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TABLE OF CONTENT
1
S.N PARTICULARS PAGE.NO
1.
Introduction1.1 Company Profile
1.2 Product and Services
4. Objective of the Study
5. Literature Review
6 Research Methodology
7. Data Analysis and Interpretation
8. Findings
9. Conclusion
10. Bibliography
11. Recommendations
12. Annexure: Questionnaire
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INTRODUCTION
INTRODUCTION
C OMPANY PROFILE
Bank is India's second-largest bank with total assets of about Rs.1, 676.59 bn (US$ 38.5 bn) at March
31, 2012 and profit after tax of Rs. 20.05 bn (US$ 461 mn) for the year ended March 31, 2011 (Rs.
16.37 bn (US$ 376 mn) in fiscal 2010). Bank has a network of about 573 branches and extension
counters and over 2,000 ATMs. Bank offers a wide range of banking products and financial services
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to corporate and retail customers through a variety of delivery channels and through its specialized
subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture
capital and asset management. Bank set up its international banking group in fiscal 2002 to cater to
the cross border needs of clients and leverage on its domestic banking strengths to offer products
internationally. Bank currently has subsidiaries in the United Kingdom, Canada and Russia, branches
in Singapore and Bahrain and representative offices in the United States, China, United Arab
Emirates, Bangladesh and South Africa.
Bank's equity shares are listed in India on the Bombay Stock Exchange and the National Stock
Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York
Stock Exchange (NYSE).
Bank has formulated a Code of Business Conduct and Ethics for its directors and employees.
At September 20, 2012, Bank, with free float market capitalization* of about Rs. 400.00 billion
(US$ 9.00 billion) ranked third amongst all the companies listed on the Indian stock exchanges.
Bank was originally promoted in 1994 by Limited, an Indian financial institution, and was its wholly
owned subsidiary. 's shareholding in Bank was reduced to 46% through a public offering of shares in
India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000,
Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and
secondary market sales by to institutional investors in fiscal 2001 and fiscal 2002. was formed in
1955 at the initiative of the World Bank, the Government of India and representatives of Indian
industry. The principal objective was to create a development financial institution for providing
medium-term and long-term project financing to Indian businesses. In the 1990s, transformed its
business from a development financial institution offering only project finance to a diversified
financial services group offering a wide variety of products and services, both directly and through a
number of subsidiaries and affiliates like Bank. In 1999, become the first Indian company and the
first bank or financial institution from non-Japan Asia to be listed on the NYSE.
After consideration of various corporate structuring alternatives in the context of the emerging
competitive scenario in the Indian banking industry, and the move towards universal banking, the
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managements of and Bank formed the view that the merger of with Bank would be the optimal
strategic alternative for both entities, and would create the optimal legal structure for the group's
universal banking strategy. The merger would enhance value for shareholders through the merged
entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability
to participate in the payments system and provide transaction-banking services. The merger would
enhance value for Bank shareholders through a large capital base and scale of operations, seamless
access to 's strong corporate relationships built up over five decades, entry into new business
segments, higher market share in various business segments, particularly fee-based services, and
access to the vast talent pool of and its subsidiaries. In October 2001, the Boards of Directors of and
Bank approved the merger of and two of its wholly owned retail finance subsidiaries, Personal
Financial Services Limited and Capital Services Limited, with Bank. Shareholders of and BANK
approved the merger in January 2002, by the High Court of Gujarat at Ahmadabad in March 2002,
and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.
Consequent to the merger, the group's financing and banking operations, both wholesale and retail,
have been integrated in a single entity.
*Free float holding excludes all promoter holdings, strategic investments and cross holdings among
public sector entities.
Bank Group
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Board Members
Board Members
Mr. K. V. Kamath, Chairman....................................................
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Mr. Sridhar Iyengar....................................................
Dr. Swati Piramal....................................................
Mr. Homi R. Khusrokhan
....................................................
Mr. Arvind Kumar.................................................
Mr. M.S. Ramachandran..................................................
Dr. Tushaar Shah..................................................
Mr. V. Sridar
Ms. Chandra Kochhar,
Managing Director & CEO.........................................................
Mr. N. S. Kannan,
Executive Director & CFO.........................................................
Mr. K. Ram Kumar,
Executive Director.........................................................
Mr. Rajiv Sabharwal,
Executive Director
Board Committees
Board Committees
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Audit CommitteeBoard Governance, Remuneration &
Nomination Committee
Mr. Sridar Iyengar, Chairman
Mr. Homi Khusrokhan,
Mr. M.S. RamachandranMr. V. Sridar
Mr. Sridar Iyengar, Chairman
Mr. K.V. Kamath
Mr. Homi Khusrokhan
Corporate Social Responsibility Committee Customer Service Committee
Mr. M.S. Ramachandran, Chairman
Mr. Arvind Kumar
Dr. Tushaar Shah
Ms. Chanda Kochhar
Mr.K.V. Kamath, ChairmanMr.M.S. RamachandranMr.V. SridarMs. Chanda Kochhar
Credit Committee Fraud Monitoring Committee
Mr.K.V. Kamath, ChairmanMr. M.S. Ramachandran
Mr. Homi Khusrokhan
Ms. Chanda Kochhar
Mr. V. Sridar, Chairman
Mr. K.V. Kamath
Mr. Homi Khusrokhan
Mr. Arvind Kumar
Ms. Chanda Kochhar
Mr. Rajiv Sabharwal
Information Technology (IT) Strategy CommitteeRisk Committee
Mr. Homi Khusrokhan, ChairmanMr.K.V. KamathMr. Sridar Iyengar
Ms. Chanda Kochhar
Mr.K.V. Kamath, ChairmanMr. Sridar Iyengar
Mr. Arvind Kumar
Mr. V. Sridar
Ms. Chanda Kochhar
Share Transfer & Shareholders'/ Investors' Grievance Committee Committee of Executive Directors
Mr. Homi Khusrokhan, Chairman
Mr. V. Sridar
Mr. N.S. Kannan
Ms. Chanda Kochhar, Chairperson
Mr. N.S. Kannan
Mr. K. Ramkumar
Mr. Rajiv Sabharwal
Product and Services
Deposit
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Bank offers wide variety of Deposit Products to suit your requirements. Coupled with convenience of
networked branches/ ATMs and facility of E-channels like Internet and Mobile Banking, Bank brings
banking at your doorstep. Select any of our deposit products and provide your details online and our
representative will contact you for Account Opening.
Bank offers you a power packed Savings Account with a host of convenient features
and banking channels to transact through. So now you can bank at your convenience,
without the stress of waiting in queues.
Fixed Deposits
Safety, Flexibility, Liquidity and Returns!!!! A combination of unbeatable features of the
Fixed Deposit from Bank.
Recurring Deposits
When expenses are high, you may not have adequate funds to make big investments. But
simply going ahead without saving for the future is not an option for you. Through Bank
Recurring Deposit you can invest small amounts of money every month that ends up
with a large saving on maturity. So you enjoy twin advantages- affordability and higher
earnings.
Loans
Bank offers wide variety of Loans Products to suit your requirements. Coupled with convenience of
networked branches/ ATMs and facility of E-channels like Internet and Mobile Banking, Bank brings
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banking at your doorstep. Select any of our loan product and provide your details online and our
representative will contact you for getting loans.
