INTRODUCTION

Significance of performance appraisal in the corporate context

EXECUTIVE SUMMARY

Human Resource Management is a management function that helps managers to Recruit, Select, Train and Develop members for an organization. Performance appraisal may be understood as the assessment of an individuals performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health and the like.

The Performance Appraisal System needs to be very transparent and helpful both to the employees and to the organization. The need is to get a feedback from appraisers and appraisees, working in the organization, about the current state of the PAS. Only after analyzing the current state of PAS, the human resource managers can go to the next step of improvements in PAS. A survey is therefore required.The type of research choosen is quantitative in nature. The research is undertaken to ascertain the views/opinions of the employees working with the company and to suggest appropriate modifications about the existing PAS. Structured questionnaire has been prepared and discussed personally with the respondents.

The sample size will be restricted to 100 respondents choosen by applying stratified random method.

The methods adopted for the performance appraisal were 360-degree appraisal, check list, rating scale, management by objective etc. that are commonly found among the information technology companies in Bangalore. The employees want their appraiser to give the feedback to them.

1. INTRODUCTION TO IT INDUSTRYOver the last decade, India has developed into a major and credible information technology (IT) outsourcing centre. In India, the software boom started somewhere in the late 1990s. Most of the Indian software companies at that moment offered only limited software services such as the banking and the engineering software.

Information Technology (IT), a knowledge-based industry, has the tremendous potential of becoming an engine of accelerated economic growth, productivity improvement for all sectors of the economy and means of efficient governance.

The IT software and service industry has been categorized into three broad sectors:

Software Product and Technology Services,

IT Services, and

IT Enabled Services.

It enhances access to information, protects consumers, provides access to government services, makes skill formation and training more effective, improves delivery health services, and promotes transparency. It provides tremendous employment potential and linkages between government and the people both at the rural and urban level. Investment in knowledge based industries will determine the level of the countrys dominant position in the world economy in the next two decades.

The IT sector is one of the fastest growing segments of Indian industry, growing from Rs. 13,200 crore in 1992-93 to Rs. 80,884 crore in 2008-09. Sixty per cent (Rs. 48,134 crore in 2008-09) is accounted for by software and the remaining 40 per cent (Rs. 32,750 crore) by hardware. IT is an area where the country has a competitive edge and can establish global dominance. Advancements in IT have a profound impact on the economy and the quality of human life.

The ITES sector in India has emerged as a key engine of growth for the Indian IT industry and the technology-led services industry. This sector has grown from Rs. 2,400 crore in 1999-2000 to Rs. 4,100 crore in 2008-2009, providing employment to 70,000 people.The major users of IT services are the government, financial services and banking, manufacturing and retail and distribution. New areas likely to emerge are communication, healthcare and utilities, as these will increasingly be deregulated. However, IT services essentially require high-quality manpower, state of the art skills, world-class telecom and IT-knowledge based environment.Status of IT Software Industry in India and GlobalThe Indian IT software and service industry has emerged as one of the fastest growing sectors in the Indian economy, with a growth rate exceeding 50 per cent in exports and 40 per cent in the total IT industry over the last five years.

Software Product and Technology Services provide a high growth opportunity for the Indian software industry.

Indian companies have a market potential of software product development, such as enterprise software (e-business solution, ERP, e-corporate governance), consumer software (personal productivity tools) and embedded software.

Indian companies have developed a number of highly acclaimed and popular packages, such as HR management and business accounting by TCS, banking automation packages by Infosys, ERP tools by RANCO, etc.

The total global software and IT services market is estimated to be about $1.2 trillion of which Indias share is 2 per cent. The Indian software industry is under threat from emerging competitors.

US technology firms are rapidly shifting back-office functions to India. Foreign firms are eagerly waiting to set up centres to process financial claims, payroll-data, building customer-support desk.

The overall success of the IT industry in India has shown spill over effects to other industries in the country. The Indian economy has grown at an average rate of 6.0% a year during the last five years [11]. In India, the success of software industry can be attributed to the excellent teamwork between the Government and the Industry. Government of India, considering the performance of the Indian software industry, has extended all support, including fiscal benefits, availability of high speed data communications and infrastructure and has ensured almost red tape-free system.1.1 INTRODUCTION TO PERFORMANCE APPRAISAL AND ITS IMPORTANCEAn organizations goals can be achieved only when people put in their best efforts. How to ascertain whether an employee has shown his or her best Performance on a given job? The answer is Performance appraisal. Employee assessment is one of the fundamental jobs of HRM, but not an easy one though. Appraising the performance of individuals, groups and organizations is a common practice of all societies. While in some instances these appraisal processes are structured and formally sanctioned, in other instances they are an informal and integral part of daily activities. In social interactions, performance is conducted in a systematic and planned manner to achieve widespread popularity in recent years.In simple terms, performance appraisal may be understood as the assessment of an individuals performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, Supervision, dependability, cooperation, judgment, versatility, health and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.Meaning of performance appraisal:Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.Definition of performance appraisal:According to Edwin.B.Flippo performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in the matter pertaining to his present job and his potential for a better job. Performance appraisal is the systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.The other terms used for performance appraisal are:

Performance rating

Employee assessment

Employee performance review

Personnel appraisal

Performance evaluation

Employee evaluation Merit rating.In a formal sense, employee assessment is as old as mankind.

