2010 Dattner Consulting, LLC
17
Giving feedback
• Setting goals
and reviewers
? Giving feedback
• Following up
Feedback reports can be (or not be):
• Filtered or summarized by manager
• For an employee’s file
• Shared with others
• Reviewed and approved by others
• Inclusive of tables or graphics© 2010 Dattner Consulting, LLC
18
Giving feedback
• Setting goals
and reviewers
? Giving feedback
• Following up
Feedback is least useful when it is:
• Inaccurate or untrue
• Biased due to favoritism or politics
• Insensitive and unduly critical
• Not specific or actionable
• Constituted by orders or ultimatums© 2010 Dattner Consulting, LLC
19
Giving feedback
• Setting goals
and reviewers
? Giving feedback
• Following up Feedback is most useful when it is:
• Candid and honest
• Specific and actionable
• Based on more than one incident or example
• Based on more than one person’s view
• Framed positively and constructively
• Behaviorally based rather than personality based
• Summarized and integrated into key themes © 2010 Dattner Consulting, LLC
20
Giving feedback
• Setting goals
and reviewers
? Giving feedback
• Following up
Feedback meetings can include:
• Discussion of
• Strengths and development needs
• Compensation
• Team challenges and opportunities
• Development and career planning
• Goal setting for upcoming performance cycle
• Upward feedback© 2010 Dattner Consulting, LLC
21
Following up
• Setting goals
and reviewers
• Giving feedback
? Following up
Follow up for the individual can include:
• A written development plan with goals, timelines
and responsibilities
• Progress reports
• Additional meetings with manager
• Training to build on strengths and address needs
• “Stretch” assignments or rotations
• Coaching
• Mentoring © 2010 Dattner Consulting, LLC
22
Follow up
• Setting goals
and reviewers
• Giving feedback
? Following up
Follow up for the organization:
• Use aggregated ratings for gap analysis and needs
assessment
• Track performance appraisal statistics to measure the
success of the management development system
• Train new hires and periodically retrain reviewers about
how to evaluate reviewees and give useful feedback
• Periodically survey reviewees and reviewers about the
costs and benefits of the system
• Ensure that the performance appraisal system is in
alignment with evolving organizational and business goals © 2010 Dattner Consulting, LLC
23
Conclusion
A wel l-designed performance appraisal system supports
an integrated human resource strategy which enables the
attainment of organizational and business goals© 2010 Dattner Consulting, LLC
24
Ben Dattner, Ph.D.
ben@dattnerconsulting.com
212-501-8945
www.dattnerconsulting.com
Journal of the Kuala Lumpur Royal Malaysia Police College, No. 4, 2005
PERFORMANCE APPRAISAL:
The Importance of Rater Training
DSP Dev Kumar
INTRODUCTION
Performance appraisal, two rather simple words that often arouse a raft of
strong reactions, emotions, and opinions when brought together in the
organisational context of a formal appraisal procedure. Most organisations
throughout the world regardless of whether they are large or small, public or
private, service or manufacturing, use performance appraisal, with varying
degrees of success, as a tool to achieve a variety of human resource
management objectives (Longenecker, 1997). Organisations use different
tools and have a number of goals for performance appraisals, often
resulting in some confusion as to the true purpose of performance appraisal
systems. However, at its core, the performance appraisal process allows an
organisation to measure and evaluate an individual employee’s behaviour
and accomplishments over a specific period of time (Wiese and Buckley,
1998). Performance appraisal is a vital component of a broader set of
human resource practices; it is the mechanism for evaluating the extent to
which each employee’s day-to-day performance is linked to the goals
established by the organisation (Coutts and Schneider, 2004).

Yong (1996) defines performance appraisal as “an evaluation and
grading exercise undertaken by an organisation on all its employees either
periodically or annually, on the outcomes of performance based on the job
content, job requirement and personal behaviour in the position”. For
example, the performance appraisal system in the Malaysian Public Service
Department is a continuous process of evaluating every employee’s
performance which begins in January and ends in December every year.
The system involves several steps, which can be considered as continuous,
however periodic.
Performance appraisal objectives can be classified in a number of
ways. One of the best known classifications was produced by McGregor
(1987) who grouped the objectives as follows:-
• Administration. Providing an orderly way of determining
promotions, transfers and salary increases.
• Informative. Supplying data to management on the
performance of subordinates and to the individual on his or her
performance.
• Motivational. Creating a learning experience that motivates
staff to develop themselves and improve their performance.
2 Performance Appraisal
The performance appraisal process can be traced back, at least, for
many thousands of years. However, the first recorded appraisal system in
industry was Robert Owen’s use of character books and blocks in his New
Lanark cotton mills in Scotland around 1800 (Newstrom and Davis, 1993).
The character books recorded each worker’s daily reports. The character
blocks were coloured differently on each side to represent an evaluation of
the worker ranging from bad to good, and they were displayed at each
employee’s workplace. Anecdotal evidence indicates that this practice had
a facilitating influence on subsequent behaviour (Wiese and Buckley, 1998).
A generation ago, appraisal systems tended to emphasise
employee traits, deficiencies and abilities, but modern appraisal philosophy
focuses on present performance and future goals (Newstrom and Davis,
1993). Modern philosophy also stresses employee participation in mutually
setting goals with the supervisor. Typically, modern performance appraisal
systems are employed to achieve several objectives that include:
(1) improvement in the communication between supervisor and
subordinate through the use of feedback between them;
(2) identification of the scope for performance improvement
and the means to achieve this;
(3) identification of individual training and development needs;
(4) identification of the potential of individuals for promotion,
placement, etc.;
(5) as the basis for remuneration and reward, on the basis of
performance; and
(6) as a powerful means of managerial control, through the
setting of objectives and a review of success or failure in
achieving these (Edmonstone, 1996; Longenecker, 1997).
Research, as well as organisational experience, has demonstrated
that in order to successfully achieve these rather broad objectives,
performance appraisal systems must have two key components in place.
First, they must have a technically sound rating process in place. That is to
say, the organisation must have clearly developed rating procedures; an
appropriate, user-friendly instrument (form); and a system in place to
monitor compliance and to store appraisal data. The second key
component to a successful performance appraisal system is the manager
who is actually called upon to evaluate employee performance. The
manager, placed in the challenging role of performance “rater,” must have
both the skills and motivation to conduct effective performance appraisals
(Fink and Longenecker, 1998). Unfortunately, far too many managers do
not possess these critical attributes.
According to Steers and Black (1994), “performance appraisal is
one of the most important and often one of the most mishandled aspects of
management”. It has also been said to be one of the most problematic
components of human resource management and is viewed as either a
futile bureaucratic exercise or, worse, a destructive influence on the

employee-supervisor relationship (Coutts and Schneider, 2004). A number DSP Dev Kumar 3
of studies suggest that managers regularly find the formal appraisal process
to be frustrating, political and less than a meaningful experience, which
does not bode well for management development. In a survey conducted by
Coutts and Schneider (2004) on several police departments in the United
States, they concluded that all too often the performance appraisal system
of a police department does not constitute an especially effective
component of the organisation’s HR system and, therefore represents a
poor investment of human, monetary, technological, and material
resources.
The purpose of this paper is to highlight the common problems
associated with performance appraisals. At the same time, this paper
explores the type of rater training programmes available and the rater skills
that managers require to enable them to perform effective formal
performance appraisals. It will demonstrate that the managerial skills
necessary to conduct an effective performance appraisal are indeed
complex and, yet, highly interrelated and require attention to properly
develop.
RATER PROBLEMS
Performance appraisals require the rater to objectively reach a conclusion
about performance. The use of ratings assumes that the rater is reasonably
objective and accurate. However, in reality, raters’ memories are quite
fallible, and raters subscribe to their own sets of likes, dislikes, and
expectations about people, which may or may not be valid (Ivancevich,
2001). Raters have their own rose-coloured glasses with which they
“objectively” view their subordinates. These biases produce rating errors, or
deviations between the “true” rating an employee deserves and the actual
rating assigned. Rating errors reduce the reliability, validity, and utility of
performance appraisal systems. Biases in performance ratings manifest
themselves in many forms. Some of the most common types of rater biases
are:-
• Halo effect. Halo error occurs when the rater perceives one factor
as having paramount importance and gives a good rating to an
employee based on this one factor. The rater fails to discriminate
between the employee's strong points and weak points; and the
halo is carried over from one dimension to the other.
• Horns effect. This is the exact opposite of the halo effect, whereby
the appraiser gives an unfavourable rating to overall job
performance essentially because the appraisee has performed
poorly in one particular aspect of the job which the appraiser
considers all-important.
• Central tendency. This occurs when a rater avoids using high or
low ratings and assign average ratings. The rater may believe that
all the employees are equal, and do not want to rock the boat. The 4
result is a failure to reflect the true range of differences among the
employees.
• Standards of evaluation. Problems with evaluation standards
arise because of perceptual differences in the meaning of the words
used to evaluate employees. Thus, good, satisfactory, and
excellent may mean different things to different raters. Some raters
are “easy A’s”, while others almost never give an A.
• Leniency effect. Giving undeserved high ratings is referred to as
leniency. This behaviour is often motivated by a desire to avoid
controversy over the appraisal. The downside of this error is that
even poor performers may get good ratings and this could create
resentment among the good performers.
• Strictness effect. Being unduly critical of an employee’s work
performance is referred to as strictness. Some managers apply an
evaluation more rigorously than the company’s standards.
• Contrast effect. This occurs when another employee’s
performance influences the ratings that are given to someone else.

For example, when performance of an average employee is
evaluated immediately after the performance of an outstanding
employee, the rater might end up rating the average person as
“below average” or “poor”.
• Similar-to-me error. This error reflects a tendency on the part of
raters to judge employees more favourably who they perceive as
similar to themselves. It has been shown that the more closely an
employee resembles the supervisor in attitude or background, the
stronger the tendency of the supervisor to judge that person
positively.
• Personal bias. Consciously or unconsciously, a rater may
systematically rate certain employees lower or higher than others
on the basis of race, origin, gender, age, or other factors.
• Recency effect. This error occurs when a rater overemphasises an
employee’s most recent behaviour. Most supervisors do not have
the time or resources to closely monitor an employee’s
performance over a year or make detailed notes. Before the
appraisal, the rater is forced to consult memory, which is clearer
and more dependable in the months leading up to review, as
opposed to the earlier part of the rating period.
• Relationship effect. Employees in high-quality trusting

relationships with supervisors receive higher ratings regardless of
how long they have worked for the supervisor, whereas employees
in distant, low-quality relationships do better than average when the
relationship is long-term. DSP Dev Kumar 5
ISSUES RELATING TO THE APPRAISAL SYSTEM
OF THE ROYAL MALAYSIA POLICE
The Royal Malaysia Police (RMP) has a performance appraisal system
based on the system designed by the Malaysian Public Service Department
(PSD). This system has undergone several changes and modifications over
the years and the latest is a system incorporated in a revised scheme called
Sistem Saraan Malaysia (SSM) implemented in 2002 (Public Service
Department, 2002).
The senior police officers’ performance appraisal system involves
the process of work target setting, assessment of behaviour and job
performance within a stipulated period. Pursuant to guidelines, the work
targets are established in January following discussions and agreement
between the first rating officer and the subordinate. The first rating officer is
required to guide their subordinates to set work targets and to complete the
annual work target. The appraisal process involves two-way interaction

between the subordinate and the supervisor. The standard of work
achievement will be measured based on cost, quantity, quality, and time
(Public Service Department, 2002). Mid-term review on the accomplishment
of those objectives is held in June/July and at the end of the evaluation
period. The supervisor must inform the results of the appraisal report to the
appraisee. The flow chart of the appraisal process is depicted in Figure 1.
Figure 1. Process flow of the RMP appraisal system

Source: Arahan Bahagian Perkhidmatan / Perjawatan Bil. 8/2003 – Panduan
Pelaksanaan Laporan Penilaian Prestasi Tahunan Sistem Saraan Malaysia
A study was conducted on 145 gazetted officers of the rank of
Assistant Superintendent of Police (ASP) to Superintendent serving in the
Klang Valley to assess the extent to which the guidelines on work target
Department Planning
(Annually)
Performance Feedback
Coordination
Preparation of
Mid-term Review
Division / Unit Target
Setting
Individual Target
Setting
Work Implementation
and Monitoring 6 Performance Appraisal
setting are adhered to, giving emphasis on the role of the supervisor and
appraisee in the setting of work targets in the beginning of the year, mid-
term review and the announcement of the appraisal results to the appraisee
at year-end (Dev Kumar 2005). This study was also designed to obtain a
general view of the level of understanding of officers on the importance of
the performance appraisal system. It was conducted using a survey form to
obtain the relevant data.
Results of the study revealed that there was rampant non-
compliance with specific guidelines – annual work targets were not set
according to schedule; there was no discussion between first rating officer
and subordinate to set work targets; subordinate was not given guidance on
setting work targets and performance indicators; mid-year review to monitor
work progress was not conducted; annual work targets and mid-term review
were only done at the end of the year; and subordinate was not informed of
the result of his appraisal. Table 1 shows the 10 key findings of the survey.
Table 1. Response to performance appraisal survey (n = 145 officers)
Response Percentage
1. Annual works targets not set in January 33
2. No discussion between first rating officer and appraisee 42
when setting work targets
3. No guidance from first rating officer during setting of 48
work targets
4. No mid-term review and discussion 51
5. No year-end appraisal interview 50
6. Appraisee not informed of appraisal results 49
7. Works targets and appraisal only done at the end of the year 76
8. No performance counselling during the entire process 68
9. Performance appraisal done at the last minute 65
10. Training required for raters 93
Undoubtedly, the pertinent finding is that more than 90 percent of
the respondents surveyed indicated the need for rater training and
acknowledged the importance of rating skills or competencies necessary to
conduct effective performance appraisals (Dev Kumar, 2005).
RATER TRAINING
The annual fiasco of the performance review continues in many
organisations despite evidence that it has the potential to be one of the
most effective management tools in the entire kit (Picket, 2003).
Considering the importance of the supervisor to the success of the
appraisal process, many organisations do little to motivate or prepare raters DSP Dev Kumar 7
to conduct effective appraisals. Most supervisors have little, if any, training

on how to properly assess employees’ performance (Imundo, 1980). A
weakness of many performance appraisal programs is that managers and
supervisors are not adequately trained for the appraisal task and provide
little meaningful feedback to subordinates (Bohlander et al., 2001). Because
they lack precise standards for appraising subordinates’ performance and
have not developed the necessary observational and feedback skills, their
appraisals often become nondirective and meaningless. Recent estimates
suggest that very few organisations conduct rigorous, skills-based training
with their raters (Grote, 1996). Instead, most organisations either hand
performance rating forms and corresponding instructions to managers and
tell them to evaluate their subordinates by a specific date or hold a short
meeting to explain the rating purpose and procedure. Such procedures
woefully underestimate the importance of managers having the proper skills
or competencies to conduct effective appraisals. It goes without saying that
a poor appraisal is worse than no appraisal at all. Bacal (1999) adds that:
“Performance appraisal isn't about the forms. The ultimate purpose
of performance appraisal is to allow employees and managers to
improve continuously and to remove barriers to job success, in
other words, to make everyone better. Forms don't make people
better, and are simply a way of recording basic information for later
reference. If the focus is getting the forms "done", without thought
and effort, the whole process becomes at best a waste of time, and
at worst, insulting”.
An established body of literature shows that training can minimise
rater effects. De Cenzo and Robbins (1996) unequivocally state that “if you
cannot find good raters, the alternative is to make good raters”. According
to Edmonstone (1996), investment in rater training needs to be planned and
implemented by organisations. Duncan (1983) stresses that raters should
be trained to understand and use the appraisal system so as to maximise
its positive aspects. It is the responsibility of the higher management to
thoroughly train supervisors in conducting assessments, and to ensure that
the learning is correctly applied (Imundo, 1980). Evidence indicates that
training of appraisers can make them more accurate raters. Common errors
such as halo and leniency can be minimised or eliminated in workshops
where managers can practice observing and rating behaviours (De Cenzo
dan Robbins, 1996). To conduct effective appraisal and counselling
sessions requires the use of skills which few managers are likely to acquire
in the normal course of their work. It is essential, therefore, that training
should be given to raters. Without such training, managers may do more
harm than good (Armstrong, 1988).
In a survey conducted by Longenecker (1997) on 120 managers in
five large organisations in the United States, it was revealed that one of the
main reasons why performance appraisals failed was because raters do not
possess the skills and motivation to conduct appraisals. He noted that:
“While all of us informally evaluate people on an ongoing basis, a

special level of skill is needed to do this effectively on a formal
basis. Raters must possess specific skills such as performance
planning, goal setting, coaching, decision making, interviewing and
conflict resolution to be effective raters”.
Torrington and Hall (1991) note that appraisers need training on
how to appraise and how to conduct appraisal interviews. They add that an
excellent performance appraisal system is of no use at all if managers do
not know how to use the system for best effect. Apart from this, appraisees
will also need some training if they have any significant involvement in the
process (Torrington and Hall, 1991). Since employees are asked to
contribute to the process (by being involved in the setting of work targets
and in the review process), some training is required of them. This training
should include how to set objectives, how to keep accurate records, and
how to communicate all aspects of performance (Boice and Kleiner, 1997).
Hellriegel et al. (2002) notes that rating accuracy can be improved
through training that focuses on improving the observation skills of raters.
Training also builds confidence. A good training experience helps raters see
that they can rate accurately and can handle the consequence associated
with giving negative feedback.
RATER TRAINING PROGRAMMES

According to Boice and Kleiner (1997), rater training needs to focus on the
process of managing, motivating and evaluating employee performance. A
comprehensive training programme entails one to two days devoted to
feedback and communication skills, developing goals and standards,
documentation skills, conducting the appraisal interview, practice in using
the rating form, and discussing rating errors to avoid (Roberts, 1998;
Hodgetts, 1993). The training should also incorporate complete
explanations of the philosophy and nature of the appraisal system (Flippo,
1984).
Many types of rater training programmes exist, differing in focus,
cost and duration. The two common types are training programmes
designed to eliminate common rating errors such as halo error and training
programmes designed to improve the supervisor’s observation and
recording skills (Bohlander et al., 2001).
Gomez-Meija et al. (1995) state that one of the most effective ways
to deal with errors and bias is to develop and communicate evaluation
standards via frame-of-reference (FOR) training, which uses fictitious
examples that an employee might exhibit. FOR training has been shown to
improve appraisal accuracy. FOR training aims at establishing common
reference among assessors as to what constitutes effective appraisal by
establishing the rating standards and showing behavioural examples on
various rating dimensions. Athey and McIntyre (1987) empirically found that DSP Dev Kumar 9
FOR training in comparison to training that is only ”information providing”
improved retention of information given during training, improved ”distance
accuracy”, and reduced halo effect. In another study, McIntyre et al. (1984)
found that FOR training improved accuracy and reduced halo effect as
compared to training on rating errors. In another study by Woehr (1994), it
was found that FOR-trained subjects not only produced more accurate
performance appraisal, but also recalled more behaviour representing wider
variety in performance dimensions.
Smith (1990) identified three types of training programmes
designed to ensure that appraisers have a reasonably common frame-of-
reference as follows:
1. Rater error training
The aim here is to reduce rating errors by exposing raters to
examples of common errors such as halo, leniency, central
tendency, etc. As they become more familiar with these
sources of errors, they are encouraged to avoid them.
2. Performance dimension training
The aim here is to familiarise raters with the dimensions along
which performance is appraised. This is done by providing
descriptions of job qualifications, reviewing existing rating
scales or having them participate in the development of such

scales.
3. Performance standards training
The aim here is to try and get the raters to share common
perceptions of performance standards. This is done by
presenting samples of job performance to those undergoing the
training, together with the ratings assigned to the performance
by trained experts.
REQUISITE APPRAISAL SKILLS
Research has demonstrated that proper rater training can increase the
overall quality of the rating experience for employees and managers alike
while at the same time improve rating accuracy (Longenecker, 1997).The
voluminous research literature on performance appraisal rater training has
focused on several training issues, including improving raters’ observational
skills, reducing judgemental biases, and providing objective, meaningful,
and constructive feedback.
Research findings on 149 managers who work in 22 different
United States manufacturing and service organisations identified ten rater
skills necessary to effectively conduct formal performance appraisals (Fink
and Longenecker, 1998). There are four basic integrated phases in the
performance appraisal process, each phase requiring the use of

appropriate skills. Failure by managers to properly develop and employ 10
these skills results in a drastic reduction in the effectiveness of the appraisal
process.
Figure 2 depicts each of these phases in relation to the key
management skills utilised to effectively complete each step in the appraisal
process. The foundational skill at all phases of the appraisal process is an
effective two-way communications skill. In addition, knowledge of
legal/compliance issues at every step of the appraisal process is also
important.
FIGURE 2. Linking appraisal skills and the appraisal process

Source: Fink, S. dan Longenecker, C. O. 1998. Training as a performance
appraisal improvement strategy. Career Development International 3 (6).
Phase 1: Performance planning

Performance
Planning
Key
Competencies
1. Knowledge
of rating
forms and
procedures
2. Ability to
clarify and
communi-
cate
expectations
3. Delegation /
empower-
ment skills
4. Knowledge
of legal /
compliance
issues
Performance
Management
and Ongoing
Coaching
Key
Competencies
1. Observation
/ work
sampling
skills
2. Coaching
skills
3. Conflict
resolution /
problem
solving skills
4. Knowledge
of legal /
compliance
issues
The Written
Appraisal
Key
Competencies
1. Knowledge
of rating
forms /
procedures
2. Effective
decision
making /
sound
judgement
3. Effective
writing /
communica-
tion skills
4. Knowledge
of legal /
compliance
issues
The Appraisal
Review
Key
Competencies
1. Specific
knowledge
of review
procedures
2. Coaching
skills
3. Conflict
resolution /
problem
solving
4. Employee
development
/ career
counselling
5. Knowledge
of legal /
compliance
issues
EFFECTIVE TW0-WAY COMMUNICATION SKILLS DSP Dev Kumar 11
During the performance planning stage, supervisors and subordinates
jointly set and clarify goals, performance expectations, and evaluation
methods and criteria. The supervisors must ensure that the subordinates
have the authority, knowledge, skills, and organisational resources to
successfully complete work targets. In addition, supervisors need to

communicate potential performance rewards/outcomes associated with
different levels of performance. Specific skills required for managers to
successfully complete this stage include:
• knowledge of organisation’s rating forms and procedures – to clarify
performance expectations, evaluation criteria, and methods;
• ability to clarify and communicate performance expectations – to
communicate and set goals and standards of performance (specific,
measurable, attainable, results oriented, with deadlines attached),
to clarify the evaluation criteria of each subordinate they appraise,
and to differentiate rewards associated with varying levels of
performance;
• delegation/empowerment skills – to create accountability by
clarifying duties, work assignments, goals and expectations, and
providing sufficient authority to achieve assigned responsibilities;
and
• knowledge of legal/compliance issues – to make sure that appraisal
content is legally defensible and that rating procedures are
uniformly applied.
Phase 2: Performance management and ongoing coaching

During the performance management phase, supervisors are required to
track the employee’s performance through effective work observation and
sampling procedures, and provide appropriate ongoing feedback. The
supervisors must monitor subordinates’ behaviours and performance,
record their performance, and provide feedback and assist through problem
solving so as to help subordinates successfully achieve delegated
responsibilities. Specific skills required for managers to successfully
complete this stage include:
• observational/work sampling skills – so that proper dimensions of
worker behaviour are observed using representative/nonbiased
sampling techniques and that a proper written record is kept for
these observations;
• conflict resolution/problem-solving skills – to potentially provide
negative feedback in a manner which overcomes resistance and
avoids resentment, and to help subordinates identify the cause of
their problems or generate a strategy for improvement;
• coaching skills – to keep employees on the right track, provide
positive reinforcement for good behaviour, and quick feedback for
unacceptable or decreasing performance; and

• knowledge of legal/compliance issues – to make sure that written
documentation of observed behaviour is legally defensible.
Phase 3: The written performance appraisal
During the written stage of the process, managers must make effective and
non-biased decisions concerning subordinate performance and skillfully
create a written record of their observations and conclusions concerning the
nature of subordinate performance. They must employ sound judgment,
effective decision making, and unambiguous and clear writing skills in
creating a written document of the employee’s contribution. Specific skills
required for managers to successfully complete this stage include:
• specific knowledge of the rating form and procedure – to effectively
complete the written appraisal document;
• effective decision making and sound judgment – to effectively
evaluate the subordinate’s actual performance on various rating
criteria;
• written communication skills – to provide clear and unambiguous
language to describe and document employee performance; and
• knowledge of legal and compliance issues – to ensure that

managers generate a written rating document that is indeed
representative of the employee’s actual contribution and is not filled
with unsubstantiated prose that makes the document difficult to
legally defend.
Phase 4: The performance appraisal review
During the appraisal review, managers meet with subordinates to review
performance ratings, deal with subordinate reactions (sometimes resistant
or negative) to appraisal ratings, solve problems with employees on how to
improve performance (if needing improvement), and potentially deal with
career counseling and career development issues. Specific skills required
for managers to successfully complete this stage include:
• specific knowledge of effective appraisal review procedures;
• coaching skills to discuss specific feedback issues;
• conflict resolution and problem-solving skills to identify and remove
employee concerns and workplace frustrations and performance
barriers; DSP Dev Kumar 13
• employee development/career counseling to help the employee

identify opportunities for improvement and to discuss long-term
career issues; and
• knowledge of legal/compliance issues to avoid discussions that
violate existing laws or create unnecessary legal exposure.
There are several questions that need to be posed at this stage of
the paper. At present, is our performance appraisal system perceived to be
effectively serving the organisation’s current needs? Do employees view
the process as one that is performance enhancing? Are the managers /
supervisors effective in their role as performance raters? The answers to
these questions are critical and require attention by those responsible for
the appraisal system. Based on the review of the skills needed at each
stage of the appraisal process, Fink and Longenecker (1998) provide a
checklist that can be used to evaluate gaps in current managers’ appraisal
skills and abilities and, therefore, better target training programs to
ameliorate these gaps.
Table 3. An organisational assessment checklist of key rating
competencies
Source: Fink, S. and Longenecker, C.O. 1998. Training as a performance
appraisal improvement strategy. Career Development International 3 (6).
CASE STUDY
Appraisal training programmes in Bank Simpanan Nasional
Bank Simpanan Nasional Malaysia was established on 1st
December 1974 under the Act of Parliament 146. The principle
objectives of the Bank are to promote and mobilise savings,
particularly from the small savers, to provide the means for savings
by the general public, to utilise the funds of the Bank for investment
including financing of economic development of the nation, and to
promote the interest of its depositors and other customers.
The Bank has currently 393 branches throughout Malaysia and
about 5,000 employees. In 2002, the Bank implemented its new
Performance Management System (PMS) for all its employees. The
system is not unsimilar to the one designed by the Public Services
Department. However, more emphasis is placed on its Management
By Objectives (MBO) component.
Before the PMS was introduced, training was conducted for
all first rating officers including the senior management. Several
workshops were held with the main aim of equipping the raters with
the necessary skills to ensure the success of the system. A total of
RM238,434 was spent on the workshops conducted by external

consultants in 2002. Since then, the Bank has been conducting
yearly refresher courses for its employees to ensure the smooth flow
of the system.
The investments made by the Bank in appraisal training
programmes is said to have improved the rating accuracy and
minimised rating errors tremendously. More importantly, the training
programmes succeeded in developing a common evaluation
standard among raters.
(Source: The Human Resource Department, Bank Simpanan
Nasional, 2005.)
CONCLUSION
Improving any performance appraisal system is a complex proposition that
requires developing sound appraisal procedures and motivated as well as
skilled raters. Appraisal training is important to the success of an appraisal
system. There is no substitute for training, which can minimise the
occurrence of rating errors and improve reliability and validity (French,
1990).
In the end, the reasons for not properly training managers to
conduct effective appraisals do not hold water in our ever-changing work

environment. If performance is important to an organisation, so is the DSP Dev Kumar 15
appraisal of that performance. If appraisal is important, then managers must
be led to develop the skills presented in this paper that are critical for
effective appraisal. Without these critical competencies, the organisational
appraisal process cannot achieve its desired objectives. No matter how well
designed a performance appraisal system is, its effectiveness is largely
determined by the understanding, commitment and skills of the managers
who must actually implement the system. Coutts and Schneider (2004) note
that “police organisations that do not invest in performance appraisal
training are sending a clear message, either wittingly or unwittingly, that
they do not consider the performance appraisal system an important
component of their HR practices”. When the manager conducting any
performance appraisal does not possess the skill or motivation to rate the
subordinate’s performance, problems are a foregone conclusion.
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Document of
The World Bank