Home Loans
The No. 1 Home Loans Provider in the country, Bank Home Loans offers some
unbeatable benefits to its customers - Doorstep Service, Simplified Documentation and
Guidance throughout the Process. It's really easy!
Car Loans
The NO 1 financier for car loans in the country. Network of more than 1500 channel
partners in over 780 locations. Tie-ups with all leading automobile manufacturers toensure the best deals. Flexible schemes & quick processing. Hassle-free application
process on the click of a mouse.
Commercial Vehicle Loans
Range of services on existing loans & extended products like funding of new vehicles,
refinance on used vehicles, balance transfer on high cost loans, top up on existing loans,
Extend product, working capital loans & other banking products.
Two Wheeler Loans
Avail attractive schemes at competitive interest rates from the No 1 Financier for Two
Wheeler Loans in the country. Finance facility up to 90% of the On Road Cost of the
vehicle, repayable in convenient repayment options and comfortable tenors from 6
months to 36 months. Ride home on your Dream Two Wheeler with our hassle free
finance.
Farm Equipment Loans
Preferred financier for almost all leading tractor manufacturers in the country. Flexible
repayment options in tandem with the farmer's seasonal liquidity. Monthly, Quarterly
and Half-yearly repayment patterns to choose from. Comfortable repayment tenures
from 1 year to 9 years.
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Cards
Bank offers a varied range of cards to suit your requirements. These cards having a wide acceptance,
nationally and internationally, coupled with benefits of channels like Internet and Mobile will enhance
your experience.
Credit Cards
Bank Credit Cards give you the facility of cash, convenience and a range of benefits,
anywhere in the world. These benefits range from life time free cards, Insurance
benefits, global emergency assistance service, discounts, utility payments, travel
discounts and much more.
Debit Cards
The Bank Debit Card is a revolutionary form of cash that allows customers to access
their bank account around the clock, around the world. The Bank Debit Card can be used
for shopping at more than 100,000 merchants in India and 13 million merchants
worldwide.
Travel Card
Presenting Bank Travel Card. The Hassle Free way to Travel the world. Traveling with
US Dollar, Euro, Pound Sterling or Swiss Francs; Looking for security and convenience;
take Bank Travel Card. Issued in duplicate. Offers the Pin based security. Has the
convenience of usage of Credit or Debit card.
Investments
At Bank, we care about all your needs. Along with Deposit products and Loan offerings, Bank assists
you to manage your finances by providing various investment options ranging from Bank Tax Saving
Bonds to Equity Investments through Initial Public Offers and Investment in Pure Gold. Bank facilitates
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following investment products:
Bank Tax Saving Bonds
Government of India Bonds
Investment in Mutual Funds
Initial Public Offers by Corporate.
Investment in "Pure Gold"
Foreign Exchange Services
Senior Citizens Savings Scheme,
You can invest in above products through any of our branches. For select products Bank also provides
the ease of investing through electronic channels like ATMs and Internet (direct.com)
Demat Services
Bank Demat Services boasts of an ever-growing customer base of over 11.5 lacks account holders. In
our continuous endeavor to offer best of the class services to our customers we offer the following
features:
E-Instructions: You can transfer securities 24 hours a day, 7 days a week through
Internet & Interactive Voice Response (IVR) at a lower cost. Now with "Speak to
transfer", you can also transfer or pledge instructions through our customer care officer.
Consolidation Demat Account: Dematerialize your physical shares in various
holding patterns and consolidate all such scattered holdings into your primary demat
account at reduced cost.
Digitally Signed Statement: Receive your account statement and bill by email.Corporate Benefit Tracking: Track your dividend, interest, bonus through your
account statement.
Mobile Request: Access your demat account by sending SMS to enquire about
Holdings, Transactions, Bill & ISIN details.
Mobile Alerts: Receive SMS alerts for all debits/credits as well as for any request,
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which cannot be processed.
Dedicated customer care executives specially trained at our call centre, to handle all
your queries.
Private Banking
Asset Products
Banking
Credit card and Debit card
Depository Services
Exclusive Phone Banking
Further More...
Asset Products
Enjoy attractive interest rates and the convenience of doorstep service from enquiry to disbursement.
The facility to transfer your existing higher interest rate loan to Bank is also available.
Home loan
Two Wheeler
Personal Loan
Auto Loan
Banking
Fixed Deposits
We offer you competitive interest rates with the added comfort of safety and liquidity. You can also
avail of loans against your Fixed Deposits up to 90% of attractive rates.
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Multicity Cheque Book facility
A payable-at- par chequebook is provided to you free of charge making outstation financial transactions
a signature away.
Debit Cards & Credit Cards
We provide you a free & personalized photo signature international debit card with enhanced cash
withdrawal and point of sales limits.
Exclusive Phone Banking
A call from your registered mobile to our Customer Care Centre would directly connect you to the
phone banking team. No further authentication would be required for your non-financial transactions.
We also provide you with a dedicated toll free number 1-600-22-8181
RISK MANAGEMENT
Risk is an inherent part of Banks business, and effective Risk Compliance & Audit Group is
critical to achieving financial soundness and profitability. Bank has identified Risk
Compliance & Audit Group as one of the core competencies for the next millennium. The
Compliance & Audit Group (RC & AG) at Bank benchmarks itself to international best
practices so as to optimize capital utilization and maximize shareholder value. With well
defined policies and procedures in place, Bank identifies, assesses, monitors and manages the
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principal risks:
Credit risk(the possibility of loss due to changes in the quality of counterparties)
Market Risk(the possibility of loss due to changes in market prices and rates ofsecurities and their levels of volatility)Operational risk(the potential for loss arising from breakdowns in policies and
controls, human error, contracts, systems and facilities)
The ability to implement analytical and statistical models is the true test of a risk methodology.
In addition to three departments within the Risk Compliance & Audit Group handling the above
risks, an Analytics Unit develops quantitative techniques and models for risk measurement.
Market Risk Compliance & Audit Group
Bank is exposed to all categories of Market Risk, viz.,
Interest Rate Risk (risk due to changes in interest rates)
Exchange Rate Risk (risk due to changes in exchange rates)
Equity Risk (risk due to change in equity prices)
Liquidity Risk (risk due to deterioration in market liquidity for tradable instruments)
The Market Risk Compliance & Audit Department evaluates tests and approves
market risk methodologies developed by the Treasury. It also participates in the new
product approval process on a firm-wide basis and evaluates all new products from a
market risk perspective.
Operational Risk Management
Bank, like all large banks, is exposed to many types of operational risks. These
include potential losses caused by events such as breakdown in information,
communication, and transaction processing and settlement systems/ procedures.
The Audit Department, an integral part of the Risk Compliance & Audit Group,
focuses on the operational risks within the organization. In recent times, there has
been a shift in the audit focus from transactions to controls. Some examples of this
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paradigm shift are:
Adherence to internal policies, procedures and documented processes
Risk Based Audit Plan
Widening of Treasury operations audit coverage
Use of Computer Assisted Audit Techniques (CAATs)
Information Systems Audit
Plans to develop/ buy software to capture the workflow of the Audit Department
The Audit Department conceptualized and put into operation a Risk Based Audit
Plan during the year 1998-99. The Risk Based Audit Plan envisages allocation of
audit resources in accordance with the risk constituents of Banks business.
social-initiatives
Bank's social sector initiatives aim to resolve some of the most fundamental developmental problems
facing India today. Our involvement is primarily in terms of non-commercial support to fill knowledge
and practice gaps in specific thematic areas Early Child Health, Elementary Education and Micro
Financial Services.
