A SUMMER TRAINING PROJECT ON PERFORMANCE APPRAISAL at BHUTANI ASSOCIATES PVT. LTD.

(Submitted in partial fulfillment of the requirement of the degree of Bachlor of Business Administration, (BBA) KURUKSHETRA UNIVERSITY, KURUKSHETRA Paper Code :- BBA-307-A

PROJECT GUIDE MISS NEHA SHARMA (ASSITANT PROFESSOR) AIMT Session 2010-13 Department of Management

SUBMITTED BY Navneet Kaur Roll No: 5119 University Roll No:.

SHRI ATMANAND JAIN INSTITUTE OF MANAGEMENT & TECHNOLOGY ( AIMT), AMBALA CITY

PREFACE

Research report is an important part of theoretical studies. It covers all that which remains uncovered in the classroom. It offers all that which remains an invaluable treasure of experience, it offers an exposure to practical of management of business organization. As we know well that practical training plays an important role in future building of an individual. One can easily overcome the fear from the life in which he has to join as a member after sometimes. Just theoretical knowledge is not sufficient for the success of an individual, to one should have practical knowledge about theory of general life.

I have been given an opportunity to do practical training in BHUTANI ASSOCIATES PVT. LTD. I availed of this opportunity is a very satisfactory manner and I think this will be much beneficial for me in future building.

ACKNOWLEDGEMENT

I take immense pleasure in thanking (Bhutani Associates Pvt. Ltd. ) for his keen interest, invaluable pain taking and excellent guidance, patience, endurance, encouragement and thoughtful advice throughout the project work duration at Bhutani associates pvt . ltd. I wish to express my deep sense of gratitude to my Internal Guide, Ms. Neha Sharma for their able guidance and useful suggestions, which helped me in completing the project work, in time. I would also like to thank Member of Bhutani Associates Pvt.Ltd. for all their valuable assistance in the project work. Words are inadequate in offering my thanks to my Co Project Trainees for their encouragement and cooperation in carrying out the project work. Finally, yet importantly, I would like to express my heartfelt thanks to my beloved Parents for their blessings, My Friends for their help and wishes for the successful completion of this project.

NAVNEET KAUR

DECLARTION

I, NAVNEET KAUR, hereby declare that summer Training entitled To analyze the PERFORMANCE APPRAISAL is an original work and has not been copied from

anywhere. This report has not been submitted in part or full to this or any other university for the award of any degree of diploma.

(Navneet Kaur)

CERTIFICATE

This is to certify that NAVNEET KAUR has proceeded under by supervision her summer training project report on PERFORMANCE APPRAISAL is specialization area HR. The work embodied in this report is original and is of the standard expected of an BBA student and has not been submitted in part or full to this or any other university for the award of any degree or diploma. She has completed all requirements of guidelines for Summer Training Project Report and the work is fit for evaluation.

Miss Neha Sharma ASSITANT PROFESSOR AIMT

INTRODUCTION TO Tea

Tea Industry in India

Tea leaves Tea isnt simply tea in India but it is like a staple beverage here and a day without it is impossible and incomplete. Indians prefer their steaming cup of tea because for them it acts as an energy booster and is simply indispensable. This popular beverage has a lot of 7

health benefits too as its antioxidants help to eliminate toxins and free radicals from the blood. Originally tea is indigenous to the Eastern and Northern parts of India, but the tea industry has expanded and grown tremendously over the years, making India the largest grower and producer of tea in the world. The tea production in India was 979,000 tonnes as of 2009. In terms of consumption, export and production of tea, India is the world leader. It accounts for 31% of the global production of tea. India has retained its leadership over the tea industry for the last 150 years. The total turnover of this industry is roughly Rs.10, 000 crores. Since 1947, the tea production in India has increased by 250% and the land are used for production has increased by 40%. Even the export sector of India has experienced an increase in the export of this commodity. The total net foreign exchange in India is roughly Rs.1847 crores per annum. The tea industry in India is labor intensive, meaning it depends heavily on human labor instead of machines. This industry provides employment to more than 1.1 million Indian workers and almost half the workforce constitutes of women.

