iffco final

7/28/2019 Iffco Final

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RESEARCH REPORT

ON

Performance Appraisal

IN

Indian Farmers Fertilizer Cooperative

Limited

Submitted by

----

SRMGPC in partial fulfillment of the requirement

for the award of the degree

Of

MBA

SHRI RAM SWAROOP MEMORIAL GROUP OF

PROFESSIONAL COLLEGES(2011-2013)

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INTRODUCTION

Human Resource (or personnel) management, in the sense of getting things done

through people, is an essential part of every managers responsibility, but manyorganizations find it advantageous to establish a specialist division to provide an expert

service dedicated to ensuring that the human resource function is performed efficiently.

People are our most valuable asset is a clich, which no member of any

senior management team would disagree with. Yet, the reality for many organizations are

that their people remain under valued, under trained and under utilized.

Performance Appraisal is the process of assessing the performance and progress

of an employee or a group of employees on a given job and his / their potential for future

development. It consists of all formal procedures used in the working organizations to

evaluate personalities, contributions and potentials of employees.

RATIONALE OF THE STUDY

Performance Appraisal is the important aspect in the organization to evaluate the

Employees Performance. It helps in understanding the employees work culture,

involvement, and satisfaction. It helps the organization in deciding employeespromotion, transfer, incentives, pay increase. It is an underlying motivation for all

employees to work harder and be more efficient in order to climb the ladder of success in

turn adding growth to the working and life of the organization. To study this area is to

study and have a deeper understanding of how employees perceive the performance

appraisal method and processes of the organization that they are part of.

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INTRODUCTION TO HUMAN RESOURCE MANAGEMENT


through people, is an essential part of every managers responsibility, but many

organizations find it advantageous to establish a specialist division to provide an expert

service dedicated to ensuring that the human resource function is performed efficiently.

People are our most valuable asset is a clich, which no member of any senior

management team would disagree with. Yet, the reality for many organizations are that

their people remain under valued, under trained and under utilized.

The market place for talented, skilled people is competitive and expensive.

Taking on new staff can be disruptive to existing employees. Also, it takes time to

develop cultural awareness, product / process / organization knowledge and experience

for new staff members.

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FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

Following are the various functions of Human Resource Management that are

essential for the effective functioning of the organization:

1. Recruitment

2. Selection

3. Induction

4. Performance Appraisal

5. Training & Development

RECRUITMENT

The process of recruitment begins after manpower requirements are determined in

terms of quality through job analysis and quantity through forecasting and planning.

SELECTION

The selection is the process of ascertaining whether or not candidates possess the

requisite qualifications, training and experience required.

INDUCTION

Induction is the technique by which a new employee is rehabilitated into the changed

surroundings and introduced to the practices, policies and purposes of the organization.

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WHAT IS PERFORMANCE APPRAISAL?

Performance Appraisal is defined as the process of assessing the performance andprogress of an employee or a group of employees on a given job and his / their potential

for future development. It consists of all formal procedures used in working organizations

and potential of employees. According to Flippo, Performance Appraisal is the

systematic, periodic and an important rating of an employees excellence in matters

pertaining to his present job and his potential for a better job.

Characteristics

1. Performance Appraisal is a process.

2. It is the systematic examination of the strengths and weakness of an employee in

terms of his job.

3. It is scientific and objective study. Formal procedures are used in the study.

4. It is an ongoing and continuous process wherein the evaluations are arranged

periodically according to a definite plan.

5. The main purpose of Performance Appraisal is to secure information necessary for

making objective and correct decision an employee.

Process

The process of performance appraisal:

1. Establishing performance standards

2. Communicating the Standards

3. Measuring Performance

4. Comparing the actual with the standards

5. Discussing the appraisal

6. 6.Taking Corrective Action

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METHODS OF PERFORMANCE APPRAISAL

The foregoing list of major program pitfalls represents a formidable challenge,

even considering the available battery of appraisal techniques. But attempting to avoid

these pitfalls by doing away with appraisals themselves is like trying to solve the

problems of life by committing suicide. The more logical task is to identify those

appraisal practices that are (a) most likely to achieve a particular objective and (b) least

vulnerable to the obstacles already discussed.

Before relating the specific techniques to the goals of performance appraisal

stated at the outset of the article, I shall briefly review each, taking them more or less in

an order of increasing complexity. The best-known techniques will be treated most

briefly.

Essay Appraisal

In its simplest form, this technique asks the rater to write a paragraph or more

covering an individual's strengths, weaknesses, potential, and so on. In most selection

situations, particularly those involving professional, sales, or managerial positions, essay

appraisals from former employers, teachers, or associates carry significant weight.

Graphic Rating Scale

This technique may not yield the depth of an essay appraisal, but it is more

consistent and reliable. Typically, a graphic scale assesses a person on the quality and

quantity of his work (is he outstanding, above average, average, or unsatisfactory?) and

on a variety of other factors that vary with the job but usually include personal traits like

reliability and cooperation. It may also include specific performance items like oral and

written communication.

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FIELD REVIEW

THE FIELD REVIEW IS ONE OF SEVERAL TECHNIQUES FOR DOING

THIS. A MEMBER OF THE PERSONNEL OR CENTRAL ADMINISTRATIVE

STAFF MEETS WITH SMALL GROUPS OF RATERS FROM EACH SUPERVISORY

UNIT AND GOES OVER EACH EMPLOYEE'S RATING WITH THEM TO (A)

IDENTIFY AREAS OF INTER-RATER DISAGREEMENT, (B) HELP THE GROUP

ARRIVE AT A CONSENSUS, AND (C) DETERMINE THAT EACH RATER

CONCEIVES THE STANDARDS SIMILARLY.

FORCED-CHOICE RATING

Like the field review, this technique was developed to reduce bias and establish

objective standards of comparison between individuals, but it does not involve the

intervention of a third party.

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MANAGEMENT BY OBJECTIVES

To avoid, or to deal with, the feeling that they are being judged by unfairly high

standards, employees in some organizations are being asked to set - or help set - their

own performance goals. Within the past five or six years, MBO has become something ofa fad and is so familiar to most managers that I will not dwell on it here.

RANKING METHODS

For comparative purposes, particularly when it is necessary to compare people

who work for different supervisors, individual statements, ratings, or appraisal forms are

not particularly useful. Instead, it is necessary to recognize that comparisons involve an

overall subjective judgment to which a host of additional facts and impressions must

somehow be added. There is no single form or way to do this.

The best approach appears to be a ranking technique involving pooled judgment.

The two most effective methods are alternation ranking and paired comparison

ranking.

1. Alternation ranking:

Ranking of employees from best to worst on a trait or traits is another method for

evaluating employees. Since it is usually easier to distinguish between the worst and the

best employees than to rank them, an alternation ranking method is most popular. Here

subordinates to be rated are listed and the names of those not well enough to rank are

crossed. Then on a form as shown below, the employee who is highest on the

characteristic being measured and the one who is the lowest are indicated. Then chose the

next highest and the next lowest, alternating between highest and lowest until all the

employees to be rated have been ranked.

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2. Paired-comparison ranking:

This technique is probably just as accurate as alternation ranking and might be

more so. But with large numbers of employees it becomes extremely time consuming and

cumbersome.

Both ranking techniques, particularly when combined with multiple rankings (i.e.,

when two or more people are asked to make independent rankings of the same work

group and their lists are averaged), are among the best available for generating valid

order-of-merit rankings for salary administration purposes.