Features of performance appraisal:i. Performance appraisal is the systematic description of an employees job relevant strengths and weaknesses.

ii. The basic purpose is to find out how well the employees are performing the job and establish a plan of improvement.

iii. Appraisals are arranged periodically according to a definite plan.

iv. Performance appraisal is not job evaluation. It refers to how well some one is doing the assigned job. Job evaluation determined how much a job is worth to the organization and therefore, what range of pay should be assigned to the job.v. Performance appraisal is a continuous process in every large scale organization.

Objectives of performance Appraisal: To review the performance of the employees over a given period of time. To judge the gap between the desired and the actual performance.

To help the management in exercising organizational control.

Help to strengthen the relationship and communication between superiors, subordinate and management employees.

To diagnose the strengths and weakness of the individuals so as to identify the training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the organization.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

Provide information to assist in the hr decisions like promotions, transfers etc.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. Need for performance appraisal: Provide information about the performance ranks basing on which decision regarding salary fixation, confirmation, promotion, transfer and demotion are taken based on performance in India Rayon. Provide feedback information about the level of achievement and behavior of subordinates. This information helps about the level of achievement and behavior of subordinates. This information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work, if necessary. Provide information which helps to counsel the subordinate. Provide information to diagnose deficiency in employees regarding skill, knowledge. Performance appraisals determine training and developmental needs. To prevent grievances and in disciplinary activities.PROCESS OF PERFORMANCE APPRAISAL

1. ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.2. COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.3. MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.

4. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis

of data related to employees performance. .

5. DISCUSSING RESULTSThe result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.

6. DECISION MAKINGThe last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

Essentials or prerequisite of performance appraisal:The essentials of an effective performance system are as follows: Documentation: Means continuous noting and documenting the performance. It also helps the evaluators to give a proof and basis of their ratings.

Practical and simple format: The appraisal format should be simple, clear, fair and objective. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information.

Evaluation technique: An appropriate evaluation technique should be selected; the appraisal system should be performance based and uniform. The criteria for evaluation should be based on observable and measurable characteristics of the behavior of the employees.

Communication: Communication is an indispensable part of the performance appraisal process. The desired behavior or expected results should be communicated to the employees as well as the evaluators. Communication also plays an important role in the review or feedback meeting. Open communication system motivates the employees to actively participate in the appraisal process. Feedback: The purpose of feedback should be developmental rather than judgemental.to maintains its utility, timely feedback should be provided to the employees and the manner of giving feedback should be such that it should have a motivating effect on the employees future performance. Personal bias: Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. Therefore, the evaluators should be trained to carry out the processes of appraisals without personal bias and effectively. Standards\goals: The goals set should be clear, easy to understand, achievable, motivating, time bound and measurable.CHALLENGES OF PERFORMANCE APPRAISALIn order to make a performance appraisal system effective and successful, an organization comes across various challenges and problems. The main challenges involved in the performance appraisal process are:1. DETERMINING THE EVALUATION CRITERIAIdentification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms.2. CREATE A RATING INSTRUMENT The purpose of the performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization.

3. LACK OF COMPETENCE Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively. 4. ERRORS IN RATING AND EVALUATION

Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees.Problems of performance appraisal:The problem with subjective measure is the rating which is not verifiable by others and has the opportunity for bias. The rate biases include (a) Halo effect (b) The error of central tendency (c) The leniency or strictness (d) Personal prejudice (e) The recent performance effect. Halo effect: It is the tendency of raters to depend excessively on the rating of one trait or behavioral consideration in rating all others traits or behavioral consideration. One way of minimizing the halo effect is appraising all the employees by one rate before going to rate on the basis of another trait. The error of central tendency: Some raters follow play safe policy in rating by rating all the employees around the middle point of rating scale and they avoid rating the people at both the extremes of the scale. They follow play safe policy because of answerability to management or lack of knowledge about the job and person he is rating or least interest in his job. The leniency or strictness: The leniency bias crops when some raters have a tendency to be liberal in their rating by assigning higher rates consistently. Such ratings do not serve any purpose. Equally damaging one is assigning consistently low rates. Personal prejudice: If the rater dislikes any employee or any group, he may rate them at the lower end, which may distort the rating purpose and effect the career of these employees. The recent performance effect: The raters generally remember the recent actions of the employees at the time of rating and rate on the basis of these recent actions favorable or unfavorable than on the whole activities.The other factors are considered as problems are: Failure of the superiors in conducting performance appraisal and post performance appraisal interview.

Most part of the appraisal is based on subjectivity. Negative ratings effects interpersonal relations and industrial relations system.

Influence of external factors and uncontrollable internal factors.

Feedback and post performance interview must have a setback on production.