Beautiful tea fields There is a wide variety of tea offered by India; from Green Tea to CTC tea to the aromatic Darjeeling tea and the strong Assamese tea, the range of tea available in India is unparalleled. Indians take a lot of pride in their tea industry because of the pre-eminence 8

of the industry as a significant earner of foreign exchange and a significant contributor to Indias GNP. The three prominent tea-growing regions in India are Darjeeling, Assam and Nilgiri. While Darjeeling and Assam are located in the Northeast regions, Nilgiri is a part of the southern region of the country. A visit to these regions is made truly memorable by the endless rolling carpets of green which are the tea gardens and one cannot but help feeling enthralled and captivated at the sight of the huge tea estates. Majority of the tea factories are located within the premises of the tea estates and this is what accounts for the freshness of the tea. The process of tea production has a series of procedures and processes. The process starts with the plucking of tea leaves in the tea estates by women employees carrying a basket over the head and ends with the production of the ultimate tea. There are mainly two ways of producing tea in India namely the CTC production and Orthodox production. CTC is an acronym for crush, tear and curl. The tea produced by this method is mostly used in tea bags. The orthodox production method consists of five stages, namely withering, rolling, fermentation, drying and finally storing. It is not possible to compare the two varieties because their quality depends on factors such as rainfall, soil, wind and the method of plucking of tea leaves and both possess a unique charm of their own. As the primary producer of an assortment of tea, India is the ideal destination for all tea enthusias

BHUTANI ASSOCIATES

BHUTANI S was set up in 1987 by its patron SHRI O.P. BHUTANI,since then it has been delivering & catering local supply in huge volumes in India. BHUTANIS has covered miles from the day of its inception in terms of infrastructure i.e better quality , productivity, timely supply & business process. Offeing consistent quality, rich blend and a perfect aroma, we have been spreading our wings Under the guidance of MR.SANJEEV BHUTANI, MR. SOMESH BHUTANI & MR.KAMALDEEP . 9

The company has started from a small enterprise today has state of-the-art modern production Cum packaging unit.

DISTRIBUTION NETWORK

We have priviledge of having a very loyal & dynamic distribution network; Comprising of dealers, distributors, stockiest & super stockiest and retailers. Each & every link in our marketing chain adds to our core strength. Consistent efforts are made to further strengthen our distribution network at all time. Our company has left no stone unturned to enhance the customer satisfaction and is still striving to improve its performance. 10

PRODUCTS

BHUTANIS are focusing on growing , manufacturing, blending & packing of tea in

India with the brand name BHUTANI ASSAM VALLEY which boasts a corporate culture that is evolved towards the all round development of the organization & the people involved in it.

VISSION & MISSION

We as BHUTANI S are passionate about what we do and we have the expertise and knowledge to compliment how we do it. We are committed to serve & operate an ethical & sustainable business that harms none & benefits all.

11

TAG LINE

FEEL THE RHYTHM OF FRESHNESS.

TYPES OF TEAS

BHUTANIS deals with types of tea with different flavour. These are follows: Assam valley Gold TEA Assam valley Centenary Assam valley Premium Tea Assam valley Economy

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CONTACT DETAILS

BHUTANI ASSOCIATES PVT.LTD . 25-26, king vihar, dhulkot vill. Road, ambala city. Ph.: 0171-2521958, 2521885, +919896907770 E-mail: assamvalleygold@yahoo.co.in

PERFORMANCE APPRAISAL
Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. performance appraisal is a formal, structured system of measuring and evaluating an employees job, related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.

Performance appraisal is a process of summarizing, assessing and developing the work 13

performance of an employee. In order to be effective and constructive, the performance manager should make every effort to obtain as much objective information about the employee's performance as possible.

Performance Appraisal is a review and discussion of an employee's performance of assigned duties and responsibilities based on results obtained by the employee in their job, not on the employee's personality characteristics. Personality should be considered only when it relates to performance of assigned duties and responsibilities. Performance Appraisal is a review and discussion of an employee's performance of assigned duties and responsibilities based on results obtained by the employee in their job, not on the employee's personality characteristics. Personality should be considered only when it relates to performance of assigned duties and responsibilities. In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions.

MEANING / DEFINITATION OF PERFORMANCE APPRAISAL

In simple terms, appraisal may be understood as the assessment of an individuals performance in a systematic way, the 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. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.

FORMAL DEFINITION
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A formal definition of performance appraisal is It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development

COMPREHENSIVE DEFINITION
A more comprehensive definition is: Performance appraisal is a formal, structured system of measuring and evaluating an employees job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.