Report No: 20203-IN
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT
IN THE AMOUNT OF SDR 75.0 MILLION
(US $100.48 MILLION EQUIVALENT
TO
INDIA
FOR A
RAJASTHAN DISTRICT POVERTY INITIATIVES PROJECT
March 31, 2000

SASSD & SASRD
South Asia Regional office
-2-
CURRENCY EQUIVALENTS
(Exchange Rate Effective March 2000)
Currency Unit= Indian Rupees (Rs.)
Rs. 1.00= US$ 0.023
FISCAL YEAR
April 1- March 31
ABBREVATIONS AND ACRONYMS
ANM Auxiliary Nurse Midwife
APPs Anti-Poverty Programs
ARCS Audit Reports Compliance System
BPL Below the Poverty Line
CAS Country Assistance Strategy
CB Capacity Building
CBO Community Based organization

CEO Chief Executive Officer
CF Community Facilitator
CIF Community Investment Fund
CIG Common Interest Group
DC District Collector
DCBSU District Capacity Building Support Unit
DIC District Industries Center
DPCC District Capacity Coordination committee
DPEP District Primary Education Project
DPIP District Poverty Initiative Project
DPM District Project Manager
DPMU District Project Management Unit
DRDA District Rural Development Unit
DWDA District Women's Development Agency
DWRC District Women's Resource Center
EA Environment Agency
EAR Environmental Assessment Report
EC Empowered Committee
EIA Environmental Impact Assessment
EMF Environmental Management Framework
EMP Environmental Management Plan
ER Environment Review
ESC Environmental Screening Criteria
FI Financial Institution
FMS
GC
Financial Management System
Governing Council
Vice President: Mieko Nishimizu
Country Manager/Director: Edwin R. Lim
Sector Managers/Directors: Ridwan Ali & Lynn Bennett
Task Team Leader/WPA Team
Leader:
Meera Chatterjee/Gajanand Pathmanathan
-3-
GIS
Geographic Information System
GOI Government of India
GOR Government of Rajasthan
GP Gram Panchayat
GSA Group Self- Assessments
GSDP Gross State Domestic Product
IAS Indian Administrative Service
ICDS Integrated Child Development Services
IGAs Income-Generation Activities

IGPRS & RDI Indira Gandhi Panchayati Raj and Rural Development
Institute
IRDP Integrated Rural Development Agency
IWDP Integrated Watershed Development Program
JRY Jawahar Rozgar Yojana
JGSY Jawahar Gram Samridhi Yojana
LACI Loan Administration Change Initiative
LEA Limited Environmental Assessment
MADA Modified Area Development Agency
M&E Monitoring and Learning
MIS Management Information System
MOU Memorandum of Understanding
MTR Mid –Term Review
NABARD National Bank for Agriculture and Rural Development
NCB National Competitive Bidding
NGO Non-Governmental Organization
O&M Operation and Maintenance
OBC Other Backward Classes
OM Operational Manual
PD Public Deposit
PFMS Project Financial Management System
PIP Project Implementation Plan
PMR Project Management Report
PR Peer Review
PRF Performance Reporting Form

PRI Panchayati Raj Institution
RBI Reserve Bank of India
SA Social Assessment
SAPAP South Asia Poverty Alleviation Project
SHG Self-Help Group
SC Scheduled Caste
SCBC State Capacity Building Cell
SGSY Swarnjayanti Gram Swarozgar Yojana
SIDA Swedish International Development Agency
SLBC State Level Banking Committee
SOE Statement of Expenditure - 4 -
SPD State Project Director
SPMU State Project Management Unit
ST Scheduled Tribe
SWRC State Women's Resource Center
TDP Tribal Development Plan
TNA Training Needs Assessment
TOR Terms of Reference
TOT Training of Trainers
TSP Tribal Sub-Plan
UNDP United Nations' Development Program
UNFPA United Nations' Fund for Population Activities
UNICEF United Nations' Children's Fund
VDA Village Development Association
WDP Women's Development Program

-5-
RAJASTHAN DISTRICT POVERTY INITIATIVES PROJECT
CONTENTS
A. Project Development Objective
1. Project development objective 2
2. Key performance indicators 2
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2
2. Main sector issues and Government strategy 3
3. Sector issues to be addressed by the project and strategic choices 4
C. Project Description Summary
1. Project components 5
2. Key policy and institutional reforms supported by the project 5
3. Benefits and target population 6
4. Institutional and implementation arrangements 7
D. Project Rationale
1. Project alternatives considered and reasons for rejection 12

2. Major related projects financed by the Bank and other development agencies
14
3. Lessons learned and reflected in proposed project design 15
4. Indications of borrower commitment and ownership 16
5. Value added of Bank support in this project 17
E. Summary Project Analysis
1. Economic 17
2. Financial 18
3. Technical 19
4. Institutional 19
5. Environment 21
6. Social 22
7. Safeguard Policy 24
F. Sustainability and Risks
1. Sustainability 25
2. Critical risks 25
3. Possible controversial aspects 27
G. Main Loan Conditions
1. Effectiveness Condition - 6 -
2. Other
H. Readiness for Implementation
I. Compliance with Bank Policies
Annexes
Annex 1: Project Design Summary
Annex 2: Project Description
Figure 1: Project Management Structure
Figure 2: Project Approval and Funds Flow Arrangements
Attachment 1: Formulation and Development of common Interest Groups
Attachment 2: Selection of Non-Governmental Organizations
Attachment 3: Capacity Building
Attachment 4: Sub-Project Eligibility Criteria
Attachment 5: Sub-Project Appraisal Process
Attachment 6: Sub-Project Agreement
Attachment 7: Environmental Assessment
Attachment 8: Monitoring and Learning System
Attachment 9: Gender Strategy
Attachment 10: Tribal Development Plan

Annex 3: Estimated Project Plan
Annex 4: Economic Assessment
Annex 5: Financial Summary
Annex 6: Procurement and Disbursement Arrangements
Attachment 1: Procedures to be followed for NCB Contracts
Annex 7: Project Processing Schedule
Annex 8: Documents in the Project File
Annex 9: Statement of Loans and Credits
Annex 10: Country at a Glance
MAP(S)
IBDR No. 30820
-1-
INDIA
RAJASTHAN POVERTY INITIATIVES PROJECT

PROJECT APPRAISAL DOCUMENT
South Asia Regional Office
SASSD & SASRD
Date: March 31, 2000
Country Manager/Director: Edwin Lim
Project ID: P010505
Lending Instrument: Specific Investment
Loan(SIL)
Team Leader: Meera Chatterjee
Sector Manager/Director: Ridwan Ali
Sector(s): SA – Social Funds & Social
Assistance
Theme(s): POVERTY REDUCTION
Poverty Targeted Intervention: Y
Project Financing Date
Loan Credit Grant Guarantee Other (Specify)
For Loans/Credits/Others:
Amount (US$m): SDR 75.0 million (US$ 100.48 million equivalent)
Proposed Terms: Standard Credit
Grace period (years): 10 Years to maturity: 35
Commitment fee: 0.5% Service Charge: 0.75%

Financing Plan: Source Local Foreign Total
Government 17.74 0.00 17.74
IBRD 0.00 0.00 0.00
IDA 87.90 12.57 100.48
BENEFICIARIES 6.57 0.00 6.57
Total: 112.22 12.57 124.79
Borrower: GOI
Responsible agency: GOVERNMENT OF RAJASTHAN
Department of Rural Development
Estimated disbursements (Bank FY/US$M):
FY 2001 2002 2003 2004 2005 2006
Annual 3.8 9.4 15.5 26.4 30.9 14.5
Cumulative 3.8 13.2 28.7 55.1 86.0 100.5
Project implementation period: 2000-2005
Expected effectiveness date: 07/01/2000 Expected closing date: 12/31/2005
-2-
A. Project Development Objective
1. Project Development Objective: (see Annex 1)

The long-term goal of the project is to reduce poverty in the selected districts of Rajasthan which
are amongst the poorest in the state. The project's development objective is to improve the economic
opportunities, living standards and the social status of the poor in selected villages of these districts
specifically, the project would: (a) mobilize and empower the poor and help them to develop strong
grassroots organization that facilitate access to end participation in democratic and development
processes; (b) support small-scale sub-projects that are priorities chosen , planned and implemented by
poor; (c) expand the involvement of the poor in economic activities by improving their capacities, skill
access to social and economic infrastructure and services, and employment opportunities; and (d) in the
abilities of non-government, government and elected government (Panchayati Raj) instruction (f) hear,
reach and serve poor clients, i.e., to function in a more inclusive and participatory manner.
2.Key performance indicators: (see Annex 1)
A sample of key performance indicators that would be used to assess achievement of the
development objective is given below.
Indicators of Social Capital Development
? No. of Common interest groups formed among the poor, active, and sustained (including
range of activities, etc.); also, women's groups and tribal groups
? Improved social status of participant households and capacity to participate in collecting
beyond the project
? Inclusiveness of PRIs in decision-making
? Operation and management arrangements, including type, regularity and value benefit
contributions.
Indicators of Economic (including infrastructure) Improvements
? Number of Sub-Project proposals submitted, funded and implemented
? Infrastructure created: type, number, economic value, quality utilization
? Improvements in practical skills among participants (e.g., planning and decision -making
productive, entrepreneurial, technical, financial management skills)
? Increase in access to end utilization of social and economic services (including edit, markets,
health, and education)
? Number of credit-worthy, bank-linked groups; volume of savings and formal sector micro-
enterprises started and successful
? Increased income and assets among participants households, related to: (a) skill developed (b)
infrastructure improvements (c) access to economic/social services
B. Strategic Context
Sector-related Country Assistance Strategy (CAS) goal supported by the project (see Annex)
Document number: CAS: 17241-I Date of latest CAS discussion: 01/15/98
Progress Report No. R99-12, IDA/R99-10 Discussed on
The key objective of the Bank Group's assistance to India is to reduce poverty by
accelerating economic growth with equity. The Country Assistance Strategy (CAS) specifically proposes
to assist to develop innovative, well-targeted programs to reduce poverty. This project would be one
such - 3 -
initiative two similar projects are being prepared in Andhra Pradesh and Madhya Pradesh. The areas in
which investments would be made under the project social organization and development, human
capital
development, agriculture and allied activities, natural resources management, infrastructure are among
the priority sector identified in the CAS. The Country Strategy includes a focus on states with a
commitment to economic reforms. The state of Andhra Pradesh embarked on reforms with Bank
assistance; and while in dialogue with the Bank regarding possible assistance to its program. Finally, the
CAS aims to promote decentralization and beneficiary participation in development, which are key
aspects of the proposed project.
2. Main sector issues Government strategy:
As the Bank's 1997 India Poverty Assessment reported, the incidence of poverty in rural areas
was around 36.7 percent in 1993-94. Rajasthan rural poverty ratio was 47.5 percent. This mass of
poverty encompasses people who live in resources-poor regions, those who lake productive assets
(especially land), skills or capacities due to ill-health, disability or illiteracy, and those who are
inadequately organized to utilize available resources or services. Resources- poor region are also
generally those where infrastructure such as roads and markets is inadequately developed, which
compounds the problem of inaccessibility and low productivity. Since the early 1950s, the Government
of
India and state governments have implemented programs to develop the resources of such regions (i.g.,
land development, agriculture, irrigation, forestry, water supply programs), or directly address the
poverty
of disadvantaged households. The direct anti-poverty programs (APPs) include efforts to provide wage-
employment, productive assets (such as land or animals), Skills, credit, and food security. However,
these efforts have not succeeded in reducing poverty to the extent necessary. High level of ill-health,
low
literacy among adults, and social problems such as gender and caste discrimination prevail, and also
constrain the reduction of poverty.
Government development programs are implemented through a sizable government presence in
the form of administration and technical agencies at the district and sub-district levels. However, low
beneficiary involvement in planning, implementation and monitoring of these programs has resulted in
many being supply-driven, primarily by numerical targets. Recently, several state government in the
country, including Rajasthan, have engaged in widespread social mobilization programs to improve the
acceptability, utilization and accountability of public programs, and some multilateral and bilateral aid
agencies such as UNCIEF, UNDP and SIDA have financed small-scale efforts of these nature.
Particularly noteworthy in Rajasthan are the Women's Development Program, non-formal education
efforts such as Lok Jumbish and Shiksha Karmi, and the Right to Information campaigns, all of which
have heightened people, especially women's awareness and participation in development.
The bank's analytical reports on Rajasthan analytical report on Rajasthan draws attention to the
state's low per capita income, lowest female literacy in the country (around 20 percent), worse than
average health status, and extremely low status of women (i.g., only 27 percent of girls aged 10 years
complete primary school, compared with 57 percent for the country as a whole). Although the state's
economy has grown faster than that of the country as a whole over the past decade (at 6 percent
compared with 5.3 percent), its public agencies are in financial distress while there is under-spending on
infrastructure and social services. Spending in these areas is also not efficient: the quality of public
infrastructure is poor, and there are imbalances in health infrastructure, worker and supply ratios. There
is a great need for water conservation and irrigation measure, potable water, roads, schools, adult
literacy, and basic health services. while the reform efforts would aim to rectify some of these problems
though macro level fiscal adjustments and by improving the state's revenue position, this project aims at
micro-level improvements, including improving the efficiency of spending by better targeting greater
synergy, attention to intra-household issues, and people's participation in implementation as well as in
operation and maintenance (Q&M) to ensure the long-term sustainability of investments. The
development of appropriate approaches under the project, including management improvements, could
assist the state government to improve the efficiency of its public expenditure more widely in the
future.
-4-
3. Sector issues to be addressed by the project and strategic choice:
The major sector issues that this project would address are:
? The high incidence of poverty in resource poor areas;
? The multi factorial causation of poverty encompassing both social and economic dimensions;
? The inadequacy of infrastructure and public services in poor areas and/or their inaccessibility to
poor people;
? Weak, or a lack of, organization among the poor;
? Inadequate targeting and inefficient management of development programs meant for the poor;
? The lack of community participation in the design and implementation of programs;
? Poor local-level accountability in development programs; and
? Inadequate synergy between different types of efforts to reduce poverty, i.g., direct and indirect
anti-poverty measures, and efforts to address 'areas poverty' and 'people poverty'.
The state government is concerned about the intractability of poverty and is seeking innovative
ways to address it. The proposed project aims to meet this need by developing a demand-driven
approach in which the poor themselves identify the actions and investment required, and take
responsibility in their implementation. Community ownership and contributions would be the
cornerstones
of the project. The project would establish the social institutional base for planning and implementation
of
activities in a wide range sectors. Implementation would involve public and private entities, with
implementing agencies responsible communities, and user groups overseeing implementation. By
applying strong participatory principles, the proposed project would ensure that activities and resources
are targeted to those who need them and would utilize them efficiently. In sum, the project aims to
improve the living standards of disadvantaged households through increased flexibility, efficiency and
local ownership of government efforts and, for sustainability, to establish a system to allocate resources
to the poor that can expand and drawn in other programs.
-5-
C. Project Description Summary
1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost
breakdown):
Component Sector Indicative
costs
(US$M)
% of Total Bank-
financing
(US$M)
% of Bank-
financing
Capacity Building OF and

FOR the Poor
Community Investment
Funds
State and District Project
Management
Human Capital &
Institutional
Development
Physical and
Support Services
Institutional
Development
15.88
102.56
6.35
12.7
82.2
5.1
15.88
80.00
4.60
15.8
79.6
4.6
Total Project Costs 124.79 100.00 100.48 100.00
Total Financing Required 124.79 100.00 100.48 100.00
2. Key policy and institutional reforms supported by the project:

The project would support key policy and institutional reforms which are under way in Rajasthan
(and other parts of India) in the areas of poverty reduction, decentralization, fiscal management and
administration. These include:
? Social mobilization and improved people's in implementation and management of programs
through engagement of local workers, group-based approaches;
? Increasing the voice of the poor, particularly in local-level resources allocation, and improved
targeting of programs to them, to women and other disadvantages groups;
? Addressing people's right to information and increasing accountability of public institutions;
? Lean and professional management structures and better deployment of staff;
? Flexibility and local adaptation of training, delivery systems, procedures and norms;
? More equitable use of public assets (i.g., lands, water resources, public building);
? Involvement of local government bodies (PRIs) in management, and of mechanisms such as
gram sabhas for voicing and redressing grievances, decision making, etc.; balancing PRIs with
wider people's organizations;
? Involvement of NGOs in training, services delivery, social mobilization, rendering of technical
assistance and other support services, and government-NGO partnerships;
? Consolidation/integration of public programs aimed at poverty reduction/improved synergies
between them; transfer of poverty-alleviation programs to the state sector;
? Collection of community contributions for capital as well as operation and maintenance (O&M)
costs.
-6-
By supporting the above approaches, the project would demonstrate their value and impact, and
provide a forum for continued dialogue with the state and central government on future reforms. The
project is highly relevant to direct efforts to reduce poverty and to departmental programs, e.g., in
health,
education, drinking water and sanitation, watershed development, agriculture and animal husbandry.
All
these departments aim to reduce poverty and account for a much larger share of public spending than
the anti-poverty Programs. Many are striving to achieve some of the strategic and policy changes listed
above. hence, the project would be instrumental in improving the efficiency and effectiveness of
development programs at large.
3. Benefits and target population:
Target Population
To reach the poor, the project would utilize three of targeting
Geographic targeting: The project has selected the seven poorest districts of Rajasthan (20
percent of districts) and, within these, it would focus on the poorest blocks, villages and habitations. All
districts in the state were ranked according to several economic and social criteria were: the percent of
scheduled castes and tribes in the total population, the percent of agricultural laborers among total
workers; the percent of the population below the poverty line; the proportion of villages not having a
health facility within five Kilometers; the proportion of workers in manufacturing to total workers (an
indicator of the industrial base of the district); the number of kilometers of road per 100 square
kilometer
area; cropping intensity; per capita rural income. The project districts are: Baran, Churu, Dausa, Dholpur,
Jhalawar, Rajsamand and Tonk. The blocks in each district were also ranked in a similar manner.
Group targeting: The project would mobilize groups of poor people and target capacity-building
and Sub-project investments to them. Group member would be form socially and economically
disadvantages households, particularly Scheduled Castes, Scheduled Tribes, women, female-headed
households, landless laborers and backward occupations.
Self-targeting: The project would focus on basic goods, small investments and activities, such as
labor-intensive constructions, that primarily attract the poor.
Social assessments (SAs) were carried out in each district. In addition to identifying the poorest
communities and the poorest groups in 'mixed' communities, the SAs determined their priorities,
appropriates areas for intervention, and the most effective mechanisms to involve them in the project. A
strategy for area coverage also evolved during the SA process: the project would begin in identified poor
areas (village’s clusters) of the two poorest blocks in each districts, and progressively cover additional
clusters and the other blocks in the district. The SAs also initiated a participatory planning process that
would be developed further during the project to ensure that communities access project funds and
utilize
them effectively. Social assessments would continue during the project to identify pockets of poverty,
poor groups, and interventions in additional areas, and to provide feedback on project activities in areas
already covered.
Benefits
About 350,000 poor families would benefit directly from the project. Benefits would include:
empowerment through mobilization and organization, information and improved awareness of