Www.socialinitiatives.org is an interactive platform that seeks to:
Bring together participants in the development process to widen and deepen the discourse
informing development practice. Interactive features include discussion boards and facilities to
post papers, articles or other resources.
Publish research related to innovations and significant problems within the identified thematic
areas.
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Enable online application for funding
Related Interests
In addition to its core areas of focus, the SIG, in a limited manner, supports some other initiatives:
1.Non-governmental Organization (NGO) Capacity Building
This is supported through the GIVE (Giving Impetus to Voluntary Effort) Foundation and the web site
communities.org.
The web site seeks to provide a variety of services to NGOs listed on the site including facilitating the
receipt of donations online (Give Online), sale of NGO products (Shop Online), volunteering of time
and skills (Volunteer Online) and news (News Online).
2. Modernization of the Indian Financial System
This involves encouraging appropriate research and institution building efforts on a national basis. The
web site, researchcentre.org, is a virtual non-profit research center that acts as a platform to address and
encourage debate, and develop a non-partisan opinion on various issues of concern and interest in
financial economics relating to emerging markets. Bank has supported the development of various
financial institutions such as the National Stock Exchange and the Bombay Stock Exchange. It has also
supported the Institute for Financial Management and Research, Chennai.
Mission Statement
The mission statement of the SIG is "to identify and support initiatives designed to improve the
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capacities of the poorest of the poor to participate in the larger economy". The SIG believes that the
three fundamental capacities any individual should possess to be able to participate in the larger
economy are in the areas of health, education and access to basic financial services. Within these broad
areas, infant health at birth, elementary education and micro financial services define the areas in which
the SIGs work focuses.
Strategy
At a very basic level, the programmes and projects supported by the SIG are required to cater to the
poorest. They should enable them to become active and informed participants in socio-economic
processes as opposed to passive observers. These initiatives must be output oriented, with a focus onproducing measurable outcomes that meet a minimum quality requirement. The initiatives also need to
be cost-effective. This is in recognition of the fact that resources are limited and their efficient use is
imperative if the maximum number is to benefit. Cost-effectiveness also facilitates the adoption of the
initiative in other contexts.
The initiative must be scalable. Scalability implies the ability to draw upon important elements of a
programme and adapt them to suit the needs of a specific situation. It should be possible to do so at a
national level. Even if the programme itself is not directly scale able, it should be possible to take away
significant lessons from it in order to enrich work in other settings.
All supported initiatives should have the potential for both near and long-term impact. Consequentially,
it is important that the impact of these programmes, in the near and long term, be carefully understood
and analyzed in a rigorous manner and not through anecdotes. It is critical to clearly understand how an
initiative is performing in terms of its predetermined goals and in comparison to alternatives. There is
little doubt that a complex of factors, very often beyond the control of the programme/ organization, will
influence the outcome. Yet, serious and regular impact analysis can only make the programme richer
and is essential. The SIG assigns greater value to programmes/ organizations that carefully examine the
short-term and long-term implications of their actions.
In pursuit of its goals in the three focus areas, the SIG tends to support reasonably large-sized initiatives
so that issues such as cost-effectiveness, scalability and impact assessment can be dealt with more
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directly. These initiatives not only have the potential to provide key research inputs to other
programmes, but also tend to have a large impact that benefits the communities they work with. The
approach of the SIG may thus be characterized more broadly as action research, to distinguish it from
pure academic research. However, in its research work and impact assessment, the SIG seeks to adhere
to the highest standards of academic rigour. It often works in partnership with academic institutions such
as Institute of Rural Management Anand, KEM, Massachusetts Institute of Technology, Tata Institute of
Social Sciences, University of California, Berkeley and the University of Southampton.
It is crucial that the programmes supported by SIG be time-bound. This lends clarity to the aim of the
programme and prevents its intent from getting diluted over time.
The SIG works by identifying gaps in knowledge and practice in its focus areas and locating initiatives
that address these gaps in a manner consistent with the SIGs mission. The identification of research
needs is followed by an in-depth analysis of the short-term and long-term implications of various forms
of action. Among other things, this requires taking a comprehensive overview of work already done in
the country and outside. The SIG, thus, seeks to answer certain fundamental questions in its focus areas
through the projects it supports and, thereby, contribute to findings that help the sector. It should be
pointed out that the SIG does not function as a rollout agency.
An important feature of the SIGs strategy is the belief in strengthening or supplementing existing
systems, rather than investing in parallel structures. Another key element of its strategy is the building of
long-term relationships with suitable partners. As part of this effort, the SIG works actively to improve
the efficacy of these partners and ensure sustained impact.
In pursuit of its goals, the SIG seeks to work actively with research agencies, Non-Governmental
Organizations (NGOs), Corporate, Government departments, local stakeholders and international
organizations. It should also be noted that the group believes modern technologies; particularly
Information and Communication Technologies (ICT) can prove to be important facilitators if used
appropriately.
Bank and the Social Sector
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The changed economic climate in India, with a growing emphasis on the market, has hastened the need
for an informed and participatory socio-economic order. As one of the largest players in the economic
landscape of the country, Bank believes that its involvement in the commercial sector must be backedby a simultaneous commitment in the social sector. This is particularly so if any of the larger goals of
economic liberalization in India, and of its players, is to be brought to fruition. Bank seeks to perform
its role in the social sector through a dedicated not-for-profit group, the Social Initiatives Group (SIG).
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O BJECTIVEOf study
O BJECTIVE
Important steps to obtaining useful traditional appraisals include determining the type of data to be
collected as well as who will conduct the appraisal, establishing a rating philosophy, overcoming typical
rating deficiencies, creating a rating instrument, and engaging the employee in making decisions onfuture performance changes.
An effective negotiated performance appraisal helps the employee take additional ownership for both
continuing effective performance and improving weak areas. Employee goals set through performance
appraisals should be difficult but achievable, as goals that are overly ambitious are doomed for failure.
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Some employees tend to boycott their own progress by setting impossible goals to achieve. Finally,
employees want to know what you think of their work. Letting workers know that you have noticed their
efforts goes a long way towards having a more motivated workforce.
The purpose of research is to discover answers to questions through the application of scientific
procedures. The main aim of research is to find out the truth which is hidden and which has not been
discovered as yet. Though each research study had its own specific purpose, we may think of research
objectives falling into a number of following broad groupings:
The major objectives of this research are:
1. To find out the techniques used for performance appraisal in Bank.
2. To know the impact of performance appraisal in organization development.
3. To find out the impact of performance appraisal on employees satisfaction.
4. To be familiar about the procedure of performance appraisal in Bank.
5. To know how performance appraisal motivates employees.
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LiteratureReview
Performance Appraisals
A performance appraisal is the process of assessing worker performance in comparison to certain
predetermined organizational standards. Appraisals not only help employees understand how they are
doing but they also help the worker's supervisor along with the organization as a whole. Often,
performance appraisals are linked to pay increases and promotions. But they also provide feedback on
ones performance, help recognize weakness and strengths, and help one to reach the desired goals of the
organization or their own individual goals. For the supervisor, performance appraisals provide
information that is valid for pay increases, promotions, demotion.