TRADITIONAL PERFORMANCE APPRAISAL

During the First World War, appraisals concept was adopted by US army which was in the form of merit rating. It was man-to-man rating system for evaluation of military personnel. From the army this concept entered the business field and was restricted to hourly-paid workers. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this 15

basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance.

MODERN PERFORMANCE APPRAISAL

sPerformance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions.

CHARACTERISTICS
The basis of a good performance management system is in the planning process. Before constructing a performance appraisal that you believe will work, consider the fundamental steps in designing a performance management system. These steps include developing job descriptions and job specifications, identifying performance standards, and formulating the types of rewards and recognition you offer for good performance

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1. JOB DESCRIPTION AND SPECIFICATION

Job descriptions and job specifications are an essential component of an effective performance appraisal. Job descriptions are based on objective information obtained through job analysis, an understanding of the competencies and skills required to accomplish needed tasks, and the needs of the organization to produce work. Job descriptions clearly identify and spell out the responsibilities of a specific job. Job descriptions also include information about working conditions, tools, equipment used, knowledge and skills needed, and relationships with other positions. The best job descriptions are living, breathing documents that are updated as responsibilities change. .The more specifically supervisors can describe the jobs performed by staff, the more specifically they can tailor their review writing to the level that individual employees have mastered them." Without knowing the company's expectations and reviewing the tasks, duties and responsibilities, your employees are lacking the necessary tools to great performance. A job specification describes the knowledge, skills, education, experience, and abilities you believe are essential to performing a particular job. The job specification is developed from the job analysis. . Ideally, also developed from a detailed job description, the job specification describes the person you want to hire for a particular job

2. ESTABLISHING PERFORMANCE STANDARDS

Performance standards define the amount of work, effort or employee tasks necessary to reach a predetermined level of performance. For example, if you have a sales representative whose work is evaluated by the number of sales made each quarter, you could establish a performance standard based on the sales revenue she generates. The standards for exceeding example from a qualitative perspective could be a human 17

resources employee relations specialist who effectively lowers turnover through planning, organizing and evaluating employee opinion surveys. Assessing a performance standard for improving employee engagement would be a suitable task for your employee relations specialist to make your performance appraisal effective

3. IMPLEMENTING REWARDS AND RECOGNITION

Most employees want to know what the rewards are for different levels of performance. Look at your company's compensation structure and select the type of rewards you believe are equitable for each level of performance. If you reward low-performing employees at all, they will receive a minimum increase or bonus in exchange for the work performed during the appraisal period. High performers are generally rewarded with a salary increase and perhaps a bonus--this motivates employees to continue providing top performance, and bestows rewards and recognition due for excellent performance, aptitude and initiative.

4. COMMUNICATION
Communication is a critical element of your company's performance management system and the performance appraisal specifically. During new-hire orientation, take time to explain to new employees how their performance will be evaluated. It's important to explain the system and the appraisal process--employees can better determine how to self-evaluate their performance if they understand the performance standards on which their performance appraisals are based

BENEFITS OF PERFORMANCE APPRAISAL

The most significant benefit of appraisal is that, in the rush and bustle of daily working life, Performance appraisal is conducted properly both supervisors and subordinates have reported the experience as beneficial and positive

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Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of the whole organization is enhanced.

1. MOTIVATION AND SATISFACTION

Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for better as well as for worse. Performance appraisal provides employees with recognition for their work efforts. The power of social recognition as an incentive has been long noted. In fact, t here is evidence that human beings will even prefer negative recognition in preference to no recognition at all , the existence of an appraisal program indicates to an employee that the organization is genuinely interested in their individual performance and development This alone can have a positive influence on the individual's sense of worth, commitment and belonging.

2. TRAINING AND DEVELOPMENT

Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs. Performance appraisal can make the need for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations From the point of view of the organization as a whole, consolidated appraisal data can form a picture of the overall demand for training. This data may be analyzed by variables such as sex, department, etc. In this respect, performance appraisal can provide a regular and efficient train

3. RECRUITMENT AND INDUCTION

Appraisal data can be used to monitor the success of the organization's recruitment and induction practices. For example, how well are the employees performing who were hired in the past two years. Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies. By following the yearly data related to new hires (and 19

given sufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the workforce is improving, staying steady, or declining.