services,
rights, etc; new improved skills; increased earning opportunities and incomes; and greater access to
productive assets, infrastructures, and economic and social services. The poor in the proposed project
districts would also benefit more broadly from improvements in the abilities of the district
administrations
and panchayats to respond to demand from poor clients, and from the resultant improved effectiveness
(through better targeting and ownership) of on-going development programs, encompassing those that
build infrastructure and/or deliver services.
-7-
4. Institutional and implementation arrangements:
The institutional arrangements include the organizations of the poor, and the mechanisms to
ensure their access to funds for investments and technical support services, in addition to lean project
management units (PMUs). The PMUs would be community-oriented and decentralized, with
operational autonomy. Their most important attribute would be the ability to work with poor
communities
as well as with public and private institutions that provide relevant resources and services.
Common Interest Groups (CIGs) Common interest group would be the key organization of the
project, formed among poor people living with in a proximity that makes it feasible to come together to
plan, manage and implement small-scale projects of their choice. These groups would be organized and
assisted by community facilitators (CFs), who are local community residents hired by local non-
governmental organizatins (NGOs). The CFs would work with the CIGs to priorities their needs and
develop appropriate sub-projects, arrange for these to be appraised, technically assisted by government
line departments or private agencies and financed, and help to manage and implement them. The CIGs
would be fully responsible for implementation of the sub-projects, and for post-investment operation
and
maintenance. Further details about CIGs are given in Annex 2, Attachment 1.
Villages Development Associations (VDAs): At the habitation level, Village Development
Associates would be formed to consolidate of CIGs and expand their ambit, transfer learning and
assistance (technical, financial, and managerial) across CIGs, and resolve any conflicts that may arise.
The VDAs would be responsible for ensuring that sub-project activities do not duplicate each other and
are harmonized with other villages development activities, coordinating with the gram Panchayat/
Panchayat Samiti where appropriate. They may propose, undertake and be responsible for post-
investments operation and maintenance of village-wide works. The VDAs would consist of all the
members of the CIGs in a habitation, and their Executive committees would be comprised of a
representative of each CIG, members(s) of the ward/ gram panchayat or sarpanch if resident in the
specific habitation, other representatives of the villages elites, and that they carry out development
activities to benefit the poor. The chairperson of the VDA would be the sarpanch of the gram panchayat
in which the habitation is located (or his/her nominee). The committee would elect its own chairperson
(who may or may not be a panchayat members). The CF would be the member secretary of the VDA and
the committee.
Panchayayti Raj Institutions (PRIs): while maintaining operational independence, CIGs and
VDAs would be assisted to develop a productive relationship with the local PRI, normally the Gram
Panchayats of the habitation/village. The project would focus on developing the dialogue between Gram
Panchayat and CIGs on the problems and priority needs of the poor, and facilitate identification and
preparation of community proposals for project financing which are endorsed by both CIGs and PRIs in
the VDAs. Financing of such proposals would enable the project to build confidence and trust between
the CIGs and PRIs. Project efforts would include preparation of micro-pans that meet the needs of the
entire village community, and strengthening of financial management capacity. This approach is
consistent with the state government's strategy to involve the panchayats gradually in developments
programs, and to give high priority to the social and economic development of poor communities. It also
fits well with the evolving relationships between community organization, PRIs, elected legislator, and
civil servants.
Non-Governmental Organizations (NGOs): The project allocates several important roles to
NGOs, who would be selected on the bases of agreed criteria and processes (see Selection of NGOs,
Annex 2, and Attachment 2). NGOs supporting the project would be expected to have good track record
of working with the poor, and to be accepted by the participating communities. They would be engaged
by the project management to mobilize and organize communities train and assist them. There would
be
several CFs in each district, according to need, and they may work individually or in teams in each village
community. The same or other NGOs would undertake the training or other capacity-building activities,
or
provide technical/managerial assistance to CIGs/VDAs for sub-project implementation and linkages with
-8-
financial institutions where relevant. NGOs who are willing to do such work, but lake adequate skills or
focus on building institutional capacity to address poverty in backward districts.
District Project Management Units (DPMUs): Project support at the district level would be provided by
proactive field units, the District Project Management Units. Each DPMU would have a District Project
Manager (DPM), a senior professional for each of the following functions: Training and Community
Development, Sub – Project Appraisal, Monitoring and Learning and Accounts/Administration, and other
support staff as needed. The DPMUs would be autonomous district – level units in the state’s Rural
Development Department, and responsible to the State Project Management Unit (SPMU), referring to
it
as needed, reporting according to a pre-defined time and task schedule, and obtaining necessary
support
from it. The DPMU would be responsible for planning and managing project activities at the district level
and below, including disseminating information to motivate the village poor, recruiting NGOs; organizing
training; sub – project appraisal; and support activities. The DPMUs would be responsible on a timely
basis to the village groups, and for ensuring implementation/completion of sub – projects. They would
maintain a roster of experts who would provide sector – specific technical assistance to CIGs/VDAs when
the letter requests it, and to the project at large.
Project moneys would flow from the SPMU into Community Investment Funds (CIFs) at the
district level to be readily available for community activities. The DPMUs would manage the CIFs and
have powers to accord technical and financial approvals to sub – projects up to US$30,000 equivalent.
Above this cost, sub – project proposals would be sent to the SPMU for consideration as they would
require the approval of the Bank. Funds for approved sub – projects would be passed on to CIGs and
VDAs under terms set out in a sub – Project Agreement with the DPMU, and in accordance with
procedures described in the section on Project Financial Management System below in Annex 6, and
in the project’s Financial Management Manual. Over time, authority to make small investments would
be
developed by DPMUs to lower levels, according to local capacity to manage such funds. The DPMU
would also be responsible for forward planning of the project in the district, environmental, technical
and
cost – benefit analysis of sub – projects, and, for contracting out/overseeing the continued social
assessment to identify new areas, additional target group, and activities. Implementation of all project
activities would be monitored by the DPMUs.
District Project coordination committees (DPCC). Would be established to ensure that DPIP –
financed activities are coordinated with the on – going or planned activities of line departments and
Panchayats and do not duplicate or conflict with interventions under other schemes. Another key role
would be to ensure that the various project – related entities collaborate and wherever appropriate,
that
synergies are achieved between them. This mechanism is intended to improve the responsiveness of
local service delivery institutions to the poor in the short term, and to assist in the transfer of successful
project experience across agencies for greater project impact and sustainability. Each DPCC would be
headed by the District Collector (who is also Executive Director of the Zila Parishad), and include he Zile
Pramukh or her/his nominee, the DPM, key District Line Officers, and representative of participating
NGOs, CIGs and VDAs. The DPCC would be a small body (10-15 members) with two – thirds non –
official and one – third official members. A democratic process overseen by the SPMU would be
followed
to identify members to the DPCs, choosing those who support the principals and values of the program.
The DPCC would ensure that the project maintains its community orientation and non – governmental
involvement at all times.
State Project Management Unit (SPMU). The State Project Management Unit is envisaged as a lean
entity – a small group of managers and professionals. It would be part of the GORs Rural Development
Department, headed by a State Project Director (SPD), and staffed by an experienced professional for
each of the following functions: Training and Community Development, Sub – Project Appraisal,
Financial
Control (heading the finance and accounting function), Financial Management, Monitoring and Learning,
and other support staff as needed. It would oversee he functioning of the District Project Management
Units. Its main roles would be: to facilitate and coordinate project activities across all project districts;
staff
recruitment; organizing cross – cutting activities such as workshops, study tours, exchange
opportunities; - 9 -
leading strategic and policy dialogue with other agencies of the state government and taking up project
–
related issues that arise across districts; ensuring timely and adequate funds flow to the districts and
maintaining the project’s financial management system; providing assistance to sub – projects appraisal,
environmental assessment, and gender – related activities; and monitoring and learning including
contracting periodic independent evaluations.
Governing Council and Empowered Committee. The project as a whole would be overseen by a
Governing Council (GC) headed by the Minister of Panchayati Raj and Rural Development, consisting of
15-20 members one third official and two thirds non-official. Its role would be to set policy for, oversee
and guide the project to ensure that project objectives are met. The GC would take up policy – related
project matters with other entities in government or in non – governmental forums. An Empowered
Committee of the state government, headed by the Chief Secretary and including the Development
Commissioner, Secretary Finance, Secretary Rural Development, Secretary Panchayati Raj, Secretary
Planning and Special Secretary DPIP (State Project Director), would be responsible for ensuring
implementation of policy decisions, providing the necessary financial authorizations for the project, and
ensuring the collaboration of other government departments.
Key Implementation Approaches
Training: The project’s capacity – building strategy is described in Annex 2, Attachment 3. The
basic premise is that building a wide range of institutions which are inclusive and appropriately skilled
would contribute greatly to poverty reduction and its sustainability. Initially, the capacities of project
staff,
NGOs and CFs to plan and carry out community – driven development would be enhanced. CFs, NGOs
and DPMUs would then be responsible for providing information to communities about the project, and
building and strengthening CIGs and VDAs among them. Further, this component would develop the
capacities of other local institutions (PRIs, line departments, private agencies) to assist community –
driven development and improve technical capabilities where these are inadequate to meet the needs
of
the poor in a given sub – sector. Local private entities are included because they are expected to
participate in the project at the behest of communities who would contract works and services to them.
District Capacity Assessments were carried out during project preparation, covering line
departments (staffing, budgets, training needs etc.), Panchayats and NGOs in each district. While certain
aspects were found to be common across all districts (such as the type of formal training being carried
out and resources available for it), other parameters were district – specific. The ensuing strategy
emphasizes the need to decentralize capacity – building and tailor approaches to local needs. Numerous
NGOs, line department officers, panchayat and community representatives participated in the Social
Assessments, District Capacity Assessment and project preparation. The project would continue to build
this constituency to promote the principles and approaches of the project, and strengthen institutions to
implement the project and carry out project – related training of government and non – governmental
personnel and communities.
Preparation, Appraisal and Financing of Sub – Projects. The major portion of project investment
would be determined by sub – project proposals submitted by CIGs, VDAs and Gram panchayats for
financing from the Community Investment Funds (CIF), operated by the DPMUs. On receiving proposals
the DPMU would check its compliance with agreed eligibility criteria and a negative list, which are given
in Annex 2, Attachment 4. If it complies, the sub project would be appraised. The approach to appraisal
is
described in Annex 2, Attachment 5. The DPMU would establish a multi – disciplinary Panel of Experts
(individuals or firms) to undertake social, technical, environmental and financial appraisal of sub –
projects and would return its approval (or reasons for rejection) to the proposing institution within
fifteen
days. It would enter into a Sub – Projects Agreement with the institution. A format that identifies, inter
alia, the type of sub – project, the works and goods to be financed, and the cash or kind contribution
from
beneficiaries has been agreed and included in the Project Operational Manual (Annex 2, Attachment 6).
Financial appraisal budgets/cost estimates as well as a review of actual expenditures. The latter would
be
carried out by the community groups as well as by the DPMU. The DPMU would examine sub – project
costs and expenditure on a sample basis. - 10 -
Eligibility Criteria for Sub – Projects: The eligibility criteria and negative list would be publicized s that
participating communities know and understand them. Technical departments would also be aware of
them and would be responsible for ensuring compliance where they are involved. In addition to criteria
for
sub – projects, eligibility criteria would be established for implementing agencies, including community
groups, NGOs, private sector and government agencies.
Beneficiary contributions: Are requirements to confirm demand and ensure sustainability of
investments. Participants Commitment to the Sub – Project of their choice is expected to be expressed
through up – front cash, kind or labor contributions. The level of contribution would be sector – specific
and not less than 10 percent of the total sub – project cost. The costs of operation and maintenance (O
&
M) of project – created assets would be wholly the responsibility of communities; or where assets
originate from sub – projects put forward by GPs, or are transferred to them, the costs of O&M would
be
provided by the local government.
Community investments: Examples of the types of sub – projects that are likely to be financed include
economic infrastructure such as village approach roads, community water and sanitation schemes mini
–
irrigation works, payments and marketplaces; social infrastructure such as village health posts and
literacy centers; training and equipment for services such as animal husbandry; or micro – enterprise
development. A sub – project could include capacity building that is managed by the group itself. A
group
could choose to implement a sub – project itself or engage contractors. Where the work is undertaken
by
the group technical assistance and quality control could be provided by technical staff of a line
department or other identified sources. It is expected that sub – projects proposed by GPs would be
mainly for community infrastructure extending across more than one habitation. They would
nevertheless
have to meet all eligibility criteria. Proposals for infrastructure would be discussed and agreed by GP and
CIG representatives in the VDA to avoid duplication and to ensure that proposed investments would
benefit the poor. Water – related sub – projects, would not in any way affect the quantity or quality of
the
waters flowing to any of the streams and rivers that the tributaries of the Ganges River, because none of
the sub – projects would be in the catchments areas of those streams and tributaries. All activities are
intended to meet the need for poor people, and would be community – based and community –
managed. They would also be subjected to environmental screening, assessment and mitigation, as
described in Annex 2, Attachment 7.
During the first two years of the project investments in infrastructure would be limited to 40
percent of the funds available annually in the CIF. After that the situation would be received and
allocations adjusted to ensure that other proposals from CIGs are not being crowded out by investments
in infrastructure. The CIFs would not have a fixed size – funds would be transferred to each on the basis
of demand and utilization to encourage competition between districts. However, to ensure that no
district
gains an unfair advantage over the others, the total amount to a district would be limited to 30 percent
of
the funds in the CIF component over the life of the project.
The eligibility criteria, sub – project appraisal process, beneficiary contribution rates, sub – project
agreement, technical specifications, procurement and other implementation procedures are set out in
the
Project Operational Manual which has been discussed and agreed with GOR. The Manual would be
revised from time to time (as agreed with the Bank) to reflect project implementation experience and
the
evolving needs of the poor.
Coordination with District Plans and Additionally. Project funds would be additional to district
development funds (including those channeled through panchayats). Interventions financed by the
project are expected to differ significantly from on – going activities on account of the participatory and
community – managed dimensions, and because the project approach encourages full financing of
activities as well as follow – on proposals to optimize the impact of investments. There is unlikely to be
duplication with on – going anti – poverty programs, but the use of funds provided, for example,
through
Swarnjayanti Gram Swarozgar Yojana (SGSY)could be coordinated productively to support project - 11

-
objectives. Responsibility for ensuring that project investments are additional and not substitutes or
marginal supplements to on – going district programs would rest, importantly, with the structures above
and below the district level, i.e., the State PMU and community committees, in addition to the DPMUs,
DPCs and District Administrations (Collector) and Zila Parishads.
Over the long term, the project is expected to influence other programs aimed at the poor. The
project’s institutional arrangements (especially the VDAs and DPCs) are designed with this is mind. As
these institutions become established, they would exercise increasing influence over other activities in
the villages. Success in this project would encourage them to promote the use of community demand
and
decision – making processes in the allocation of resources from a number of different programs,
including
the state – and centrally – funded anti – poverty schemes. Thus, the impact of DPIP would include the
spread of its methods to other programs, and potentially throughout the state. The process of
rationalizing the numerous anti – poverty schemes has already been started by both GOI and GOR, and
it is expected that the experience effective in reducing poverty because they harness the capabilities and
meet the needs of the poor.
Participatory Monitoring and Learning: Monitoring and Learning (M&L) are critical in this project to
plan, and make mid – course corrections, as well as to assess its impacts. The M&L system would
involve and be used by all actors in the project from poor clients to NGOs project managers, and the
Bank, to learn about on – going activities, achievements, gaps and failures. The main elements of the
system are: (a) computerized performance tracking; (b) participatory process monitoring; (c)
development
audit; and (d) impact assessment. Details of the M&L system are given in Annex 2, Attachment8. the first
activity, part of the impact assessment, would be a baseline survey (BLS) conducted in a sample of
project and non – project villages/families by an independent agency experienced in quantitative and
qualitative evaluation of field programs similar to DPIP. Towards and end of the project, the impact
assessment would be similarly contracted out.
The task of setting up the broader monitoring and learning system for the project would be carried
out in several stages. The initial focus would be on developing a strategy, including formats, procedures
and methods, for elements (a) to (c) listed above. The strategy would emphasize the importance of self
–
assessment by beneficiaries, in particular, of group processes, skills, decision making capabilities and
sustainability. The SPMU would work with a selected agency to develop the computerized tracking
system and engage an independent agency to develop and undertake the process monitoring. The
second stage would be to develop an M&L manual (including reporting formats), the software package
and training modules for project staff, NGOs, CFs and community groups. These stages would be
completed by project start – up. Responsibility for operating the performance tracking system would be
with the project units at district and state levels. Process monitoring would be carried out by CIGs and
CFs on a continuous basis, with the assistance of the outside agency.
Another dimension of project learning would be cross – learning among the three proposed DPIP
states – Andhra Pradesh and Madhya Pradesh, Rajasthan. As the objectives and basic design of these
three projects are similar, it is planned to share information on their implementation experiences, and
transfer strategies, procedures and instruments across locations. This process occurred throughout
project preparation (e.g., through joint workshops, exchange visits of project planners, shared
membership of the Bank task teams) and would continue to be fostered by the individual states as well
as the Bank. Other mechanisms for sharing would include dissemination of reports, joint study tours,
and
common consultants. The Bank would also organize multi – state events during supervisions missions.
Reporting and Mid – Terms Review (MTR). The SPMU would submit to IDA a six – monthly progress
report and a comprehensive annual report. The six-monthly reports would consist of (a) physical and
financial expenditure data (b) a progress report on performance indicators (c) successes and problems
encountered, with suggested remedial actions; (d) socio – economic and environmental impacts; and (e)
progress against benchmarks in implementing policy reforms. These reports would be in addition to the
quarterly Project Monitoring Reports (PMRs) which will be generated by the computerized financial -
12 -
management system from the start of the project. The annual report would cover all quantitative and
qualitative aspects of implementation progress, including implementation plans for the following year.
The Mid – Term Review would be an in – depth assessment of progress and an opportunity to
change course where appropriate. As an input to the MTR, the SPMU would commission specific studies
as part of the M&L work on: (a) the effectiveness and efficiency of the institutional and implementation
arrangements (b) the impact of the project’s capacity building program including the program to secure
credit for interested groups on the quality and performance of CIGs/SHGs and their assess to credit from
the lending institutions; (c) fiscal impact on the state budget and effectiveness of DPIP and (d) overall
impact of the project. The terms of reference for the proposed studies would be developed by SPMU
and
amended as necessary based on comments provided by IDA. The SPMU would take responsibility for
contracting and managing consultants provided by IDA. The SPMU would take responsibility for
contracting and managing consultants engaged for the proposed studies. The studies would be
completed and reports provided to IDA three months before the MTR. The overall MTR report would
include the results of the DPIP Development Audit conducted in the second year of the project. - 13 -
D. Project Rationale
1. Project alternatives considered and reasons for rejection:
During the early preparation of this project, which involved the Government of India, the state
Governments of Rajasthan, Andhra Pradesh and Madhya Pradesh, and the Bank, several alternatives
were considered.
Support of Existing Anti – Poverty Programs: The Bank could assist on-going anti-poverty programs
such as the Integrated Rural Development Program (IRDP, now combined with other programs into the
Swarnjayanti Gram Swarozgar Yojana, SGSY), a beneficiary-oriented credit program, or the wage-
employment creation, Jawahar Rozgar Yojana (JRY, now known as the Jawahar Gram Samridhi Yojana,
JGSY) or Employment Assurance Scheme (EAS). However, these programs are centrally-sponsored and
implemented throughout the country with limited state contributions and very little beneficiary
participation
and would require major improvements to achieve significant poverty reduction. These programs were
the subject of the 1998 India Poverty Assessment, which concluded that they have not reduced poverty
to extent needed.
A Larger, Specific Investment Project: Early proposals for a poverty alleviation project envisaged very
a large (US$500 million) investment in a few selected activities. While this approach was multi-sectoral,
it
was not tailored to meet the many and locale-specific needs of the poor. Nor did it develop the
organizational framework to involve potential beneficiaries in the selection or implementation of

activities,
to enhance ownership, accountability and sustainability. It was felt that the impact of such an
investment
would be limited in much the same way as that of existing programs. A specific investment project
would
have been implemented by one or more line departments, accustomed to implemented top – down and
target – driven programs.
The Panchayati Raj Model: This would be the ‘democratic’ alternative, as PRIs are elected by the
people, have the potential to respond to communities at the local level, and can be voted out if they do
not perform well. However, the model would be problematic at the current time because Panchayats
frequently do not represent the poor or excluded. Social structures may prevent adequate attention to
the
poor. Decision – making is not transparent, and they have not yet learned how to manage resources.
PRIs have weak capacities for implementation, and fiscal devolution policies are still evolving. It would
be
to establish a stable working environment because of the evolving relationship between PRIs, politicians
and the bureaucracy.
The Social Fund Model would transfer funds to NGOs and other agencies working directly with the poor.
It has the potential for better targeting to the poor and local adaptation. However, in the Indian context,
it
is limited in scope because, although there are many NGOs in the state, they collectively cover a fraction
of the population, and few are found working in the most difficult areas. Long-term sustainability is also
at
issue because the approach bypasses existing institutions such as PRIs. It is less likely to transfer
learning to other institutions, and even to poor communities as the institutions may create dependency
rather than develop lasting capacities for self-help.
Alternative Institutional Arrangements: During project preparation, various institutional arrangements
were considered, e.g., management by the District Rural Development Agencies (DRDAs), on the one
hand, or full implementation of the project by NGOs or by an independent Society, on the other. The
institutional arrangements arrived at represent GORs and the Bank’s joint agreement on what is most
likely to ensure: (a) full participation of the poor; (b) innovation; (c) partnerships for wider impact; (d)
sustainability; and (e) influence on other development programs. Project management was not placed in
the DRDAs, which are directly funded by the Central Government, in order o enhance its potential to
involve and impact other district and state – level departments. Importantly, the proposed project
brings
villages groups into focus, providing them with greater control as well as responsibility. - 14 -
2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing
and planned).
Latest Supervision (PSR)
Ratings (Banks financed
projects only)
Sector Project Implementation
Progress (IP)
Developme
nt
objective
(DO)
Bank–financed
Agriculture
Agriculture Development
Project: Rajasthan (1993)
Bihar Plateau Development Project (1993)
S
S
Rural Development Uttar Pradesh Sodic Land Reclamation Project
II (1999) (Phase I – 1993)
SS
Natural Resource
Management
Forestry Projects: Madhya Pradesh (1995), also
Andhra Pradesh (1994), West Bengal (1992),
Maharashtra (1992)
Integrated Watershed
Development Project Hills II (2000) (Hills
I(1990), Plains (1990))
Micro-Credit &
Micro-Enterprises
Rural Women’s Development (1997) S S

Rural Water Supply
& Sanitation
Uttar Pradesh (1996)
Kanrataka (1993)
Education Raj. District Primary Edu. Project (1999) S S
Women and Child
Development
Women and Child Develop. (1998) S S
Poverty Reduction Proposed Andhra Pradesh District Poverty
Initiatives Project (2000)
Poverty Reduction Proposed Madhya Pradesh District Poverty
Initiatives Project (2001)
Other development
agencies
Social Mobilization
GOR Women's Develop. Program

Education SIDA supported Lok Jumbish NORAD
supported Shiksha Karmi
Integrated Social
Services
UNICEF Community based Convergent
Services
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U(Unsatisfactory), HU (Highly Unsatisfactory)
3. Lessons learned and reflected in the project design:
The three proposed DPIPs (Rajasthan, Andhra Pradesh and Madhya Pradesh) are the first multi –
sectoral projects supported by the Bank in India and targeted exclusively at the poorest segments of the
population. They have nevertheless drawn on extensive experience in on – going projects. For example,
some projects, such as the Uttar Pradesh Sodic Lands Project, have shown how the poor themselves
wish to establish organizational structures and engage in multiple activities in order to mitigate risk and
participate more fully in development. Several Bank projects have sought to involve beneficiaries in
planning and implementation, and have shown how communities will contribute towards investment
and
operating costs if they are assured a good service. Among the more successful are the Integrated
Watershed Development Projects, which have demonstrated the viability of a strategy based on the
formation of user groups, their potential to manage project activities, and the effectiveness of
community - 15 -
contributions. Similar lessons also emerge from the Karnataka and Uttar Pradesh Rural Water Supply
and Sanitation Projects. The Forestry projects, particularly in West Bengal and Andhra Pradesh, have
also demonstrated the potential of community groups such as Joint Forest Management Committees,
and the value of successful partnerships between community organizations, NGOs and the Government.
Some projects have encountered difficulties of which this project is mindful, such as conflicts of interest
in
planning and implementation. The institution – centered approach of this project seeks to place
planning
exclusively in the hands of organized poor groups and to strengthen the responsiveness and abilities of
agencies charged with implementation.
Early preparation of the three proposed DPIPs was carried out jointly resulting in common
objectives in similar basic designs. The experiences of non – going programs in each state were shared.
An important lesson from the UNDP – assisted South Asia Poverty Alleviation Project (SAPAP) in Andhra
Pradesh was that it is not enough to mobilize communities for social action – they want economic
opportunities and need investments, alongside social development. Hence, the DPIPs seek to mobilize
communities and provide them the support to improve productivity. They also include support to
develop
linkages with credit institutions to expand micro – enterprise opportunities. Another relevant lesson of
SAPAP was that NGO involvement must be selective and focused. These lessons were applied to the
specific situations in each state, resulting in some differences in project design. Nevertheless, the three
states all recognize the value of continued interaction, and several mechanisms are planned to promote
cross – learning during implementation (see the section on Participatory Monitoring and Learning).
In addition to lessons learned from India, the proposed has drawn on Bank experience elsewhere.
Up to the end of FY96 the Bank had approved 51 Social Fund Projects in 34 countries, amounting to
commitments of over US$ 3.1 billion. These were evaluated in 1998 and this project’s design
incorporated lessons from some of them. In particular, the following aspects of project design have
benefited from the findings of the evaluation: (a) the creation of a decentralized project management
structure with control over the sub – project approval to expedite decisions and minimize political
interference; (b) streamlined procurement and disbursement rules and regulations to ensure speedy
implementation; (c) competitive employment conditions for project management staff to attract and
retain
competent and motivated individuals; (d) detailed Operational Manual, computerized MIS, standardized
financial management procedures, regular and rigorous auditing and quantitative and qualitative
evaluations of project outcomes, all aimed at ensuring transparency, accountability and development
effectiveness; (e) mechanisms for sectoral coordination that are flexible enough not to compromise the
independent and efficiency of the State and District PMUs; and (f) incorporation of physical and financial
sustainability criteria for sub – project eligibility, to ensure a continued flow of benefits.
4. Indications of borrower commitment and ownership:
The state government has been steadfast in its request for Bank assistance for a poverty
reduction project, whose importance has been expressed by senior ministers and bureaucrats. It has
shown its commitment to the project throughout preparation, completing several tasks which
demonstrate
both its commitment and early readiness for implementation.
• It identified project districts on the basis of poverty indicators, and subsequently conducted
extensive Social Assessments and detailed District Capacity Assessments in the selected
districts. These facilitated selection of priority blocks, village clusters and social groups for
project start-up, and the preparation of a plan to cover the districts during the project
period. The activities involved government officials, NGOs other private institutions, and
potential, beneficiaries, building wide support for the project.
• It established a State Project Management Unit early in preparation, and has maintained
this along with contact persons in each districts. The SPMU has adequate office space
and equipment, and key staff have been recruited (the State Project Director, Finance
Manager, Training & Community Development Officer, Project Appraisal Officer,
Monitoring and Learning Officer). District Project Managers are also in place, and the - 16 -
district – level Training & Community Development Officers, and Accounts Officers would
be in position by project start – up.
• Building on its good track record of working with NGOs it has selected a first group for
project implementation, including community mobilization, group formation, and training
activities.
• It has developed a comprehensive capacity building strategy and a plan for the first year,
and identified the lead institutions for capacity building activities. It has prepared a Project
Implementation Plan; an Operational Manual agreed with the Bank; the procurement plan
for the first year, including bidding documents for two NCB contracts, and typical bidding
documents for three types of works likely to be financed under the project; the Financial
Management Manual and software; and the Environmental Assessment Report. It retained
consultants to implement the last two activities, and to further develop the Sub – Project
Appraisal guidelines.
• It has included the overall project budget and counterpart funding in the annual budget for
Indian FYs 1999-2000 and 2000-2001.
• It has constituted the Governing Council and Empowered Committee for the project.
In general, the state is committed to expanding participatory approaches and fostering grassroots
institutions, based on the experience of other programs. It is also accelerating decentralized
development, as demonstrated by its recent decision to hand over elementary education to the
Panchayats.
5. Value added of Bank support in this project:
There is growing recognition that the efficiency, effectiveness and sustainability of development
programs significantly enhanced if they are implemented using decentralized and participatory
approach.
There is great need in India to promote such approaches. The Bank’s added value stems from its wide
related experience, particularly; (a) its international experience of decentralization, participation,

demand-
driven rural investment funds, and social funds; (b) the large India Portfolio, which offers experience of
participatory approaches in other states, in a range of sectors including land and water development,
water supply and sanitation, forestry, micro – credit, etc.; (c) the size of its lending, which is large
enough
to address relevant policy issues and investment needs in a comprehensive manner; and (d) its board
experience with policy issues in all the key sectors. Furthermore, Bank support for DPIPs in three states
simultaneously would greatly facilitate the sharing of information, and enhance the quality of each
project
and their total value to India’s development.
E. Summary Project Analysis (Detailed assessments are in the project file, see Annex. 8)
1. Economic (see Annex. 4):
• Cost benefit NPV = US$ million; ERR = 10% (see Annex 4)
• Cost effectiveness
• Other (specify)
The main benefits of the project would arise from human and social capital development and
economic activities that would result in better living conditions and higher incomes. The impacts of
project
investments in social mobilization and group organization, capacity building, and knowledge and skill
transfers are not readily quantifiable. However, these would be the pre – condition for investing in
public
infrastructure, services, and goods that would benefit about 3,50,000 poor families, enhancing their
access to the means of production.
Investment in Group Development and Capacity Building: The formation of effective groups, and
investing in individual and institutional capacities could bring about multiple benefits, including
increased
participation in economic activities, skill improvements for greater productivity, and improved - 17 -
responsiveness and efficiency of public and private services (e.g., services provided by financial
institutions).
Economic Viability of Sub – projects Supported by the Community Investment Funds. While some
investments from the CIF would serve as ‘enabling’ investments to improve the knowledge or skills of
the
poor (e.g. demonstration of technologies, skill training, product exhibitions), most would generate
measurable benefits. To ensure that sub – project activities undertaken are economically viable,
proposals from the CIGs would be subject to a least return analysis (see Annex 4), which would ask how
much the productivity of participants would need to be raised to make the investment worthwhile.
Reference would be made to the total sub – project investment per individual or per CIG, and the net
incremental economic return needed over a certain period of time to generate an Internal Rate of
Return
(IRR) above 12 percent. A relatively quick and reliable judgment could be expected on whether to go
ahead. Since the scope of the CIFs is not restricted to economic activities, multiple criteria would be
used
to assess viability. The overall approach to Sub – Project appraisal is described in Annex 2, Attachment
5, and detailed guidelines are included in the Project Operational Manual.
Annex 4, Table 1 shows the analysis for a few typical sub– projects. More examples are given in
the Guidelines for sub – project Appraisal in the Operational Manual. The example shown estimate the
economic IRRs as ranging from 19 percent (cotton bed and cushion production) to 48 percent (training
of
para – veterinary workers). While these examples demonstrate the good potential of sub – project
activities would be too speculative to derive an IRR for the project as a whole, a it is not possible to
anticipate the composition of activities likely to be financed from the CIF. However, in global terms,
assuming benefits to 3,50,000 families, the project cost (CIF, Capacity Building and Project Management
components) would amount to approximately US$188 per family. Assuming that benefits were to start 2
to 3 years after group formation, an average annual increase in the economic net productivity per family
of about US$25.3 per year (equivalent to less than Rs. 100 per month) would allow break – even with an
IRR of 12 percent. It is expected that the project would yield higher benefits in most cases.
Rationale for Public Investment: Overall, the project is expected to improve the efficiency and
effectiveness of public services for the poor in the selected districts, and to reduce poverty. It would give
high priority to capacity building, including social mobilization and empowerment, enabling the rural
poor
to influence public services beyond the project as well. Typical investments from the CIF would enhance
capital and productive resource and remove specific disadvantages faced by the poor (e.g. lack of
information/transparency to overcome market imperfections).
2. Financial (see Annex. 5):
NPV = US$ million; FRR = 0% (see Annex 4)