ASSESSMENT CENTERS

So far, we have been talking about assessing past performance. What about the

assessment of future performance or potential? In any placement decision and even more

so in promotion decisions, some prediction of future performance is necessary. How can

this kind of prediction be made most validly and most fairly?

360 DEGREE FEEDBACK

Many firms have expanded the idea of upward feedback into what the call 360-

degree feedback. The feedback is generally used for training and development, rather

than for pay increases.

Most 360 Degree Feedback system contains several common features.

Appropriate parties peers, supervisors, subordinates and customers, for instance

complete survey, questionnaires on an individual. 360 degree feedback is also known as

the multi-rater feedback, whereby ratings are not given just by the next manager up in the

organizational hierarchy, but also by peers and subordinates. Appropriates customer

ratings are also included, along with the element of self appraisal. Once gathered in, the

assessment from the various quarters are compared with one another and the results

communicated to the manager concerned.

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Another technique that is useful for coaching purposes is, of course, MBO. Like

the critical incident method, it focuses on actual behavior and actual

results, which can be discussed objectively and constructively, with little or no need for a

supervisor to "play God."

ADVANTAGES

Instead of assuming traits, the MBO method concentrates on actual outcomes. If

the employee meets or exceeds the set objectives, then he or she has demonstrated an

acceptable level of job performance. Employees are judged according to real outcomes,

and not on their potential for success, or on someone's subjective opinion of their

abilities.

The guiding principle of the MBO approach is that direct results can be

observed easily. The MBO method recognizes the fact that it is difficult to neatly

dissect all the complex and varied elements that go to make up employee

performance.

MBO advocates claim that the performance of employees cannot be broken up

into so many constituent parts, but to put all the parts together and the performance may

be directly observed and measured.

DISADVANTAGES

This approach can lead to unrealistic expectations about what can and cannot be

reasonably accomplished. Supervisors and subordinates must have very good "Reality

Checking" skills to use MBO appraisal methods. They will need these skills during the

initial stage of objective setting, and for the purposes of self-auditing and self-monitoring.

Variable objectives may cause employee confusion. It is also possible that fluid

objectives may be distorted to disguise or justify failures in performance.

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BENEFITS OF PERFORMANCE APPRAISALS

Measures an employees performance.

Helps in clarifying, defining, redefining priorities and objectives.

Motivates the employee through achievement and feedback.

Facilitates assessment and agreement of training needs.

Helps in identification of personal strengths and weaknesses.

Plays an important role in Personal career and succession planning.

Clarifies team roles and facilitates team building.

Plays major role in organizational training needs assessment and analysis.

Improves understanding and relationship between the employee and the reporting

manager and also helps in resolving confusions and misunderstandings.

Plays an important tool for communicating the organizations philosophies,

values, aims, strategies, priorities, etc among its employees.

Helps in counseling and feedback.

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RATING ERRORS IN PERFORMANCE APPRAISALS

Performance Appraisals are subject to a wide variety of inaccuracies and biases

referred to as 'rating errors'. These errors can seriously affect assessment results. Some of

the most common rating errors are: -

Leniency Or Severity: - Leniency or severity on the part of the rater makes the

assessment subjective. Subjective assessment defeats the very purpose of performance

appraisal. Ratings are lenient for the following reasons:

a) The rater may feel that anyone under his or her jurisdiction who is rated unfavorably

will reflect poorly on his or her own worthiness.

b) He/She may feel that a derogatory rating willbe revealed to the rate to detriment the

relations between the rater and the ratee.

c) He/She may rate leniently in order to win promotions for the subordinates and

therefore, indirectly increase his/her hold over him.

Central Tendency: - This occurs when employees are incorrectly rated near the average

or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude

stems from certain doubts and anxieties, which the raters have been assessing the rates.

Halo Error: - A halo error takes place when one aspect of an individual's performance

influences the evaluation of the entire performance of the individual. The halo error

occurs when an employee who works late constantly might be rated high on productivity

and quality of output as well ax on motivation. Similarly, an attractive or popular

personality might be given a high overall rating. Rating employees separately on each of

the performance measures and encouraging raters to guard against the halo effect are the

two ways to reduce the halo effect.

Rater Effect: -This includes favoritism, stereotyping, and hostility. Extensively high or

low score are given only to certain individuals or groups based on the rater's attitude

towards them and not on actual outcomes or behaviors; sex, age, race and friendship

biases are examples of this type of error.

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Primacy And Regency Effects: - The rater's rating is heavily influenced either by

behavior exhibited by the ratee during his early stage of the review period (primacy) or

by the outcomes, or behavior exhibited by the ratee near the end of the review period

(regency). For example, if a salesperson captures an important contract/sale just before

the completion of the appraisal, the timing of the incident may inflate his or her standing,

even though the overall performance of the sales person may not have been encouraging.

One way of guarding against such an error is to ask the rater to consider the composite

performance of the rate and not to be influenced by one incident or an achievement.

Performance Dimension Order: - Two or more dimensions on a performance

instrument follow each other and both describe or rotate to a similar quality. The rater

rates the first dimensions accurately and then rates the second dimension to the first

because of the proximity. If the dimensions had been arranged in a significantly different

order, the ratings might have been different.

Spillover Effect: - This refers lo allowing past performance appraisal rating lo

unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating

for current period although the demonstrated behavior docs not deserve the rating, good

or bad.

ROLES IN THE PERFORMANCE APPRAISAL PROCESS

a) Reporting Manager

Provide feedback to the reviewer / HOD on the employees behavioral traits indicated

in the PMS Policy Manual

Ensures that employee is aware of the normalization / performance appraisal process

Address employee concerns / queries on performance rating, in consultation with the

reviewer

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b) Reviewer (Reporting Managers reporting Manager)

Discuss with the reporting managers on the behavioral traits of all the employees for

whom he / she is the reviewer

Where required, independently assess employees for the said behavioral traits; such

assessments might require collecting data directly from other relevant employees

c) HOD (In some cases, a reviewer may not be a HOD)

Presents the proposed Performance Rating for every employee of his / her function

to the Normalization committee.

HOD also plays the role of a normalization committee member.

d) HR Head

Secretary to the normalization committee

Assists HODs / Reporting Managers in communicating the performance rating of

all the employees

e) Normalization Committee

Decides on the final bell curve for each function in the respective Business Unit /

Circle

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KEY CONCEPTS IN PMS

In order to understand the Performance Management System at MIPS, some

concepts need to be explained which play a very important role in using the PMS

successfully. They are:

KRAS (Key Result Areas): The performance of an employee is largely dependent

on the KRA score achieved by the employee during that particular year. Thus, it is

necessary to answer a few basic questions i.e.

What are the guidelines for setting the KRAs for an employee?

How does an employee write down his KRAs for a particular financial year?

KRAs: The Four Perspectives.

How is the KRA score calculated for an employee on the basis of the targets sets

and targets achieved?

Behavioral Traits: Some of the qualitative aspects of an employees performance

combined with the general behavioral traits displayed by the employee during a

year constitutes his behavior traits. An employee is assigned the rating on the

basis of the intensity of the behavior displayed by him. They play a very

important role in the deciding the final performance rating for an employee as is

even capable of shifting the rating one level upwards/downwards.

Bharti 2010 Leadership Competency Framework: This competency framework

is a simple and structured way to describe the elements of behaviors required to

perform a role effectively. This framework also tries to assess the performance

of an employee objectively.