1. EMPLOYEE EVALUATION
Employee evaluation is a legitimate and major objective of performance appraisalBut the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative and developmental priorities appear to frequently clash. Yet at its most basic level, performance appraisal is the process of examining and evaluating the performance of an individual. Though organizations have a clear right - to conduct such evaluations of performance, many still recoil from the idea. To them, the explicit process of judgment can be dehumanizing and demoralizing and a source of anxiety and distress to employees. Performance appraisal cannot serve the needs of evaluation and development at the same time; it must be one or the other. But there may be an acceptable middle ground, where the need to evaluate employees objectively, and the need to encourage and develop them, can be balanced.

OBJECTIVES OF PERFORMANCE APPRAISAL

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1. SALARY INCREASE
Performance appraisal plays a role in making decision about salary increase. Normally salary increase of an employee depends upon on how he is performing his job. There is continuous evaluation of his performance either formally or informally. This may disclose how well an employee is performing and how much he should be compensated by way of salary increase.

2. PROMOTION
Performance appraisal plays significant role where promotion is based on merit and seniority. Performance appraisal discloses how an employee is working in his present job and what are his strong and weak points. In the light of these, it can be decided whether he can be promoted to the next higher

3. TRAINING AND DEVELOPMENT

Performance appraisal tries to identify the strengths and weakness of an employee on his present job. This information can be used for devising training and development programmer appropriate for overcoming weaknesses of employees

4. FEEDBACK
Performance appraisal provides feedback to employees about their performance. A person works better when he knows how he is working. This works in two ways, firstly, the person gets feedback about his performance. Secondly, when the person gets feedback about his performance, he can relate his work to the organizational objectives.

5. PRESSURE ON EMPLOYEES

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Performance appraisal puts a sort of pressure on employees for better performance. If the employees are conscious that they are being appraised in respect of certain factors and their future largely depends on such appraisal.

OTHERS
a) Identifying systemic factors that are barriers to, or facilitators of, effective performance.

b) To confirm the services of probationary employees upon their completing the probationary period satisfactorily.

c) To improve communication. Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves

understanding of personal goals and concerns.

This can also have the effect of increasing the trust between the rater and the ratee.

d) To determine whether HR programmed such as selection, training, and transfer have been effective or not.

PROCESS OF PERFORMANCE APPRAISAL

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1. ESTABLISH PERFOMANCE STANDARD

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

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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 the employees performance

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5. DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employees on oneto-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 MAKING
The 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.

METHODS OF PERFORMANCE APPRAISAL

1. Modern Methods 25

2. Traditional Method

1.Modern methods of Performance Appraisal:

1. ASSESSMENT CENTRES An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centers are also an effective way to determine the training and development needs of the targeted employees.

2. BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally 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

3. HUMAN RESOURCE ACCOUNTING METHOD

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Human 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.

4. 360 FEEDBACK METHOD

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-thejob" performance of the employee. 360 degree appraisal has four integral components:

1. 2. 3. 4. Peer appraisal.

Self Superiors Subordinates

appraisal appraisal appraisal

Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superiors appraisal forms the traditional part of the 360 degree performance appraisal where the employees responsibilities and actual performance is rated by the superior. 27

5. THE MBO PROCESS

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It is a goal directed approach to performance appraisals in which workers and their supervisors set goals together for the upcoming evaluation period. The rating than consists of deciding to what extent the goals has been met. This approach provides clear and UN ambiguous criteria by which workers performance can be judged. It also eliminates subjectivity and the potential for errors and bias that goes along with it with an MBO approach, workers objectives can easily be adjusted at the beginning of a new evaluation period. Although the system being totally objective, this measure still contains certain disadvantages. The major one is that this outcome measure may give a seriously deficient a distorted view of worker performance levels. Secondly, in some situations, human judgment is more relevant than objective measure. So, this approach is not fit for every situation that may occur in any organization. Another potential difficulty with outcome based performance based measure is the development of a result at any cost mentality.

TRADITIONAL METHODS
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1. ESSAY APPRAISAL METHOD

This traditional form of appraisal, also known as "Free Form method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.

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 It is the oldest and the simplest method of measuring the performance, by which the man and his performance are considered as an entity by the rater. No attempt is made to his performance the whole man is compared with the whole man that is, the ranking of a man in a work group is done against that of another. The relative position of each man is tested in terms of his numerical rank. It may also be done by ranking a person on his job performance against that of another member of a competitive group by placing him as a member one or two or three in total group person are tested in order of merit and placed in a simple grouping. This is the simplest method of separating the most efficient from the least efficient and relatively easy to develop and use. But in practice it is very difficult to compare a single individual with human beings having varying different behavior traits. Task of ranking individual becomes difficult when a large number of persons are to be rated.