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ns, and firings along with feedback for an employee.
Performance appraisals are also used to encourage interaction between workers and supervisors. As one
might think, there are many different kinds of performance appraisals that an organization can decide to
use. The first thing that an organization must decide is whether they want to do what is called an
objective or a subjective performance appraisal.
An objective performance appraisal is when you measure quantifiable aspects of job performance. An
example would be the number of units produced. A subjective performance appraisal is when some
knowledgeable individual rates or critiques your work. Once you decide if an objective or subjective
performance appraisal is good for your organization, you then have to decide what type is right for you.
There are many different ways you can go about deciding and of course many different types to choose
from. The links below point towards sites that can help you find more information about performance
appraisals and some examples of different types of performance appraisals to choose from.
WHAT SHOULD A PERFORMANCE SYSTEM BE?
Correlated with the organization's philosophies and mission
Cover assessment of performance as well as potential for development
Look after the needs of both the individual and the organization
Help create a clean environment
Rewards linked to achievements
Generate information for personnel development and career planning
suggesting appropriate person-task matching
STANDARDS AND INDICATORS OF PERFORMANCE APPRAISAL
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1. Mutual goal
2. Reliable and consistent
3. Accurate and equitable Regular and routine
4. Participatory and open
5. Rewards
6. Timely feedback
7. Impersonal feedback
8. Noticeable feedback
9. Relevance and responsiveness
10. Commitment
HOW CAN THE PERFORMANCE APPRAISAL SYSTEM HELP?
Promote better understanding of an employee's role and clarity about his or her
functions
give a better understanding of personal strengths and weaknesses in relation to
expected roles and functions
Identify development needs of an employee
Establish common ground between the employee and the supervisor
Increase communication
Provide an employee with the opportunity for self-reflection and individual goal
setting
Help an employee internalize the culture, norms and values of the organization. This
helps develop an identity with and commitment to the organization and prepares an
employee for higher-level positions in the hierarchy
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Assist in a variety of personnel decisions
DURING PERFORMANCE APPRAISAL, DISTINGUISH BETWEEN...
Effective human resources management (HRM) is essential for optimally utilizing creativity and
attaining individual as well as organizational goals. Leadership has to ensure proper integration of
various activities and harmonious functioning directed towards organizational goals. High motivation is
essential for ensuring commitment of human resources to the given objectives. The key to motivation
lies in integrating organizational and individual goals. Therefore, a manager has to concentrate on basic
HRM tasks such as planning, development, compensation and Evaluation includes performance
planning, appraisal and counseling. These are critical in effective HRM.
Performance appraisal system: The concept
Performance appraisal is a management tool, which is helpful in motivating and effectively utilizing
human resources. Assessments of human potential are difficult, no matter how well designed and
appropriate the performance planning and appraisal system is.
- Linking rewards with achievements,
- generating information for the growth of the employee as well as of the organization, and
- suggesting appropriate person-task matching and career plans.
Feedback is an important component of performance appraisal. While positive feedback is easily
accepted, negative feedback often meets with resistance unless it is objective, based on a credible
source and given in a skilful manner.
Just like any other process, if performance appraisals aren't working, don't blame the
process, ask yourself whether it is being properly trained, explained, agreed and conducted.
Effective performance appraisals Performance appraisals are essential for the effective management and
evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed
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into business planning. Formal performance appraisals are generally conducted annually for all staff in
the organization. His or her line manager appraises each staff member. (Directors are appraised by the
CEO, who is appraised by the chairman or company owners, depending on the size and structure of the
organization). Annual performance appraisals enable management and monitoring of standards, agreeing
expectations and objectives, and delegation of responsibilities and tasks. Staff performance appraisals
also establish individual training needs and enable organizational training needs analysis and planning.
Performance appraisals data feeds into organizational annual pay and grading reviews, and coincides
with the business planning for the next trading year. Performance appraisals generally review each
individual's performance against objectives and standards for the trading year, agreed at the previous
appraisal meeting. Performance appraisals are also essential for career and succession planning.
Performance appraisals are important for staff motivation, attitude and behavior development,
communicating organizational aims, and fostering positive relationships between management and staff.
Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a
plan for future development. In short, performance and job appraisals are vital for managing the
performance of people and organizations.
Are performance appraisals truly beneficial?
It is sometimes fashionable in the 'modern age' to dismiss traditional processes such as performance
appraisals as being irrelevant or unhelpful. Be very wary however if considering to remove appraisals
from your own organizational practices. It is likely that the critics of the appraisal process are the people
who can't conduct them very well. It's a common human response to want to jettison something that one
finds difficult. Appraisals - in whatever form, and there are various - have been a mainstay of
management for decades, for good reasons.
Think about everything that performance appraisals can achieve and contribute to when they are
properly managed, for example:
Performance measurement - transparent, short, medium and long term
Clarifying, defining, redefining priorities and objectives
Motivation through agreeing helpful aims and targets
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Motivation though achievement and feedback
Training needs and learning desires - assessment and agreement
Identification of personal strengths and direction - including unused hidden strengths
Career and succession planning - personal and organizational
Team roles clarification and team building
Organizational training needs assessment and analysis
Appraise and manager mutual awareness, understanding and relationship
Resolving confusions and misunderstandings
Reinforcing and cascading organizational philosophies, values, aims, strategies, priorities, etc
Delegation, additional responsibilities, employee growth and development
Counseling and feedback
Manager development - all good managers should be able to conduct appraisals well - it's a
fundamental process
The list goes on.
People have less and less face-to-face time together these days. Performance appraisals offer a way to
protect and manage these valuable face-to-face opportunities. My advice is to hold on to and nurture
these situations, and if you are under pressure to replace performance appraisals with some sort of
(apparently) more efficient and cost effective methods, be very sure that you can safely cover all the
aspects of performance and attitudinal development that a well-run performance appraisals system is
naturally designed to achieve.
There are various ways of conducting performance appraisals, and ideas change over time as to what are
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the most effective appraisals methods and systems. Some people advocate traditional appraisals and
forms; others prefer 360-degree-type appraisals; others suggest using little more than a blank sheet of
paper.
In fact performance appraisals of all types are effective if they are conducted properly, and better still if
the appraisal process is clearly explained to, agreed by, the people involved.
Managers need guidance, training and encouragement in how to conduct appraisals properly. Especially
the detractors and the critics. Help anxious managers (and directors) develop and adapt appraisals
methods that work for them. Be flexible. There are lots of ways to conduct appraisals, and particularly
lots of ways to diffuse apprehension and fear - for managers and appraises alike. Particularly -
encourage people to sit down together and review informally and often - this removes much of the
pressure for managers and appraises at formal appraisals times. Leaving everything to a single make-or-
break discussion once a year is asking for trouble and trepidation.
Look out especially for the warning signs of 'negative cascaded attitudes' towards appraisals. This is
most often found where a senior manager or director hates conducting appraisals, usually because they
are uncomfortable and inexperienced in conducting them. The senior manager/director typically will be
heard to say that appraisals don't work and are a waste of time, which for them becomes a self-fulfilling
prophecy. This attitude and behavior then cascades down to their appraises (all the people in their team)who then not surprisingly also apply the same 'no good - not doing it' negative attitude to their own
appraisals responsibilities (teams). And so it goes. A 'no good - not doing it' attitude in the middle ranks
is almost invariably traceable back to a senior manager or director who holds the same view. As with
anything, where people need help doing the right thing, help them.