The Performance Rating Process: The rating process tries to explain the four

different types of rating that an employee can achieve i.e. EC, SC, C and PC. It

also explains the criteria, which is considered for awarding any of these ratings

to the employee.

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Promotion and Rating Distribution Guidelines: The promotion and normal

distribution guidelines provide the framework within which the performance

appraisal process has to work. It is very important that the HR department pays

due attention to these guidelines while preparing the bell curves for various

functions and the consolidated bell curve for all the functions. These guidelines

also help in deciding upon the promotion cases in a year.

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LITERATURE REVIEW AND CONCEPT FORMULATION


through people, is an essential part of every managers responsibility, but many

organizations find it advantageous to establish a specialist division to provide an

expert service dedicated to ensuring that the human resource function is performed

efficiently.

People are our most valuable asset is a clich, which no member of any senior

management team would disagree with. Yet, the reality for many organizations are that

their people remain under valued, under trained and under utilized.

Following are the various functions of Human Resource Management that are

essential for the effective functioning of the organization:

1. Recruitment

2. Selection

3. Induction

4. Performance Appraisal

5. Training & Development

Performance appraisal is necessary to measure the performance of the

employees and the organization to check the progress towards the desired goals and

aims.

The latest mantra being followed by organizations across the world being

"get paid according to what you contribute" the focus of the organizations is

turning to performance management and specifically to individual performance.

Performance appraisal helps to rate the performance of the employees and evaluate

their contribution towards the organizational goals. If the process of performance

appraisals is formal and properly structured, it helps the employees to clearly

understand their roles and responsibilities and give direction to the individuals

performance. It helps to align the individual performances with the organizational

goals and also review their performance.

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Performance appraisal takes into account the past performance of the

employees and focuses on the improvement of the future performance of the

employees.

PART OF SELF APPRAISAL

Performance Review - Preparation

Performance Review The Meeting

How to Complete a Performance

Appraisal FormAnalysis for Improving Performance

Active performance appraisal

conversation

Performance appraisal feedback

Performance Consulting: Moving

Beyond Training

Writing performance appraisalPerformance Appraisal Training

How to Measure Employee

Performance

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SELF APPRAISAL

Self appraisal is an important part of the Performance appraisal process where the

employee himself gives the feedback or his views and points regarding his performance.Usually this is done with the help of a self appraisal form where the employee rates

himself on various parameters, tells about his training needs, if any, talks about his

accomplishments, strengths,

PERFORMANCE APPRAISAL FEEDBACK

Performance appraisal process is incomplete without the feedback given to the

employee about his appraisal and his performance. But the way of giving as well as

receiving the feedback differs from person to person and their way of handling and their

outlook towards the issue.

According to a popular saying:

"A SUCCESSFUL MAN IS ONE WHO CAN LAY A FIRM FOUNDATION WITH

THE BRICKS OTHERS HAVE THROWN AT HIM."

Therefore, On the part of the person receiving the feedback, the following points are

important to be taken care of:

The employee should have a positive attitude towards the feedback process

He should listen to the suggestions of the appraiser calmly and try to incorporate them

in his plans.

He should not hesitate to ask for the help of his superiors.

Should have a co-operative attitude during the feedback meeting.

Dont judge the appraiser as a person.

Should take the feedback objectively.

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Should not judge the appraiser as a person on the basis of the feedback.

On the part of the appraiser or the manager / person giving the feedback, the following

points are to be taken care of:

The appraiser should make the receiver feel comfortable during the feedback meeting.

The appraiser should make it a two way conversation i.e. let the employee speak.

Listen to the employee and note his points, suggestions, problems etc.

The appraiser should not adopt a confrontational approach towards the meeting. The

goal is not to criticize the employee.

Provide a constructive feedback to the employee i.e. in a way which will motivate

him to perform better.

Have a positive attitude towards the process

Try to understand the reasons of his failure.

Make the appraisal feedback meeting useful and productive for the organization and the

employee.

Performance Consulting: Moving Beyond Training

Organizations are growing in size, becoming complex and the importance of

trained and developed workforce is also increasing. One of the major objectives and

benefits of the performance appraisal is that it helps in identifying the training needs of

the employee and reducing the gap between the actual and the desired performance of the

employees. But Performance appraisal also facilitates the other decisions like:

Compensation and rewards

Performance Feedback

Manpower planning

Performance improvement

Promotions and transfers

HR Documentation

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To meet the increasing competition and the challenging organizational goal, the

human resource departments of the organizations throughout the world are moving away

from the traditional and the theoretical training methods. The organizations are focusing

on "Performance Consulting" i.e. the practical aspects of the employee training and what

the employees should do to achieve the organizational goals.

Therefore, to improve the effectiveness and the performance, the conventional

role of the trainers have changed to "performance or HR consultants".

Performance consulting refers to the actual transfer of the new skills, competencies

acquired through the training to the job, focusing on the employees performance needs

i.e. the needs to improve the performance.

Your performance appraisals should be intrinsically linked to your regular one onones, you should give feedback in your one on ones on the same criteria that you are

using in your performance appraisals.

The diagram below shows both your performance appraisals and your one on ones

to highlight that this is one process, rather than two processes.

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THE IFFCO: An Executive Summary

IFFCO is one of the largest chemical fertilizer producers in the country/Asian region over

a period of 25 years. IFFCO has been concentrating in the production and marketing of

nitrogen phosphorus and potassium (NPK) complex and urea and introduced Di-

ammonium Phosphate (DAP) in 1981.

The study is divided into 2 parts .the first part mainly involves studying and analyzing the

currentperformanceappraisalsystem and identifying the gaps between the current state

and the desired-in-state. The general methodology adopted for study was primarily

collection of primary dative; Survey based. Some secondary sources like company

records, manuals, books, accounting and internet were also tapped.

The second part involves designing a moor effective performanceappraisalsystem. The

effort involved designing a guide book on performance appraisal, which throws light on

the critical area of managing human performance.

The scope of the project involved defining and designing performance appraisal system,

devising feedback system, motivating and rewarding performance, employee career

growth and development and studying the implications of an effective performance

appraisalsystem on organizations performance.

Effectively managingperformanceappraisalhas never been more critical then in todays

dynamic business environment. In order to drive increased productivity managers must

consistently monitor team performance and provide meaningful feedback to their

subordinates. Employees must be constantly aware of their progress as the expectations

for their contributions evolve. Finally, visibility to employee accomplishments and areas

of weaknesses should be used by managers to provide coaching and guidance to their

subordinates. The reality is that without adequate performanceappraisaltools, any and

all of these requirements are difficult to fulfill.

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The performance appraisal application allows for an ongoing meaningful feedback

mechanism between managers and their subordinates. It helps transform the often rushed

and tedious once-a-year performance review into an ongoing performance appraisal

process that ties employee performance to bottom line business results. Most importantly,

the improved effectiveness of the overall process has been proven to increase employee

morale and overall productivity.

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COMPANY PROFILE

&

ITS PRODUCTS

IFFCO has built its present structure based on three broad objectives defined by its

founders. These are (A) production of quality chemical fertilizers-UREA, NPK and DAP

(B) Service to the farming community (C) making fertilizers available close to them

withstand competition.