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3. PAIRED COMPARISON

In this method, each employee is compared every trait with all the other persons in pairs one at a time the number of times each individual is compared with another tallied on a piece on paper. These numbers yield the rank order of entire group. The supervisors are provided with a bunch of slips each containing a pair of names. The rater puts a tick mark against the individual whom he consider the better of two and final ranking is determined by number of tines that individual is judged better than the others. The maximum numbers of pairs is indicated by the formula N (N-1)/2, where N is the total number of employees to be evaluated. For example if five employees A, B, C, D, and E are to be evaluated, than above formula 5 (5-1)/2 give 10 pairs which are:A with B, A with C, A with D, A with E, B with C, B with D, B with E, C with D, C with E and D with E. to his score. The main disadvantage of this method is that in a large group of employees, the number of permutations and combinations increase requiring more time and efforts from the evaluators.

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 essence of this system is that it attempts to measure workers performance in terms of certain events or episodes that occur in performance of rates job. These events are known as Critical Incidents. This technique involves three steps. A test of note worthy on the job behavior, usually of specific instances is prepared. A group of experts than assigns scale values of them, depending upon degree of desirability of the job. Last step is 31

constructing a checklist that includes incidents which defines goods and bad workers. The supervisors use these lists for evaluating the workers. This method helps to identify key areas in which employees are weak or strong. It emphasis rating of objective evidence rather than on subjective evaluation of traits, finally the supervisors finds counseling easier since he knows subordinates weakness.

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 METHOD
The 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.

7. GRAPHIC RATING SCALE

In this method, an employees quality and quantity of work is assessed in agar phi 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 32

8. FORCED DISTRIBUTION

To 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.

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PROBLEMS OF PERFORMANCE APPRAISAL

Performance appraisal is a critical HR process yet often yields unnerving experience for both employees and their supervisors. Though several systematic methods and approaches are available to assess employee performance, the element of subjectivity cannot be completely eliminated from the process. Human judgment is far from perfect Sand this weakness is an important factor behind the controversies associated with performance appraisals. Human performance is largely a qualitative phenomenon and cannot be precisely measured quantitatively. Though quantifying performance elements can make the overall process more objective, but not exact or perfect. After all, human behavior is a complex phenomenon - far more perplexing than the measurement problems in Physics - weight and length etc. High precision in performance measurement for most of the jobs is a mere illusion. s

HALO EFFECT
Halo effect occurs when a rater attaches too much significance to a single factor of performance and gives similar ratings on other performance elements. Thus overall evaluation is significantly influenced by a single factor. Such a perception undermines the importance of other elements and leads to an unbalanced performance assessment of the individual. For example a manager rates a worker very high on quality because of her 34

immaculate attention to details and lack of defects in her work. Then assuming the individual to be an overall high performer based on the quality of her work output, the manager rates her very high on efficiency, responsibility, punctuality, etc. without taking an objective look at her performance in these area.

STRICTNESS, LENIENCY AND CENTRAL TENDENCY BIAS

People differ in their tendency to evaluate people or performance. Some supervisors are very strict or conservative in their ratings and generally give low scores in their evaluations. This tendency may make high performers attain somewhat average ranking and average performers appear as poor performers. Raters with such tendency are known to have a strictness bias. On the other hand, some supervisors demonstrate a leniency bias and rate their subordinates very liberally which may make even average performers seem like star performers, attaining very high performance scores. And yet, others "play safe" by rating around the golden mean - the average. This may be done to avoid the necessity to justify scoring across the two extremes as some systems expect managers to specify additional comments as they give too high or too low ratings to employees. This rating error is known as the central tendency bias.

REGENCY BIAS
Performance appraisal involves assessment of employee performance for a specific period - quarterly, annually etc. People may not perform uniformly throughout that period. We all face highs and lows and demonstrate variance in performance due to numerous factors. It is therefore very important to review performance demonstrated throughout the period under consideration. Often however, recent events tend to overshadow the overall performance. People do have "short memories". Thus a person who has worked very hard and excelled throughout the year, but for some inadvertent reasons had faced performance issues in the last weeks or month may at times get a poor appraisal from the supervisor, showing regency bias.