Fiscal Impact:
The total cost of DPIP would be US$ 124.8 million over a five – year period, of which US$ 100.5
million (80.5 percent) would be financed by IDA, US$17.7 million (14.2 percent) would be funded by the
state government, and US $ 6.8 million (5.3 percent) would be raised through beneficiaries contributions
sub – projects. Projected DPIP expenditures would amount to about 1.7 percent of GOR’s current annual
expenditures on Social and Economic Services on average would remain constant as a share of Gross
State Domestic Product (GSDP) over 5the next five years, which would allow some increase every year
as GSDP grows, thereby creating space for DPIP expenditures.
In the long term, DPIP is expected to improve the efficiency of the state’s spending on poverty
alleviation. Efficiency gains are expected through the careful targeting planned in this project, direct
transfers of funds, and reduction of overheads. Furthermore, success in implementing a demand –

driven
approach could have spill – over effects to programs in other sectors. In the medium to long term this
improved efficiency will allow the fiscal to be created to expand DPIP-type operations to other districts.
- 18 -
Counterpart Funding: The state government would contribute about 15 percent of total project costs as
counterpart funds. This claim on its budget is conside5red manageable and would not cause under
burden. During the five year p
roject period, the counterpart funding would range from about US$1.0 million to 6.0 million Rs. 45 to
317
crores) per annum. Consequently, the requirement for counterpart funds for the project in the peak
year
would be only 0.4 percent of the revenue expenditure under the Social and Economic Services heads.
Beneficiary Contributions: About 5.3 percent of total project costs, equivalent to about 6.7 percent of
the amount in the CIF, would be raised through community contributions, in cash, kind or labor. The
value
of the latter would be monetized in accordance with appropriate guidelines. The total beneficiaries’
contribution amounts to US$ 6.57 million (about Rs. 34 crores) over the life of the project. It is expected
that at least 350,000 families would benefit from the project directly and additional families indirectly
would also be potential contributors to sub – project costs. Each core family would thus contribute a
maximum of Rs. 1,000 over the project period or about Rs. 200 per year on average. This can be
compared with the expected minimum increase in beneficiary family income of about Rs. 1,200 per
year.
Post – project Period. DPIP would require only minimal expenditures by government during the post –
project period. The project is not expected to have significant recurrent cost implications beyond its life
as
most staff would be on contract. The incremental operation and maintenance costs of the small-scale
infrastructure investments are expected to be met by beneficiary communities, which would be ensured
by the sub – project appraisal process and agreements. Thus, there would not be a significant additional
burden on public expenditures for O&M in the future.
3. Technical:
The project would finance a variety of interventions, ranging from land development to water
resource management, horticulture and other agricultural activities, micro – enterprises development
social services. The project would be flexible in terms of the activities financed, but strict in ensuring
adherence to core principles such as: the demand – driven nature of investments; community
management (both short and long term) of activities; targeting to the poorest; and financial efficiency
and
accountability. Activities would be carried out within the policy framework and general guidelines
established for other Bank – assisted projects in a given sector (modified where experience suggests this
is necessary or advisable). Sub – project appraisal would be informed by sectoral guidelines and would
assess the appropriateness of methods and technologies being used and their cost – effectiveness. Sub
– projects could draw on designs and standards already available in many sub – sectors, e.g., watershed
development, rural infrastructure. These would continue to be developed for new interventions, or
when
the scope of interventions changes, and refined on the basis of implementation experience.
4. Institutional:
4.1 Executing Agencies:
The institutional arrangements for project implementation are described in detail in Section C4,
above. The main executing agencies are the CIGs, VDAs Gram Panchayats, NGOs, District line
departments, and private agencies willing able to work at the village level. The formation and
development of local grassroots organizations (the CIGs and VDAs) is the crux of the project. In addition,
the project design gives an important role to NGOs and local government bodies (Panchayats) in
mobilizing, organizing and supporting poor communities to access resources. Both NGOs and
government line departments have roles in providing technical support to the CIGs and private agencies
would also be engaged for particular purposes (e.g. construction of small infrastructure, marketing etc.)
in
addition, support structures such as the District Project Coordination Committees and panels of experts
set up at the district and state levels would work closely with the PMUs to broad base the project’s
ideas,
approaches and implementation strategies.
- 19 -
Even through Rajasthan has a vibrant NGO sector and several examples of productive
collaboration between NGOs and government, the availability and capacity of NGOs within the project
districts is variable. As the project design envisages important roles for NGOs in mobilizing communities,
forming and supporting CIGs, training and other activities, the DPMUs and SPMU would continuously
identify NGOs and assess and build their capacities. NGOs would be selected on the basis of criteria
outlined in Annex 2, Attachment 3.
4.2 Project Management:
Project Management is the responsibility of the State Project Management Unit (SPMU) and
seven District Project Management Units (DPMUs) within the Government of Rajasthan’s Rural
Development Department. The SPMU would facilitate the development of project strategies, plans,
procedures, and materials that can be commonly used across districts. It would also assist in the transfer
of experience and learning and promote competition between districts for innovation, quality of
implementation, and the effective utilization of funds. A focus on developing the DPMUs allows for the
creation of strong linkages between institutions/programs at the local level, which would promote
sustainability. The DPMUs would maintain the required operational autonomy and flexibility to respond
to
demand – driven proposals quickly. Accordingly, they would:
• Respond to the priority needs of poor communities;
• Ensure the participation of representatives of poor communities in the district project coordination
committee;
• Adopt streamlined administrative procedures for day – to – day management;
• Develop effective convergence between development programs managed by Panchayati Raj.
Institutions (PRIs), line departments and other local institutions;

• Adopt a simple funds flow arrangement to allow direct transfers of funds to the community groups
implementing sub – projects (see Annex 2 Figure2).
4.3 Procurement issues:
The bulk of project funds would be in the CIF component to finance small sub - -projects requiring the
procurement of works, goods and services costing less than US$30,000 equivalent. These sub – projects
would be implemented by communities or through direct contracting or by NGOs.
Since most procurement activities would be managed by the DPMUs, each unit would have a trained full
– time staff to handle the procurement work. As the formation of CIGs and hiring of NGOs would occur
continuously throughout the project, workshops and seminars on procurement would be organized at
regular intervals to ensure good understanding of procurement procedures among district staff NGOs
and
beneficiary institutions. The State Project Management Unit would have a trained procurement officer
conversant with the Bank’s procurement procedures, especially those related to small community –
based investments. He/she would also; (a)coordinate demands coming from the DPMUs; (b) oversee
updating of the procurement section of the Operational Manual which would serve as a reference for
procurement procedures applicable to different situations; and (c) standardize the technical details for
community works which would be used as an aid to the preparation and review of sub – project
proposals.
4.4 Financial Management issues:
Project Financial Management System (PFMS). Financial Management Arrangements for the project
are detailed in Annex 6. An FMS Manual hs been prepared and integrated computerized financial
management system is being developed. Computers for the SPMU and DPMUs have been procured and
installed. The next key tasks to be carried out would be: (a) installation of PFMS software expected to be
completed by April 30, 2000; (b) full placement of FM staff at SPMU (a qualified Chartered Accountant
as
a Finance Manager, and a Financial Controller) and DPMUs (Accounts Officers expected to be - 20 -
completed by May 31, 2000; (c) training of staff in implementation of the PFMS, expected to be
completed by June 30, 2000. The PFMS is expected to be fully operational by July 1, 2000.
Flow of Funds: The Government of India would pass on funds to the Government of Rajasthan
accordance with the prevailing system of fund transfers from the Center to the states as applied to Bank
– assisted state – sector projects. The state government would release funds to an interest – bearing
personal deposit (PD) account established for the project. The SPMU would transfer funds to the seven
DPMUs through banking channels based on their fund requirement projections and work plans. These
two mechanisms (the PD account and district bank accounts) would facilitate monitoring of the state
government’s provision of funds to the project, and project allocated funds for project use. It is
expected
that Rajasthan’s fiscal reforms and the on – going dialogue between the Bank and GOI regarding fund
flow arrangements would facilitate financing (including counterpart funding) of the project. The flow of
fund flow from the DPMUs to beneficiary institutions would be based on the schedule in the sub –
project
agreement between them, which would be structured to ensure that adequate funds are available in
advance for all operations. The CIGs would be required to maintain simple books of accounts recording
all transactions pertaining to the sub – project.
Disbursements: Disbursements from the IDA credit would initially be made according to the traditional
method (reimbursement with full documentation and against statements of expenditures) and would be
converted to disbursement based on Project Management Reports (PMR) after the successful
implementation of the computerized PFMS. The target date for this conversion is July 01, 2001.
Retroactive financing: Retroactive financing up to an amount of US$ 0.7 million equivalent would cover
eligible expenditures for activities after July 01, 1999, based on a Statement of Expenditure. Retroactive
financing would support consultancies which have been contracted by the SPMU to advance the
Environmental Assessment, Sub – Project Appraisal and other work on the project, and some
establishment and operating costs of the SPMU and DPMUs.
Audit: The financial statements of he project would be audited by the Comptroller and Auditor General
of
India (CAG) of his nominee. The Rural Development Department would prepare the financial statements
and reconcile the accounts with the State Accountant General’s figures within four months of the close
of
the Indian fiscal year. The audited annual project financial statements would be submitted to the Bank
within six months of the close of the Indian fiscal year. This report would be monitored under the Audit
Reports Compliances System (ARCS). An agreement would be reached between CAG, GOR and IDA on
the formats of financial controls on a quarterly basis, for which a terms of reference would be agreed by
GOR and IDA in consultation with DEA-GOI and the CAG by May 31, 2000.
5. Environmental Category: B
5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including
consultation and disclosure) and the significant issues and their treatment emerging from this analysis.
An independent agency was engaged by GOR to develop an Environmental Assessment Report
(EAR) on the basis of the project design, available information on the project districts and likely project
investments. From an environmental perspective the project component that would be of concern is the
CIF. Hence, an Environmental Management Framework (EMF) has been developed for the CIF.
The CIF would support both income – generating activities and infrastructure investments which,
in most cases, would be small – scale and hence not expected to cause environmental impacts of any
significance. All sub – project proposals would, however, be subject to environmental screening in order
to: (a) prevent execution of sub – projects with potentially significant negative impacts; (b) decrease
potential minor negative impacts through modifications in sub – project design, location or execution;
(c)
prevent or mitigate negative impacts resulting from cumulative small – scale investments; (d) enhance
the positive impacts of sub projects and (e) prevent additional stress on environmentally sensitive areas.
- 21 -
5.2 What are the main features of the EMP and are they adequate?
To assist in meeting theses objectives, the Environmental Assessment Report (EAR) sets out the
following; (a) a methodology and administrative structure for environmental management; (b) an
environmental capacity building and awareness raising program; and (c) an environmental supervision
and monitoring plan. The EAR is part of the Project Operational Manual. To ensure the effective
implementation of these measures, an Environmental Agency has been appointed by the SPMU. Further
information on the EMF and the proposed management arrangements is given in Annex 2, Attachment
7.
5.3 For Category A and B projects, timeline and status of EA;
Date of receipt of final draft: February 29, 2000
The final draft of the EAR has been received.

5.4 How have stakeholders been consulted at the state of (a) environmental screening and (b) draft
EA report on the environmental impacts and proposed environment management plan? Describe
mechanism of consultation that were used and which groups were consulted?
As the specific project investments would be decided during implementation, environmental
screening of sub – projects would take place as part of sub – project preparation and appraisal.
Beneficiaries would be fully involved in sub – project preparation, and in the environmental reviews
conducted by the community facilitators. Local NGOs and the DPMU would be involved in sub – project
appraisal and in the Limited Environmental Assessment. Very few sub projects are likely to require an
Environmental Impact Assessment, but it is expected that the consultants engaged to carry out EIA s
would consult all stakeholders in the process.
5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the
environmental? Do the indicators reflect the objective and results of the EMP?
The terms of reference of the appointed Environmental Agency include continues monitoring of
environmental issues and of awareness of project personnel. An independent agency would conduct an
audit of the implementation of the EMF every two years.
6. Social:
6.1 Summarize key social issues relevant to the project objectives, and specify the project’s social
development outcomes.
The key issue in the project is its continuing need to ensure the participation of and attention to
the needs of the socially disadvantaged among the economically poor.
Women: It is recognized that women are disproportionately represented among the poor, and that
female
– headed households are amongst the poorest. In addition, the gender division of labor and gender
differentials in access to resources and services have important implication in the project. Information
collected during the social assessments on the situation of women in the project districts and from
consultation with a wide range of stakeholders, including organizations and individuals who have been
involved in the state’s Women’s Development Program, women activists, researchers and others was
use to formulate a detailed gender strategy for the project. The full strategy is part of the State’s Project
Implementation Plan and Operational manual. Annex 2 Attachment 9 summarizes its key features. The
strategy aims to ensure gender equity in and through all project processes, including planning, staffing,
community mobilization, capacity – building, sub – project appraisal and investments, and monitoring
and
learning. The project would ensure the participation of females as well as males and, where necessary
an
feasible, take special measures to overcome gender – related handicaps (e.g., formation of women’s
groups attention to their health, education or child – care needs). A gender advisory committee would -
22 -
guide and oversee the project, and women’s resource centers would be established at state and district
levels.
Schedule Castes and Tribes, and Other Vulnerable Groups. The project would also focus on other
socially vulnerable groups among the economically poor including the Schedule Tribes and Schedule
Castes. The approach adopted by the project also allows interventions to be made for groups such as
the
disabled, destitute windows etc. While social disadvantage would be a criterion for the formation of
certain groups and activities, it is expected that all groups formed would be assisted through economic
interventions. Attention would be paid to ensuring that the natural resource base, on which the
livelihood
of many poor people (especially tribal groups) are founded is protected and developed rather than
eroded. Indigenous forms of community action would be encouraged where these are useful to assist
poverty reduction. As several project districts have significant tribal populations, a Tribal Development
Plan has been formulated to address their needs. The full plan is contained in the Project
Implementation
Plan and attached to the Minutes of Negotiations. Annex 2 Attachment 9 summarizes its key features.
The project aims to cover all tribal villages in the districts.
The Right to Information: The project is predicated on a participatory approach, for which information
dissemination is critical. Beneficiaries would receive information to participate in the initial processes
(e.g., group formation, preparation of proposals), and they would also be informed continuously about
project – related services, opportunities etc. The involvement of Panchayats (at all levels) would be an
important aspect of participation, and their roles in the provision of information, decision-making and
management of the project would be built carefully. The project also includes a social audit mechanism
–
development audit, and the learning system would ensure that participants and village communities
have
access to information about project progress, achievements, expenditures, and effectiveness at all
times.
Dealing with Community Divisiveness: The most difficult social issue which the project is likely to face
is that of community divisiveness. It would be difficult to assist the poor unless the better – off are
convinced of the common good, and agreeable to the proposed interventions. The project would
attempt
to ensure adequate support from groups who would not benefit directly (or who may even lose benefits
by project interventions or their success) through public consultations and by establishing a close
working
relationship between the CIGs and Gram Panchayats who very often represent the interests of the
better
– off in a village.
Land Provision for the Construction of Rural Roads and Small Infrastructure. The CIF provides for
communities to undertake improvement of inter – habitation roads and small civil works. In some cases,
the work may require small amounts of land. This would most often be public land (government or
Panchayat owner), but in some situations private land may be needed. It is common practice for such
land to be given voluntarily, without compensation, because of the strong private and community
interest
in improving road linkages and infrastructure. It has been agreed that a Memorandum of Understanding
(which has been attached to the Minutes of Negotiations and is included in the Project Operational
Manual, along with the procedure to be followed) would be signed between the District Collector or his
nominee, the Gram Panchayat and the land water (s). Construction would be started only communities
are not disadvantaged by the land transfer/use, and the procedure would emphasize a transparent
public
consultation process. Close attention would be also be paid to this aspect in the independent
monitoring,
to ascertain that land contribution are made voluntarily.
6.2 Participatory Approach: How are key stakeholders participating in the project?
The primary beneficiaries of the project would be poor rural people, organized into Common
Interest Groups. The project design calls for them to participate in the identification, planning,
implementation, operation and maintenance of all activities at the local level. This would also involve
the
participation of other civil society institutions such as NGOs and Panchayats, whose roles are described
in Section C4 and E4 above.
6.3 How does the project involve consultations or collaboration with NGOs or other civil society
organizations?
Consultations were held during project preparation with a board cross
–selection of poor communities, a number of NGOs and Panchayats. These would continue during the -
23 -
project to further develop project modalities and procedures, as well as to expand an interest and
supportive constituency for the project. NGOs also conducted the social assessments and the district
capacity assessments, and participated in the preparation of project strategy and plans. As described in
Section C4 NGOs would be key agencies in the implementation of the project.
6.4 What institutional arrangements have been provided to ensure the project achieves its social
development outcomes?
See Section C4.
6.5 How will the project monitor performance in terms of social development outcomes?
See Section A2, key Performance Indicators.
7. Safeguard Policies.
7.1 Do any of the following safeguard policies apply to the project?
Policy Applicability
Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) Yes No
Natural habitats (OP 4.04, BP 4.04, GP 4.04) Yes No
Forestry (OP 4.6, GP 4.36) Yes No

Pest Management (OP 4.09) Yes No
Cultural Property (OPN 11.03) Yes No
Indigenous Peoples (OD 4.20) Yes No
Involuntary Resettlement (OD 4.30) Yes No
Safety of Dams (OP 4.37, BP 4.37) Yes No
Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) Yes No
Projects in Disputed Areas (OP 7.60, BP 7.60, BP 7.60) Yes No
7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies.
An Environmental Assessment Report has been prepared which would screen sub – project
activities and subject them to appropriate levels of EA. A Tribal Development Plan has also been
prepared. Both have been agreed between GOR and the Bank and are part of the Operational Manual.
F. Sustainability and Risks.
1. Sustainability:
There are three dimensions to sustainability in DPIP: that of sub
– project investments; of DPIP structures; and of the project as a whole. The sustainability of sub –
project investment is assured by the requirements that O & M arrangements be planned and agreed
during sub – project preparation, and that contributions for O & M be collected during implementation.
No
other liabilities would be created by the project. Sustainability of the project approach would depend
largely on the extent to which the capacities of the poor and PRIs are successfully built and
strengthened, and changes in modus operandi are brought about in line departments. Not all DPIP
structures (e.g., CIGs, VDAs, DPMUs) have to survive the project. The design provides for them to be
institutionalized, or to disappear once the demand-driven and community – based services delivery
approach demonstrated by DPIP has been absorbed by agencies such as PRIs and line departments.
Theses institutions would then b expected to operate more efficiently and equitably. If the project is
successful, it is expected it would be scaled up with resources available to the state government,
possibly
reallocated from other programms. - 24 -
2. Critical Risks (reflecting assumptions in the fourth column if Annex 1):
Risk Risk
Rating
Risk Minimization Measures.
From Outputs to Objective
Caste and class tensions are not
contained to enable the poor to
benefit from project processes
and resources.
S The project would include consultations and
collaboration with potential 'negative
stakeholders' and resolve conflicts
wherever possible
Technical support services are
not available or not of sufficiently
high quality to ensure lasting
investments.
M Capacity would be developed by the project
over time to fill gaps and improve quality.
Adequate credit is not made
available to the poor through
financial institutions (FIs).
M The project would strengthen the ability of
groups that require credit to access FIs –
the capacity building activities would enable
them to become credit-worthy, and would
also train bank staff to facilitate their
dealings with the poor.
beneficiary contributions are
inadequate to support O&M to
sustain infrastructure
investments
S The project focuses on establishing
sustainable ownership by ensuring choice,
group management, and partially self-
financed construction up front, and own-
managed and self
-financed O&M.
From Components to Outputs
Adequate funds are not made
available in time by the state

finance department to the
project, including counterpart
funds.
M The state government has shown its
commitment to the project by setting aside
funds in anticipation of DPIP for the past
three financial years. The financial
management system envisages a quarterly
release of funds from GOR to SPMU on the
basis of funds forecast requirements for the
next two quarter.
Adequate institutional support
does not exist or cannot be
treated in time for skills training,
marketing or other needs
identified in community
proposals.
M The project will track needs over time and
ensure the timely design of alternatives
when required (e.g., engaging appropriate
skills, institutions, from the other parts of
the country).
Natural resources that are
needed, such as land or water,
impose serve constraints on the

planning or implementation of
sub – projects proposals
S project design has flexibility to develop non-
resource based activities, alternative
employment .
negative reaction of non-poor
groups ,or spokespersons for
non-poor groups, (e.g.,
politicians, PRIs) to project
investments being directed
solely at the poor.
M the project would share information and
consult with these stakeholders during
implementation; it would involve the PRIs
and local NGOs in social intermediation. in
whose benefits, while intended mainly for
the poor, would extend to communities at - 25 -
large, e.g., rural roads, school, health
clinics.
NGO- government interactions
become problematic or unfruitful.
M the project would develop networks of
NGOs so that they can assist each other,
engage in a meaningful dialogue with the

government agencies involved, any
conflicts that may arise.
possible reaction of mainstream
government line departments
against and involvement of
NGOs, resulting in low
collaboration with the project.
M the project flexibility provides for alternative
involvement of private service providers.
however, the project would make every
effort to involve line departments in positive
ways . the district level committee has been
designed with this in mind. the project
would evolve ways to provide non-monetary
incentives for department staff to
collaborate well. the political visibility of the
project would minimize this problem over
time and good linkages would be developed
between these and other local institutions.
Overall Risk Rating S
Risk Rating-H (High Risk), S (Substantial Risk),M (Modest Risk), N(Negligible or Low Risk)
3. Possible controversial aspects:

The main controversies that could arise in this project concern the relationships between the poor
and non- poor, government and NGOs , and line departments and beneficiary institution and private
agencies. these are discussed in the risks matrix above.
G. Main Credit Conditions
1. Effectiveness Condition
Standard Conditions Of Effectiveness
2. Other [classify according to convenient types used in the legal agreements.]
• Financial management : to establish an effective financial management system, Rajasthan shall:
(i) maintain for the duration of the project a computerized project financial management
system in accordance with a project financial management manual agreed with IDA;
(ii) Employ and thereafter maintain,(a) a chartered accountant as a finance manager, and (b)
accounting staff as envisaged in the financial management manual to ensure effective
financial management for the duration of the project.
? Annual plans: Rajasthan shall, not later than December 1 of each year, starting in 2000, prepare
annual action and procurement plans for the implementation of the project and taking into account
the association's recommendations, finalize such plans, not later than February 28 of the following
year.
• - 26 -
Annex 2
Attachment 2
Selection of Non – Governmental Organization
To ensure flexibility and responsiveness to the village poor, DPIP will involve NGOs as there is
now wide acceptance that they are an effective mechanism for mobilization and organization to people
at
the grass – roots. Two main roles are envisaged for NGOs in the project: a Project Implementation role
and Capacity Building and Support. A Project Implementation NGO will be based within the district and
operate locally. These NGOs will have good understanding of the local culture and the socio – economic
conditions of the people in the area. They will carry out the following tasks:
• Establish contact with the community through suitable village entry programms;
• Build awareness about the project;
• Initiate processes of community mobilization;
• From CIGs and nurture them;
• Build the capacities of CIGs;
• Generate options regarding sub – project activities and assist CIGs in identifying suitable activities
and preparing proposals for them;
• Provide process related support;
• Access and provide technical support for sub project activities;
• Ensure that the process approach is not overtaken by the target approach;
• From and nurture VDAs;
• Establish effective links between the CIGs/V'). As and the DPMU/SPMU;
These tasks would be carried out by Community acilitators contracted by the NGOs.
Capacity Building and Support NGOs would take on training and capacity building, or provide
specialized support. They will have a high level of professional competence and personnel with a good
field experience, with training capability and/or specialized technical knowledge and skills. Capacity
Building and Support NGOs would normally be based in the district, but could also come from other
areas. They would be expected to be closely involved primarily with Implementation NGOs, but also with
CIGs and VDAs.
The NGO Selection Process.
A fully transparent process will be used to identify, access and select NGOs for the Project. The
roles and responsibilities of both the DPMU (and in some cases the DPMU) and the NGO would be laid
out clearly in a contractual agreement. The NGO identification, selection and contracting process will be,
refined continuously through wide consultation at the state and districts levels. State and districts
workshops will serve the purpose of introducing the project to potential NGO partners, reviewing
selection
criteria and processes, discussing key elements of the contract, support to be provided by the DPMU
and
other agencies, and so on. The workshops will help to identify NGOs who are willing and able to work
with the project.
The selection process currently envisaged will for low a series of steps, and will adhere to the
Bank's procurement guidelines.
Step 1- SPMU: Issue advertisement calling of expression of interest in which interested NGOs are
requested to send information on their organization and experience.
- 27 -
Step 2- SPMU: Set up an NGO Selection Group including the State Project Director or District
Project Manager of the concerned district, representative of the Lead Training agency, and
two independent persons.
Step 3- NGO Selection Group: Develop parameters for screening (see below) and for detailed
assessment (including staffing, other resources, financial capability, etc.)
Step 4- NGO Selection Group: Screen NGOs and visit suitable NGOs to meet with their team
access the infrastructure and facilities, staff capacities, financial turnover and management
and interest, based on the previously set parameters. In the event that no NGO is found
suitable the selection group will proactively approach some NGOs and/or develop capacity
building plans with 'almost suitable' NGOs.
Step 5- NGO Selection Group: Shortlist NGOs definitely capable of working with the Project invite
these to become partners in the Project, requesting them to submit proposals.
Step 6- NGO: Submit technical and financial proposals and work plan to the Selection Group and
present the proposal.
Step 7- NGO Selection Group: Evaluate proposals and recommend selection to the DPMU.
Successful proposals go to Step8. In the event that the technical and financial proposals
no upto standard, the group provides detailed feedback to the NGO to facilitate
improvement of their proposals, or to rectify any other deficiency.
Step 8- DPMU and NGO: Negotiate successful Technical and Financial Proposal and sign.
Proposed Screening Criteria
NGOs will be shortlisted using, inter alia, the following criteria:
• Legal Status: evidence of legal registration;
• Constitution: constitutional provision to engage in social/economic activities;
• Track record: at least three years experience in group formation and group – related
social/economic activities or the specific activities for which they will participate in the project; the
NGO should of have been blacklisted at any time by CAPART, CSWB or the relevant government
agency;
• Finance: accounts audited and certified by a charted accountant for at least three year;
• Staff: staff capacity to carry out the proposed activities or demonstrated ability to procure capacity.
NGOs will be screened by the Selection Group on the basis of the above criteria prior to short –
listing. Thereafter, the process listed above will be carried out.
Scoring System for Technical Proposals.
In order to ensure the selection of optionally qualified NGOs a scoring system will be de. The
NGOs will be independently assessed by at least three team members, and their average score aced the
basis for decision – making. NGOs not achieving at least 75 points out of 100 will be disqualified
following parameters will be included and the points to be assigned are given. In addition:
• Suitability to providing direct services to communities (location, mobility, language skills (10
points);
• Geographical orientation and demonstrated loyally to particular communities over a period time
(10 points);
• Experience of grassroots work, specifically; - 28 -
Previous experience of social mobilization/group formation in rural areas (15 points).
Previous support activities in social and economic development (15 points).
Other activities relate to rural development (5 points).
• Methods and Skills:
Experience of using participatory methods and tools (15 points).
Financial and record – keeping skills (10 points).
General management skills (10 points).
• Continuity of leadership (10 points).
In addition costs would be considered (20 point) in following the Bank's Quality and Cost Based
Selection (QCBS) procedure.
Other Considerations.
NGOs selected to work in a district will be represented on the District Project Coordination
Committee. The State Project Director will hold regular quarterly meetings with the NGOs working in the
Project to resolve any difficulties they may be facing or conflicts that may have arisen. - 29 -
Annex 2
Attachment 3
Capacity Building
Definition, vision and expected outcomes.