IFFCO has assumed the status of the largest chemical fertilizer producer in the country

/Asian region over a period of 25 years. IFFCO has been concentrating on the production

and marketing of NPK complex and urea and introduced DAP in 1981.The volume of

production has increased from 20,000t NPK in 1970-1971(Imported material from USA

under seeding programme) to 40.5lakh ton NPK, DAP and Urea (1997-98). The target for

the current year (1998-99) is 49.5 lakh ton. These volume are expected to increase

further in the years to come and will reach about 53Lakh tones by 2000-01.

Service to the farmer by way of transferring to them the knowledge of modern agriculture

has been one of the core activities since the inception of IFFCOs marketing activities in

the seeding programme launched in Rabi 1970-71.Cooperative societies have been the

focal point for IFFCOs activities in the rural areas. The market scenario is changing fast.

While there is shortage of phosphoric and potassic fertilizers currently in the market,

there is a glut situation with respect to urea .As a matter of philosophy ,principle and

provision in the by laws , .IFFCO has to continue to market its products through the

cooperative system. The cooperative system has not grown to the extent of absorbing all

the additional volumes offered by IFFCO and KRIBHCO . The private trade is growing

faster and trying to make inroads in the cooperative system. Under these circumstances,

IFFCO has to a relook at its marketing strategy and modify/strengthen the cooperative

system in the particular to face the competition from the private trade.

Service to the farming community by way of various educational programmes for the

transfer of modern agricultural technology and subjects like Fertilizer Use Efficiency,

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Balanced Fertilization and IPNS approach have to be more effective and to be spread in

the interior of rural India.

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PROMOTIONAL AND PUBLICITY ACTIVITIES

Fertilizer promotion is one of the important components in fertilizer marketing. The

objective is to create awareness about fertilizers and improve technical information on

improved agricultural practice and fertilizers use so as to increase productive and use

efficiency. Mass media approach is followed in fertilizers promotion.

AIR, DOORDARSAN AND PRESS

These are powerful and effective medium of communication and the message is

conveyed even in remote and in accessible areas in a short time. IFFCO has been taking

the advantage of this media for promotion of fertilizers use. IFFCOs staff field staff

often deliver talks over AIR and production are also published in local and national

level newspapers. Fairs and exhibitions, fairs, and exhibitions are organized at the local

and national level to appraise the farmers about achievements in agricultural development

through audio / visuals aids. This medium has a mass appeal.

TECHNICAL LITERATURE

Publication and updating of technical literature from time to time-n regional language on

crop production practices and fertilizer use is very important. This includes crop folder,

leaflets and pamphlets etc., which give brief accounts on crop production technology.

HOARDING AND ROADSIDE SIGNBOARDIFFCO is effectively making use of state an national highway and market places for

promoting the concept of balanced fertilizes use by erecting hoardings and roadside sign

boards, wall paintings etc.

CROP FILM

Appreciating the importance of the electronic media and popularization of video

presentations, IFFCO has developed 8 crop films depicting the practices for the benefit of

farmers. This film are of 15 minutes duration each and covers important crops like rice,

wheat, maize, cotton, sugarcane, soybeans, and mustard seed.

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INTRODUCTION TO PERFORMANCE APPRAISAL

Since organizations exist to achieve goals, the degree of success that individual

employees have in reaching their individual goals is important in determining

organizational effectiveness. The assessment of how successful employees have been at

meeting their individual goals, therefore, becomes a critical part of HRM. This leads us to

the topic of performance appraisal.

People differ in their abilities and aptitudes. These differences are natural to a

great extent and cannot be eliminated even by giving the same basic education and

training to them. There will be some differences in the quality and quantity of work done

by different employees even on the same job. Therefore, it is necessary for management

to know these differences so that the employees having better abilities may be rewarded

and the wrong placements of employees may be rectified through transfers. The

individual employee may also like to know the level of his performance in comparison to

his fellow employees so that he may improve on it.

Thus, there is a great need to have suitable performance appraisal system to measure the

relative merit of each employee.

The basic purpose of performance appraisal is to facilitate orderly

determination of an employees worth to the organization of which he is a part. However,

a fair determination of the worth of an employee can take place only by appraising

numerous factors some of which are highly subjective, as for instant, attendance, while

others are highly subjective, as for instant, attitude and personality. The objective factor

can be assessed accurately on the basis of records maintained by the Human resource or

personnel Department, but there is no device to measure the subjective factor precisely.

Notwithstanding this, appraisal of these factors must be done to achieve the full

appreciation of every employee merit.

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Purpose of Performance Appraisal

The objective of performance appraisal fall in two categories:

1) Administrative; and

2) Self-improvement

1) ADMINISTRATIVE OBJECTIVES

a) Promotions

This is the most important administrative use of performance appraisal. It is to

the common interest of both the management and employees to promote employees onto

position where they can most effectively utilize their abilities. It is mismanagement to

promote employees into position where they cannot perform effectively at the time in

question. A properly developed and administered performance appraisal system can aid

in determining whether individuals should be considered for promotions. The system

must rate the ratee for the present job and his potentialities for the higher job. A person

performing the job well does not necessarily mean that he is fit for promotion.

b) Transfers

In an organization, it may be necessary to consider various types of personnel actions

such as transfer, layoffs, demotions and discharges. In some cases, such actions are called

for because of unsatisfactory performance while in other cases it may be called for due to

economic conditions over which the organization has no control because of changes in

production process. Such actions can be justified if they are based on performance

appraisal.

c) Wage and Salary Administration

In some cases, the wage increases are based on the performance appraisal reports. In

some cases, appraisals and seniority are used in combination.

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d) Training and Development

An appropriate system of performance appraisal can be helpful in identifying the areas of

skills or knowledge in which certain employees are not up to par, thus pointing out

general training deficiencies which presumably should be corrected by additional

training, discussions, or counseling. Performance appraisal can also help in spotting the

talented employees so as to train and develop them to create an inventory of executive

skills. It can also provide the areas where the employees/executives could be further

trained and positioned to meet retirement and expansion situations.

e) Personnel Research

Performance appraisal helps in research in the field of personnel management. Various

theories in human relationship are outcome of efforts to find out the cause and effect

relationship between the personnel and their performance.

2) SELF IMPROVEMENT OBJECTIVES

The performance appraisals bring out the deficiencies and shortcomings of the

employees. Performance appraisal helps human resource development in a way. A

promotion minded individual could ask for the target programmes of a position he seeks

and use the information given by performance appraisal to prepare him for the job and

enhance his candidacy.

Performance appraisal also helps to spot out a persons ability to see an

organization problem, devise ways of attracting it, translate his ideas into action,

incorporate new information as it arises and carry his plans through the results. It

highlights a sort of total managerial action in contrast to things they customarily factor

out as conceptual entities-things such as planning function, leadership ability, or financial

knowledge. The managers selection will often be improved by this emphasis on the

whole managerial job.

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Why Performance Appraisal?

The important reasons or benefits, which justify the existence of a system of performance

appraisal in an enterprise, are as under:

1) A good system of performance appraisal helps the supervisor to evaluate the

performance of his employees systematically and periodically. It also helps to assign that

work to individual for which they are best suited.

2) Performance rating helps in guiding and correction of employees. The

supervisor may use the results of rating for the purpose of constructively guiding

employees in the efficient performance of work.

3) The ability of the staff is recognized and can be adequately rewarded by

giving them special increments.

4) Performance appraisal can be used as a basis of sound personnel policy in

relation to transfers and promotions. If the performance of an employee is better than

others, he can be recommended for promotion, but if a person is not doing well in a job,

he may be transferred to some other job.

5) Ratings can be used to evaluate the effectiveness of training programmes.