Management emphasis on punishment rather than development of an employee performance appraisal.

Some ratings particularly about the potential appraisal are purely based on guess work.

Absence of inter-rater reliability. The situation was unpleasant in feedback interviewMethods and techniques used for performance appraisal:The various methods and techniques used for performance appraisal can be categorized as the following traditional and modern methods

TRADITIONAL METHODS OF PERFORMANCE APPRAISAL:1. ESSAY APPRAISAL METHODThis traditional form of appraisal, also known as Free Form method involves a description of the performance of an employee by his superior. This method requires the manager to write an essay describing each employees performance during the rating period. This is emphases evaluation of overall performance, based on strength\weaknesses of employees performance rather than specific job dimension.

2. STRAIGHT RANKING METHOD

This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation.

3. PAIRED COMPARISON

A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings.

4. CRITICAL INCIDENTS METHODS

In this method of performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behavior as and when they occur.

5. FIELD REVIEW

In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors personal bias.

6. CHECKLIST METHODThe rater is given a checklist of the descriptions of the behavior of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.A) Simple checklist method.

B) Weighted checklist method.

C) Forced choice method.

7. GRAPHIC RATING SCALEIn this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on-the-job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.

8. FORCED DISTRIBUTIONTo eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.9. CONFIDENTIAL REPORT:Assessing the employee performance confidentially in a traditional method of performance appraisal. Under this method, the superior appraise the performance of his subordinates based on his observations, the judgment and intuitions. The superior keeps his judgment and report confidentially in performance. The superior writes the reports about his subordinates strengths, weakness, intelligence, attitude to work ,sincerity, commitment, punctuality, attendance, conduct, character ,friendliness etc. most of the public sector organizations follow the same method.10. GROUP APPRAISAL:Under this method, an employee is appraised by a group of appraisers. This group consists of immediate supervisors of the employee to other supervisors who have close contact with the employees work, manager or head of the department and consultant. The head of the department or management may be the chairman of the group and the immediate supervisor may act as the coordinator for the group activities. The group uses any one or multiple techniques, this method is widely used for the purpose of promotion, demotion and retrenchment appraisal. MODERN METHODS OF PERFORMANCE APPRAISAL:

1. BEHAVIORALLY ANCHORED RATING SCALESBehaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for e.g. the qualities like inter-personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents.

In this method, an employees actual job behavior is judged against the desired behavior by recording and comparing the behavior with BARS. Developing and practicing BARS requires expert knowledge.2. HUMAN RESOURCE ACCOUNTING METHODHuman resources are valuable assets for every organization. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added (in monetary terms). The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them.3.360 DEGREE FEEDBACKS:360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the on-the-job performance of the employee.

360 degree appraisal has four integral components:

1. Self appraisal

2. Superiors appraisal

3. Subordinates appraisal

4. Peer appraisal 4. MANAGEMENT BY OBJECTIVESThe concept of Management by Objectives (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.

The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. 5. ASSESSMENT CENTRES:Assessment centre refers to a method to objectively observe and assess the people in action by experts or HR professionals with the help of various assessment tools and instruments. Assessment centers simulate the employees on-the-job environment and facilitate the assessment of their on-the-job performance.

An assessment centre for Performance appraisal of an employee typically includes:

Social/Informal Events An assessment centre has a group of participants and also a few assessors which gives a chance to the employees to socialize with a variety of people and also to share information and know more about the organization.

Information Sessions Information sessions are also a part of the assessment centres. They provide information to the employees about the organization, their roles and responsibilities, the activities and the procedures etc.

Assignments- assignments in assessment centres include various tests and exercises which are specially designed to assess the competencies and the potential of the employees. These include various interviews, psychometric tests, management games etc. All these assignments are focused at the target job.

2.1 RESEARCH DESIGN2.1.1 Statement of the problem.This project aims to study the performance appraisal system (by considering certain important dimensions) followed in organizations today. The study aims to highlight the significance of such performance appraisal system in the corporate context. Thus the study tries to establish the link between performance appraisal system and organizational effectiveness.2.1.2 Objectives of the study To study performance appraisal system in the corporate context To highlight the significance of performance appraisal system in the corporate context and establish the link between performance appraisal system and organizational effectiveness.

2.1.3 Need of the study:

provide information about the performance ranks based on which decision regarding salary fixation, confirmation, promotion, transfer and demotion are taken based on performance appraisal in the corporate context. provide feedback information about the level of achievement and behavior of subordinates in the corporate context.

To provide information which helps to counsel the subordinate

To prevent grievances and in disciplinary activities in the corporate context.

2.1.4 Scope of the study: To provide employees with a better understanding of their role and responsibilities in the corporate context. To increase confidence through recognizing strengths and also identifying training needs to minimise weaknesses in the corporate context. To improve working relationships and communication between supervisors and subordinates. To increase commitment to organizational goals and to develop employees into future supervisors in the corporate context. To assist in personnel decisions such as promotions or allocating rewards.2.1.5 Limitations of the study:

The study is constrained only to performance appraisal system

The study is limited to the Bangalore city only.