Capacity – building (CB) is the process by which the abilities of target communities to plan and
manage development programs, and influence the economic social and political environment in which
they are implemented is increased; and those of the staff of governmental and NGOs to facilitate such
efforts is improved. Also, the capacities of the PRIs to plan and manage development activities and
facilitate the empowerment of the poor would be enhanced. The capacity – building procures would
consist of training and networking initiatives, using participatory method dologies. Networking initiatives
are non – module based learning efforts that respond to project needs as they arise. These would
include, for example, for example, an annual DPIP Conference bringing together all leading DPIP
participants from the village to the state level, or village fairs to increase the buy – in to DPIP concepts,
processes and plans of the private sector and others not directly involved in DPIP. Capacity – building
under DPIP would develop the know – how and build linkages, through joint programs, study visits,
material development etc., with institutions and facilitators in the state, the rest of India and abroad to
carry the vision forward.
The following are the expected outcomes of capacity – building in DPIP:
• Empowerment of the target communities: i.e. their achievement of control over development
processes;
• Improved quality of services: i.e. greater responsiveness, innovation, transparency, accountability,
flexibility, and susta ned participatory management and processes;
• Enhanced gender equity: i.e. greater involvement of women in development process, based on
proper gender analysis, sensitization etc.
• Participant learning: through feed back and analysis, and an impact on attitudes and behaviours
such as sharing trust, responsiveness and openness;

• Institutional change: internalizing the new perspectives, decentralization, learning partnerships,
seeing government as 'facilitator, not a provider'.
• Capacity for participatory development: i.e. a cadre of facilitators sensitive to a more inclusive
approach to development, and with commitment to promoting participatory mechanisms;
• Innovation: new ways of addressing poverty;
• Process documentation.
Guiding Principles
The capacity – building in DPIP would:
• Be motivational and learner – centric;
• Be customized for different stakeholders;
• Include continuous capacity needs assessments and adaptation of curricula and activities to these
needs;
• Involve continuous learning support and extension, including counseling;
• Be on location, mainly at the point where participants have to apply their knowledge and skills;
• Be experiential – a minimum of theory and grounded in the experience of participants;
• Emphasize win – win outcomes ; and
• Create an environment that sustains the values, attitudes and operational charges being
emphasized by DPIP.
- 30 -
Elements of Capacity – Building
Capacity – building aims to address the following aspects of the lives of target communities, staff,
NGOs other implementing agency personnel and PRI representatives.
• Physical capacities;
• Relationships between co – workers, juniors and seniors, and most importantly, staff and target
communities, stressing trust, respect, cooperation, and teamwork;
• Attitudes and behavior toward the poor;
• Awareness and knowledge of socially – sensitive approaches to development;
• Skills related to project implementation, including manual, technical financial and managerial
skills;
• Opportunities for learning, including networking to share experiences and learn first – hand from
peers.
Capacity Building Modules
The capacity – building modules would include a Basic /Foundation Module (for all participants)
which provides: an understanding of the project, its vision and approach to poverty alleviation, and
comparison with other approaches; physical capacity – building relationship development for identified
activities. Follow up Modules would include refresher courses on identified issues, and advances courses
in skill development and knowledge enhancement, applicable on the basis of the needs assessments. An
indicative list of focus areas in the sectoral and follow – up module follows: Participatory Learning and
Action; Listening and Sensitivity; Gender Analysis, Equity and Participation; Project Management;
Financial Management; Sector – Related Capacity Building (e.g., raicro – enterprises management);
Group Organization and development (for CFs and CIGs); Sub Project Preparation and Proposals;
Environment Management, Monitoring and Evaluation. The details of these modules would emerge
from
the needs assessments and sub – projects.
Capacity Building Process
The capacity – building process consist broadly of the following steps. It would be responsive to
project participants changing needs and requirements.
• List participant categories and indicative to pics/subject areas in which they require CB;
• Assess the number of participants in each category, and determine the best way to reach them,
e.g., for large numbers, through the training of Facilitators or, if the numbers are small, direct CB
modules delivered through a mobile CB team in each district;
• Prepare a database of CB resource persons including Master Facilitators;
• Conduct Capacity Needs Assessments for each participant category to assess existing levels of
capacity and specific needs;
• Prepare modules;
• Organize participants and modules;
• Conduct modules.
The modules would be designed by individuals or institution with relevant experience. Basic work on
module design would be undertaken at the state level and they would be field tested before being
produced and put to use. The overall process would initially be the responsibility of the State Capacity
Building Cell but is expected to be taken over repaid the district team, supported by consultants.
- 31 -
Methods
CB methods would:
• Be flexible and participatory – e.g., working groups rather than lectures, involving participants as
resource persons, shifting venues;
• Bridge the traditional gap between project managers and grassroots clientele, e.g., involving
articulate and experienced village dwellers and resource persons, such as articulate village
women in gender sensitization of project managers and line department staff;
• Be adapted to illiterate and semi – literate people; visual material, role plays/simulation and
experience – sharing and similar methods would be norm, written materials would be used mainly
for managers and staff, and so the methods such as study visits and experience – sharing would
be common to all.
Enhancing State Capacities for Capacity Building
In addition to building the capacities of people who would be involved in implementing DPIP in the
seven districts, the project would build capacity for participatory development in other organization in
the
state, which would then be utilized for the benefit of other development projects and beyond the
project
period.
At the state level DPIP would build capacities in (a) the Indra Gandhi Panchayati Raj and Rural
Development Institute (IGPR & RDI), the lead capacity building agency within which the State Capacity
Building Cell (SCBC) would be established; and (b) Aravali, the Association for Rural Advancement
through Voluntary Action and Local Involvement which would develop the CB strategy, plans and many
modules for the project in partnership with IGPR & RDI. Aravali which ha the potential to become a
leading capacity – building agency in the state is currently in its infancy, and would be provided with
suitable financial support to expand its current infrastructure and staff to carry out CB activities for the
project.
At the district level, DPIP would support the establishment of district capacity building centers
(DCBCs) with suitable infrastructure and qualified staff. Each center would serve the CB needs of the
district. The management of these centers would be either with the SCBC or with an NGO in the district
chosen for the purpose, or a partnership between the two. For the duration of DPIP, the centers would
house the district capacity – building team that would coordinate and manage CB at the district level.
Post DPIP the services provided by these centers would be chargeable and thereby able to generate
revenue.
PRI members are important stakeholders in the project to ensure the empowerment of target
communities. Hence, they would also be part of the vision – building for DPIP and undergo a short e.g., a
resource center, where they would able to get information they require. These Panchayat Resources
Centers would be based at the block – level and managed by NGOs. They would be set up
collaboratively by the district capacity – building team and the NGOs in the district. In the initial years
the
personnel managing theses centers would play a proactive role and reach out to the PRIs. Importantly,
these centers would serve the special needs of women PRI members whose capacity – building would be
undertaking separately to help them better understand their roles and responsibilities and be effective.
Management of the Capacity Building Program

A Specially – organized DPIP capacity – building cell will be established by Aravali within IGPR &
RDI in Jaipur to manage the overall capacity – building effort. The IGPR & RDI is an autonomous
organization set up by the GOR, with administrative links to the Rural Development Department. The 99
– 00 it also hosts the State Institute for Rural Development. The Minister for Rural Development and -
32 -
Panchayati Raj is the Chairperson of the Institute and the Director is an Indian Administrative Service
officer. The Institute has well – developed infrastructure, including a hostel.
The DPIP State Capacity – Building Cell would be headed by a Capacity – building coordinator.
The CB Coordinator would be a person from the non – governmental development sector, with suitable
experience of managing organizations, capacity – building, and development programs. S/he would
report to the DPIP State Project Director for all program activities and to the Director of the IGPR/RDI on
establishment matters. The funding for the capacity – building activities would flow to the IGPR/RDI. The
CB Coordinator would assume complete responsibility for the capacity – building program and also
manage the funds for this purpose. The CB Cell would have a core staff to plan and manage the CB
activities, and monitor the process and outcomes. the main job responsibilities of all key staff involved in
capacity – building at the state and district levels are given in the State Project Implementation Plan and
Project Operational Manual.
The SCBC would be responsible for undertaking he capacity need assessments, designing and
developing the modules, field testing them, and building the capacity of staff in the district capacity –
building teams. The SCBC would also be responsible for helping the district develop materials to be used
in the modules and in the communication efforts. There would be some common materials that could
be
used for all districts, and others that would be more specific to the needs of a particular district. The
SCBC would contract out the materials developments, and other tasks as needed.
The district capacity – building teams would be the principal coordinators and managers of all CB
activities in the districts. The budget for capacity building would be provided against an annual CB plan
through the DPMUs, including the salaries of the district CB staff and operational expenses. The District
CB Coordinator would manage the funds for the unit in accordance with the yearly plan. The district SB
teams would consist of individuals with participatory learning and action skills. Team members would be
carefully selected from the open market. They would facilitate the capacity – building of Community
Facilitators, technical staff, personnel selected by CIGs and VDAs to lead their groups and assist in the
district level and another significant component of the SB strategy is continuing counseling and support
to
field personnel. The capacity – building of CFs would be structured intensive and continuous. The district
team would be trained to provide constant counseling and support to the CFs. In turn, the CFs would
build the capacities of the village – level institutions. Their performances would be constantly upgraded
through continuous needs assessment and refresher modules. The capacity – building of the district
teams themselves is an important aspect of the CB plan.
The district capacity – building teams, together with professional from NGOs or government would
constitute the District Capacity – Building Support Units (DCBSU). There would be relevant experience or
operated by the SCBC in the DPMU, if it is not possible to find a suitable NGO. The advantage of such an
approach is that the selected NGOs would be able to bring their own varied experience in of the project,
which could be useful for building greater learning in and among the districts. A spirit of competition
between the SCBC – operated unit ( ) and the NGO – operated units could be useful to bring out the best
in each. These NGOs would be identified with care by a committee consisting of representatives of the
SCBC, other NGO support organization, and a few experienced development consultants and the
selection would be in accordance with the procedure laid down for NGO selection in general.
The DCBSU would report administratively to the DPMU, but have a functional relationship with the
SCBC. The SCBC would guide the DCBSU, and provide it with the basic materials developed for the
required CB activities. The DCBSU would use the modules that have been developed and field tested by
the SCBC, modify them if required to suit local conditions, and implement them. The CB strategy
visualizes the DCBSU as a dynamic, proactive expansion unit that would assist field staff in the district to
undertake activities related to capacity building. The basic characteristic of the DCBSU would be ability
to
be responsive and flexible its ability to plan we I, and ability to function as an extension agency. For
capacity building to be effective, it would need good follow – up which requires the units to be self –
contained and have a strong support – oriented culture. - 33 -
Annex 2
Attachment 4
Sub Project Eligibility Criteria
All Sub Project would have to meet basic eligibility criteria in order to receive finance from the
project. The eligibility criteria include:
• The sub project benefits the poor;
• The sub project originates from the beneficiary community, which was provided a range of options
from which to choose as well as sufficient information to make an informed choice; and the design
of the sub project encourages community participation in all phases;
• The sub project is technically sound and technologically simple, and the community can operate
and maintain it;
• The sub project is labor intensive and uses local labor, or otherwise generates a significant social
impact;
• There is adequate evidence that the sub project would be effectively managed in implemented by
the community making the request, with the community acting independently or contracting other
agencies;
• The financial, technical and institutional arrangements for operation and maintenance of the sub
project are in place, including assignment of responsibilities for maintenance of works, provision
of maintenance – related training, and ensuring the necessary funding;
• The sub project is consistent with good practice sectoral policies and guidelines;
• The total sub project cost does not exceed us $ 10,000;
• the beneficiaries will contribute 10 percent of total sub project costs in cash or kind;
• The sub project is additional to existing on planed public investments;
• The sub project meets the cost per unit and cost per beneficiary ceilings established by the
project;
• The sub project does not duplicate or replace other sources of funds;
• The sub project is located on public or community land, or land belonging to local bodies, or, if the
location proposed is private land, an appropriate written Memorandum of Understanding has been
framed between the owner (s) of the land and the beneficiaries ensuring unlimited and unimpeded
assess of beneficiaries to the land and assets created;
• The sub project does not have negative environmental effects or, if it does adequate mitigation
measures exist.
Negative list – Part A, Activities not eligible for project financing.
• Cash grants or loans to individuals or groups;
• Facilities that do not directly improve the productivity of the poor (e.g. public administration
buildings, political or trade union facilities, religious buildings);
• Sophisticated equipment that cannot be operate and maintained at the village level;
• Cost of running/operating constructed facilities;
• Relief activities and activities which directly support consumption.
Negative list – part B, Activities not eligible for IDA Credit financing.
• Rehabilitation or construction on private land improvement of private property unless contributing
to and in agreement with groups or overall community;
• Purchase or leasing of land;
• Taxes and duties.
- 34 -
Annex 2
Attachment 5
Sub Project Appraisal Process
Introduction
The project is expected to generate a large number of sub project which would be systematically
appraised to ensure their worthiness and high benefits or rates of return. The process and criteria used
for sub project appraisal, therefore, must be sound, and quick to ensure that the sub project is
implemented at the cost estimated in the proposal.
Appraisal criteria and norms: Thumb rules.
The nature and objectives of DPIP call for sub project appraisal to cover a number or areas.
However, it is not easy to practice multi – dimensional appraisal of small projects, especially at the
district
level. Therefore, for each type of sub project, certain simple but critical, appraisal parameters reflecting
key processes and results would be identified and their normative level determined on the basis of a
simple of sub projects. The norms would be in the form of thumb rules which can be understood and
applied by project staff with some orientation and training to facilitate quick appraisal of sub project
proposals. The parameters identified would indicate activities/performances critical for the achievement
of
sub project goals, and would be appropriate to the size of sub projects. The following areas of appraisal
would be included.
Institutional Appraisal: The age, experience, human resources capacities, managerial
capabilities, cohesiveness, operational modalities, and financial (or thrift and credit) record of the
CIG/VDA/GP would be assessed before assessing the sub project proposals per se. The complexity of
the sub project is expected to match the technical and managerial capability of the group proposing it.
Social Appraised: The expected social impact of each proposal would be assessed. Parameters
such as the percentage of beneficiaries expected to cross the poverty line, proportion of beneficiaries
belonging to social groups such as SCs, STs, OBCs, women, windows, female headed – households,
and physically handicapped persons, additional employment and income generated, and changes in the
consumption patterns or quality of life of the beneficiaries would be relevant.
Participation Appraisal: Proposals is would have to show how participation has occurred in the
identification and preparation of the sub project, and how it would occur in implementation and
management, monitoring and evaluation, operation and maintenance. Participation appraisal would
also
assess the proposed arrangements for sharing ownership, and beneficiaries’ commitment to the sub
project as expressed through their contributions of cash, labor or materials.

Financial Appraisal: Financial viability would be assessed for each investment proposals related
to economic activities and small – scale infrastructure. To simplify financial appraisal, benchmarks for
investment costs per unit (e.g., costs per beneficiary households for roads, drinking water and sanitation
etc., or costs per hectare for irrigation infrastructure, horticulture, etc.) would be developed and used.
For
micro – enterprises, a full cash flow analysis would be done.
Economic Feasibility: In addition financial viability, a separate economic analysis would be
undertaken when major inputs and/or outputs with distorted financial prices are crucial in the sub
project
proposal. An example would be water pumping using subsidized electricity.
Technical Appraisal: Each sub project would be checked for compliance with engineering and
technical standards prescribed for local conditions, and consistency with national standards and cost –
effective construction/production methods.
- 35 -
Environmental Appraisal: An environmental checklist would be utilized for appraisal, including
impacts on natural resources, human safety, health risks etc. as described in Annex 2, Attachment 7.
Sustainability and O&M Arrangements: The sustainability of a sub project would be assessed
on the basis of proposed O & M arrangements (a detailed plan and firm commitments) and surety of the
resources required for maintenance being generated by the beneficiary community. Activities such as
micro – enterprises would need to ensure continued linkages to raw material supplies, markets, etc.
Input formats
To facilitate quick sub project appraisal, the agency making the proposal would furnish sub project
details on a pre designed computer compatible format so that the critical parameters could be
computed
quickly and compared with their normative levels. To minimize human error in project selection, each
critical parameter would be assigned a value consistent with the overall project goals. Any sub project
with a normative minimum score would automatically pass the appraisal test under each category.
Database for appraisal
The DPMU would derive date on the costs and benefits, social, technical and sustainability
dimensions of sub project from the proposals sent up by CIGs or other agencies. Over time, to facilitate
quick appraisal of large number of sub projects, a comprehensive data bank on different types of sub
project would be built in each district, using these data in addition to those generated by sample
studies.
Operational guidelines
The operational guidelines for sub project appraisal would include: sub project formulation and
format methodology and process of appraisal, sub project appraisal criteria covering institutional social
participation financial economic technical environmental and sustainability appraisal and thumb rules
case studies of sub project appraisal, and information on the database on sub projects. The guidelines
would be update periodically.

- 36 -
Annex 2
Attachment 6
Sub Project Arrangement

Memorandum of Understanding
Between
The First Party The Second Party
............................................ CIG
............................................ Village
............................................Panchayat
Samiti
............................................District
Represented by its
President/Secretary
DPIP State Project Management Unit
Represented by
Sri/Smt. ............................................
S/o W/o D/o Sri .................................
Resident of .........................................
Sri/smt. ............................................
............................................
(Designation)
NGO/DPMU
........................................... Panchayat
Samiti
............................................ District
Preamble
The two parties to this MOU being interested in the elimination of poverty through effective
participatory methods.
The first party to this MOU being a Common Interest Group (CIG) of poor consisting of
............................. members, is interested in upgrading the quality of life of its members through
social/economic development initiatives.
The second party, being an agency of the Government of Rajasthan interested in the elimination
of poverty, is interested in contributing to the elimination of poverty of the first party.
This MOU is therefore, entered into between the representatives of the parties specified above.
Mission
To contribute to the upgrading of the economic and social well being of the members of the
................................... CIG, the first party to this MOU.
Objective
To implement the sub project in the habitation of................................ in the revenue village
of................................ in the panchayat samiti of ................................ the details of which are as follows:
1. Name and type of the sub project
2. Location of the sub project.
3. If the sub project is benefiting a well defined number of persons of a reasonably small CIG:
• Number of persons who will benefit (list of persons who will benefit from the sub project is
enclosed as Attachment – I to the MOU) - 37 -
4. If the sub project is envisioned to benefit a large number of persons in a group of villages:
• Number of villages which will be benefited
• Number of families who will be benefited (list of habitations and the names of families who will be
benefited from the sub-project is enclose as attachment-1 (a) to the MoU)
5 Activities to be carried out
i. ....
ii. ....
iii. .....
iv. .....
v. .....
6 Anticipated results of the project
i. ....
ii. ....
iii. ....
iv. ....
v. ...
7. Costing
SI No, Activity Unit
Description
No, of
Units
Unit
Cost
Total
Cost
TOTAL
8 Work Completion Milestones
Milestone
description
Agreed time to complete
milestone
(month/year)
Cost in Rupees:
contributed by:
Total Second Party :
Total First Party
Cash: Labor: Material:
TOTAL
9 Payment Terms
Installment number and amount* Activity/ milestone to be copleted before
release of installment amount
1st
installment 10% of the estimated cost
plus the cost of the first milestone
a) signing of this MOU, b)project Bank
Account is opened by the First Party , c)
Cash contribution of First Party fo5r the
first milestone is deposited into the
Project Bank Account, e) the First party
has demonstrated satisfactory financial
management capability on its initial
savings activities, - 38 -
2nd
installment cost of the second
milestone
a) Certification of completion of the first
milestone, b) cash contribution of first
party for the second milestone is
deposited into the project Bank Account,
c) First Party is up-to-date on
submission of monthly financial reports,
3rd
installment Cost of third milestone
mints the 110% of the estimated cost
a) Certification of the completion of the
second milestone. b) cash
contribution of First Party for the third
milestone is deposited in the project
Bank Account, c) First Party is up-to-
date submission of monthly financial
reports,
* Amount refecrs to the portion of the
total cost which the second party agrees
to provide.
• Amount refers to the portion of the total cost, which the Second Party agrees to provide.
10. Obligations of the First Party: The First Party undertakes to
i. Facilitate training of its activities/members, organized by the Second Party for effective
management of the assets/services.
ii. Complete the sub – project through a participatory process with due diligence and efficiency as
per specification within the time agreed.
iii. Follow satisfactory financial management arrangements as indicted in the Attachment – 2 to the
MOU.
iv. Ensure its contribution in Cash/kind for the work.
v. Ensure that the goods and services to be financed under the Project are procured in accordance
with the provisions of the Project Agreement signed between the International Development
Association and the Government of Rajasthan, and such goods and services are used exclusively
in the carrying out of the sub – project.
vi. Monitor the work and report to the Second Part in the formats and according to the periodicity
agreed.
vii. Maintain the asset at its cost through voluntary contributions or cost recovery.
viii. Properly insure the asset wherever this is product.
ix. Ensure equitable use of the asset by all the prospective beneficiaries.
x. Permit at all times, the second party or it's representatives to inspect the accounts, records and
physical works under the Project and comply the recommendations/observations as a results of
such inspection.
11. Obligations of the Second Party: The Second Party undertakes to
i. Release the installments within a week of the receipt of documents for completion of the
activity/milestone.
ii. Organize required training programmes for the CIG members for the effective management of
assets/services.
iii. Secure coordination of other agencies involved for the sub – project.
Signature of the Representative of the
First Party
Signature of the Representative of the
Second Party
- 39 -
Attachment – 1
List of persons benefiting from the Project agreed upon in this MOU
Attachment – 1(a)
List of habitations and names of families:
Who will be benefited from the Project agreed upon in this MOU
Attachment – 2
Satisfactory financial management arrangements comprise the following:
a) The First Party shall open a separate Project Bank Account for project funds. The First Party's
cash contributions for project activities and the contributions received from the Second Party shall
be deposited into the Project Bank Account. The Project Bank Account would be used for project
– related receipts and payments only. Operation and Maintenance contributions, savings
contributions and related payments shall not be made into and from this Project Bank Account.
The Project Bank Account would be used for project – related receipts and payments only.
Operation and Maintenance contributions, savings contribution and related payments shall not be
made into and from this Project Bank Account
b) The First Party shall have a trained accounts bookkeeper (who is trained during social
mobilization).
c) The First Party shall maintain the following accounts registers/records as per the formats provided
by the Second Party: (i) Simple Cash/Bank book providing details of amounts received and details
of payments along with classification on major heads; (ii) Register of contributions received from
members in cash, labor and materials and (iii) Register of materials purchased using project funds
and materials utilized.
d) The First Party shall maintain vouchers/bills/supporting documents for the various receipts and
payments (systematically numbered), and copies of the Bank Account Statement (pass book).
e) The First Party shall prepare a simple report each month as per format provided by the Second
Party. This summary would indicate (i) Amount received from First Party and Second Party
contributions. amount spent on the various items, and balance in the Bank account or cash; (ii)
the details of the work being carried out activity to be completed, cost, the work already completed
and the work to be done in the next month); and (iii) Amounts of the First Party's contribution in
labor and materials (the formats of the accounts registers/records would facilitate easy
preparation of this report).
f) The First Party shall regularly preset this report to its members and the Gram Sabha. The First
Party shall also display this report in the notice board of the Gram Sabha or village hall, etc. In
addition, the books/registers, vouchers and bank statements shall be brought to the meetings of
the First Party and Gram Sabha and be open for scrutiny by members.
g) The First Party shall provide a copy of the report to Second Party each month (within 7 days of
the end of the month).
h) The First Party shall provide the account registers/records, supporting documents, and all other
information and cooperation to him Project Auditor appointed by the Second Party.
i) The First Party shall maintain similar accounts for its Operation & Maintenance Bank Account;
and present a summary account statement for this account to this account to its members and to
the Gram Sabha - 40 -
providing standard guidance for mitigation of potential minor environmental impacts. The completed
checklist would be submitted with the sub – project proposal to the District Project Management Unit
for
review prior to sub – project approval.
In the case of the sub – projects requiring an I.E.A., the DPMU would be responsible for ensuring
that it is conducted according to a generic TORs by a local consultant approved by the E.A.
Sub – projects requiring an EIA would be forwarded for review to the SPMUs Project Appraisal
Officer, who would request an estimate of the E.A. cost from the E.A. Based on a comparison of this cost
with the expected economic benefits of the sub – project, the Project Appraisal Officer would decide
whether the EIA would be undertaken, or whether the sub – project would be denied DPIP funding.
Environmental Capacity – Building and Awareness raising.
One of the principal tasks of the EA appointed by the SPMU would be to provide adequate
training to allow the CFs, DPMU and SPMU staff, and approved local environmental consultants to fulfill
their environmental responsibilities. To meet this goal, the EA would prepare four training courses as
follows:
• Environmental Awareness – raising or DPIP Beneficiaries;
• Basic Environmental Screening an I Mitigation for Community Facilitators;
• Environmental Screening and Mitigation for DPMU and SPMU Staff;
• Limited Environmental Assessment for Environmental Consultants.
These courses would be prepared and delivers in close consultation with the SPMU Training
Officer and the State Capacity – building Cell.
Environmental Supervision, Monitoring and auditing:
(a) Environmental Supervision. Supervision of EMF implementation would be conducted at two
levels. At the district level, as part of their overall supervisory responsibilities, the DPMU staff would be
required to verify that CFs are correctly using the environmental screening and mitigation checklists and
guidelines, and that the environmental mitigat on measures included in the approved sub – project
proposal are implemented. The DPMUs would verify these matters for the same sample of sub –
projects
as they use for other supervisory requirements and the results would be included in their overall
supervision reports provided to the SPMU. These supervision reports would be submitted to the EA for
review of EMF implementation.
At the state level, the EA would conduct six – monthly supervision of EMF implementation
selecting a representative sample of ER, LEA and EIA category sub – projects. The EA would verify
whether the screening process was correctly applied, suitable mitigation measures specified, and the
measures correctly implemented. The supervision report, to be submitted to the State Project Director,
would include recommendation for improving either the EMF approach, or its implementation.
(b) Environmental Monitoring. It would be the representative of the EA to remain abreast of
changing environmental conditions and emerging environmental concerns in DPIP areas. This would not
be achieved provided by governmental and civil society sources. On the basis of this information, the EA
would recommend revisions to the EMF, and highlight local concerns to the DPMUs. Details of changing
conditions, emerging concerns, recommended revisions, and local issues would be included in the six –
monthly supervision reports provided to the State Project Director.
(c) Environmental Auditing. To provide an independent assessment of the effectiveness of the
design and implementation of the EMF, once every two years the State Project Director would contract
environmental audit of DPIP, to be conduced by independent civil society organization. The principal -
41 -
focus of the audit would be to assess the extent to which the EMF has lead to the implementation of
appropriate environmental mitigation measures in DPIP sub projects, and has promoted the
implementation of environmentally – beneficial sub – projects. A secondary goal of the audit would be
to
attempt an assessment of the extent to with the DPIP may have led to improvement or deterioration in
environmental quality.
Role of the Environmental Agency:
At the State level, the SPMU would appoint an EA to undertake a range of environmentally –
related activities. The mission of the EA would be to:

• Prevent environmental degradation as a result of either: (a) the cumulative effect of many
small DPIP investments that individually have a negligible impact; or (b) of individually
harmful sub – projects. This duty would be fulfilled without imposing an unnecessary
administrative burden on the DPIP;
• Promote the implementation of sub – projects that would be expected to lead to
improvements in local environmental quality; and
• Build capacity for environmental management at the local, district and state levels.
In order to achieve this mission, the EA would undertake sub principal tasks;
• The design and provision of training in environmental management.
• Supervision of the implementation of the Environmental Management Framework of DPIP.
• Monitoring of environmental conditions to ensure that the EMF remains responsive to
environmental concerns.
• Estimation of the cost of undertaking specific sub – project EIAs requested by the SPMU.
• Specific sub – project EIAs which may be requested by the SPMU, but undertaken under
separate contracts.
• The provision of ad hoc technical support on environmental issues, as requested by the
SPMU or DPMUs.
- 42 -
Annex 2
Attachment 8
Monitoring and Learning System
Objectives design, and expected results.
The project emphasized the need to build ownership of the monitoring and learning (M & L)
system among potential users, and proposes to accomplish this by involving project managers, NGO
implementers, and identified beneficiaries in the detailed design of the system to ensure that only
relevant data are collected and that the data are analysed and used by them. System design therefore is
simple, flexible and transparent, and would focus mainly on four result areas; (a) empowerment,
mobilization and the capacities of the rural poor; (b) CIG's access to productive assets, infrastructure and
services; (c) administrative and local governments capacities to meet the development needs of the
poor;
and (d) changes in vulnerability and poverty.
Description of the M&L system:
DPIP would not set targets for activities or for numbers of beneficiaries. Hence these would not be
the basis for monitoring its progress. Instead, would focus on project outcomes and results as perceived
by the target communities, including their perceptions of self – development. The M&L system would
monitor the project's progress in items of:
• Inputs delivered timeliness effectiveness and efficiency;
• Delivery system responsiveness to beneficiary needs;
• Information used for project learning;
• Beneficiaries empowerment and capacity development.
Given the objectives and expected results of the project, a four – component M&L system is
envisaged. These components are:
• Performance tracking;
• Process monitoring;
• Development audit;
• Impact evaluation.
Performance tracking would monitor progress in the requirement and training of staff, formation of
groups, sub – projects initiated and completed, financial flows, and benefits accrued. This component
would be linked to the information and technology of the financial management system required by the
World Bank.
Process monitoring would focus on the critical aspects of project learning such as CIGs skills in group
activities, decision – making, and important events in CIGs life. Examples of information generated at
different levels are given in the next section.
Development audit would contribute to increasing transparency, accountability and efficiency of the
project. It is a tool to access the effects of the project from the perspective of different stakeholders.
Impact evaluation would establish the net effects of the project on poverty reduction and the capacities
of
the poor. It would assess the changes in poverty levels, changes in capacities to utilize recourses and
exploit opportunities; and changes in poverty causing factors such as debt, ill–health and addictions.
These results would be relevant for subsequent phases of DPIP, and for designing other similar projects.
- 43 -
M & L components and indicators:
Component 1: Performance Tracking.