Merit rating reveals weaknesses of employees and the training programmes can be

modified accordingly.

6) Performance appraisal provides an incentive to the employees to better their

performance in a bid to improve their rating over others.

7) Systematic appraisals will prevent grievances and develop confidence

amongst the employees if they are convinced of the impartial basis of evaluation. The

record of merit rating is available in permanent form to protect the management against

subsequent charges of discrimination, which might be leveled by the trade union leaders.

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Performance Appraisal has a beneficial effect on both the persons doing the

appraisal and being appraised. The appraisal brings prominently to the attention of

supervisors or executives the importance of knowing their subordinates as human being.

The necessity of performance appraisal leads the appraiser to a thoughtful analysis of

people rated and tends to make him more alive to opportunities and responsibilities in

developing the subordinates.

The objective of appraisal is to derive the point to the appraisee without inviting his

resentment or drawing back into the shell or taking defensive attitude.

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LIMITATIONS OF PERFORMANCE APPRAISAL

Performance appraisal may not yield the desired results because of the

following deficiencies:

1) If the factor included in the assessment is irrelevant, the result of merit rating will not

be accurate.

2) Different qualities to be rated may not be given proper weightage certain in cases.

3) Some of the factors are highly subjective like initiative and personality of the

employees; so the actual rating may not be on scientific lines.

4) Supervisors often do not have critical ability in assessing the staff. Sometimes, they

are guided by their personal emotions and likes. So the ratings are likely to be biased.

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Difference between Performance Appraisal and Job Evaluation:

Performance Appraisal Job Evaluation

1. Performance appraisal is concerned with the

differences among the employees in terms of

their performance. It is also termed as merit as it

is concerned with the comparative merit of

individuals.

Job evaluation is the analysis of various

jobs to know the demands, which the

normal performance of particular jobs

make on average employees. It does not

take into account the individual abilities of

the job-holder.

2. It considers the abilities and performance of

individuals.

It considers the requirement of various

jobs in terms of jobs description and job

specifications.

3. The purpose of merit rating is to appraise the

performance of individuals to take decisions like

increase in pay, transfer, promotion, etc. It also

serves as guidelines for the management to

consider the type of training, which should be

imparted to the employees.

The purpose of job evaluation is limited,

i.e. to determine the worth of the job on

the basis of demands made by a particular

job on the average worker. This facilitates

fixation of wages for various jobs.

4. Performance appraisal rates the man and not the

job as it is concerned with assessing of the

abilities of the individuals. As a matter of fact, it

measures the worth of different employees to the

organization.

Job evaluation analyses the job to

determine their relative worth and fix their

wage levels that are fair and equitable.

5. Performance appraisal is used as a basis of

personnel policies as regards transfer and

promotion

Job evaluation is used to shape the wage

policy of the organization.

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OBJECTIVES

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.

To determine increments rewards, and provide a reliable index for promotions

and transfers to positions of greater responsibility.

To maintain individual and group development by informing the employee of his

performance standards.

To suggest ways of improving the employees performance when he is not found

to be up to the mark during the review period.

To identify training and development needs and to evaluate effectiveness of

training and development programmes,

To plan career development, human resources planning based on potentialities.

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METHODS OF PERFORMANCE APPRAISAL

There are various methods of merit rating may classified into:

1) Traditional Methods and

2) Modern Methods.

1) Traditional Methods

Traditional methods are very old technique of performance appraisal. They are based on

trait-oriented appraisal. Evaluation of employees is done on the basis of standards of

personal traits or qualities such as attitudes, judgment, versatility, initiative,

dependability, leadership, loyalty, punctuality, knowledge of job, etc.

There are seven traditional methods of appraisal. They are:

Unstructured appraisal.

Employee ranking.

Forced distribution.

Graphic rating scales.

Check lists.

Critical incidents.

Field review.

Unstructured Appraisal

Under this, the appraiser is required to write down his impression about the person being

appraised in an unstructured way. However, in some organizations, comments are

required to be grouped under specific headings such as quality of job performance,

reasons for specific job behaviors, personality traits, and development needs. This system

is highly subjective and has its merit in its simplicity and is still in use especially in the

small firms.

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Ranking Method

Ranking is a simple process of placing in a rank according to their job performance. It

permits comparison of all employees in any single rating group regardless of type of

work. All workers are judged on the same factors and they are rated on the overall basis

with reference to their job performance instead of individual assessment of traits. In this

way, the best in placed first in the rank and the poorest occupies the last rank. The

difficulty of this system is that the rater is ranked to consider a whole person.

Subjectively of the appraiser may enter into his judgments. Asking the appraiser to rank

employees on certain desirable traits can reduce the subjective ness in this method. The

other difficulty with this method is that it does not indicate the degree of difference

between the first man and the second man, and so on.

Forced Distribution Method

Some appraisers suffer from a constant error, i.e., they either rate all workers as excellent,average or poor. They fail to evaluate the poor, average or excellent employees clearly.

The forced distribution system is devised to force the appraiser to fit the employees being

appraised into predetermined ranges of scales. It has an advantage over the paired

comparison system in that two or more employees can be given equal ratings. This

system is based on the presumption that employees can be divided into five points scale

of - outstanding, above average, average, below average and poor. In this system, the

appraiser is asked to distribute the employees into these categories in such a way that

about 10% of the men are in group outstanding, 20% above average, 40% average,

20% below average, and 10% poor.

This method obviously eliminates the room for subjective judgment on the

part of supervisors. This system is easy to understand and administer. The objective of

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this technique is to spread out ratings in the form of a normal distribution, which is open

to criticism.

Graphic Rating Scales

Under this method, scales are established for a number of specific factors and qualities.

Five degrees are established for each factor and general definitions appear at points along

the scale. Generally, the rater is supplied with a printed form, one for each person to be

rated. The selection of factors to be measured on the graphic rating scale is an important

point under this system.

There are two types:

1) Characteristics, such as initiative and dependability, and

2) Contributions, such as quantity and quality of work.

Since certain area of job performance cannot be objective measured, it is likely that

graphic scales will continue to use a mixture of both characteristics and contributions.

Graphic scales impose a heavy burden upon the supervisor. He must report and evaluatethe performance of his subordinate on scales involving as many as five degrees on

perhaps ten different factors. The main drawback of this system is that the rater may be

biased. However, one means of ensuring that the rater has based his scoring upon

substantial evidence is to leave space on the form after each factor and require him to

explain the reason for his rating. In effect, he is asked to give example of the ratees

behavior that justifies the assigned rating. A supervisor may tend to rate him men high to

avoid criticism from them.

The graphic rating method is easy to understand and easy to use. It permits the statistical

tabulation of scores in terms of measures of central tendency, skew ness and dispersion. It

permits a ready comparison of scores among employees. The scores presumably reveal

the merit or value of every individual. However, this method has certain serious

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drawbacks. There is an implication that a high score of one factor can compensate for a

low score on another. If a man scores for attendance, attitude, cooperativeness, etc.

Frequently, the rating tends to cluster on the high side under this system. A supervisor

may tend to rate his men high so that they may receive high share of pay raises in some

cases.