Analysis of primary data is done on the assumption that the answers given by the respondents are true and correct.

Time and Resource constraints.

2.2 RESEARCH METHODOLOGY2.2.1Type of Research:Descriptive research: This research is the most commonly used and the basic reason for carrying out descriptive research is to identify the cause of something that is happening.The research is primarily quantitative in nature. The study is based on data collected through structured questionnaire from the respondents and interviews conducted with the respondents.2.2.2Sampling Technique/method:The research technique used is Random Sampling method.

Sampling unit:

Hewlett Packard, Sonata software ltd, & Capgemini companies has been selected as the sampling unit.

2.2.3Data collection:Data is the fact of an event. Data is the base for every research work. The data is mainly classified into two groups.

1) Primary data: These data are gathered for our research purpose. This is first hand information, for this purpose a structured type of questionnaire was designed and administered. 2) Secondary data: Books, journals, websites etc., have been consulted for obtaining related information, and also for crosschecking of primary data.Tools and techniques of data collection:a. To get the response, the questionnaire method was used.

b. The questionnaire used in this study was a structured one.

c. Here the questions were arranged in a specific order and were logically interconnected for the research study

d. The advantage of the structured questionnaire lies in the reduction of bias.

e. Questionnaire containing of both open-ended questions and close-ended questions.Contact method: Personnel interview

The respondents were contacted personally interviewed them and collected their views, opinions and suggestions given by them.2.2.4 Sample Size:The respondents used for survey and for certain conclusion, we used 100 respondents who are working in the companies.

2.2.5 Sample procedure:

The study required probability method since the sample was chosen at random. Hence the study was dealt with simple random tool.

2.2.6 Plan of analysis:

Calculations have been done for interpretation such as percentage, averages etc.This report has been covered with various tables, graphs and charts obtained from sources such as questionnaires, and personal interview etc.The data collected through the questionnaire are organized, processed and tabulated in order to create graph and charts to make the project understandable.INDUSTRY PROFILEIn the early eighties, three major trends started emerging, which revolutionized the information technology industry. It emerged in the late 80s, as a combination of several facets; hardware, software and communication. It became evident that information technology had a wide range of scope covered a variety of hardware, several operating system, innumerable application software that facilitates development and easies interface with the user.

IT Vision: 2020 on the national level encompassing various technology areas. A detailed survey of key areas in major infrastructure, advanced technologies and technologies with socioeconomic implications was taken up. In a span of two years, over 5000 area experts from the industry, Government, R&D agencies and academia were brought together for a through survey of shared opinion in select areas.

Concerted action-plans were formulated on short, medium and long-term basis up to 2020 AD and seventeen key technology areas of prime importance to the country were addressed; around 100 sub-sectors were covered for specific details. The exercise was carried out in the backdrop of a complex and heterogeneous social milieu of India and thus a country specific vision merged. The task forces were constituted for seventeen areas. Each task was headed by a chairperson and comprised of a go-chairperson, coordinator and panels of experts looking at major sub-area s covered.The typical technology forecasting techniques like brainstorming, scenario rating, Delphi, nominal group techniques (NGT) etc Were adapted to some extent for the exercise to bring out the vision. The perspective/scenario reports of the panel, Delphi responses; NGT rankings were formed as the basis to arrive at suggestions for policy guidelines, strategies, and action plans for Government NGOs, industry, R&D institutes and academia to realise the vision for India 2020 AD.

1. HEWLETT- PACKARD-PROFILEHewlett-Packard Company,commonly referred to asHP, is an American multinationalinformation technologycorporation headquartered inPalo Alto,California, USA. HP is one of theworld's largest information technology companiesand operates in nearly every country. HP specializes in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services.HP is founded in 1939 and its first product is the resistance-capacitance audio oscillator (HP 200A), an electronic instrument used to test sound equipment. Over the next decade, test and measurement products from HP win excellent acceptance among engineers and scientists.HP is a technology company that operates in more than 170 countries around the world. They explore how technology and services can help people and companies address their problems and challenges, and realize their possibilities, aspirations and dreams. They apply new thinking and ideas to create more simple, valuable and trusted experiences with technology, continuously improving the way their customers live and work.

No other company offers as complete a technology product portfolio as HP. HP provide infrastructure and business offerings that span from handheld devices to some of the world's most powerful supercomputer installations. HP offer consumers a wide range of products and services from digital photography to digital entertainment and from computing to home printing. This comprehensive portfolio helps us match the right products, services and solutions to our customers' specific needs.

PRODUCT PROFILEThe products of Hp Company are as follows.

Software products

Desktop and work stations Servers and storage. Handhelds and calculators.

monitors printers

Ink. Toner and Paper

Scanner and Fax Laptop and table Pcs

2. SONATA SOFTWARE LIMITEDSonata Software Limitedis an IT consulting and Software Services Company. Sonata is headquartered inBangalore, India, and has offices in the US, Europe, Middle East and the Asia Pacific region. Sonata has four development centers in Bangalore, one in Hyderabad and two in Hanover, Germany. Sonata's services include IT Consulting, Product Engineering Services, Travel Solutions, Application Development, Application Management, Managed Testing, Business Intelligence, Infrastructure Management and Packaged Applications.