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CONTRAST EFFECT
When supervisors rate employees one after another, rating of an exceptional performer or a very poor performer could affect the subsequent ratings of other individual(s). This phenomenon is known as the contrast effect. For example, let's suppose that a supervisor has just rated an outstanding performer and is now evaluating an individual who is also a good performer but there seems to be a contrasting difference between the abilities and output of the two individuals. This significant difference in performance or employee competencies could lead the supervisor to rating the second individual as an average performer.

PERSONAL BIAS
Personal beliefs, attitudes, assumptions, experiences, preferences and lack of understanding about a person, class or a phenomenon can lead to an unfair evaluation which is off from reality. We all suffer from these shortcomings, consciously or unconsciously, while making everyday judgments about people, things, events etc. It is especially important to be aware and sensitive to possible biases, prejudices and stereotypes while making judgments about employee performance. While many of the prejudices operate covertly and unconsciously, others strike us through conscious thoughts and feelings. Understanding common biases and being on guard while appraising can significantly raise the objectivity of the evaluation process.

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RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
The term Research Methodology indicates an exhaustive and searching investigating into some accept principles and conclusions, so as to bring into light some new and novel facts. The purpose of research is discovering answer to questions through the application of the scientific procedures. The first step towards any research is to identify the problem and look at it objectively.

OBJECTIVES OF THE STUDY

37

The annual performance appraisal review is a key element in the performance management process. It is getting a better result from the organization, teams and individuals by understanding and managing performance within an agreed frame work of planned goals, standard and competence requirements. Hence the overall objective is the study the whole Performance Appraisal System at BHUTANIS effectiveness in term of:

Identification of the technique of performance appraisal followed in BHUTANIS ASSOCIATES. Employee attitude towards the present appraisal system. Review of the current appraisal system in order to o Enhance productivity o Attain global standards

To provide suggestions & recommendations from the study conducted

Thus the research is conducted in order to check the overall effectives of Performance Appraisal System at BHUTANIs then find out shortcomings (if any) and give suggestion to improve the same.

38

RESEARCH METHODOLOGY OF THIS PROJECT IS AS UNDER:

1. RESEARCH DESIGN
A research design is the arrangement of conditions for collection and analysis of data, in a manner that aims to combine relevance to research purpose with the economy and procedure. The research design used in my study is basically Descriptive in nature.

METHOD OF DATA COLLECTION

Data collection is a major ingredient of any research project. Its detail out the various modes by which data is collected, which is very necessary for the further precedence of the research project. Both primary and secondary sources of data collection were used for the project under study.

1. PRIMARY DATA COLLECTION

Questionnaires Personal interview and discussion

2. SECONDARY DATA COLLECTION

Secondary data is collected from various sources like: Records of the organization Internet and intranet

39

I have used all the four above tools to get along with research project, but the main emphasis is given to the responses collected through questionnaire, personal interviews and discussion. The numerous official records of the past and the present, intranet sight are also referred for the collection of exact information and statistical data.

3. SAMPLE DESIGN
A sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the research would adopt in selecting items for the sample i.e. the size of the sample. Simple random sampling method was adopted to select the sample.

4. SAMPLE SIZE
Fifty Employees

5. SAMPLE UNIT
The sample unit for conducting the survey consists of various employees from different age group, gender, designation etc

40

LIMITATIONS:
A few limitations and constraints came in way of conducting the study, under which the researcher had to work are as follow: Sample size which I have taken is very small on the basis of which decision cant be taken.

Managers and employees of the company are hesitating to disclose information.

Less cooperation of respondents.

Although all attempts were made to make this an objective study, biases on the part of respondents might result in some subjectivity.

Employees were reluctant to fill questionnaires. This has been a major problem.

41

DATA ANALYSIS AND INTERPRETATION

42

1.

I have clear understanding of my PAS in my organization

Strongly Agree Frequency Percentage 17 34

Agree

Neutral Disagree Strongly Disagree

Total

21 42

6 12

4 8

2 4

50 100

50 40 30 Percentage 20 10 0 Strongly agree Agree Neutral

Degree

Disgree Strongly Disagree

INTERPRETATION: Maximum % age i.e. 42% of the employees are agree that they have clear understanding of PAS at PCCPL while 34% of the employees strongly agree to the same .