Check Lists

It also consists of two techniques:

a) Weighted check list, and

b) Forcedchoice.

a) Weighted Check List:

Under this method, various statements are prepared in such a manner that they describe

various types and levels of behavior for a particular job. Each statement is attached with a

scale value. At the time of rating the employees, the supervisor just collects and checks

all the statements. After the weights and values are attached to the individual traits, the

rating up to this level is gathered on the rating sheet. Then the weights are averaged andemployee is evaluated. The weighted check the persons thoroughly acquainted with job

and perfect at preparing and weighing statements should prepare list. When this process

is over, rating is placed on separate cards. Then raters who actually observed the

accomplishment of the work sort these cards. They rank the employee from poor to

excellent. Weights are then assigned to the statements in accordance with the way they

are ranked by the raters.

b) Forced Choice

This method is used particularly with the objective of avoiding scope for personal

prejudices. Under this method, the rater is forced to choose between descriptive

statements of seemingly equal worth describing the person in question. Statements are

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chosen of both the sides (favorable as well as unfavorable). For example, the following

two pairs of statement from each pair that is represented by supervisor.

a) Gives clear instructions to his subordinate.

b) Can be dependent upon to complete any job assigned.

c) Makes promises that he knows he cannot keep.

d) Shows favoritism to some employees.

The rater may feel that neither of the two statements in a pair is applicable, but he must

select the one that is more descriptive. Only one of the statements in each pair is correct

in identifying the better performances and this scoring key must be kept secret from

raters. In this way, bias removed from the appraisal process. The main advantage of

establishing this system of performance appraisal is that it has greater objectivity than

most other methods.

Critical Incident Method

A critical incident means a significant act by an employee exceeding or failing any of therequirements of his job. It represents an exceptional behavior of an employee at work, as

for instance, Resisted the implementation of change; Became upset over work; Refused

to help a fellow worker; Suggested an improvement in the work method Tried to get a

fellow worker to accept the management decision; Welcome new ideas.

This method requires every supervisor to record all such significant incidents

in each employees behavior, which indicate effective or successful action and those,

which indicate ineffective or poor behavior. These are recorded in a specially designed

notebook, which contains categories or characteristics under which various behaviors can

be recorded. Examples of such type of job requirements of worker a are judgment,

learning ability, productivity, dependability, accuracy of work, responsibility and

initiative. Daily recording of these items seems to be essential because, otherwise, the

supervisor may forget the incidents with his subordinates.

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This method suffers from the defect that outstanding incident happens so

frequently that individuals appraisal may not vary markedly between any two time

periods. It has been observed that most of the time the employees have neither positive

nor negative incidents. If the critical event does not happens it will be difficult to rate an

employee. Moreover, it may be difficult for a supervisor to decide what the critical or

exceptional incident is. To rectify this defect, Gerald Whitlock designed a specimen

checklist, which consists of a number of behavior incidents, which are considered to be

an example of - uncommonly, ineffective, or effective job behavior. The usual procedure

in constructing the specimen checklist is to collect behavior incidents from certain

experts in this area. The number of such performance behaviors ranges from 80 to 150

incidents, equally divided between effective and ineffective specimens.

Field Review Method

Under this method, an expert from the personnel department interviews the supervisors.

The expert questions the supervisor to obtain all the pertinent information on each

employee and takes notes his notebook. Thus, there is no rating form with factors or

degrees, but overall ratings are obtained. The workers are usually classified into threecategories - outstanding, satisfactory and unsatisfactory. The interviewer questions the

supervisor about the requirements of each job in his unit and about the performance of

each man in his job. He probes to find out only how a man is doing but also why he does

that way and what can be done to improve or develop him. The supervisor is required to

give his opinion about the progress of his subordinates, the level of performance of each

subordinate, his weaknesses, good points, outstanding ability, promotion ability, and the

possible plans of action in cases requiring further consideration. The questions are asked

and answered verbally.

The success of field review method depends upon the competence of the

interviewer. If he knows his job, he can contribute significantly to accurate appraisal.

Criticism of Traditional Methods:

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The general criticism of traditional performance appraisal systems is that they are two

subjective in nature because all of them are on personal judgment of the rater. The

personal judgment is always subjected to personal bias or prejudice as well as pressure

from certain other areas. The appraiser may not be able to judge the competence of the

employees because of lack of training.

Because of the judgment role of the supervisors under the traditional system,

performance ratings are frequently subject to a number of errors and weaknesses, which

are discussed below:

Halo Error: This type of error occurs when the rater allows one

aspect of a mans character or performance to influence his entire evaluation. It is the

tendencies of many raters to let the rating they rating to one characteristic excessively

influence their rating on all subsequent characteristics. Many supervisors tend to give an

employee approximately the same rating on all factors. The error can be recognized quite

easily on factors scales. The rating scale technique of performance appraisal is

particularly susceptible to the halo supervisor judge all of his subordinates on a single

factor or trait before going to the next. In this manner, he can consider all of the menrelative to a standard or to each other on each trait.

Central Tendency: This error occurs when the rater is in doubt

about the subordinates or has inadequate information about them or is giving less

attention and effort to the rating process. Because of these reasons, generally the raters

are reluctant to rate people at the outer ends of the scale. The rater knows that he has to

appraise his subordinates at periodic intervals but if he is unfamiliar with some of the

subordinates or does not have sufficient time to devote to the rating process, he may play

it safe by neither condemning nor praising. So he may rate them average. It is possible

for this type of rating i.e., all average to be a true rating, but its probability is less than its

frequency.

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Leniency or Strictness: Some supervisors have a tendency to

be easy raters and others have a tendency to be harsh in their ratings. Lenient or easy

raters assign consistently high values or scores to their subordinates and strict or harsh

raters give consistently low ratings. Both the trends can arise from varying standards of

performance among supervisors and form different interpretations of what they observe

in employee performance.

Recent Behavior Bias: Often some raters evaluate persons on

the basis pf their performance in recent few weeks; average behavior is not checked.

Some employees being aware of this tendency show better results when they feel that

they are being observed and the report of their performance is to be compiled soon.

Miscellaneous Biases: In many cases, the rater may give

higher ratings because he thinks that it would look bad for him if employees in the other

department received higher pay increases than his pay. Supervisors will tend to rate their

subordinates near the middle of the spectrum if their bosses put pressure on them to

correct the workers average rates or to get rid of the subordinates. Some supervisors

show bias against members of the opposite sex or of another caste, religion or nationality.

They also give higher ratings to senior employees because they are too ready to admitthat they have not improved under their leadership. Many a times, a rater is influenced by

organizational positions and may give higher ratings to those holdings the higher

positions.

2) Modern methods

There are two important methods of performance appraisal,

which are used by the modern concerns. The first is management by objectives, which

represents result-oriented appraisal. The second is behaviorally anchored rating scale,

which is based on the behaviour of the subordinates.

Management by objectives

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performance appraisal. It emphasizes training and development of individuals. It is

problem-solving approach rather than tell and sell approach. This approach has also got a

built in device of self appraisal by the subordinates because they know their goals and

the standards by which their performance will be measured.

The Goal setting approach suffers from the following limitations:

The subordinates can apply this approach only when the goal setting is possible.

It is doubtful if such a procedure can be applied for the blue color workers.

This approach is not easy to administer. It involves considerable time, thought

and the superior and the subordinate. If the span of supervision is quite large, it will not

be possible for the superior to have discussion with each and every subordinate for setting

up mutually agreed goals.

This approach mainly emphasizes counseling, training and development. It is

argued that critical evaluation and modification to improve are incompatible. But, in

practice, it is not possible to forge the critical aspect of performance appraisal.