Its subsidiaries include:

Sonata Information Technology Ltd. (SITL)

Sonata Software FZ - LLC

Sonata Software GmbH

Sonata Europe Limited

TUI InfoTec GmbH

Offshore Digital Services Incorporated (ODSI).

Sonata isSEICMMLevel 5 certified. Sonata's shares are publicly traded in Indian Stock Exchanges. Sonata is ranked in NASSCOMS TOP 20 IT Software & Service Exporters FY 20082009.Sonata Software has also been ranked global #2 in the 2008 Top Ten ESO: Outsourced Software Development in The Black Book of Outsourcing. Sonata has alliances with Microsoft, IBM, SAP and Oracle. Sonatas total income FY 20082009 was $344.26 million. The current employee strength is 2706 employees (FY 08-09).SERVICESSonata Software offers end-to-end software solutions. Its service offerings include:

IT Consulting - SAP, Microsoft, IBM and Oracle

Travel Solutions,

Application Development,

Application Management,

Managed Testing,

Business Intelligence,

Infrastructure Management and

Outsourced Product Development.

3. CAP GEMINI PROFILE

With more than 91,000 employees, Cap Gemini is a global leader in consulting, technology, outsourcing, and local Professional Services.

Headquartered in Paris, Cap Gemini regional operations include North America, Northern Europe & Asia Pacific and Central & Southern Europe. Sogeti-Transicel is a subsidiary business dedicated to local professional services.Cap Gemini works in partnership with clients to develop business strategies and technologies tailored to their unique requirements.Cap Gemini operates in more than thirty countries worldwide.Industries that Cap Gemini serves: Each industry has its own unique requirements and challenges. The priorities of health care are completely different from telecommunications and consumer products companies face challenges that are non-existent in the oil and gas industry. Cap Gemini has teams of industry experts who are devoted 100% to solving problems and making advancements within their respective industries. They have developed tools, methodologies and best practices based on years of experience with top companies in all major industries.

CAPGEMINI PRODUCT PROFILE

AutomotiveCap Gemini works with the worlds leading automotive manufacturers and suppliers to sustain growth in a highly competitive industry. Consumer Products, Retail and Distribution

We help consumer products; retail and distribution companies grow stronger through the power of collaboration. Energy, Utilities and Chemicals

Cap Geminis experience with energy, utility and chemical companies around the world is truly collaboration in action. Financial Services

As one of the worlds foremost service providers to the financial services industry, Cap Gemini brings the power of both traditional experience and a modern collaborative approach to bear on our clients' business issues. Manufacturing

The Manufacturing Revolution - From economic challenge to revenue growth, Cap Gemini helps clients to navigate an increasingly dynamic marketplace. Public Sector

Cap Gemini is leading the way in government and public sector, creating solutions for the 21st century and anticipating trends. Telecom, Media & EntertainmentMaximizing assets and unleashing growth - Cap Geminis global Telecom, Media & Entertainment (TME) group is dedicated to helping companies achieve strategic goals and world-class results in an environment of increasing opportunity.Table No 1- Showing the response towards the Awareness of the Performance appraisal system.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1YES9797%

2NO33%

TOTAL100100%

Analysis: From the above table out of 100 respondents 97% of the employees are aware of the performance appraisal system and 3% of the employees are not aware.Graph No 1- Showing the response towards the awareness of the performance appraisal system.

Source: primary dataInterpretation:From the above graph it can be interpreted that the employees are well aware of the performance appraisal system followed in the company. Table No 2- Showing the level of satisfaction towards the performance appraisal system.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Fully satisfied1010%

2Partially satisfied8080%

3Not satisfied at all1010%

Total100100%

Analysis: The above table shows that 80% of the employees are partially satisfied with the PAS followed, only 10% of the employees are fully satisfied where as another 10% of the employees responded that they are not at all satisfied with the PAS followed in the company.Graph No 2-showing the response towards the level of satisfaction.

Source: primary data

Interpretation: This shows that the present performance appraisal system is satisfactory to some extent. Further improvement in the system can be made in order to attain full satisfaction of the employees/executives of the companyTable No 3- Showing the response about the importance of Self AppraisalSI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1YES8787%

2NO1313%

TOTAL100100%

Analysis: From the above table out of 100 respondents 87% of the employees are in the opinion that the self appraisal is relevant as part of performance appraisal and 3% of the employees are not in the opinion.Graph No 3- Showing the response towards the importance of Self Appraisal

Source: primary dataInterpretation:From the above graph it can be interpreted that the self appraisal is relevant as part of performance appraisal.Table No 4- Showing the response about the Knowledge of Traits/Attributes.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1YES8282%

2NO1818%

TOTAL100100%

Analysis: This issue analyzes the awareness about the Traits/Attributes contained in the Appraisal system. 822% of the respondents say they are completely aware of the traits based on which they are appraised. But 18% of the respondents answered that they are not aware of all the different traits.Graph No 4- Showing the response towards awareness about different traits.