2.

I have clear understand of my KRAs

43

Strongly Agree Frequency 11

Agree

Neutral

Disagree

Strongly Disagree

Total

6 12

22 44

6 12

5 10

50 100

Percentage 22

50 40 30 Percentage 20 10 0 Strongly Agree Neutral Degree StronglyDisagree

INTERPRETATION:
Maximum % age i.e. 44%of the employees are neutral, total 22% disagree and the same %age agree that they understand their KRAs

3.

My inputs are considered while setting up my KRAs

44

Strongly Agree Frequency 8

Agree

Neutral

Disagree

Strongly Disagree

Total

12 24

17 34

6 12

7 14

50 100

Percentage 16

40 30
Percentage 20

10 0 Strongly agree Agree Neutral

Degree

Disagree

Strongly Disagree

INTERPRETATION:
34% of employees are neutral about their inputs being considered while setting up their targets while in totality 26% disagree to the same

4.

My development needs are satisfied with the current PAS .

45

Strongly Agree Frequency 5

Agree

Neutral

Disagree

Strongly Disagree

Total

28 56

15 30

1 2

1 2

50 100

Percentage 10

60

40 Percentage
20 0 Strongly Agree Agree Neutral Degree Disagree Strongly Disagree

INTERPRETATION:
While the maximum % from the sample size agrees that their development needs are satisfied as a result of PAS, 30% of them are neutral i.e. they neither agree nor disagree to it and negligible % disagrees to very same

5.

PAS gives me a fair reflection of my performance

46

Strongly Agree Frequency 8

Agree

Neutral

Disagree

Strongly Disagree

Total

20 40

15 30

3 6

4 8

50 100

Percentage 16

40 30 Percentage 20 10 0 Strongly Agree Agree Neutral Degree Disagree Strongly Disagree

INTERPRETATION:
40% of the sample size agree that PAS gives a fair reflection of their performance 30% neither agree not disagree to the same while 16%,8%,6% strongly agree , strongly disagree respectively.

6.

PAS is positively affects the efficiency at the individual and deptt level.

Strongly

Agree

Neutral

Disagree

Strongly

Total 47

Agree Frequency 6 25 50 14 28 3 6

Disagree 2 4 50 100

Percentage 12

50 40 30 Percentage 20 10 0 Strongly Agree Agree Neutral

Degree

Disagree

Strongly Disagree

INTERPRETATION:
50% of employees agree that analysis of performance positively affects the efficiency at the individual and deptt level while 28,12,6 and 4 % of the sample size is neutral. Strongly agrees, disagrees and strongly disagrees respectively.

7.

I want to learn about psychology appraisal

48

Strongly Agree Frequency 16

Agree

Neutral

Disagree

Strongly Disagree

Total

24 48

7 14

1 2

2 4

50 100

Percentage 32

50 40 30 Percentage 20 10 0 Strongly Agree Agree Neutral

Degree

Disagree Strongly Disagree

INTERPRETATION:
48% of the sample size wants to learn about psychological appraisal while 32% feels strongly about it. And very minimum percentage is neutral and disagrees to the very same statement

8.

I feel psychological appraisal will be great help to me

49

Strongly Agree Frequency 14

Agree

Neutral

Disagree

Strongly Disagree

Total

24 48

7 14

5 10

50 100

Percentage 28

50 40 30 Percentage 20 10

0 Strongly Agree Agree Neutral Disagree Strongly Disagree

Degree

INTERPRETATION:
48% of the sample size feels that psychology appraisal will be of some of help to them and 28% strongly agree to it while 14% of them neither agree nor disagree and only 10% disagrees to it.

9.

Psychological appraisal should be incorporated .

50

Strongly Agree Frequency 17

Agree

Neutral

Disagree

Strongly Disagree

Total

22 44

7 14

3 6

1 2

50 100

Percentage 34

50
40 30 Percentage 20 10 0 Strongly Agree Agree Neutral Disagree Strongl;y Disagree

Degree

INTERPRETATION:
44%and 34% of the sample size wants it to be incorporated and 14% of them are neutral about it while negligible % i.e. 2% and 6% strongly disagrees and disagrees to it. .

10.