This approach is appropriate for the appraisal of executives and supervisory

personnel who can understand it in a better way. Operative workers cannot understand

this approach and moreover, a vast majority of them do not want to take initiative in

setting their own goals.

Behaviorally Anchored Rating Scales

Behaviorally Anchored Rating Scales (BARS) are designed to

identify the critical areas of performance for a job, and to describe the more effective and

less effective job behavior for getting results. Performance is evaluated by asking the

rater to record specific observable job behaviors of an employee and then to compare

these observations with a behaviorally anchored rating scale. As a result, the supervisor

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is in a position to compare the employees actual behavior with the behavior that has

been previously determined to be more or less effective.

Proponents of BARS claim many advantages of this approach. They argue that

such a system differentiates among behavior, performance, and results, and consequently

is able to provide a basis for setting developmental goals for the employee. Because it is

job- -specific and identifies observable measurable behavior, it is a more reliable and

valid method for performance appraisal.

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Designing an Appraisal Programme

Determining the Objective of performance Appraisal.

Before any performance appraisal programme is initiated, it is

essential to determine its objectives. The objective of the appraisal programme may be

either to appraise the actual performance of individuals to higher jobs or both.

Sometimes, performance appraisal programmes are associated with specific objectives

like training and development, transfer and promotion, increase in pay, etc.

Establishing Standards of Performance.

For effective rating of employees, it is necessary to establish

standard on performance against which their performance should be compared. However,

an approach that is more preferable is to establish, in writing, definite standards of

accomplishment, which the employee can reasonably be expected to meet. Such a method

will take it possible for both supervisor and his subordinate to reach agreement on just

what is expected in terms of performance. It should be noted that performance standards

are relative to the group and the organization. Not only are the needs of each organization

different, but the talents of manpower also varying from organization to organization.

The expectation of management is also higher in some organizations than in others.

Who is to do the Appraisal?

Generally, the appraiser is the immediate superior of the man to be

appraised. He is most familiar with the employees work and is in contact with him and

so he is considered to be able to appraise him well. But there are certain limitations of

appraisal by one person. That is why some organizations try to obtain two or more ratings

on each employee. But again the difficulty may arise because the second rater may not

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have the necessary contact with the individual who is to be rated. The possibility is the

constitution of a rating committee, which may consist of a number of supervisors and

specialists from personnel department and a representative of the worker. The committee

will rate each individual collectively. Some people feel that employee should be allowed

to rate themselves. When this is done, their immediate superiors may offer their rating in

conjunction with ratings.

Whosoever the appraiser may be, the subjectivity invariably steps in. A

well-adjusted person is less subject to projecting himself into other than a poorly adjusted

person and, therefore he is able to judge them better. It is often assumed that qualified

psychologists are more capable than laymen of making unbiased judgments since they

receive training in the dynamics of the personality and also in the correct manner of

making the judgment.

Frequency of Appraisal

The frequency of appraisal differs from organization and with the

nature of duties performed. There are not spot appraisals, monthly, quarterly, and six

monthly or yearly appraisals. But most of the organizations conduct yearly or half

yearly appraisals because more frequent appraisals besides taking away time of the

appraiser or raters, may create a sense of fear amongst the ratees. Idea frequency is one,

which fits into the objectives of the older ones.

Designing of Forms

This is an important step in performance appraisal to design the ratingforms to be utilized in the programme. The forms should be related to job families such

as clerical, mechanical, sales, technical and supervisory. All require a different evaluation

form. Performance forms may be classified as those involving comparative ranking and

others involving the comparison of each employees actual performance with

predetermined standards. The first category of forms is designed to evaluate employee

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performance for the purpose of making wage adjustments, lay offs, promotions, etc. and

second category of forms is used to improve the performance of workers on their present

jobs.

Requirements of a Sound Performance Appraisal Programme

A sound system of performance appraisal must fulfill the following essentials:

1) The appraisal plan should be simple to operate and easy to understand.

When the appraisal system is complicated, employees may not understand it fully and

may look at the plan with suspicion. The plan should not be very time-consuming.

2) The performance appraisal system should be performance based,

uniform and non variable, fair, just and equitable. It should be ensured that the

appraisers are honest, rational and objective in their approach, judgment and behavioral

orientation.

3) The employees should be made aware of the performance in terms of

goals, targets, behavior, etc. expected of them. A personal between the appraiser and theemployee has to be developed to achieve mutual understanding of the criteria of

evaluation.

4) The appraisal plan should be devised in consultation with the

subordinates. This will increase their commitment to the plan and their understanding of

expected performance.

5) The appraisal plan should take into account the appraisal practices

prevailing in other units in the industry as well as the latest thinking on performance

appraisal. It should fit in the structure and operations of the organization.

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6) The top management must create a climate of reliable appraisal

throughout the organization. Goal orientation, open communications, mutual trust

informal relationships, etc. are the basic elements of such a climate.

7) The appraisal plan should be designed to achieve specific objectives.

The objectives of the appraisal programme may be to evaluate current performance on

the job and to determine the potential for higher jobs. In some cases, performance

appraisal is linked with specific objectives like pay raise, training, promotion, transfer,

etc. The number of factors to be considered and the data to be collected should be tailor-

made to achieve the objective of the appraisal.

8) The appraisers should be selected and trained properly so that they

have no personal bias and possess the necessary capabilities for objective evaluation of

employees. In order to ensure objectivity in appraisal, more persons may rate an

individual independently.

9) There should be provision of appeals against appraisals to ensure

confidence of the employees and their associations or unions. The results of appraisal

must be discussed with the rates so that they may get an opportunity to express their

feelings on their progress reports.

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OBJECTIVES OF STUDY

Any survey report begins with stating the objectives of the study; therefore, the first step

in the survey analysis deals with the objectives. Next, the methodology adopted to collect

the information required will be dealt with, that is, the survey design will be described.

General, data sources include secondary and primary sources. Secondary can

provide a range of information and should be consulted first. If they do not provide

necessary information to the research problem then primary data is to be collected.

THE MAIN OBJECTIVES OF STUDY ARE: -

To study the current performance appraisal system of the organization and

identify the gaps between the current state and the desired-in-state.

To find out the performance dimensions relevant to the strategic plan of the

company.

To identify the potential areas for the scope of improvement in the current system

and thereby in the organizational performance.

To study the implications of an effective performance appraisal system on the

productivity of employees and the organizational performance as a whole.

To identify the key performance indicators and critical success factors for

achieving organizational excellence.

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RESEARCH METHODOLOGY

Research methodology is simple framework or plan for the study that is asguide in collection and analyzing the data. It is the blue print that is followed in

completes the study. Thus, good research methodology ensures the completion of project

efficiency and affectivity. Since there are many aspect of research methodology, the line

of action has to be chosen from the variety of alternatives, to choose the suitable method

through the assessment from various alternatives.

Research methodology gives the researcher an opportunity to put forward his

argument for having opted for certain alternatives and also at the same time he can justify

his ruling out some other possibility likes. Why research study has been undertaken, how

the research problem has been formulated what data has been collected, what particular

technique if analyzing the data has been used and lot of similar type question are usually

answered when we talk of research problem in study.

Keeping in view the above stated objectives the following methodology was

adopted:

The Marketing Research Process:-

Define the problem and Research Objectives: -

The first and main step of any research is to define the relevant problems

or objective for which the researcher wants to do research.

Develop the research plan: -

To makes the plan for overall research as how, when, where and from

whom researcher will collect the data.