Performance tracking would use mainly quantitative indicators to access progress in the physical,
financial, and capacity development aspects of the project. These indicators would include, for example,
CFs and other project staff appointed and trained, number of CIGs formed, participation of the poor and
vulnerable groups in the CIGs number of sub - projects approved and completed, utilization of funds,
benefits accrued, etc. It would also track some of the quality aspects of the project such as delays in
appraisal and approval of sub – projects; time and cost over – runs; CIGs becoming dysfunctional, and
changes changes in perceptions of poverty and vulnerability in the project villages. Using these
indicators
project implementations would assess whether project inputs are being used efficiently, reaching the
intended target groups, and helping the CIGs to develop their capacities.
Component 2: Process Monitoring
Process Monitoring would be undertaken to help those involved in the project to understand how
inputs get converted into outputs, what issues are critical in that conversion process, and what action is
necessary to increase effectiveness. This component would monitor issues such as project sensitivities to
the need of the poor; intimidation or capturing of benefits by elite groups; internal and external
functioning
of CIGs and VDAs. Another purpose of process monitoring would be to identify good practices to
emulate
elsewhere in the project.
Process monitoring is especially important in DPIP because the project does not have
predetermined targets. It does however assume that certain procedures would take place, which would
help to achieve project goals. The project's success hinges on how well these assumptions hold. Key
process-related assumptions are:
• The target communities have information about and access to investment funds.
• CIGs would effectively and inclusively manage group dynamics and operations.
• PRIs and district administrations do not fee alienated by CIG initiatives.
• DPMUs would respond quickly and objectively to sub – project proposals.
• Service and other input providers would respond adequately to CIG needs.
If these assumptions did not well, DPIP would not achieve its intended outcomes. Performance
tracking could highlight process issues but would not provide adequate explanations or identify
mediating
factors that affect performance. Such realities are best assessed through a combination of conventional
and participatory techniques and learning strategies. Process monitoring would therefore consist of
three
approaches to data collection and use:
Group self – assessment in which CIGs and VDAs would use learning tools access their own
organizational and capacity development. Each CIG or VDA would periodically undertake an self –
assessment of the goals it set for itself and measure progress using indicators it selects. Self –
assessments would track levels of satisfaction/dissatisfaction of the groups, CIGs' capacities to manage
local activities, to solve problems, to mobilize sources and take responsibility. In order for the group self
–
assessments to be useful and taken seriously by CIG members, the CIGs must be empowered to take
decisions on the basis of their collective analysis. They may also need to be effectively linked to a higher
– level decision – making body that would respond quickly and effectively when required.
Peer Reviews would be used for cross – group learning. These would involve experience sharing and
learning from groups with similar interests, e.g., CIGs formed around the same activity, VDAs addressing
similar issues, DPMUs managing particular project components. Peer reviews would focus on a limited
number of activities or projects. Because the emphasis is on constructive lessons, topics would normally
be those with which at least one group is having positive experiences. It is anticipated that the outcomes
- 44 -
of these reviews would feed back into the overall project monitoring data/information base in a small
report form.
Focused – studies would be needed from time to time to understand certain process issues in a more
rigorous and systematic way. Methodologies for these studies could range from rapid assessments to
more conventional analytical approaches. Identification of the issues or the trigger for such studies
would
come from a variety of sources. Some would emerge from the tracking and monitoring components;
others would emerge in response to changes in the projects macro – environment. Any group of
stakeholders would be able to put forth requests for a focused – study to the concerned DPMU or the
SPMU. It is anticipated t hat about 20 – 25 such studies would be carried out during the life of the
project.
Each report would be made publicly abatable, and an executive summary circulated and kept at all
DPMUs and the SPMU.
Component 3: Development Audit.
In many respect development audit is very similar to process monitoring but it differs in three
important ways. First, it can be undertaken by an independent agency, giving an opportunity to project
implementers to stand back and review the project from different perspectives – those of non-
beneficiaries, of opinion leaders, and other stakeholders. Sectional, it can take place less frequently than
other process monitoring activities say, once in two year. Third, it would draw information from a wide
range of stakeholders, including those not directly involved in the project. Development audit would be
a
powerful tool to demonstrate public value and accountability of the project. Experimentation in
Rajasthan
would accountability, and an experiment scheduled as a part of the Madhya Pradesh DPIP.
Development audit is currently conceived as a series of steps that would culminate in scored
assessment of project effectiveness in the broader social, economic and political context of DPIP.
Development audit activities would being in Rajasthan in second yea of the project. As present it is
anticipated that development audit would assist those involved in the project to:
• Verify sub – project activities, their costs and timeless;
• Assess whether project benefits have reached poor and vulnerable groups;
• Assess whether CIGs and VDAs are empowering the poor and vulnerable;
• Analysis whether the selection of sub – projects, use of project resources, and decision –
making in the project are transparent and inclusive;
• Assess whether different stakeholders have understood and accepted the project's
objectives and strategy.
Component 4: Impact Evaluation
The central objective of the impact evaluation would be to establish the net contribution of the
project to poverty reduction and capacity building among the poor. Measuring impact would involve
comparing qualitative and quantitative outcome, "before and "after" the project, and between the
"project"
and "control" areas. Since these outcomes depend on a number of factors, many related but some
unrelated to the project, an effective impact evaluation would try to estimate the net effect after
controlling
for the non – project factors to the extent possible. It is accepted that attribution of causality would be
difficult. This would involve not only acknowledgement of possibility unacceptable assumptions, but also
a rigorous methodology and level of analysis which is unlikely to be cost – effective for DPIP. However,
the simple quantitative and qualitative exercise using con parative analysis in project and control areas
could provide extremely useful feedback on project impact.
The changes in poverty and poverty – causing factors would be assessed through indicators such
as the increase of the target groups, in land yields, in access to water, health and education facilities,
and
in skills and organizing capacity. The project impact would also be measured in terms of increased and
strengthened social capital of vulnerable groups in the project villages. The indicators of social capital -
45 -
include strength of formal and informal village networks, capacity of members to form new groups,
member’s knowledge and participation in existing government programs, and the responsiveness of
PRIs
and government administration to the needs of the poor.
Recognizing that this project expects different outcomes at the village, household and sub –
project levels, different sets of indicators have been proposed at each level. Baseline information on
these outcomes would be collected mainly through household surveys, supplemented by other data
sources such as census and village records, and using other data gathering techniques such as social
mapping and participatory learning techniques. An external agency would be appointed to undertake
the
baseline survey in a sample of project and control villages before project start up; and the end line
survey
would similarly be contracted out to an independent agency.
M & L Responsibilities, Periodicity and Use of Information

Element of
M&L
Mechanism/Deli
verable
Periodicity Responsibi
lity
From/to Use
Performance
Tracking
(a) Performance
Reporting
from
(b) Monthly
Performance
Reports
(c) Progress
Reports
(d) Physical &
Financial
Reports
(a) Monthly
(b) Monthly
(c) Quarter
ly
(d) Quarter
ly
(a) CIG/EF
(b) DPMU
(c) DPMU
(d) SPMU
(a) CF/DPMU
(b) DPMU /
SPMU
(c) DPMU /
SPMU
(d) SPMU /
World
Bank
(a) - -(C)
1. tracking
2. issue
identificat
ion
3. Accounti
ng
Process
Monitoring (i)
Group self-
Assessments
(a) Internal
discussion
(b) GSA
Summaries
(a) six
monthly
(b) Six
monthly
(a) CIG/CF
CF/NGO/
DPMU
(c) CF NGO
DPMU
(a) n.a.
n.a.
n.a.
(b) CF/DPMU
NGO/DPMU
DPMU/SPMU
(a) Group
learning,
NGO / Unit
learning
Project
learning
Project
learning
Project
learning.
(ii) Peer
Reviews
(a) Peer Review
Summary
Reports
(a) Six
monthly
CIG/CF
CF/NGO
NGOs/proje
ct partners
DPMU
CIG/CIG
CFs/CFs
NGO/NGO
DPMU/DPMU
1. Tracking
2. group/uni
t learning
3. project
learning
(iii) Focused
Studies
(a) Study Report
(b) Executive
Summary
(c) Synopsis for
news Bulletin
(a) As
needed
(b) and (c)
based on
(a)
(a) - (c)
Consultant /
commissioni
ng group
(a)
Consultant/
Commissionin
g group
(b) DPMU /
SPMU
DPMUs
/Training
agencies
(c) DPMU /
SPMU
(a) - (c)
1. tracking
2. group /
unit learning
3. project
learning
- 46 -
Development
Audit
DA Reports Year 2
Year 4
SPMU/DA
Consultant
DA
Consultant
/SPMU
1. tracking
2. group /
unit learning
3. project
learning
Impact
Assessment
(a) Baseline
Study
(b) Impact Study
Project
startup
project end
(a) and (b)
SPMU/
Organizatio
(a) and (b)
Independent
Organizations
/ SPMU
(a) And (b)
project
learning.
Institutional Arrangements for M & L in the Project
Subject Required Activity Capacity
Development
Needed
Responsibility
Performance
Tracking
(a) develop
performance
reporting form
(b) develop
computerized
system to manage
PRIFs
(c) use of PRIFs
(a) none
(b) none
(c) Train CFs in
use of CIFs
(a) SPMU,
Independent
Agency
(b) SPMU
Independent
Agency
Computer/MIS
specialist
Process Monitoring
(i) Group Self
Assessment
(a) develop GSA
principles/guideline
(b) use GSA (CIG,
VDA, SPMU)
(a) develop project
staff understanding
of this activity
(b) train groups in
self analysis
approach,
techniques,
outcomes
(a) Independent
Agency, DPMUs,
CFs/NGOs
(b) Independent
Agency, DPMUs,
training terms,
NGOs
(ii) Peer Review (a) develop PR
principles/guideline
s
(b) use PR
(a) develop project
staff understanding
of this activity
(b) train groups,
NGOs project, staff
in peer review
approach,
techniques,
outcomes.
(a) Independent
Agency, DPMUs,
CFs / NGOs
(b) Independent
Agency, DPMUs,
training terms,
NGOs
(iii) Focused
studies
(a) develop
guidelines for
subject selection,
minimum
standards /
content, consultant
selection criteria
(b) carry out
studies and
disseminate
findings
(a) none
(b) possibility-
methodology or
contents
workshops,
(a) SPMU
(b) Independent
agencies, DPMUs,
SPMU - 47 -
Development Audit (a) undertake DA
(b) use DA
(a) build
understanding of
all project
stakeholders
(b) DPMU, CF,
NGO
(a) Independent
Agency
(b) Independent
agencies
DPMU, SPMU
Impact
Assessment
(a) Undertake
Baseline & Impact
(endline) surveys.
(a) none (a) Independent
Agency.
- 48 -
Annex 2
Attachment 9
Gender Strategy
The Situation of Women in Rajasthan
Rajasthan is acknowledged as a state where women's status is particularly low. It has a feudal
culture and patriarchy is institutionalized. Power and land ownership have remained largely vested in
men, and patriarchyhas also been enforced through institutions such as Purdah (selection of women),
child marriages, female infanticide, and sati. (Widow Immolation). An alarming trend is the steep decline
in the ratio of women to men in the state. In 1981, the sex ratio was 919 females to males, and in 1991
this figure was 913 females per 1000 males (compared with the all-India average of 932). The sex ratios
in the DPIP districts have decreased, with Churu showing a large decline from 954 in 1981 to 937 in
1991, and Jhalawar reaching the lowest level of 918 in 1991 from 926 in 1981. Educational attainment
among women in Rajasthan is extremely low – only 20.44 percent are literate, one of the lowest literacy
rates in the country. The literacy levels for rural women in all the DPIP districts is low, ranging from 9.29
percent in Jhalawar to 14.19 percent in the best district. These data indicate extreme exploitation and
subordination of women.
Since the 1970s the Government of Rajasthan has initiated a number of programs for women's
development including programs for women's health, education employment. The Women's
Development
Program was the first program in the state to make a conscious effort to empower women through
communication, information, education and awareness. Recognition of the need to increase the space
for
women in the public sphere also promoted legislation to give women 33 percent reservation in the
Panchayati Raj institutions all over India, including Rajasthan.
The importance of women's participation in PRIs has to be understood in the context of their
social subordination. While it is true that the traditional social and political structures continue to
subordinate women even after they are elected, the opportunity to participate in public space is itself a
great leap forward for women in Rajasthan. There are over 2000 women members of PRIs altogether in
the seven DPIP districts. Women Panchayat members would remain limited in their capacity to make or
enforce decisions until they become informed and aware, and can function confidently in a traditionally
male domain.
DPIP's Approach to Gender Equity
In Rajasthan, it is vitally important for women to have greater control over decisions regarding
expenditure, marriage and reproduction; opportunities to be effective in diverse roles, especially in PRIs;
and recognition of their rights to dignity and security. In this context, the approach of DPIP to meet the
economic needs of the poor within the strategic focus of capacity – building is appropriate and
conducive
to addressing the needs of women. Three elements are essential for successful gender intervention in
DPIP:
• Environmental-building to prepare the ground for gender action at both village and
district levels. Community Facilitators would involve existing women's groups to create
awareness and information about DPIP to address the needs of women. The message of
women's empowerment through poverty reduction and capacity building would be spread
through village-level meetings, workshops, fairs, etc.
• Capacity-building, consisting of gender sensitization of male and female staff; the use of
knowledge and tools to promote women's development and empowerment; and the
promotion of learning of self – development among women in the target communities.
• Women's Resource Centers to provide human and material support to women in the
project areas, and over time in other parts of the state, to ensure gender equity. The - 49 -
WRCs would support DPIP through training, research, and documentation and information
dissemination, to strengthen the delivery mechanisms for women, and enable them to
become active partners in the development process. A State Women's Resource Center
(SWRC) would be responsible for promoting and incorporating a gender perspective into
all DPIP activities. It would be autonomous unit, with an overall Coordinator and three
specialist coordinators for training, documentation and information dissemination, and
research. Autonomy would ensure the focus, flexibility and sensitivity to women issues.
The District Women's Resource Center (DWRC) would be created by the SWRC in all
seven project districts to ensure attention to gender in the day-to-day implementation of

the project.
Gender in Project Implementation:
Community Investment Funds
DPIPs design to support small, community-based initiatives is particularly appropriate to meet
women's needs. CFs would be trained to work with women to articulate their needs and priorities, a
number of which were identified during the social assessments, including drinking water, income-
generation, health, literacy, day care, and micro-enterprises. The following issues would be part of the
discussion in each CIG or VDA prior of the proposal of an activity as a sub – project.
• Are women's needs and potential being addressed through the proposed intervention?
• What benefits would flow to women from the intervention?
• What resources are being made available through the intervention? Would women have
access to them, and be likely to manage and control them?
• Are there likely burdens on women? If so, are they being compensated adequately and/or
mitigation measures worked out?
Gender Appraisal of Sub – Projects: These questions would underlie the criteria of gender appraisal
that would be part of the social appraisal format for sub – projects, to ensure that gender is considered
in
determining the viability of a sub – project and that women are part of the process of determining
trade-
offs and the selection to mitigation measures. Close monitoring of activities would also be undertaken to
identify requirements that were not apparent during sub – project appraisal.
Capacity – building:
The gender-related capacity-building strategy is detailed in the State Project Implementation Plan.
Some elements of the plan would serve as budget heads for the separate allocations of project funds to
women's development. At least 40 percent of the funds for capacity – building under DPIP would be
allocated for women's development, and expenditures monitored separately.
Project Management
At least 30 percent of the members of the DPIP Governing Council would be women (government
representatives and non-officials, counted separately). Women non-officials would representatives of
genuinely progressive women's empowerment efforts in the state, with demonstrated capacity for
women's advocacy. In addition, a Gender Advisory Committee would be set up at the state level to
guide,
monitor and evaluate the implementation of gender aspects in DPIP. Regular quarterly meetings of the
members of the committee would be held to ensure support to project activities. The committee would
give feedback to the SPMU and suggest actions on various issues emerging from the field. The decisions
of the Advisory Committee would be taken cognizance of during implementation.
Linkages with Other Government Programs: Trained human resources exist in other state programs,
such as WDP, Lok Jumbish, and Shiksha Karmi, that could be effectively used for environment-building -
50 -
and capacity-building in DPIP. DPIP would also extend to these workers the networks that are created
for
women staff at the grassroots level.

Monitoring and Learning. The M&L system would monitor the progress and evaluate the impact
of the project on women. The participatory nature of the M&L would ensure that appropriate indicators
for
impact, performance and process monitoring are developed in consultation with women in the target
communities and staff, although some have already been identified. Among the broad areas to be
tracked by performance monitoring are: the number of women's groups formed, the number of women
in
mixed CIGs, activities being selected and managed by women, and the benefits they are receiving. The
process monitoring would, among other things, assess the following: development and consolidation of
women CIGs; women's role in mixed CIGs; the effect of organizational development on their capacities
to
make decisions within groups as well as in the household and community. It would also assess the role
of
capacity – building, women's resource centers. Women in CIGs would be involved in assessing their
empowerment through self-assessments. The process of recording, analysis and reporting are
empowering mechanisms in themselves. The tools for group self-assessment that are part of the M&L
are intended to help beneficiaries track their own progress. Women's culture, literacy levels, and other
aspects would be taken into account in their design. For example, for illiterate woman the self-
assessments tools would be largely visual. The impact assessment would monitor, inter alia, the impact
of DPIP on women's incomes and livelihoods; linkages with markets; access to technology; skills; new
designs for crafts; understanding of gender issues among staff; and gender sensitivity in line
departments
at various levels, and within NGOs.

- 51 -
Annex 2
Attachment 10
Tribal Development Plan
A Tribal Development Plan as been prepared for the project and has been attached to the
Minutes of Negotiations. A brief overview is provided here.
Background
Rajasthan has a tribal population of 5.47 million people, amounting to 12.44 percent of its total
population. Tribal 1 provides information on the percentage of tribal people in the project districts and
blocks, and the year-wise phasing of coverage of the blocks. Twenty – four of the 42 project would being
implementation in the most difficult tribal blocks in each district, and cover additional blocks in
subsequent years. All project blocks would be covered during the project period, and it is proposed that
all tribal villages would participate in the project. In order to ensure that the impact of the project of
tribal
people is measurable, and to provide specific, reliable and up-to-date information on them, a Baseline
Survey would be carried out in all project districts once the Project becomes effective. This would
include
the tribal blocks and an appropriate sample of tribal villages and people.
The principal tribal groups are the Bhils, Sehariyas and Meenas. Poor tribals are largely
agriculture laborers and cultivators, and are involved in forest-related occupations. Only a very small
proportion of them are engaged in other occupations of the district such as mining. quarrying,
construction or services. They are generally found to be poorer then non – tribal groups. Their search for
livelihoods has pushed them out of main villages to the edges of settlements. The inaccessibility of tribal
hamlets denies them even the rudimentary infrastructure and services that exist in non – tribal areas.
The
Schedule Tribes have lower literacy levels than non – tribal people. According to the 1991 Census, the
average literacy rate was 38.55 percent for the whole state, but it was only 19.44 for the STs. While the
female literacy rate for the state was 20.44 percent, for ST females it was only 4.42 percent.
Project Approach
Because the needs of tribal people are manifold and the result of problems that have evolved over
time, improvements in their condition would need integrated interventions and sustained efforts over a
long period. The precise nature of interventions and the additional activities needed to rout specific or
deeply – entrenched problems would be determined when their needs are articulated during the social
mobilization phase of the DPIP project cycle, and expressed as demands through the sub – projects
proposed by Common Interest Groups. In addition to meeting immediate needs, the entitlements of STs
to common property lands and forest would be addressed together in DPIP, i.e. the overall
implementation strategy would be to improve STs incomes in the short-them through economic
solutions,
such as inputs and training to increase productivity, or micro – enterprises development, and enhance
their sustainable development by helping the tribal people address the underlying causes of their
problems, to identify and take actions necessary to remedy their situations, ensuring their entitlements
and that they gain control of their economic lives.
NGOs already working with tribal people would be involved in the project and assisted to enlarge
their ambit, to undertake community organization work and or provide other project related services.
Where necessary, capacity would be built by the project to encourage and equip NGOs to work
with tribal people. And they would be provided adequate resources for field operations in these, often
difficult, areas. The project would ensure high levels of effort in preparing viable sub project proposals
for
the tribal groups and villages, and make investment funds readily available through the CIFs. the DPMUs
- 52 -
would be the main project agencies responsible for ensuring adequate attention to tribal areas. They
would lilies with and mobilize, as required, other government agencies in the districts to provide
support,
including officers and line department staff working in/near the tribal areas. Where necessary, the
capacities of these staff to work in tribal areas (physical capacity, sensitivity, motivation, and skills)
would
also be enhanced through the project. This would, in turn, strengthen existing programs. The state
project management unit would be responsible for overall project planning and supervision, including
ensuring that monitoring data are collected and utilized to keep project implementation on track to
meet
its development objectives in tribal areas.
Table 1: Coverage Of Tribal Populations In The Project Blocks
Project Year` I II III IV V