All that said, performance appraisals that are administered without training (for those who need it),
without explanation or consultation, and conducted poorly will be counter-productive and is a
waste of everyone's time.
Well-prepared and well-conducted performance appraisals provide unique opportunities to help
appraise and managers improve and develop, and thereby also the organizations for whom they work.
Aside from formal traditional (annual, six-monthly, quarterly, or monthly) performance appraisals, there
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are many different methods of performance evaluation. The use of any of these methods depends on the
purpose of the evaluation, the individual, the assessor, and the environment.
The formal annual performance appraisal is generally the over-riding instrument, which gathers together
and reviews all other performance data for the previous year.
Performance appraisals should be positive experiences. The appraisals process provides the platform for
development and motivation, so organizations should foster a feeling that performance appraisals are
positive opportunities, in order to get the best out of the people and the process. In certain organizations,
performance appraisals are widely regarded as something rather less welcoming ('bollocking sessions' is
not an unusual description), which provides a basis only on which to develop fear and resentment, so
never, never, never use a staff performance appraisal to handle matters of discipline or admonishment,
which should instead be handled via separately arranged meetings.
Objectives of performance appraisal
From the point of view of the organization, performance appraisal serves the purpose of providing
information about human resources and their development; measuring the efficiency with whichhuman resources are being used and improved; providing compensation packages to employees;
and maintaining organizational control.
Performance appraisal should also aim at the mutual goals of the employees and the organization. This
is essential because employees can develop only when the organization's interests are fulfilled. The
organization's main resources are its employees, and their interest cannot be neglected. Mutual goals
simultaneously provide for growth and development of the organization as well as of the human
resources. They increase harmony and enhance effectiveness of human resources in the organization.
Uses of an appraisal system
A properly designed performance appraisal system can:
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Be instrumental in helping employees to better understand their strengths and weaknesses with
respect to their role and functions in the organization;
Help in identifying the developmental needs of employees, given their role and function;
Increase mutuality between employees and their supervisors so that every employee feels
happy to work with their supervisor and thereby contributes their maximum to the
organization;
Act as a mechanism for increasing communication between employees and their supervisors.
In this way, each employee gets to know the expectations of their superior, and each superior
also gets to know the difficulties of their subordinates and can try to solve them. Together,
they can thus better accomplish their tasks;
Provide an opportunity to each employee for self-reflection and individual goal setting, so that
individually planned and monitored development takes place;
Help employees internalize the culture, norms and values of the organization, thus developing
an identity and commitment throughout the organization;
Help prepare employees for higher responsibilities in the future by continuously reinforcing
the development of the behavior and qualities required for higher-level positions in the
organization;
Be instrumental in creating a positive and healthy climate in the organization that drives
employees to give their best while enjoying doing so; and
Assist in a variety of personnel decisions by periodically generating data regarding each
employee.
Characteristics of an appraisal system
Performance appraisal cannot be implemented successfully unless all concerned accepts it. There
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should be a common and clear understanding of the distinction between evaluation and appraisal. As
Patten (1982) argues, evaluation aims at 'objective' measurement, while appraisal includes both
objective and subjective assessment of how well an employee has performed during the period under
review. Thus performance appraisal aims at 'feedback, development and assessment.' The process of
performance appraisal should concentrate on the job of an employee, the environment of the
organization, and the employee him- or herself. These three factors are inter-related and inter-
dependent. Therefore, in order to be effective, the appraisal system should be individualized,
subjective, and qualitative and oriented towards problem solving. It should be based on clearly
specified and measurable standards and indicators of performance. Since what is being appraised is
performance and not personality, personality traits, which are not relevant to job performance, should
be excluded from the appraisal framework.
Some of the important considerations in designing a performance appraisal system are:
Goal the job description and the performance goals should be structured mutually decided and
accepted by both management and employees.
Reliable and consistent Appraisal should include both objective and subjective ratings to
produce reliable and consistent measurement of performance.
Practical and simpleformat the appraisal format should be practical, simple and aim at fulfilling
its basic functions. Long and complicated formats are time consuming, difficult to understand, and do
not elicit much useful information.
Regular and routine while an appraisal system is expected to be formal in a structured manner,
informal contacts and interactions can also be used for providing feedback to employees.
Participatory and open an effective appraisal system should necessarily involve the employee'sparticipation, usually through an appraisal interview with the supervisor, for feedback and future
planning. During this interview, past performance should be discussed frankly and future goals
established. A strategy for accomplishing these goals as well as for improving future performance
should be evolved jointly by the supervisor and the employee being appraised. Such participation
imparts a feeling of involvement and creates a sense of belonging.
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Rewards - both positive and negative - should be part of the performance appraisal system.
Otherwise, the process lacks impact.
Feedback should be timely unless feedback is timely; it loses its utility and may have only
limited influence on performance.
Impersonal feedbackmust be impersonal if it is to have the desired effect. Personal feedback is
usually rejected with contempt, and eventually de-motivates the employee.
Feedback must be noticeable the staff member being appraised must be made aware of the
information used in the appraisal process. An open appraisal process creates credibility.
Relevance and responsiveness- Planning and appraisal of performance and consequent rewards
or punishments should be oriented towards the objectives of the programmer in which the employee
has been assigned a role. For example, if the objectives of a programmer are directed towards a
particular client group, then the appraisal system has to be designed with that orientation.
Commitment Responsibility for the appraisal system should be located at a senior level in the
organization so as to ensure commitment and involvement throughout the management hierarchy.
Types of performance and aptitude assessments
Formal annual performance appraisals
Probationary reviews
Informal one-to-one review discussions
Counseling meetings
Observation on the job
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Skill- or job-related tests
Assignment or task followed by review, including second (temporary job cover or transfer).
Assessment centre, including observed group exercises, tests presentations, etc.
Survey of opinion of others who have dealings with the individual
Psychometric tests and other behavioral assessments
Graphology (handwriting analysis)
None of these methods is mutually exclusive. All of these performance assessment methods can be used
in conjunction with others in the list, depending on situation and organizational policy. Where any of
these processes is used, the manager must keep a written record, and must ensure agreed actions are
followed up. The notes of all review situations can then be referred to at the formal appraisal.
Holding regular informal one-to-one review meetings greatly reduces the pressure and time required for
the annual formal appraisal meeting. Holding informal reviews every month is ideal all staff. There are
several benefits of reviewing frequently and informally:
The manager is better informed and more up-to-date with his or her people's activities (and more in
touch with what lies beyond, e.g., customers, suppliers, competitors, markets, etc)
Difficult issues can be identified, discussed and resolved quickly, before they become more serious.
Help can be given more readily - people rarely ask unless they see a good opportunity to do so - the
regular informal review provides just this.
Assignments, tasks and objectives can be agreed completed and reviewed quickly - leaving actions more
than a few weeks reduces completion rates significantly for all but the most senior and experienced
people.
Objectives, direction, and purpose is more up-to-date - modern organizations demand more flexibility
than a single annual review allows - priorities often change through the year, so people need to be re-
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directed and re-focused.