Source: primary dataInterpretation:From the above graph it can be interpreted that the managements effectively inform the appraisee about the traits contained in the appraisal formats.Table No 5- Showing the knowledge about reviewing officers.

SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Yes9595%

2No55%

Total100100%

Analysis: From the above table out of 100 respondents 95% of the respondents are know about their reporting officers and 5% are dont know. Graph No 5 Showing the response towards knowledge about reviewing officers.

Source: primary dataInterpretation: From the above graph it can be interpreted that the employees are aware of their Reporting officers.Table No 6

Showing the response towards the review of present performance appraisal system.

SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Yes6565%

2No3030%

3Cant say55%

Total100100%

Analysis: From the above table out of 100 respondents 65% of the respondents sense that the present appraisal system should be reviewed, where as 30% of the respondents are satisfied with the present PAS, 5% didnt give any view. Graph No 6 Showing the response towards the review of performance appraisal system

Source: primary data

Interpretation: It can be said that many employees are not contented with the present PAS and consequently experience the need for the restoration of the system.Table No 7- Showing response towards how frequently performance appraisal can be done.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1I Year4646%

26 months2222%

33 months3232%

Total100100%

Analysis: From the above table out of 100 respondents 46% employees agreed that performance appraisal can be done once in a year and for 22% employees are in the opinion that it can be done in every 6 months and for 32 % of the employees agreed that performance appraisal can be done in every 3 months.Graph No 7- Showing the response towards frequently of performance appraisal

Source: primary dataInterpretation:From the above graph it can be interpreted that the many employees prefer annual performance appraisal system.Table No 8- showing the influences of Performance Appraisal according to the Employees perspectiveSI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Promotions 5858%

2Salary 3939%

3Retention/Termination 1212%

4Recognition of individual performance6363%

5Identification of Poor

Performers3232%

Total100100%

Analysis: From the above table out of 100 respondents 58% of the employees agreed that performance appraisal system helps in promotions, and for 39 of the employees agreed that it helps in salary, for 12% of the employees agreed that it helps in retention, and for 63% of the employees agreed that it helps in Recognition of individual performance, and for 32% of the employees agreed that it helps in identification of poor performers.Graph No 8- Showing the response towards application of performance appraisal.

Source: primary data

Interpretation: From the above graph it can be interpreted that the Performance appraisal influences promotions and also aids in recognition of individual performances.Table no 9-

Showing the response towards the appraiser in the organisation.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Peers4747%

2subordinates2828%

3Client or outsiders1111%

4Self appraisal1414%

Total100100%

Analysis: From the above table out of 100 respondents 47% of the respondents are rated by peers. While 28% of the employees are appraised by subordinates and 11% of the respondents by clients and 11% of the respondents are appraised by self.Graph no-9- Showing the response towards the appraiser in the organization.

Interpretation:From the above graph it can be interpreted that most of the employees are rated by peers and rest of the employees are rated by subordinates, client and few people are rated by self.

Table No 10- showing the response about the techniques of evaluation used by the company.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Graphic rating scale2020%

2360 degree performance feedback2020%

3BARS3030%

4Paired comparison00

5MBO2020%

6If any other1010%

Total100100%

Analysis: From the above table out of 100 respondents 20% of the employees are agreed that Graphic rating scale is one of the method used by the company for doing evaluation and other 20% of the employees preferred 360 degree performance feedback and other 30% of the employees rated BARS and other 10% of the employees agreed MBO and only 10% of the employees preferred other methods of evaluation.Graph No. 10- showing the response towards appraisal system followed in the company.

Source: primary data

Interpretation:From the above graph it can be interpreted that the MBO and BARS are preferred techniques of evaluationTable No. 11- Showing the response towards the problems while doing evaluation.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1A00

2B2020

3C00

4D8080

5E00

Total100100%

Analysis: From the above table out of 100 respondents 20% of the employees are in the opinion that leniency is a problem which is encountered during the evaluation and other 80% of the employees it is the recent performance errors.Graph No 11 Showing the response towards the problems while doing evaluation.

Source: primary data

Interpretation:From the above graph it can be interpreted that the employees agreed that recent performance effects does effect the evaluation procedureTable No12- Showing the response towards the Training needs identified through the Performance AppraisalSI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1A7070%

2B1515%

3C1515%

Total100100%

Analysis: From the above table out of 100 respondents 70% of the employees are in the opinion that the training needs identified through the performance appraisal is formulated into a training programme and for 15% of the employees it is not considered for training and for other 15% employees it is dont know.Graph No 12 Showing the response towards the Training needs identification.