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Sources of Data Collection

In order to carry out the resent study, the data used is secondary in nature and is

collected from published sources i.e. websites, newspapers, business magazines, journals,

etc.

Analyze the information: -

After collecting the data the next step is to analyze the information.

Present the findings: -

To make a summary on the basis of analyzing the collect data and find out the

situation.

Make the decision: -

The last step is to take a decision on the basis of finding that what action should

be regarding the findings

INSTRUMENTS TO BE USED:

INTERNET

MAGAZINES

JOURNALS

NEWS PAPERS

SCOPE OF THE STUDY

The scope of the study has been concised to the exposure of derivatives.

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METHODS OF DATA COLLECTION:-

Primary data: -

Primary data is the data collected specially for a specific purpose. The

methods used for its collection are personal discussion & questionnaire etc.

The method used in collecting primary data in my research was

questionnaire. In this I asked a set of predetermined questions in a predefined order, the

answers given by the respondents were used to fill up the questionnaire.

SECONDARY DATA:

Secondary data consists of information that already exists

somewhere and was collected for another purpose, which may not be the same as the

purpose of research. Secondary data used here was the Performa of performance

appraisal used in IFFCO .

The secondary data provide a starting point for research and offer

advantage of low cost and ready availability.

Questionnaire: -

A questionnaire was prepared which consisted of open-ended questions

with multiple choices. The questionnaire used was structured type of questionnaire. It

was prepared taking into account the factors, which were to be analyzed to know the

process of Performance Appraisal.

This method was preferred as it is economical, given more information

and the response is very good.

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DATA ANALYSIS

By filling of the questionnaire, the data was collected which is analyzed as follows:

1. Type of performance appraisal preferred

Table No. 1

Quarterly 85%

Half-yearly 15%

Monthly 0

Annually 0

Graph No. 1

After analyzing the data, the results shows that 85% of the senior production

officers prefer quarterly performance appraisal and 15% prefer half-yearly performance

appraisal.

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85%

15%

0 00%

10%

20%30%

40%

50%

60%

70%

80%

90%

Quarterly Half-yearly Monthly Annually


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2. Seniors satisfied by subordinates performance

Table No. 2

Yes 75%

Cant say 25%

Graph No. 2

75%

25%

Yes

Cant say

After analyzing the data, the results shows that 75% of the senior production

officers feel that their seniors are satisfied with their performance and 25% cant say.

This analysis shows there is lack of appraisal by the immediate seniors.

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3. Satisfied with their own Performance

Table No. 3

Yes 85%

No 15%

Graph No. 3

After analyzing the data, the results shows that 85% of the seniorproduction officers

are satisfied with their own performance and 15% are not satisfied with their own

performance.

This implies that satisfaction level has to be increased among senior production

Officers.

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85%

15%

Yes

No


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4. Performance appraisal improves performance

Table No. 4

Yes 100%

No 0%

Graph No. 4

After analyzing the data, the results shows that100% of the senior production officers

feel that performance appraisal do helps in performing better.

Through this we come to know that process of performance appraisal is coming

out to be positive and it should be continued.

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100%

0%

Yes

No


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5. Information is submitted timely by the senior production officers to their seniors

Table No. 5

Yes 100%

No 0%

Graph No. 5

After analyzing the data, the result shows that 100% of the senior production

officers submit all the information timely to their seniors.

This shows that all the senior production officers submit all the information

timely to the seniors.

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100%

0%

Yes

No


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6. Adequate and fair chance provided to defend against adverse entries in your

appraisal

Table No. 6

Yes 57%

No 43%

Graph No. 6

After analyzing the

data, the result shows that 57% of the senior production officers feel that they are

provided with a chance to defend them against adverse entries in their appraisal whereas

43% denies it.

This shows that there is lack of chances provided to defend against adverse entries in

appraisal.

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57%

43%Yes

No


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7. Reason for bad performance

Table No. 7

Personal 16%

Official 16%

Others 16%

No Bad Performance 52%

Graphs No. 7

16% 16% 16%

52%

0%

10%

20%

30%

40%

50%

60%

Personal Official Others No Bad

Performance

After analyzing the data, the results shows that 16% of senior production officers

performed bad due to personal reasons, 16% of senior production officers due to official

reasons, 16% of senior production officers due to other reasons and no bad performance

from the rest of the 52% of senior production officers.

This shows that there are some reasons, which are required to be rectified to

improve performance.

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8. Awareness of appraisal system.

Table No. 8

Yes 60%

No 40%

Graph No. 8

After analyzing the data, the results shows that 60% of the senior production officers are

fully aware of the appraisal system and rest 40% are unaware of this system.

This shows that awareness about the performance appraisal system is to be increased.

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60%

40%

Yes

No


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FINDINGS

1.) Performance appraisal in IFFCO, LUCKNOW, is done annually.

2.) For appraisal in IFFCO, Lucknow, a SELF-APPRAISAL form is given to the

staff members and they fill it up. And then after according to their self-observation

and through the appraisal form filled by the staff members rating is given to the

members. Accordingly then incentives and promotions are granted.

3.) In IFFCO, LUCKNOW, at the majority senior staff members submit all the

information timely to their superiors.

4.) All senior production officers agree that performance appraisal system helps them

to perform better.

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LIMITATIONS

In IFFCO, LUCKNOW, there is lack of proper knowledge among senior productionofficers about the procedure followed in Performance Appraisal.

There is lack of fair chances provided to defend yourself against adverse entries inyour appraisal.

There is lack of satisfaction level among the senior production level officersregarding to their own work as they have monotony at their work.

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RECOMMENDATIONS

The company should appraise the performance of the workers by giving them

some incentives, which motivate them to work to their fullest capacity and to

motivate them to work more and show good and better results.

For the top management of the company it should offer them holiday package,

appraise performance by recognizing there work in meetings etc. this will help to

raise their moral and they can work better. They dont want financial help as they

earn enough to maintain their status. They want their work recognition.

For the lower group the company can increase their wages, give them pension

schemes, and provide them the medical facilities etc because they want financial

help from the company to insure their proper living.

They should keep changing the raters for the performance appraisal system from

time to time so that they dont become bias at anytime for any employee.

The method of the company should be changed periodically so that the employees

have no chance to complain for the method.

The criteria decided upon which the performance has to be rated should not be

fixed it should be changed from time to time.

The standards of the rating should be very specific, clear and concise.

There should be the feeling of teamwork in the organization.

The system should be cost effective and it should suit the budget of the company.

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CONCLUSION

In IFFCO performance appraisal is conducted annually. The immediate boss who has

been observing the immediate subordinate throughout the year rates him according to the

self appraisal form filled and personal observation under following factors-

a) Quality of work.

b) Quantity of work.

c) Job knowledge.

d) Dependability.

e) Innovation and creativity.

f) Ability to learn.

g) Attendance.

h) Reactions to criticism.

i) Discipline.

j) Customer relations.

k) Subordinate development.

The rating given is confidential and out of the knowledge of their subordinates.Accordingly, promotions and incentives are granted to the deserving ones.

Rating given to the senior production officers is done confidentially and whatever

information is been filled in the self-appraisal form is not cross-questioned.

The sole objective for taking part in performance appraisal of senior production

officers in IFFCO is to be awarded with promotions and incentives but the basic

reason why performance appraisal is conducted is to develop the performance and

attitude.

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ANNEXURE

STUDY OF PERFORMANCE APPRAISAL SYSTEM

iffco final

Documents