Training and development actions can be broken down into smaller more digestible chunks, increasing
success rates and motivational effect as a result.
The 'fear factor', often associated by many with formal appraisals, is greatly reduced because people
become more comfortable with the review process.
Relationships and mutual understanding develops more quickly with greater frequency of meetings
between manager and staff member.
Staff members can be better prepared for the formal appraisal, giving better results, and saving
management time.
Much of the review has already been covered throughout the year by the time comes for the formal
appraisal.
Frequent review meetings increase the reliability of notes and performance data, and reduce the chances
of overlooking things at the formal appraisal.
Performance appraisal system:
The process
Performance appraisal involves an evaluation of actual against desired performance. It also helps in
reviewing various factors, which influence performance. Managers should plan performance
development strategies in a structured manner for each employee. In doing so, they should keep the
goals of the organization in mind and aim at optimal utilization of all available resources, including
financial. Performance appraisal is a multistage process in which communication plays an important
role.
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Performance appraisals process
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Craig, Beatty and Baird (1986) suggested an eight-stage performance appraisal process:
(I) Establishing standards and measures
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The first step is to identify and establish measures, which would differentiate between successful and
unsuccessful performances. These measures should be under the control of the employees being
appraised. The methods for assessing performance should be decided next. Basically, management
wants to:
Know the behavior and personal characteristics of each employee; and
assess their performance and achievement in the job.
There are various methods available for assessing results, behavior and personal characteristics of an
employee. These methods can be used according to the particular circumstances and requirements.
(II) Communicating job expectations
The second step in the appraisal process is communicating to employees the measures and standards,
which will be used in the appraisal process. Such communication should clarify expectations and
create a feeling of involvement.
(III) Planning
In this stage, the manager plans for the realization of performance expectations, arranging for the
resources to be available which are required for attaining the goals set. This is an enabling role.
(IV) Monitoring performance
Performance appraisal is a continuous process, involving ongoing feedback. Even though performance
is appraised annually, it has to be managed 'each day, all year long.' Monitoring is a key part of the
performance appraisal process. It should involve providing assistance as necessary and removing
obstacles rather than interfering. The best way to effectively monitor is to walk around, thus creating
continuous contacts, providing first-hand information, and identifying problems, which can then be
solved promptly.
(V) Appraising
This stage involves documenting performance through observing, recalling, evaluating, written
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communication, judgment and analysis of data. This is like putting together an appraisal record.
(VI) Feedback
After the formal appraisal stage, a feedback session is desirable. This session should involve verbal
communication, listening, problem solving, negotiating, compromising, conflict resolution and
reaching consensus.
(VII) Decision making
On the basis of appraisal and feedback results, various decisions can be made about giving rewards (e.g.,
promotion, incentives, etc.) and punishments (e.g., demotion). The outcome of an appraisal system
should also be used for career development.
(VIII) Development of performance
The last stage of performance appraisal is 'development of performance,' or professional development,
by providing opportunities for upgrading skills and professional interactions. This can be done by
supporting participation in professional conferences or by providing opportunities for further study.
Such opportunities can also act as incentives or rewards to employees.
Communication
It is obvious that communication is at the core of an appraisal system. Communication can be either
upward or downward.Downward communication is from upper management levels to lower levels, and
passes on a judgment of how the employees are doing and how they might do even better. As the
information flows downward, it becomes more individualized and detailed. Upward communication is
from lower to higher levels. Through this process, employees communicate their needs, aspirations and
goals. As information flows upward, it has to become brief and precise because of the channels through
which it has to pass.
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Approaches and techniques in performance appraisal
Performance appraisal is a multistage process involving several activities, which can be administered
using a variety of approaches. Some of these approaches are considered below, based on Einstein and
LeMere-Labonte, 1989; and Monga, 1983:
APPROACHES IN PERFORMANCE APPRAISAL
Intuitive
Self-appraisal
Group
Trait
Achievement of results
Behavioral method
Intuitive approach in this approach, a supervisor or manager judges the employee based
on their perception of the employee's behavior.
Self-appraisal approach Employees evaluates their own performance using a common
format.
Group approach the employee is evaluated by a group of persons.
Trait approach this is the conventional approach. The manager or supervisor evaluates
the employee on the basis of observable dimensions of personality, such as integrity,
honesty, dependability, punctuality, etc.
Appraisal based on achieved results in this type of approach, appraisal is based on
concrete, measurable, work achievements judged against fixed targets or goals set
mutually by the subject and the assessor.
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Behavioral method: This method focuses on observed behavior and observable critical
incidents.
Appraisal techniques
TECHNIQUES OF PERFORMANCE APPRAISAL
Easy appraisal method
Graphic rating scales
Field review method
Forced choice rating method
Critical incident appraisal method
Management by objectives
Work standard approach
Ranking methods
- Alteration methods
- Alteration ranking
- Paired comparison
- Person-to-person rating
- Checklist
- Behaviorally anchored rating scales
- Assessment centre
There are several techniques of performance appraisal, each with some strong points as well as
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limitations. Oberg (1972) has summarized some of the commonly used performance appraisal
techniques.
(i) Essay appraisal method
The assessor writes a brief essay providing an assessment of the strengths, weaknesses and potential of
the subject. In order to do so objectively, it is necessary that the assessor knows the subject well and
should have interacted with them. Since the length and contents of the essay vary between assessors,
essay ratings are difficult to compare.
(ii) Graphic rating scale
A graphic scale 'assesses a person on the quality of his or her work (average; above average;
outstanding; or unsatisfactory).' Assessment could also be trait centered and cover observable traits,
such as reliability, adaptability, communication skills, etc. Although graphic scales seem simplistic in
construction, they have application in a wide variety of job responsibilities and are more consistent
and reliable in comparison with essay appraisal. Using it in conjunction with the essay appraisal
technique can enhance the utility of this technique.
(iii) Field review method
Since individual assessors differ in their standards, they inadvertently introduce bias in their ratings.
To overcome this assessor-related bias, essay and graphic rating techniques can be combined in a
systematic review process. In the field review method, 'a member of the HRM staff meets a small
group of assessors from the supervisory units to discuss each rating, systematically identifying areas of
inter-assessor disagreement.' It can then be a mechanism to help each assessor to perceive the
standards uniformly and thus match the other assessors. Although field review assessment is
considered valid and reliable, it is very time consuming.
(iv) Forced-choice rating method Unlike the field review method the forced-
choice rating method does not involve discussion with supervisors. Although this
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technique has several variations, the most common method is to force the assessor to
choose the best and worst fit statements from a group of statements. These statements
are weighted or scored in advance to assess the employee. The scores or weights
assigned to the individual statements are not revealed to the assessor so that she or he
cannot favor any individual. In this way, the assessor bias is largely eliminated and
comparable standards of performance evolved for an objective. However, this
technique is of little value wherever performance appraisal interviews are conducted.
(v) Critical incident appraisal method
In this method, a supervisor describes critical incidents, giving details of both positive and negative
behavior of the employee. These are then discussed with the employee. The discussion focuses on
actual behavior rather than on traits. While this technique is well suited for performance review
interviews, it has the drawback that the supervisor has to note down the critical incidents as and when
they occur. That may be impractical, and may delay feedback to employees. It makes little sense to
wait six months or a year to discuss a misdeed, a mistake or good display of initiative.
(vi) Management by objectives.