Source: primary dataInterpretation:From the above graph it can be interpreted that the management is effective in recognizing the training needs and then incorporating the needs into an appropriate training programme.Table No 13 Showing the response towards the sufficiency of help and guidance provided by Reporting/Reviewing officers.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Highly sufficient 3838%

2sufficient 5555%

3Insufficient66%

4Highly insufficient 11%

Total100100%

Analysis: From the above table out of 100 respondents 38% of the employees are in the opinion that help and guidance provided to them by their reporting/reviewing officers is Highly sufficient, and for 55% it is sufficient, and for 6% of the employees it is insufficient and for only one employee it is highly insufficient.Graph 13-

Source: primary dataInterpretation:From the above graph it can be interpreted that the Help and guidance provided to employees by their reporting/reviewing Officers is sufficientTable No 14 - showing the response to the extent of closeness between Performance Appraisal rating and the corresponding monetary benefits.

SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Highly Co-related 4242%

2Co-related 4141%

3Not related 1111%

4Dont know 66%

Total100100%

Analysis: From the above table out of 100 respondents 42% of the employees are in the opinion that the close relationship between their performance appraisal rating and corresponding monetary reward is highly co-related.and for 41% it is co-related, for 11% of the employees it is not related and for 6% of the employees are dont know about that.Graph No 14- showing the relationship between PA and pay.

Source: primary dataInterpretation:From the above graph it can be interpreted that there is a high close relation between performance appraisal and corresponding monetary reward.Table No 15- Showing the response towards the degree of mutual understanding in work relationships with the employees Superior.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Very high 4646%

2Quite high 3939%

3Quite low 1111%

4Very low 44%

Total100100%

Analysis: From the above table out of 100 respondents 26% of the employees agreed that the degree of Mutual Understanding in their work relationships with their supervisor is very high and for 39% employees it is quite high and for 11% of the respondents agreed that it is quite low and for only 4% of the employees it is very low.Graph No 15- Showing the response towards the degree of mutual understanding.

Source: primary dataInterpretation:From the above graph it can be interpreted that the degree of mutual understanding in work relationships with the employees superior is very high. Table No 16- showing the response towards conducting a feedback interview with employees soon after the evaluationSI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Yes8080%

2No2020%

Total100100%

Analysis: From the above table out of 100 respondents 80% of the employees agreed that the company conduct feedback interviews with their employees soon after the evaluation and 20% of the employees are in the opinion that the company is not providing feedback interview.Graph No 16 showing the response towards conducting a feedback interview soon after the evaluation.

Source: primary dataInterpretation:From the above graph it can be interpreted that the feedback interview is provided to the employees to improve upon their performance.Table No 17- Table showing the response about the employees getting counseling and training (if needed) after the performance appraisal and feedback.

SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1Yes100100%

2No00%

Total100100%

Analysis: From the above table out of 100 respondents all 100% of the employees agreed that the employees getting counseling and training (if needed) after the performance appraisal and feedback to improve their performance. Graph No 17 - showing the response towards counseling and training.

Source: primary dataInterpretation:From the above graph it can be interpreted that the responses were very good, indicating that all respondents agreeing to the fact that the employees are given counseling and training.Table No 18- Showing the response towards the overall feeling about the Performance Appraisal system.SI NOPARTICULARSNO.OF RESPONDENTSPERCENTAGE

1A8989%

2B1111%

3C00%

4D00%

Total100100%

Analysis: From the above table out of 100 respondents 89% of the respondents felt that the Performance appraisal is highly relevant in the present scenario as well as provides an opportunity for growth. Also 11% of the respondents said that the performance appraisal is not of much value, as it doesnt help in any enhancement. Graph No 18-

Source: primary dataInterpretation:From the above graph it can be interpreted that the Performance appraisal is highly relevant in the present scenario as well as provides an opportunity for growth.LIST OF FINDINGS1. From the study it is found that 97% employees are aware of the performance appraisal system followed in the company.2. It is found from the study that 80% of the employees are partially satisfied with the PAS followed in the organization.3. From the study it is found that 87% of the employees are satisfied with the Self-Appraisal process being followed in the company.

4. It is found from the study that 82% of the employees are aware of the different traits or attributes according to which they are rated.5. From the study it is found that 95% of the respondents are know about their reporting officers.

6. It is found from the study that 65% of the respondents agreed that the present appraisal system should be reviewed.

7. From the study it is found that the many employees prefer annual performance appraisal system.

8. It is found from the study that 63% of the employees agree that performance appraisal system helps in Recognition of individual performance.9. From the study it is found that 47% of the employees are rated by peers.10. It is found from the study that 30% of the employees are agreed that BARS is one of the method used by the company for doing evaluation.RECOMMENDATIONS1) The performance appraisal should begin by concentrating on what employees have done well. 2) The Reporting officer must focus on employees key effectiveness areas where he should show results.3) The Reporting/Reviewing officer must establish objectives in terms of an employees performance (Both short term and Long-term), which in a way will affect the total organizational plan.4) The reporting officer and the reviewing officers can hold discussions with the employees and help the employee set up objectives and goals relating to employees performance.5) The HR manager should give continuous feedback reviews to the employees about their performance. These feedbacks can be in the form of discussion of the performance, performance counseling etc.6) It is desirable to link the performance appraisal systems with employees reward and recognition programs and the impact of PAS should be gauged on these programs.CONCLUSIONS

From the study, it can be concluded that if, the organization implements new performance appraisal system it may enhance employees effectiveness. It may help in identifying his or her strength and weakness and information the employees as to what performance is expected from them, would go a long way in making one stand his/her role clearly, and is expected to be more effective on his job .Performance appraisal system in the corporate context today seems to be highly satisfactory .Most of the employees are satisfied with the existing system.