District (Percent
Tribal of Total
Popu.)
Clusters/Blocks To Be Covered (Percent Tribal Of Total Population)
Rajsamand
(12.8)
First Cluster Of
Kumbalagarh
& Khamnor
(20.0)
II and III
Cluster of
Yerar I Blocks
IV and V Cluster of
Year I Block and
Bhim (1.3)
Deogarh
(4.9)
Railmagra
(8.4)
Rajsamand
(14.4)
Amet (8.7)
Baran (23.3) First Cluster Of
Shahbad
(34.7)
Kishanganj
(34.2)
II and III
Cluster of
Yerar I Blocks
IV and V Cluster of
Year I Block and
chhabra(22.5)
Chhipabarod
(17.9)
Atru (18.5)
Baran (18.6)
Anta(18.4)
Churu (0.5) First Cluster Of
Churu (1.1)
Ratangarh
(4.0)
II and III
Cluster of
Yerar I Blocks
IV and V Cluster of
Year I Block and
sujangarh(0.1)
Deogarh
(0.02)
Sardarshahr(
0.3)
Ratanagar
(0.5)
Rajagarh
(0.9)
Dausa (28.8) First Cluster Of
Dausa (30.9)
And Lalsot
(40.4)
II and III
clusters of
year I blocks
IV and V cluster
of year I block
Mahua
925.8)
Sikari (24.6)
Baswa (20.6)
Dholpur (5.5) First Cluster Of
Bari (9.9) And
Baseri (14.7)
II and III
cluster of
year I block
IV and V cluster of
year I block
Dholpur Rajakhera
(0.02)
Jhalawar (13.4) First Cluster Of
Manoharthana
(28.0) And Dag
(0.4)
II and III
clusters of
year I blocks
IV and V clusters
of year I Blocks
and pirava (6.7)
Bakani (13.9)
Jhalarapatan
(16.2)
Khanpur
(16.0)
Tonk (14.5) First Clusters
Of
Todaraisingh
(8.1) And
Uniara (28.2)
II and III
clusters of
year I blocks
IV and V clusters
of year I Blocks
and Deoli (22.1)
Niwai (17.9)
Tonk (10.3)
Malpura (3.7)
NGOs already working with tribal people would be involved in the project and assisted to enlarge
Their ambit, to undertake community organization work and /or provide other project related
services, where necessary, capacity would be built by the project to encourage and equip NGOs to work
with tribal people, and they would be provided adequate resources for field operations in these, often
difficult, areas. The project would ensure high levels of effort in preparing viable sub project proposals
for
the tribal groups and villages, and make investment funds readily available through the CIFs. The
DPMUs would be the main project agencies responsible for ensuring adequate attention to tribal areas.
- 53 -
They would liaise with and mobilize, as required other government agencies in the districts to provide
support, including officers and line department staff working in/ near the tribal areas. Where necessary,
the capacities of these staff to work in tribal areas (physical capacity, sensitivity, motivation, skills) would
also be enhanced through the project. this would, in turen, strengthen existing programs, the SPMU
would be responsible for overall project planning and supervision, including ensuring that monitoring
data
are collected and utilized to keep project implementation on track to meet its development objectives in
tribal areas.
Implementation Arrangements, Organization and Management
Agency Mambers Functions
STATE Level Empowered
Committee
• Representative Of Tribal Welfare
Department As Member
• Providing Necessary
Guidance And Support To
The Project In The Tribal
Areas
Sub committee on tribal
area plan, SPMU
• To be chaired by special secretary
(DPIP), and including
representative of the tribal welfare
department, and the project
districts, NGOs, banks and key
line departments active in tribal
areas.
• Approval of the tribal area
plan for the year
• Coordination with the line
departments and banking
institutions
• Review and advise
SPD and DPMs and
training and community
development officers at
state and district levels
• SPD and TCDO at state level
• DPMs and TCDOs at district level
• Day to day implementation
(budgeting, releases, and
implementation)
• Monitoring & reporting to
SPMU
• Coordination with other
tribal area activities and
line departments
• Training of personnel and
tribal participants
(institutions and
individuals)
Lead NGOs • NGOs who have been working

among tribals for more than 5 year
period
• Other NGOs willing to work in
tribal areas.
• planning
• implementation
• training of tribals
• technical/sectoral
assistance
• marketing
• evaluation
NGOs tribal area
Coordinator
• One per NGO
• Post graduate in social
anthropology or rural sociology
• To be trained at an appropriate
institution .
• Assisting the CFs in
motivation of tribals
• Assisting the CFs in
organizing CIGs and VDAs
• Facilitating
implementation of sub-
project activities
• Coordination with ongoing
govt. activities to avoid
overlap. - 54 -
Impact Management
Problem Mitigation Actions Implementing Agency
Lack Of Knowledge Of Tribal
Culture, Etc. Among Project
Functionaries
• Motivation
• Training
• Exchange Visits/Tours
• Orientation In
Participatory
• Planning ,
Implementation And
Monitoring
• State Capacity Building Cell
(SCBC)
• District Capacity Building
Support Unit (DCBSU)
• NGOS
LAVK Of Income During
Implementation Period
• Building Wage
Component Within Work
Being Executed By
CIG/VDA/GP
• Taking Up Other
Economic Activities
During Gestation Period
• NGO With DPMU and other line
Departments
• Gram Panchayats
Lack Of Awareness Of
Markets, Weights And
Measures, Terminology, And
Technical Activities.
• Orientation Training
• Translation Into Local
Language And Issue Of
Information Pamphlets
• DPMU and NGO With
Assistance From SCBC/DCBSU
And Technical
Departments/Experts As
Needed.
Lack Of Skills For Taking Up
Off Farm Activities
• Market Information
• Orientation About
Avenues Of Self
Employment
• Training By Attachment
With On Going Project
And Institutions To
Asquire Skills
• Financial Support And
Provision Of Tools.
• DCBSU With Reputed Training
Institutions
• Leading Or Established Self
Entrepreneurs
Lack Of Knowledge Of Legal
Provisions
• Orientation Onlegal
Matters Such As
• Land Tenure/Tenancy
• Money Lenders
Regulation
• Pricing Policy For NTFP

And Agricultural Produce
• Panchayat Raj act as
extended TO Scheduled
Areas
• Constitutional Safe
Guards And Rule Of
Reservation
• Forest Acts And JFM
• DCBSU With Additional District
Collector And Concerned Line
Officers
• NGO
Low Human Development
Indices, E.G. Low Literacy,
High IMR, High Incidence Of
Diseases (Water Borne,
• Health, Immunization
• Nutrition
• Safe Drinking Water
• Sanitation
• NGO And Line Department
• DCBSU - 55 -
Malaria, T.B., Etc.),
Alcoholism, Etc.
• Primary Education
• Social And Legal
Education
low productivity from land and
forest, leading to problems of
food security
• awareness creation
through demonstrations
high yielding crops and
crops suitable to the area
• soil conservation and
land development
• protection and re-
generation of forests
• Modern agriculture
practices, suitable
cropping patterns, etc.
• Department of agriculture, soil
conservation, horticulture,
forests, etc.
lack of women's
empowerment and low
participation
• awareness generation
• organization of CIGs
• training
• tours/ visits
• productive interventions
• market information
• health, nutrition,and
sanitation
• education
• NGOs
• DCBSU and district women's
resource centers
• relevant line department
low returns to production
(forest and agricultural)
• training in scientific
tapping/ collection of
NTFP
• value addition
• preservation techniques
• market information
(markets & prices)
• specialized NGO
• relevant line department
need for coordination between
different project to avoid
overlap and ensure

integration
• planning review and co-
ordination at DPMU and
DPCC levels
• DPM with district collector and
concerned line departments
need for coordination in
training
• coordinating all training
programs in tribal areas
• empowerment programs
• SCBC with DCBSUs
Monitoring and Evaluation
Objective Actions Implementing agency
Monitoring and evaluation of
all activities in tribal areas
• Quarterly progress
reports
• Six monthly and progress
reports
• Process monitoring
activities
• Development audits (year

2 and 4)
• Impact evaluation
• SPMU AND DPMU's
• NGOs and CFs with
beneficiaries and other
stakeholders
• Independent contracted
agencies
- 56 -
Annex 3 : estimated project costs
INDIA: Rajasthan district poverty initiatives project
Project Cost by Component
Local US $
million
Foreign US $
million
Total US $
million
capacity building
community investment funds
project management
total baseline cost
physical contingencies
price contingencies
14.20
89.99
5.64
109.83
0.13
2.16
1.30
9.85
0.50
11.65
0.07
0.85
15.50
99.84
6.14
121.48
0.20
3.11
Total Project Costs 112.22 12.57 124.79
Total Financing Required 112.22 12.57 124.79
Project Cost by Component
Local US $
million
Foreign US $
million
Total US $
million
Good and equipment
Services
Training and consultancls
Community investment funds
Unallocated
1.95
2.67
11.41
87.79
8.40
0.82
0.00
0.85
10.27
0.63
2.77
2.67
12.26
98.26
9.03
Total Project Costs 112.22 12.57 124.79
Total Financing Required 112.22 12.57 124.79

- 57 -
Annex 4
INDIA: RAJASTHAN DISTRICT POVERTY INITIATIVES PROJECT
Economic Assessment
Introduction
The project would invest in increasing the knowledge the knowledge and organization of poor,
and their access to public infrastructure, services and markets, covering at least 350,000 millions in
seven of the poorest districts of Rajasthan, this investment would significantly increase their levels of
economic activity, productivity and income, knowledge and organization of poor people, and their
access
to public infrastructure, services and markets, commonly called "intangible assets ", are crucial to
enhance of the economic productivity of individuals as well as enterprises. However, while their
importance is well recognized, the quantification of these assets is often difficult, and it is even more
difficult to give them an economic value. Given these problems, the following economic assessment
does
not compute an overall economic rare of return (IRR) for the project, but demonstrates. (a) the
likelihood
that the project would pass the overall benchmark of capital investment with an IRR of more than12
percent, and (b) that individual activities likely to be taken up under the project would be economically
viable.
Capacity Building and The Community Investment Funds:
final benefit from the capacity building component of the project, in terms of improved incomes
and living conditions of the poor, arise through several intermediate stages. chart 1 provides and
illustration of the economic input/output flows for selected project activities. The exact type and
composition of output cannot be be anticipated at this stage. Uncertainty about the outcome of the
capacity building component enters into the CIF component since sub project proposed for financing
under the CIFs are expected to arise as a result of capacity building in the form of CIG development and
CIG supporting activities. most of the CIF investments are expected to serve as 'enabling investments,
which would improve the conditions of the poor and would stimulate in a second third stage the
beneficiaries' own economic activities and productivity.
Despite these difficulties an investment decision would be supported by and economic analysis
through:
A comparative analysis: under otherwise comparable condition, the economic productivity of
people organized into groups would be compared with those not organized. all intermediate input and
output could be seen as a 'black box' . it would
not be necessary to quantify them since the incremental benefit of the project would be measured by
assessing the economic net vlue of production of groups, comparing them with the economic net value
of
production of a similar number of people not organized in groups: or
a least return analysis : this analysis would ask by how much the productivity of people would
need to be raised to make the investment viable) break even point). Reference would be made to the
total project investment individual or per CIG nd the incremental economic net return, which would be
necessary over a certain period of time to generate an IRR above 12 percent.
No comprehensive assessment of economic activities of CIGs has been undertaken in the project
areas and therefore no data are available for a comparative analysis. Given the limitation of quantitative
information the "least return analysis" was used as a rapid assessment method. This analysis is
supported by cost-benefit analyses of a limited number of typical small sub-project, which indicate the
considerable scope of viable investment opportunities under the CIF (see table 1) further example
analyses would be made available in the guidelines for sub-project appraisal prepared for the project. -
58 -
Economic assessment results: it is estimated that about 350,000 families would directly benefit
from membership in one or more CIGs supported by the project. Total project investment for CIGs is
estimated at about US $ 65.9 million or about US$188 per family. Assuming that benefit would start 2 to
3
years after group formation, an average annual raise in the economic net productivity per family of US$
25.3 would break even with an IRR of 12 percent. an average raise in family productivity of about two
dollars per month (equivalent to less than Rs. 100 per higher.
Samples of activities stipulated by the project show estimated economic IRRs from 14 percent
(village access road construction) to 48 percent (training of para-veterinary workers, see table 1 B 1).
These examples demonstrate a good potential for economically viable activities. Assessment of the
economic benefits of individual investment proposals under the CIF would be an on going process as
part of the sub-project appraisal mechanism. This would ensure that the overall project would be
economically viable as well.
- 59 -
Annex 6: Procurement and Disbursement Arrangements
Procurement
Procurement in the project would be carried out under the overall supervision and guidance of the
State Project Management Unit (SPMU). Its Actual management will be at the district level. The project
design is based on the concept of bottom-up planning, and most of the activities under the project
would
be decided by individual village communities.
Community Investment (US$ 102.56 million): The project would finance small sub – projects
proposed by Common Interest Groups, such as village approach or link roads, community halls,
watershed development, strengthening of health care centers, improving animal health care and breed
up gradation facilities, drains, minor irrigation works, wells, drinking water arrangements etc. The sub –
projects would also include the hiring of services or training of community members, wherever these
would be managed by the communities themselves. NGOs assistance would be taken for preparation of
sub – projects. Procurement would follow National Competitive Bidding (NCB) on direct contracting,
quotation or community participation procedures following Bank Procurement Guidelines (January

1995,
Revised January and August 1996, September 1997 and January 1999) as follows:
NCB: While it is unlikely that individual contracts to be financed under the CIF would cost more
than US$ 30,000 equivalent, contracts for works under the CIF costing US$ 30,000 or more per contract
would be awarded on the basis of NCB procedures acceptable to IDA.
Direct Contracting/Shopping/Community Participation: Procurement of works under the CIF
estimated to cost less than the equivalent of US$30,000 per contract would be done through: (a) direct
contracting with registered NGOs or local community organizations such as Common Interest Groups;
(b)
lump – sum fixed-price/unit rate contracts with qualified contractors awarded on the basis of quotations
obtained from at least 3 qualified domestic contractors in response to a written invitation; or (c)
community participation. These works would not be suitable for competitive bidding due to the small
amounts entailed their scattered nature, and the remoteness of potential locations.
Goods, Equipment, Furniture and Supplies (US$ 2.8 million): Goods would be procured
following Bank, Procurement Guidelines (January 1995, Revised January and August 1996, September
1997 and January 1999) as follows:
NCB: Goods estimated to cost less than the equivalent of US$ 20,000 per contract (e.g., furniture,
computers and peripherals, office equipment, training equipment etc.) up to an aggregate value of
US$0.6 million would be procured following NCB procedures acceptable to IDA.
National Shopping: Goods (expect vehicles) estimated to cost less than US$ 30,000 per contract
(e.g., small items of equipment, urgent requirements of computers, audio – visual equipment, furniture
etc.) would be procured by the various implementing agencies in small lost using National Shopping
procedures in accordance with paragraphs 3.5 and 3.6 of the Guidelines, up to an aggregate amount of
US$ 1.5 million. Rate contracts of the Directorate General of Supplies and Disposals (DGS&D) would be
acceptable as substitute for National Shopping.

Direct contracting : goods estimated to cost less then US$ 10,000 equivalent per contract Up to
an aggregate of US $0.7 million(e.g., books, periodicals, extension and publicity materials, software,
proprietary equipment and spares, etc.) would be procured using direct contraction procedures in
accordance with paragraph 3.7 of the guidelines. petty items costing US $ 500 equivalent or less subject
to an aggregate amount of US $ 100,00 would be procured following paragraph 3.7 of guidelines.
- 60 -
Vehicles (US $ 0.015 million): the requirement of vehicles (motorcycles)is small and thus
would shopping procedure of DG & D rate contracts.
Training and Consultancies (US$ 16.8 million): technical assistance and consultancy
services, including the hiring of NGO services, community facilitators, quality supervisors for community
works, consultancies and studies would be contracted on terms and conditions which are in accordance
with IDA guidelines for the use of consultants (January 1997 and revised in September 1997 and
January 1999). technical assistance and constancy services would be procured using QCGS
procedures, for contracts whit consulting firms/institutions valued below US$100,00 equivalent per
contract, procurement would follow QCBS or other methods mentioned in the guideline , depending
upon
the appropriateness of the procedures relevant to the requirements, for proposals and conditions of
contract would be used for all contracts.
Review by The Bank of Procurement Decisions :(Table B)
Procurement planning
Prior to the issuance of any invitations to per qualify for bidding or to bid for contracts, the
proposed procurement plan for the project shall be furnished to the bank for its review and approval, in
accordance with the provisions of paragraph 1 of appendix 1 to the guidelines. Procurement of all goods
and work shall be undertaken in accordance with the procurement plan which shall have been approved
by the bank and with the provisions of said paragraph 1. annual procurement plans would be reviewed
by
IDA/bank.
Prior Review of Contracts
Civil works and goods contracts. all packages for civil works exceeding the equivalent of
US$200,00 and exceeding the equivalent of US$100,00and the first two contracts for goods and works
above US$30,000 would be fully documented and subject to prior review by the bank as per the
procedures set forth in paragraphs 2 and 3 appendix 1 to the bank guidelines.
consultancy contracts, prior review procedures would be as follows :
(a) with respect to each contract for employment of consulting firms/institutions estimated to cost the
equivalent of US $100,000 or more, the procedures set front in paragraphs 1,2(other than the third
sub paragraph of paragraphs 2(a) and 5 of appendix 1 to the Consultant guidelines shall apply;
(b) with respect to each contract for employment of consulting firms/ institutions estimated to cost less
than the equivalent of US$100,000, the procedures set forth in paragraphs 1,2 (other than the third
sub paragraph of paragraph 2(a) and 5 of appendix 1 to the consultant guidelines shall apply; and
(c) With respect to each contract for the employment of individual consultant to cost the equivalent of
US$50,000 or more, the qualifications, experience, terms of reference, and terms of employment of
the consultant shall be furnished to the association for its prior review and approval.
Post Review
Work and goods: the contracts below the prior review threshold for works and goods shall be
subject to post review as per the procedure set forth in paragraph 4 of appendix 1 of the bank
guidelines;
and
Technical assistance, studies and training: contracts for the employment of consulting firms
estimated to cost less than US$100,00 and contracts for the employment of individuals estimated to
cost
less than US$50,000 shall be subject to post review provided that the generic TORs and shortlist for
critical assignments have been cleared with the bank.
Procurement Information:
Procurement information would be collected and recorded as follows: - 61 -
(a) Prompt reporting of contract award information by SPMU;
(b) Comprehensive semi annual reports by SPMU indicating :
(i) Revised cost estimates for individual contracts and the total cost;
(ii) Revised timings of procurement actions , including advertising, bidding, contract award
,and completion time for individual contracts ; and
(iii) Compliance with aggregate limits on the specified methods of procurement ; and
(c) Completion report by the borrower within three months of the credit closing date.
Procurement Schedule and Proposed Procurement Arrangement:
The proposal packages and the procurement schedules for goods/equipment for capacity-building
and project management have been provided by SPM. the project's capacity- building plan is presented
as an summarized in table A. figures in parentheses are the respective amounts to be financed through
the IDA credit.

Procurement Methods (Table A)
Table A: Project Costs by Procurement Arrangement ( In US$ Thousand)
Expenditure Category Procurement Method
ICB NCB OTHER NBF TOTAL
A. Investment Costs
Community Investment
funds
10,250
(10,250)
92,310
(69,760)
22,550 102,560
Goods, Equipment and
Vehicles
600
(600)
1,500
(1,000)
500 2,100
Training 13,550
(13,550)
0 13,550
Consultant Services And
Studies
2,900
(2,900)
0 2,900
Sub Total Investment
Costs
121,100
B. Incremental Operating
costs
Salaries and Allowances 2,050
(1,300)
750 2,050
Office Operating Costs 1,020
(790)
230 1,020
Office Rental Charges 100
(60)
40 100
Vehicle Hiring 520 (330) 190 520
Subtotal of Operating
Costs
3,690
(2,480)
1,210 3,690
Total 10,800
(10,800)
113,500
(89,690)
24,310 124,790.
(100,478)
Note : other methods include force account, national shopping, direct contracting, and community
participation for CIF, goods, equipment and vehicles, and incremental operating costs; and QCBC for
training and consultancies and studies.
NBF = Not bank-financed (includes both state government and beneficiary contributions) bank
disbursements in parentheses.
- 62 -
Prior Review Thresholds (Table B)
Table B: thresholds for procurement methods and prior review
Expenditure Category Contract
Value
Threshold
(US$
Thousands)
Procurement Method Contracts Subject to Prior
Review
(US$ millions )
1. Works > 30 NBC Prior award review : first 2
contracts and all above US
$200,000 post award review.
Goods & Equipment >30 and<200
>10and <30
<10
NBC
National Shopping
Direct Contracting
Prior award review: first 2
contracts
post award review
post award review
Services
Consultants, NGOs,
Training by firms
Individual Consultants
>100
<100
>50
<50
QCBS
CQ, Sole Source or any
other Method as per
guidelines
QCBS
CQ, sole source
Prior review
post award review, except
TOR of generic activities,
and the shortlist for critical
assignments
prior award review :
post award review
Community
Investments
>30
<30
NCB
Quotations/
Direct
Contracting/Community
participation
Prior award review: first 2
contracts and all above
US$100,000
post award review
5. Vehicles <100 National Shopping,
DGS&D rate Contracts
post award review
Total Value of Contracts Subject to Prior Review:
Overall Procurement Risk Assessment
Average
Frequency of Procurement Supervision to Sions Proposed: one every 4 months (includes special
procurement supervision for post- review /units)
Notes:
NCB: national competitive bidding
SW: small works under force account/ quotation
NSP: national shopping procedures requiring least three price quotations
QCBS: quality and cost based selection
CQ: consultant’s qualifications
Thresholds Generally Differ by Country as Project, Consult OD 11-04"Review of Procurement
Documentation" and Contact the Regional Document Adviser for Guidance.

Disbursement
Allocation of Credit Proceeds (Table C)
Table C: Allocation of Credit Proceeds
Expenditure Category Amount in US$ million Financing Percentage
Community Investments 75.50 85% of Expenditure - 63 -
Goods and Equipment 1.60 80% of Goods procured locally;
100% of ex-factory costs;
100% of foreign expenditure
Training and
Consultancies
11.90 100% of Expenditure
Incremental Operating
Cost
2.48 80% of Expenditure in year 1 & 2 ;
60% of expenditure in year 3& 4;
40% of expenditure there after.
Unallocated Funds 9.00
Total 100.48
Use of Statements of Expenditures (SOEs):
When the existing disbursement procedures are used, reimbursement of expenditures with full
documentation; and (c) reimbursement of expenditures against statements of expenditure (SOEs). IDA
would disburse against SOEs for the following expenditures: (a) community investment fund sub
projects
not exceeding US$ 100,000 equivalent; (b) contracts for goods and Equipment not exceeding US$
100,000 equivalent ;(c) contracts for consultants services not exceeding US$ 100,000 in the case of
consulting firms, and not exceeding US $ 50,000 in the case of individual consultants; (d) training
expenditure; and (e) incremental operating costs.
Special Account:
A special account would be maintained in the reserve bank India; and would be operated by the
department of economic affairs (DEA) of government of India (GOI). The special account would be
operated in accordance with the bank’s operational policies:
when existing disbursement procedures are used , the authorized allocation of the special account
would
be US$7.0 million which represents about 4 months of estimated disbursements form the IDA credit.
the
authorized allocation would be US$3.5 , million unit the aggregate disbursement form the IDA credit
reach the equivalent of SDR 10.5 million. The special account would be replenished monthly or when 20
percent to the advance to the special account has been utilized whichever occurs first.
When disbursements are based on PMRs, the authorized allocation of the special account would be
US$ 15.0 million. This represents 6 months of peak expenditure. the special account would be
replenished quarterly and be based on the next 6 months funds forecast .
the disbursement would initially be made according to the traditional method (reimbursement with full
documentation and against statements of expenditure and would be converted to PMR based
disbursement after the financial management system has been demonstrated to be operating
satisfactorily. the target date for this conversions is July 1, 2001.
Financial Management
Current Financial Management System
The executing agency for the project is the department of rural development, government of
Rajasthan. The department follows the government accounting system, the main focus of which is on
book-keeping and transactional control over expenditures. There is no concept of financial

management
information being used for decision making, and hence there is very limited focus on meeting project
management information needs. Project financial statements indicating sources and uses of funds
(including information on project expenditures by components, types of expenditure, etc.) are not
prepared for the projects executed by the department. There is no effective funds management in place
in the absence of a regular system of forecasting of expenditure and monitoring. Audit of expenditure -
64 -
statements carried out by the state accountant general (audit) focuses only on authentication of
individual
transactions, verification of compliance with government procedures, and certification of

reimbursement
claims made to the bank. the financial system is operated manually.
Specific Areas to be strengthened, the following aspects of the current financial management
system would be addressed to ensure that a satisfactory financial management system, commensurate
with the size and scope of the project, is established:
Satisfactory staffing and training, financial functions would be staffed by suitably qualified
accounts professionals. the entire financial staff would be sensitized to the importance of financial
management for effective project management. Since a significant part of the accounting under the
project is to be done at the village level. it would be very important o impart accounting training to the
village accountants.
Analysis of financial information and its use as a decision making tool. financial reports which
provide timely, relevant and accurate information on the financial performance of the project would be
prepared. the accounting system would ensure classification and compilation/ analysis of accounting
data
in a manner that provides useful and timely information for project mentoring and decision- making.
Transparency of project operations and establishment of clear financial policies and procedures.
All stakeholders would be provided with clear, simple, user friendly, and consistent financial information
about the project's performance financial status.
Satisfactory audit arrangement: Including timely submission of audit reports and certification of
project financial statements adopting acceptable auditing standards would be ensured.
Linking of physical progress with financial progress would be done.
A simple and effective monitoring mechanism would be introduced to ensure effective monitoring
of a large number of widely dispersed entities.
a smooth funds flow system would be adopted for the project to ensure smooth flows of funds to
common interest groups ( CIGs) at the operating level, as these groups may be highly vulnerable to
periodic funds shortages. The system of funds flow management would also ensure that control over
the
money actually passes to the CIGs, but that the necessary controls are built in to check
misappropriation.
The SPMU is developing a comprehensive computerized financial management system which would
address these issues.
Proposed Financial Management System
The proposed project financial management system has been documented in a
'Financial management manual'. This manual would be a part of the borrower's project implementation
plan on financial management; the financial management manual would also serve as reference
document for all project staff. The financial management would be periodically updated based on
implementation experience. The significant changes in the manual would be made in consultation with
the bank. The manual includes the following aspects of financial management:
Budgeting and flow of funds;
Accounting system (including chart of account, formats of books, accounting and financial procedures:
Financial reporting (including formats of reports, and linkages with chart of accounts): staffing and
training
aspects;
Auditing arrangements including terms of reference;
Procurement and contract administration monitoring system;
Financial and accounting policies; and
Service standards (benchmarks) for various accounting and financial activities.
- 65 -
Budgeting and Flow of Funds
The funds flow process is summarized below:
The government of India (GOI) would pass funds on to the government of Rajasthan (GOR) in
accordance with the prevailing system of center to state fund transfers applied to bank transfers applied
to bank assisted state sector projects.
the state government would pass on the funds to an interest bearing public (PD) account established for
the project at the state level (SPMU), and from there the funds would be passed on to the project bank
accounts in the districts, based on the cash flow forecasts of the districts. Transfers from the state
government to the SPMU PD account, and from the SPMU PD account to the DPMU's bank accounts
would be on a quarterly basis. The DPMUs would retain funds for their own expenditures, and advance
funds for approved sub- projects to CIG's.
Few of Funds to CIGs: The process of funds flow to the CIGs would be as follows:
On receipt of a proposal for a sub-project from a CIG, the proposal would be technically and financially
appraised.
the proposal would be processed within 15 days and if it is approved, a sub project agreement would be
signed between the DPMU and the CIG for a 'fixed- price contract' for the sub-project, the agreement
would inter alia specify:(a) the total cost of the work;(b) work completion milestones; (c) payment
terms;
(d) beneficiary contributions (in cash, labor and /or material);and (e) the scheduling of beneficiary
contributions.
The release of installments would be worked out to ensure that the processing time taken at the DPMU
does not adversely affect the execution of the sub-project by the CIG. the schedule of payment would be
as follows:
On signing the agreement and fulfillment of initial (INCLUDING any beneficiary contributions to be
collected): 10 percent plus the amount agreed for the first milestone;
On completion of the first milestone; amount due to reach the second milestone;
On completion of second milestone; amount due to reach the third milestone minus 10 percent.
Thus, a buffer of 10 percent of the total cost of the sub- project would be with CIG to tide-over any
delays
in processing at the DPMU.
The basis for the release of all subsequent installments would be completion certifications for the
previous milestones. CIGs would provide completion certifications for each milestone (checked and
certified by appropriate persons appointed by the DPMU for this purpose), along with a request for the
next installment.
cash contributions from beneficiaries, if envisaged in the sub project agreement, would be deposited up
front into the project bank account of the CIGs, and would be a per condition for release of the first
installment. The beneficiary contributions would be accounted for as sources of funds for the respective
sub-project.
Service standards (benchmarks) have been developed to specifically monitor the turn around time for
funds transfer form DPMUs to CIG. Regular feedback would be obtained from CIGs on whether there are
any difficulties in releases of funds.
Accounting and Internal Controls
The overall framework for the system is give below:
the financial management system would cover al project related transactions, i.e., all sources of funds
(GOR, beneficiaries, and bank )would be accounted for and reflected in the project financial
statements ;
and, similarly, all project expenditures would be reflected in the project financial statement. - 66 -
A chart of accounts has been developed. the chart of accounts enables expenditure data to be captured
and classified be project components and expenditure categories. The chart of accounts also has
linkages to: (a) government budget heads/ categories; and (b) disbursement categories. Similarly, and
chart of accounts enables data on sources of funds to be captured.
The financial management system is being computerized. the computerized system would be seven
DPMUs would be consolidated for project financial reports. Data transfer for the various consolidations
would be done periodically through electronic mail or storage media (diskettes/compact disks).
Books of accounts for the project would be maintained using double entry bookkeeping principles,
standard books/records of accounts (cash and bank-books, journals, ledgers, trial balance.etc.)Would be
maintained at the SPMUs and DPMUs using an integrated computerized accounting system. a register of
fixed assets, indicating assets created through the project or acquired under the project, would also be
maintained using the computerized system.
Accounting for Sub-Project Implemented be CIGs. the release of funds to CIGs for sub-project would be
based on the terms agreed to in the agreement between the DPMU and the CIG. The disbursements
would be based on these releases to CIGs. However, in the DPMU books of account advances to CIGs
would be treated as advances, and expenditures would be booked against these advances only when
physical milestones are reported to have been completed by the CIGs. The DPMUs would also maintain
records of assets created.
Beneficiary contributions: Cash contributions from beneficiaries would be accounted on the basis of
actual amounts deposited be beneficiaries into their 'project bank account' . beneficiary contributions of
labor and materials would be accounted based on the terms of beneficiary contribution as defined in the
agreement and as capture in the achievement of the physical benchmarks.