The employees are asked to set or help set their own performance goals. This avoids the feeling among
employees that they are being judged by unfairly high standards. This method is currently widely used,
but not always in its true spirit. Even though the employees are consulted, in many cases management
ends up by imposing its standards and objectives. In some cases employees may not like 'self-direction
or authority.' To avoid such problems, the work standard approach is used.
(vii) Work standard approach
In this technique, management establishes the goals openly and sets targets against realistic output
standards. These standards are incorporated into the organizational performance appraisal system.
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Thus each employee has a clear understanding of their duties and knows well what is expected of
them. Performance appraisal and interview comments are related to these duties. This makes the
appraisal process objective and more accurate. However, it is difficult to compare individual ratings
because standards for work may differ from job to job and from employee to employee. Some form of
ranking using pooled judgment can overcome this limitation.
(viii) Ranking methods
Some of the important forms of ranking for performance appraisal are given below, based on Oberg,
1972; and Monga, 1983:
(a)Alteration ranking methodThe individual with the best performance is chosen as the ideal
employee. Other employees are then ranked against this employee in descending order of comparative
performance on a scale of best to worst performance. The alteration ranking method usually involves
rating by more than one assessor. The ranks assigned by each assessor are then averaged and a relative
ranking of each member in the group is determined. While this is a simple method, it is impractical for
large groups. In addition, there may be wide variations in ability between ranks for different positions.
(b)Paired comparisonThe paired comparison method systematizes ranking and enables better
comparison among individuals to be rated. Every individual in the group is compared with all others inthe group. The evaluations received by each person in the group are counted and turned into
percentage scores. The scores provide a fair idea as to how each individual in the group is judged by
the assessor.
(c) Person-to-person rating In the person-to-person rating scales, the names of the actual
individuals known to all the assessors are used as a series of standards. These standards may be
defined as lowest, low, middle, high and highest performers. Individual employees in the group are
then compared with the individuals used as the standards, and rated for a standard where they match
the best. The advantage of this rating scale is that the standards are concrete and are in terms of real
individuals. The disadvantage is that the standards set by different assessors may not be consistent.
Each assessor constructs their own person-to-person scale, which makes comparison of different
ratings difficult.
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(d) Checklist method The assessor is furnished with a checklist of pre-scaled descriptions of
behavior, which are then used to evaluate the personnel being rated (Monga, 1983). The scale values
of the behavior items are unknown to the assessor, who has to check as many items as she or he
believes describe the worker being assessed. A final rating is obtained by averaging the scale values of
the items that have been marked.
(e) Behaviorally anchored rating scales (BARS) This is a relatively new technique. It
consists of sets of behavioral statements describing good or bad performance with respect to important
qualities. These qualities may refer to inter-personal relationships, planning and organizing abilities,
adaptability and reliability. These statements are developed from critical incidents collected both from
the assessor and the subject.
(f) Assessment centreThis technique is used to predict future performance of employees were
they to be promoted. The individual whose potential is to be assessed has to work on individual as well
as group assignments similar to those they would be required to handle were they promoted. The
judgment of observers is pooled, and paired comparison or alteration ranking is sometimes used to
arrive at a final assessment. The final assessment helps in making an order-of-merit ranking for each
employee. It also involves subjective judgment by observers.
A performance appraisal system could be designed based on intuition, self-analysis, personality traits,
behavioral methods and result-based techniques. Different approaches and techniques could be
blended, depending on the goals of performance appraisal in the organization and the type of review.
For example, management by objectives, goal-setting and work standard methods are effective for
objective coaching, counseling and motivational purposes. Critical incident appraisal is best suited
when supervisor's personal assessment and criticism are essential. A carefully developed and validated
forced-choice rating can provide valuable analysis of the individual when considering possible
promotion to supervisory positions. Combined graphic and essay form is simple, effective in
identifying training and development needs, and facilitates other management decisions.
Components of the appraisal format
Key performance areas, self-appraisal, performance analysis, performance ratings and counseling are
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the important components of a performance appraisal system oriented to development of human
resources in an organization. The appraisal format should be designed in consonance with the
objectives of the performance appraisal system, and generate information on a number of important
aspects, including (Rao, 1985):
COMPONENTS OF THE APPRAISAL FORMAT
Identification of key performance areas
Identification of qualities for job performance
Self-appraisal
Analysis
Discussion
Identification of training needs
Action plan and goal settings for the future
Final assessment
Identificationof key performance areasThe first step in an appraisal process is identifying
key performance areas and setting targets for the next appraisal period. This may be done either
through periodic discussions or at the beginning of the year, as in research institutions.
Self-appraisal by the subject At the end of the appraisal period, employees appraise their own
performance against the key performance areas, targets and pre-identified behavior. Information on
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these issues is provided in an appraisal format. The employees also write their self-evaluation reports
and hand them to their supervisors.
Analysis -The supervisor reflects on the performance of the employee, and identifies the factors,
which facilitated or hindered the employee's performance. The manager then calls the employee for a
discussion to better understand his or her performance and provide counseling on further
improvements. During this discussion, appraisal records (such as notes, observations, comments, etc.)
are exchanged. The manager then gives a final rating and recommendations regarding the
developmental needs of the individual. These are shown to the subject and his or her comments are
recorded on the appraisal form. The appraisal form is then transmitted to the personnel department for
the necessary administrative action. The personnel or human resource development department uses
these forms for identifying and allocating training, rewards and other activities.
Identification of training needs the use of a development-oriented performance appraisal
system is based on a good understanding of the concept of human resources development. The need
for developing employee capabilities, the nature of capabilities to be developed, and the conditions
under which these capabilities can be developed have to be appreciated. During the discussion
between the supervisor and the employee, the development needs of the subject are identified and
goals set for the next period.
Identification of qualities The supervisor may also identify the qualities required for current as
well as future tasks, and assess the employee's potential and capabilities to perform jobs at higher
responsibility levels in the organization.
ATTRIBUTES CONSIDERED IN EVALUATING PERFORMANCE
There are many personality traits, which could be considered when evaluating performance, and
methods to facilitate such consideration include scaling methods that differentiate employees on a
series of given traits. The important personality traits fall into two categories: personal qualities and
demonstrated qualities.
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Management problems in evaluating performance
Identification of appraisal criteria
Assessment problems
Policy problems
Some of the important problems faced by managers in evaluating performance are identification of
appraisal criteria, problems in assessment, and policy-related problems.
PERFORMANCE APPRAISAL SYSTEMS
Identification of appraisal criteria
It is usually quite difficult to decide the criteria for evaluating performance, particularly the
performance of those engaged in research activities. Initiative, appearance, tact or organizational skills
of researchers are very difficult to assess. While deciding the performance criteria, it is important to
simultaneously decide how well people should perform. The aim of the appraisal system is to make
informed, accurate and fact-based judgments, although some of these judgments may not be
quantifiable.
Conventionally, the number of contributions accepted for publication in refereed professional journals
has been a useful measure for evaluating the performance of scientists. This is perhaps an appropriate
measure for those who are engaged in basic research. However, publication numbers do not
adequately measure performance of those engaged in adaptive and applied research, which are aimed
at meeting practical and critical needs of users. The performance of such researchers has to be
measured differently, taking due consideration of their success with the user system. On the whole,
qualitative assessment may be more appropriate for researchers because of difficulties in quantitative
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assessment, as research is relatively non-repetitive, requires creativity, usually takes a longish time,
has unpredictable outcomes, and could result in multi-dimensional outputs. Therefore, outputs of
research and researchers should not be measured by one criterion. Instead, performance of a researcher
has to be measured in Toto, as an integral part of the research program.