Performance appraisal system is found to be highly significant in the corporate context. The researcher is able to establish link between Performance appraisal system and organizational effectiveness.

Significance of Performance Appraisal System in the Corporate Context

QuestionnaireDear Employee,

I, Ramya H, student of MBA from Don Bosco Institute of Bio-Science & Management studies Bangalore, would like to ask a few questions as part of my MBA project. I request you to kindly answer them honestly and accurately. I assure you that the information given by you will be kept extremely confidential. Thanking you in advance for your co-operation.Employee Details

a) Name:

b) Age:

c) Total number of years of experience:d) Designation held in the company:For the questions that follow, please tick whichever option you think is applicableQ1.Are you aware of performance appraisal system followed in your company?

Yes [ ]

No [ ]

Q2. How satisfied are you with the present Performance Appraisal system?

Fully satisfied [ ] Partially satisfied [ ] Not at all satisfied [ ]Q3.In the performance appraisal system self appraisal forms a part. Do you think it is relevant?

Yes [ ]

No [ ]

Q4.Are you aware of the different traits / attributes according to which you are rated?

Yes [ ]

No [ ]Q5. Do you know who are your Reporting officers?Yes [ ]

No [ ] Q6. Do you think the present Performance Appraisal system should be reviewed?Yes [ ]

No [ ] Cant say [ ]

Q7.How frequently do you think can Performance Appraisal be done?

1Year [ ] 3 Months [ ] 6 Months [ ] Q8.The performance appraisal system helps in

a) Promotions [ ]b) Salary [ ]c) Retention/termination [ ]d) Recognition of individuals performance [ ]e) Identification of poor performers [ ]Q9. Who is appraiser in your organisation?

a. Your peers [ ]b. Your subordinates [ ]c. Client or outsiders [ ]d self appraisal. [ ]Q10. Which one of the following techniques of evaluation used by the company?a) Graphic rating scale [ ]b) 360 degree performance feedback [ ]c) BARS [ ]d) Paired comparison method [ ]e) Management by objectives [ ]f) If any other, Please specify-

Q11. Do the company encounter the following problems while doing evaluation?a) Problems with standards of evaluation [ ]b) Halo effect [ ]c) Leniency or harshness [ ]d) Central tendency errors [ ]e) Recency of events errors [ ]l) Personal bias (stereo typing) [ ]

Q12.The training needs identified through the performance appraisal:

a) Are formulated into a training programme [ ]b) Not considered for training [ ]c) Dont know [ ]Q13.Help and guidance provided to you by your reporting/reviewing Officers is-Highly sufficient [ ] Insufficient [ ]

Sufficient [ ] Highly insufficient [ ]Q14.The close relationship between your performance appraisal rating and corresponding monetary reward is

Highly co-related [ ] Not related [ ]

Co-related [ ] dont know [ ]

Q15.The degree of Mutual Understanding in your work relationships with your supervisor-1-Very High [ ] 2-very low [ ]

3-Quite High [ ] 4-Quite Low [ ]

Q16. Do the company conduct feedback interviews with their employees soon after the evaluation?Yes [ ]

No [ ] 17. After the Performance Appraisal and feedback, do the employees get counseling and Training, if needed to improve their performance in future?

Yes [ ]

No [ ] Q18.What is your overall feeling about the Performance Appraisal system?

a) Highly relevant in the present economic scenario and provides an opportunity for growth.

b) Not of much value as it does not help in any enhancement in performance.

c) Is of no significance in the present scenario not growth oriented.d) Highly irrelevant, does not help the individual or the company. Thank You Very Much!!!BIBLIOGRAPHY

TEXT BOOKS:

1. Human Resource Management and Personnel Management by Ashwathappa, 3RD Edition TATA McGraw-Hill.2. Human Resource Management and Industrial Relations by Subba Rao, 2nd Edition, Himalaya Publishing House. 3. Personal Management and Industrial Relations by Paul Yoder and Paul D S4. WEBSITES:

www.performance-appraisal.comwww.sonata-software.comhttp://www.wikipedia.org.

www.hrguide.comwww.capgemini.com

Performance appraisal

Traditional method

Modern method

Essay method.

Straight ranking method.

Paired comparison method.

Critical incident method.

Field review method.

Checklist method.

Graphic rating scale.

Forced distribution method.

Management by objective.

360 degree appraisal.

Assessment center.

Behavioral anchored rating scale.

Human resource accounting.

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