Accounting at CIGs: In accordance with the sub-project agreement, the communities would maintain
(for
their own purposes and to ensure transparency ) accounts of amounts spent and contributions received
formats of simple accounting records to be maintained by the communities are being developed, and
village level bookkeepers would be engaged by the communities and trained in this system. Eligibility
criteria for sub- project and advances to communities would include ensuring satisfactory arrangements
for accounting. And submission of summary account statements.
Each CIG would maintain the following books (for which formats are being developed):
Simple cash/bank book providing details of amount received into the project bank account and details of
payments;
Register of contributions received from members in cash, labor and materials:
Register of materials purchased using project funds, materials contributed and materials utilized.
Transaction Information flow. The SPMU and DPMUs would generate and maintain the transaction
vouchers for the various receipts and expenditures made at SPMU and DPMU levels, respectively. The
CIGs would also maintain vouchers/ bills/supporting documents for the various payments
(systematically
numbered) , and copies of the bank account statement(pass book).
The CIGs would prepare a simple report each month and submit it to DPM. This would indicate:
the cash amount received from state and beneficiary contribution , amounts spent on various items, and
balance in the bank account or cash book ( the format of the cash /bank book would facilitate easy
preparation of this summary);
the details of the work being carried out (activity to be completed, cost ), the work completed, and the
work to be done in the next month;
the CIGs contribution in labor and materials. - 67 -
The CIG would present this report to the members and to the gram sabha. This report would be
displayed on the notice board of the gram sabha or village hall, etc. all the reports of the various CIGs
operating in the village would be so displayed. in addition, in the books/ registers, vouchers and bank
statements would be brought to the meetings of the CIGs and gram sabha, and be open for scrutiny by
members.
Accounting at the DPM would not be based on this statement (except for beneficiary cash
contributions). the DPMUs would monitor the regularity of submission of these reports. up-to-date
submission of these monthly reports would be required before release of subsequent installments. this
report would not be used at the district either for accounting or for determining the amount of money
to be
regular updating of accounts.
Consolidation of project accounts would be done first at the district level by consolidation of data
of all the CIGs and the DPMU, and then at the SPMU by consolidation of accounts of the SPMU and all
the DPMUs using the computerized system. data transfer would be handled through: (a) an integrated
computer network, or (b) a periodic data transfer through electronic mail or floppy diskettes.
Internal Control, internal control mechanisms for the project would include the following:
establishment of appropriate budgeting systems, and regular monitoring of actual financial performance
with budgets and targets, monitoring of physical and financial progress, monitoring of unit costs;
Development and adoption of simple, clear and transparent financial and accounting policies which
would
govern financial management of and accounting for the project;
Regular monitoring of advances given to CIGs, field offices and others, reconciliation and confirmation of
bank balances;
at the transaction level, the establishment of procedures and systems for ensuring standard internal
controls such as checking of expenditures, appropriate documentation levels of authorization ,
segregation of incompatible duties, periodic reconciliation, physical verification;
Establishment and operation of a comprehensive audit mechanism.
Financial Reporting
Project management reports would be generated from the computerized financial management
system.
Quarterly financial management reports would include:
Comparison of budgeted and actual expenditures and analysis of major variances , including on aspects
such as sources of funds (indicating funds from beneficiaries separately) and application of funds
(classified by components, sub-components, summarized expenditure categories);
Comparison of budgeted and actual expenditures and analysis of major variances on key physical
parameters and unit rates for selected key items;
Forecasts for the next two quarters;
Information on procurement management for major contracts.

Financial Reporting to Local Communities: To make the accounts of the projects implemented by CIGs
transparent to all local stakeholders, a simple summary of the accounts of each such intervention
(amounts received from the members and from the government, amount spent, and balance) would be
publicly posted in a notice-board in the village.
Staffing and Training
The financial and accounting department of the SPMU would be headed by a financial controller,
who would be an accounting a professional with about 10-15 years experience in a similar position. The
financial controller would have the overall responsibility for all financial and accounting aspects of the
project; the SPMU would also have a finance management who would be a qualified chartered - 68 -
accountant with about 4-5 years of post qualification experience. The finance manager in the SPMU
would be responsible for development, updating and operation of the financial management system of
the project, financial planning and management of the project including financial forecasting.
The finance and accounting sections of the DPMUs would each be headed by an accounts officer
who would be an accounting professional with about 4-5 years work experience. both the SPMU and
DPMUs would have an appropriate number of
accountants/account clerks to carry to carry out the various routine maintain a lean organization, all
routine activities relating to generation of books of accounts, compilation, preparation of financial

reports,
etc. would be handled through the computerized financial management system to the maximum extent
possible.
An intensive training program is being chalked out to train the accounting personnel at the SPMU
and DPMUs in the operation of the financial management system and the software.
bookkeeping/financial management would be trained to maintain proper accounting records for their
activities, including proper records of contributions received and operation of their project bank
account.
Auditing Arrangements
The financial statements of project would be the accountant general (audit)of GOR. the audited
annual project financial statements would be submitted to the bank within 6 months of the close of
GOI's
fiscal year . the department would Perrier the financial statements and reconcile the accounts with the
state accountant general's figures within 4 months of the close of the GOI fiscal year. This report would
be monitored under ARCS. an agreement will be reached between the GOR, state AG and IDA on the
formats of financial statements and terms of reference for the audit.
The following audit reports will be maintained under ARCS:
Agency Audit Report
GOR department of rural development project/SOE
GOI department of economic affairs special account
The audit would be carried out in accordance with the standards of auditing of the controller and
auditor general of India. They would be comprehensive and cover all aspects of the project (i.e., all
sources and utilization, of funds, and expenditures incurred by all implementing agencies). The terms of
reference of the audit would include both audit of financial transactions, and an assessment of the
operation of the financial management system, including review of internal control mechanisms. Special
emphasis would be placed on the audit of the sub project being executed by CIGs. The books/record of
the CIGs would audit; and about 10 percent of the remaining sub projects would be audited. Any issues
arising in these audits including systemic issues would be promptly addressed. all implementing
agencies
would provide the auditor with access to project related documents and records, and information
required by the auditor for the purposes of the audit. to ensure that sound internal control is
maintained
through out implementation, a CA firm will carry out an internal financial review on a quarterly basis.
The
TOR of the CA firm will be agreed between GOR and the Association in consultation with C&AG, DEA-
GOI by May 31, 200
Time Table for Implementation of Project Financial Management System and Next Steps:
The computerized project financial management system (PFMS) is being developed for the
project with the help of consultants specifically appointed for the purpose of designing, developing and
instituting the FMS in the project. The FMS manual has been prepared. The computers for the SPMU and
the DPMUs have been procured and installed. The successful implementation of PFMS in the project
would entail the following key activities :(a) finalization of the financial management software for PFMS
implementation; (b) staffing of key positions; and (c) training of staff in the PFMS operation. The PFMS is
expected to be fully operational by project start-up. - 69 -
Annex 6
Attachment 1
Procedures to be followed for NCB Contracts
with reference to the procedures for undertaking procurement on the basis of national competitive
bidding (NCB) referred to in part C-I of section I, schedule 1, of the project agreement, all NCB contracts
shall be awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the guidelines for
procurement under IBRD loans and IDA credits published by the bank in January 1995 and revised in
January and august 1996, September 1997 and January 1999 (the guidelines). In this regard, all NCB
contracts to be financial form the proceeds of the credit/ loan shall follow the following procedures:
Only the modal bidding documents for NCB agreed with the government of India task force (and as
amended form time) shall be used for bidding;
Invitations to bid shall be advertised in at least one widely circulated national daily newspaper, at least
30
days prior to the deadline for the submission of bids;
No special preference would be accorded to any bidder when competing with foreign bidders, state-
owned enterprises, small-scale enterprises or enterprise from any given state.
Except with the prior concurrence of the bank / association, there shall be no negotiation of price with
the
bidders, even with the lowest evaluated bidder;
Except in cases of force majeure and /or situations beyond control of the borrower, extension of bid
validity shall not be allowed without the prior concurrence of the bank/association (a ) for the first
request
for extension if it is longer than eight weeks; and (b) for all subsequent requests for extension
irrespective
of the period.
Re.- bidding shall not be carried out without the prior congruence of the bank/association. The system
of
ejecting bids outside a per-determined margin or " bracket" of prices shall not be used.
Rate contracts entered into by DGS&D would not be acceptable as a substitute for NCB procedures;
such contracts would be acceptable for any procurement under national shopping procedures.
- 70 -
Annex 7: Project Processing Schedule
Project Schedule Planned` Actual
Time taken to Prepares
the Project (Months)
24 55
First Bank Mission
(Identification)
05/27/95 05/27/95
Appraisal Mission
Departure
11/09/99 11/09/99
Negotiations 02/14/2000 03/13/2000
Planned Date of
Effectiveness
07/01/2005
Prepared by:
Government of Rajasthan
Preparation Assistance:
India Country staff and Consultants

Bank Staff Who Worked on the Project Included:
S.No. Name Specialty
Meera Chatterjee Social Development
Soniya Carvalho Poverty Reduction
Rajat Narula Financial Management
D.J.Baxi Procurement
T.K. Balakrishnan Financial Analysis
Mam Chand Procurement
Ashok K. Seth Agriculture
Ruth Alsop Social Development
C.S. Nawathe Infrastructure
Paal Martin Environment
Salman Legal Counsel
T.C.Jain Rural Development
Parameswaram Iyer Public Administration
Jeeva Perumalpillai-
Essex
Economics
Maria Clark Social Development
Daniel Gross Social Development
G.Srihari Team Assistant

- 71 -
Annex 8: Documents in the Project File*
INDIA: RAJASTHAN DIST POVERTY INITIATIVES PROJECT
Project Implementation Plan
District poverty initiatives project Rajasthan, project Implementation plan July 2005-june 2005 (revised
February 2000)
Rajasthan district poverty Initiatives project: operational manual(February 2000)
Supporting Documents
Capacity Building Strategy (Arrival, Jaipur, November 1999)
Environmental Assessment Report (EAR) For Sub-Project Under Rajasthan State DPIP (Malaviya
Regional Engineering College, Jaipur, January 2000)
Gender Strategy (K.Mathur, Institute Of Development Studies, Jaipur, 1999)
Tribal Strategy
Enterprise Development Strategies Draft Report (November 1999)
Rajasthan DPIP- First Year Procurement Plan (2000-2001)

Financial Management Manual For DPIP (B.L. Ajmea & Co. Jaipur,2000)
Decentralization And Devolution Of Powers To Panchayati Raj Institutions (Government Of Rajasthan,
1999)
A Note On Poverty Alleviation Programmes (Government Of Rajasthan, 1999)
The Rajasthan Panchayati Raj Act, 1994,And The Rajasthan Panchayati Raj Rules, 1996
Desk Reviews And Stakeholder Analyses
Baran District (Center For Community Economics And Development, Chaksu, 1997)
Churu District (Shri Gandihi Bal Niketan Society, Ratangarh, April 19970
Dausa District (Kumatappa Institute Of Gram Swaraj, Jaipur, September 1996)
Dholpur District (Lupin Human Welfare & Research Foundation, Bharatpur, July 1996)
Rajsamand District (Sewa Mandir, Udaipur, May 1997)
Tonk District (Indian Institute of Rural Management, Jaipur)
Social Assessments
Report On Social Assessment for the District Poverty Initiatives Project In Baran District (Center For
Community Economics And Development, Chaksu, April 1997)
Report On Social Assessment for the District Poverty Initiative Project In Churu District (Shri Gandhi Bal
Niketan Society, Ratangarh, April 1997)
Social Assessment for District Poverty Initiative Project, District Dausa (Kumarappa Institute Of
Bharatpur, April 1997)
Social Assessment Field Work Report (Lupin Human Welfare & Research Foundation, Bharatpur, April
1997)
Report On Social Assessment For The District Poverty Initiative Project In Jhalawar District (Indian
Institute For Rual Development, Jaipur.)
A Social Assessment of the Rajsamand District of Rajasthan (Sewa Mandir, Udaipur, April 1997)
A Report on Findings Of Field Work (DPIP) In Todaraisingh And Uniara Blocks Of Tonk District (Indian
Institute Of Rural Management, Jaipur)
District Capacity Assessments
District Capacity Assessment Report, Baran District (Sanket , Jaipur,Jaipur, 1997)
Summary Matrix of District Capacity, Baran District (Aravali, June 1997) - 72 -
Report On the Capacity Assessment of Churu District and Matrix of Department Capacity (Aravali, June
1997)
Report On the Capacity Assessment Survey of Dpip of District Dausa (Society For Education, Research
And Voluntary Efforts, Jaipur, June 1997)
Report On the Capacity Assessment Survey Of Dpip Of District Dholpur (Society For Education,
Research And Voluntary Efforts, Jaipur, June 1997)
District Capacity Assessment Report, Jhalawar District (Sanket, Jaipur, 1997)
Report On The Capacity Assessment Survey Of Dpip Of District Tonk ( Society For Education, Research
And Voluntary Efforts, Jaipur, June 1997)
District Capacity Assessment Report, Rajsamand District (Sanket, Jaipur, 1997)
B. Bank Staff Assessment
Social Assessment Key Findings and Recommendations For Seven District Of Rajasthan (1998)
Non-Farm Micro- Enterprise Development for District Poverty Initiative Project (September 1998)
South Asia Region Workshop on the Design of Poverty Alleviation Projects (October 1998)
Lessons Learned From Other Decentralized Projects In India (December 1998)
India: Participatory Institution Building And Social Fund Projects: A Note On A Framework For Project
Design (March 1999)
Economic Analysis and Issues (March 1999)
Quality Enhancement Review Of India District Poverty Initiatives Project: Andhra Pradesh And Rajasthan
(Quality Assurance Group Panel, August 1999)
India: Rajasthan: Challenge Of Sustaining Development and Restoring Fiscal Balance (Draft, October
1999)
Village Level Group (Cig) Formation and Project Implementation (December 1999)
Institutional Review (Project Organization and Management, Project Processes, Collaboration With
NGOs, And Village Level Processes) (December 1999)
Information and Communication (December 1999)
Monitoring and Learning System (December 1999)
Micro- Enterprise Development (December 1999)
C. Other
White Paper On The State Of Economic And Finances ( 1951-1998) (Government Of Rajasthan, 1999)
Report On Survey Of Infrastructure Needs And Demand- Driven Activities In The Poorest Cluster Of
Manoharthana And Dag Blocks Of Jhalawar District ( Indian Institute For Rural Development, Jaipur)
*including electronic files - 73 -

Annex 9: Statement of Loans and Credits
Original Amount in US$ Millions
Difference between expected and
actual disbursements
Project ID FY Borrower Purpose IBRD IDA Cancel Undisb. Orig. Frm Rev'd
P045051 1999 India 2ND NATL HIVIAIDS CO 0.00 191.00 0.00 184.47 3.93 0.00
P049301 1997 India A. P. EMERG. CYCLONE 50.00 100.00 0.00 100.66 71.97 0.00
P010407 1993 India ADP, RAJASTHAN 0.00 106.00 0.00 17.27 20.21 0.00
P010503 1995 India AGRIC HUMAN RES DEVT 0.00 59.50 0.00 25.34 24.52 0.00
P010489 1995 India AP 1ST REF. HEALTH'S 0.00 133.00 0.00 50.61 16.87 0.00
P049385 1998 India AP ECON RESTRUCTIURIN 301.30 241.00 0.00 415.33 36.01 0.00
P010449 1994 India AP FORESTRY 0.00 77.40 0.00 12.57 11.32 0.00
P035158 1997 India AP IRRIGATION III 175.00 150.00 0.00 244.19 61.08 0.00
P049537 1999 India AP POWER APL I 210.00 0.00 0.00 171.95 32.29 0.00
P010522 1995 India ASSAM RURAL INFRA 0.00 126.00 0.00 91.06 50.20 0.00
P010408 1993 India BIHAR PLATEAU 0.00 117.00 0.00 33.54 40.22 0.00
P010455 1994 India BLINDNESS CONTROL 0.00 117.80 0.00 79.55 50.99 0.00
P010480 1996 India BOMBAY SEW DISPOSAL 167.00 25.00 0.00 109.38 100.33 0.00
P043310 1996 India
COCAL ENV & SOCIAL
MITIGATION
0.00 63.00 44.91 28.31 0.00
P009979 1998 India COAL SECTOR REHAB 530.00 2.00 15.00 327.86 86.51 86.51
P009870 1994 India CONTAINER TRANSPORT 94.00 0.00 0.00 692.77 62.77 31.93
P010464 1995 India DISTRICT PRIMARY ED 0.00 260.30 0.00 111.06 57.81 0.00
P035821 1996 India DEEP II 0.00 425.20 0.00 246.48 11.11 0.00
P038021 1998 India DEEP III (BIHAR) 0.00 152.00 0.00 131.77 46.46 0.00
P036062 1997 India ECODEVELOPMENT 0.00 28.00 0.00 20.83 8.12 0.00
P043728 1997 India ENV CAPACITY BLDG TA 0.00 50.00 0.00 41.64 19.49 0.00
P010563 1995 India
FINANCIAL SECTOR DEV
PROJ. (FSDP)
700.00 0.00 301.30 147.03 0.00 0.00
P010448 1994 India FORESTRY RESEARCH ED 0.00 47.00 0.00 17.18 35.65 10.64
P035160 1998 India HARYANA POWER APL - I 60.00 0.00 0.00 28.06 14.73 0.00
P010485 1996 India HYDROLOGY PROJECT 0.00 142.00 0.00 84.43 67.55 0.00
P009977 1993 India ICDS II (BIHAR & MP) 0.00 194.00 0.00 111.38 113.08 108.09
P039935 1996 India ILFS-INFRAS FINANCE 200.00 5.00 0.00 178.87 142.44 0.00
P010463 1995 India INDUS POLLUTION PREV 143.00 25.00 1.64 142.99 115.91 2.67
P010418 1993 India KARNATAKA WS & ENV/S 0.00 92.00 0.00 14.30 14.91 0.00
P049477 1998 India KERALA FORESTRY 0.00 39.00 0.00 32.54 1.18 0.00
P010461 1995 India MADRAS WAT SUP II 275.80 0.00 189.30 46.11 205.96 9.68
P050651 1999 India MAHARASH HELATH SYS 0.00 134.00 0.00 128.49 130.89 0.00
P010390 1992 India
MAHARASHTRA
FORESTRY
0.00 124.00 16.77 26.09 41.97 25.29
P010511 1997 India MALARIA CONTROL 0.00 164.00 0.00 148.83 57.56 0.00
P009946 1992 India NAT HIGHWAYS II 153.00 153.00 0.00 109.94 87.12 23.21
P009869 1989 India NATHPA JHAKRI HYDRO 485.00 0.00 0.00 88.59 88.59 -5.29
P010561 1998 India NATL AGR TECHNOLOGY 96.80 100.00 0.00 188.69 43.03 0.00
P010424 1993 India NATL LEPROSY ELIMINA 0.00 85.00 8.70 20.74 30.73 15.36
P009982 1990 India NOR REG TRANSM 485.00 0.00 35.00 122.74 157.74 0.00
P010496 1998 India ORISSA HEALTH SYS 0.00 76.40 0.00 72.28 10.83 0.00
P035170 1996 India ORISSA POWER SECTOR 350.00 0.00 0.00 280.00 130.00 0.00
P010529 1996 India ORISSA WRCP 0.00 290.90 0.00 134.44 20.85 0.00
P010416 1993 India PGC POWER SYSTEM 350.00 0.00 75.00 37.46 110.60 0.00
P010457 1994 India POPULATION IX 0.00 88.60 0.00 46.41 27.80 0.00
- 74 -
P009963 1992 India POPULATION VIII 0.00 79.00 0.00 50.06 50.90 0.00
P045050 1999 India RAJASTHAN DPEP 0.00 85.70 0.00 81.54 3.80 0.00
P010410 1993 India RENEWABLE RESOURCES 75.00 115.00 0.00 66.01 95.48 0.00
P010531 1997 India REPRODUCTIVE HEALTH 0.00 248.30 0.00 202.52 79.03 25.90
P009959 1993 India RUBBER 0.00 92.00 36.61 16.40 53.37 -1.43
P044449 1997 India
RURAL WOMENS
DEVELOPMENT
0.00 19.50 0.00 16.51 9.85 0.00
P009921 1992 India SHRIMP & FISH CULTUR 0.00 85.00 50.02 15.78 63.65 15.04
P035825 1996 India STATE HEALTH SYS II 0.00 350.00 0.00 220.36 136.71 0.00
P009995 1997 India STATE HIGHWAYS I(AP) 350.00 0.00 0.00 299.64 62.98 0.00
P045600 1997 India TA ST'S RD INFRA DEV 51.50 0.00 0.00 26.29 17.13 17.79
P010476 1995 India TAMIL NADU WRCP 0.00 282.90 0.00 160.18 102.11 0.00
P050637 1999 India TN URBAN DEV II 105.00 0.00 0.00 96.95 12.75 0.00
P010473 1997 India TUBERCULOSIS CONTROL 0.00 142.40 0.00 127.49 72.85 0.00
P050638 1998 India UP BASIC ED II 0.00 59.40 0.00 19.68 4.64 0.00
P009955 1993 India UP BASIC EDUCATION 0.00 165.00 0.00 12.39 -1.47 0.00
P035824 1998 India UP DIV AGRC SUPPORT 79.90 50.00 0.00 121.77 36.14 0.00
P050667 2000 India UP DEEP III 0.00 182.40 0.00 178.31 0.00 0.00
P035169 1998 India UP FORESTRY 0.00 52.94 0.00 42.86 10.35 0.00
P010484 1996 India UP RURAL WATER 59.60 0.00 0.00 47.67 20.41 0.00
P050646 1999 India UP SODIC LANDS II 0.00 194.10 0.00 185.52 19.66 0.00
P009961 1993 India UP SODIC LANDS RECLA 0.00 54.70 0.00 10.56 9.03 0.00
P009964 1994 India WATER RES CONSOLID H 0.00 258.00 0.00 118.28 82.91 0.00
P035827 1998 India WOMEN & CHILD DEVLPM 0.00 300.00 0.00 289.47 0.35 0.00
P041264 1999 India WTRSHD MGMT HILLS II 85.00 50.00 0.00 129.33 3.65 0.00
Total 5631.90

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MBA (Human Resources)

PERFORMANCE APPRAISAL EFFECTIVENESS ANALYSIS

CHAMPION VOYAGER DESIGNERS PVT LTD

THE UNIVERSITY OF PUNE

MASTERS IN BUSINESS ADMINISTRATION

BANSILAL RASMNATH AGARWAL CHARITABLE TRUST S (BRACT)

VISHWAKARMA INSTITUTE OF MANAGEMENT, PUNE

Performance Appraisal Effectiveness MBA (Human Resources)

Preparing a project of this nature is an arduous task and I was fortunate

enough to get support f rom a large number of people to whom I shal l

Voyager Designers Pvt Ltd for allowing me to undertake this project.

with an opportunity to work for Champion Voyager Designers Pvt Ltd.

I am also desirous of ment ioning my profound indebtedness to Dr

Vandana Gote, Faculty member, Vishwakarma Inst itute of Management ,

I would be failing in my duty if I do not acknowledge my gratitude to Dr S.

J oshi, Director, Vishwakarma Inst itute of Management , who mot ivated me

a lot in carrying out this project.

which I would not be able to complete this project.

Performance Appraisal Effectiveness MBA (Human Resources)

Section Page No.

Company Prof i le . ..4

Importance and Purpose ...12

Performance Structure in the Organizat ion 16

o Tools of Data Collection

o Technique of Data Collection

Limitat ions ...50

Findings and conclusions 52

Performance Appraisal Effectiveness MBA (Human Resources)

Performance Appraisal Effectiveness MBA (Human Resources)

Champion Voyager Designers Pvt Ltd

types of printing, computer-generated communications, stitched apparel and product

imprinting and work 24 hours / 7 days a week / 365 days a year.

suppliers/distributors, advertising agencies and corporations rely on Champion Voyager

ongoing costs of equipment, labor, or technology.

Performance Appraisal Effectiveness MBA (Human Resources)

Affinity Express commitment to continuous improvement.

convenience and speed. Champion Voyager Designers Pvt Ltd supports PC

Confidentiality and Security

A.M. to 6:00 P.M. Central Standard Time.

screen-printing on ad specialty items.

Performance Appraisal Effectiveness MBA (Human Resources)

publishing, digital pre-press or pre-flighting.

Artwork Creation and Layout

Translating artwork into a series of commands to be read by an embroidery machine for

output on various items of apparel, bags, caps, etc.

Performance Appraisal Effectiveness MBA (Human Resources)

The world-class, cost-effective document creation, artwork and digitizing services of

companies in the world.

Outsourced graphics services

Custom website creation (for order management)

Performance Appraisal Effectiveness MBA (Human Resources)

Tables, Charts and Graphs

Performance Appraisal Effectiveness MBA (Human Resources)

Apparel and Promotional Products Suppliers/Distributors

higher profit margins.

In the highly competitive printing industry, outsourcing document creation to Champion

Performance Appraisal Effectiveness MBA (Human Resources)

straightforward execution and excess demand resulting in higher profit margins.

Outsourcing (either off-site or a combination of on- and off-site) to Champion Voyager

Performance Appraisal Effectiveness MBA (Human Resources)

Performance Appraisal Effectiveness MBA (Human Resources)

Introduction to Performance Appraisal

are taken to communicate with the employee and remedy them.

Performance Appraisal is a process of evaluating an employee s