Assessment problems
It is difficult to observe behavior and interpret it in terms of its causes, effects and desirability. Rating
behavior on an appraisal form is quite difficult. The human element plays a significant role in the
appraisal process and introduces subjectivity and bias. This can be minimized by:
Documenting performance from time to time,
Basing criteria for evaluation on observable behavior,
Training the supervisors; and effectively communicating the expectations
which management has of staff.
Policy problems
The results of the appraisal system should be followed up through a set of well-designed and enforced
policies, and translated into rewards and punishments. Performance of researchers is sometimesdifficult to assess. A research manager has to balance between researchers' creativity and
organizational goals. Researchers do not like others passing judgment on qualitative or quantitative
aspects of their work, yet the need for an effective performance planning and appraisal system in a
research organization is well accepted.
APPRAISAL INTERVIEW
Planning an interview
- Tell and sell
- Tell and listen
- Problem solving
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conducting an interview as planned
Applying good questioning techniques
Listen intelligently and without prejudice while someone less senior
does most of the talking
communicating effectively verbally and non-verbally
Introduction of 360-degree appraisals
360-degree appraisal is the process of systematically gathering data on a persons skills, abilities and
behaviors from variety of sources-the manager, peers, subordinates and even customers and clients. In
360-degree appraisal, his superior, his peers, his subordinates and clients or outsiders with whom he
interacts in the course of his job performance do appraisal of an employee. In 360-degree appraisal,
besides appraising the performance of the assesses, his other attributes such as talents, behavior, values,
and technical considerations are also appraised. How appraisal information is collected from various
sources in 360-degree appraisal is presented below:
Appraisal by Superior. In most of the traditional techniques, the immediate superior does appraisal of an
employee. In 360-degree appraisal, the superior appraises the employee on various dimensions of the job
as may be decided. There are three reasons why the immediate superior must appraise the performance
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of his subordinate.
1) He is more familiar with his subordinates performance.
2) He understands more specifically where his particular subordinate lacks which may be
overcome by training and development.
3) Because of the nature of authority relationship, the superior is responsible for getting the
things done which necessitates appraisal of his subordinates.
However, many biases are likely to emerge in his appraisal. Further, he may not be aware fully about
many behaviors of subordinates, which may be important for appraisal.
Appraisal by peers. Peers of an employee are in a better position to evaluate certain aspects of his
behavior. Since the employee is more closely linked to his peers at the workplace, they may be able to
appraise his contributions to the group efforts, interpersonal effectiveness, communication skills,
reliability, initiative, and etc. However, in such an appraisal, biases are likely to emerge specially if the
appraisal results are used for deciding rewards. Further, appraisal may take the shape of give and take
in which there may be reciprocal appraisal, you rate me good, I will do the same for you.
Appraisal by subordinates. Subordinates can appraise their superior in terms of how he facilitates their
working, delegates authority, allocates work and resources, disseminates information, resolves
interpersonal conflicts and shows fairness to them. However, how objectives this appraisal is depends on
the liberty to which subordinates enjoy n appraising his superior.
Appraisal by clients. The clients who interact with the employee evaluate an employees performance.
These clients may be suppliers of inputs or customers of outputs. These clients may rate the employee in
terms of his providing services to them, his cooperation, courtesy, dependability and innovativeness.
There are two problems, which may emerge in this appraisal.
1. There may be motivational problem in which clients may not be evaluated an employee of
organization as they feel that this is not their responsibility.
2. The objectivity of their evaluation is likely to be affected by how their own interest is served by
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the employee which may not be reflect the true performance of the employee.
Role of HR Department in 360-degree appraisal. The role of HR department in 360-degree appraisal is
that of facilitators. The department consolidate the appraisal inputs, identifies the points of consensus,
and provides feedback to the appraise so as to overcome the weakness as identified in the appraisal. The
presence of facilitators also acts as a buffer, preventing the aoppraisee from attacking those who
provided honest inputs. The department also devices action plans for overcoming those weaknesses.
Evaluation of 360-degree appraisal. The 360-degree appraisal is better as compared to many traditional
techniques because it examines employee from different perspectives. Such an appraisal provides useful
information about him which can used for developing him to overcome his deficiency. The result can
also be compared over the period of time for the same employee to find out whether there has been any
improvement in him. The 360-degree feedback works best if the employee concerned matches the data
gathered with his own self-assessment.
Positive and negative aspects of 360-degree appraisal
Positive aspects
1. Greater self-awareness of managers; reveals strengths and weaknesses.
2. Reduced gap between self-assessment and colleagues assessment.
3. Teamwork thrives through peer group assessment.
4. Fact about organizational culture and ambience are brought to light.
5. Empowerment is facilitated.
6. Inflexible employees are forced to initiate self-image.
Negatives Aspects
1. The system may be utilize to humiliate personnel
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2. Response from colleagues may be biased.
3. Linking rewards to appraisal may turn to be unfair.
4. It ignores performance in terms of reaching goals.
5. The ratee may deny the truth of negative feedback.
360-degree feedback form template example
A typical 360-degree feedback form template would look like this. This template allows a mixture of
key skills comprising one, two, three, four, and up to six elements. The number of elements per key
skill/capability would vary of course, so if necessary adjust the size of the boxes in the first column
accordingly to accommodate more or less elements. See the notes directly above for more explanation
about the purpose of each column and heading, and the feedback scoring method.
SCOPE OF STUDY
In present scenario with the growing complexities of the industrial Society, work is simply a means of
earning a living this appears to Be an over simplification. Work serves many other functions for an
Individual. An individual sense of well being, of doing something Worthwhile, of having some
considerations, may be so compulsive. That man may continue to work even if they are not pressed by
Economic needs.
Performance appraisal provide needful helping for the following:
Status
Job Security
Feelings of Recognition
Feeling of Achievement
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Feeling of Possible Growth
Feeling of Responsibility
Group Feelings
Feeling of Interest in the performance of Job.
Feeling of Increase Status
Performance Effects
Change in rate of output.
Change in Quality of Work
Effects on Interpersonal Relationships
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LITERATURE
REVIEW
Research methodology
Methodology is the study of methods it deals with the philosophical assumption underlying the process
of research.
A method is specific technique for data collection under certain philosophical assumptions.
The practical work that lies between the theoretical framework and practical analysis.
Following are then kinds of methodologies
1. Quantitative methodologies- involves those methodologies, such as closed surveys structured
interviews and sociograms (diagrammatic representations of interactions between individuals), which
enable data (concrete or conceptual) to be collected, measured and compared with a standard.
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A. Survey -A methodology which can use different instruments such as observation, interview or a
written list of questions called a questionnaire. Surveying is the process of conducting a study from
representative samples of specific populations (for example, women in the workforce, Year 9 students,
recent immigrants). If a questionnaire is used, it may be comprised entirely of closed questions,
multiple-response questions, Lickett scale questions (differential sliding scale or rating scale questions)
or open-ended questions, or may be a combination of all question styles. Data recording sheets for
observa