My needs are properly identified as a result of PAS

Strongly

Agree

Neutral

Disagree

Strongly

Total 51

Agree Frequency 4 27 54 13 26 3 6

Disagree 3 6 50 100

Percentage 8

60 40 Percentage 20 0 Strongly Agree Agree Neutral Degree Disagree Strongly Diosagree

INTERPRETATION:
54% of the sample size agrees that their training need are properly identified as a result of PAS while 26% is neutral and equal % strongly disagrees and disagree to it.

11.

The current PAS system is fair and just

52

Strongly Agree Frequency 6

Agree

Neutral

Disagree

Strongly Disagree

Total

9 18

27 54

4 8

4 8

50 100

Percentage 12

60 50 40 Percentage30 20

10
0 Strongly Agree Agree Neutral Degree Disagree Sttrongly Disagree

INTERPRETATION:
54% are neutral while only 18% agree and 12% strongly agrees about the fairness of the PAS system while very few disagrees the same.

12.

The feedback I get for my response is

53

Timely Frequency Percentage 33 66

Delayed 17 34

70 60 50 Percentage 40 30 20 10 0 Timely Degree Delayed

INTERPRETATION:
666%of the employees feel that the feedback they get their performance is timely while only 30% of them feel that it is delayed.

13.

Feedback is the true indicator for improving my performance 54

Strongly Agree Frequency 10

Agree

Neutral

Disagree

Strongly Disagree

Total

27 54

8 16

1 2

4 8

50 100

Percentage 20

60

50
40 Percentage 30 20 10 0

Strongly Agree

Agree

Neutral
Degree

Disagree Strongly Disagree

INTERPRETATION:
54% of the sample size agrees to the fact that feedback is the true indicator feedback improving their performance. 20% of them strongly agrees, 16% are neutral to it only small % disagrees to it.

14.

I am fully satisfied about the feedback I get from my performance 55

Strongly Agree Frequency 4

Agree

Neutral

Disagree

Strongly Disagree

Total

13 26

16 32

11 22

6 12

50 100

Percentage 8

40 30
Percentage20

10 0 Strongly Agree Agree Neutral

Degree

Disagree

Strongly Disagree

INTERPRETATION:
34%of the employees disagree while 32% are neutral while contrary to that only 26% agree and 8% strongly agree about the satisfaction level from the feedback system.

15.

Through which medium feedback is mostly communicated to you.

Written

Personal

Total 56

Communication Frequency Percentage 32 64

Interaction 18 36 50 100

80 60
Percentage 40

20 0 Written Communitation
Medium

Personally

INTERPRETATION:
64% of the sample size agrees that feedback is communicated through the written communication and only 36% get feedback personally.

16.

After what time period the feedback should be given to employees for their Performance? 57

Quarterly

Yearly

Only at the time Total of Appraisal

Frequency Percentage

37 74

6 12

7 14

50 100

80 60
Percentage40

20

0
Quarterly Yearly
Time Period

Only at the time ofAppraisal

INTERPRETATION:
Maximum no. i.e. 70% of employees feel that they should get the feedback quarterly and only 12% want that it should be done at half yearly and 14% wants it only at the time of appraisal.

17.

In your opinion is your compensation tied to PAS?

58

Yes Frequency Percentage 37 74

No 13 26

Total 50 100

80 70 60 50 Percentage40 30 20 10 0 Yes Opinion No

INTERPRETATION:
74% believe that they are compensated according to the review of PAS and 26% oppose it.

59

FINDINGS,

CONCLUSION SUGGESTIONS

60

FINDINGS
During my training I found: 1. Most of the employees agree that they have clear understanding of PAS in their organization 2. The employees do not have a complete and a proper idea of KRA 3. The inputs of the employees are not given due weightage while setting up their KRAs. 4. The development needs of employees are satisfied through the PAS. 5. All employees do not seem to be satisfied by the feedback after the appraisal is done. 6. PAS positively affects the efficiency at the individual and deptt level. 7. Employees want to learn about psychological appraisal 8. They do feel that it would be some help to them. 9. Employees feel that it can be incorporated . 10. The training needs of employees are properly identified but there is a mixed response this to as well. 11. Employees feel that feedback is the true indicator of improving their performance 12. Employees are not totally satisfied from the feedback system. 13. Most of the employees want that the feedback should be given to them on quarterly basis. 14. Although most of the employees are aware of the fact but it should be made clear to all the employees that compensation is tied to PAS. 61

SUGGESTIONS
1. Managers should treat each and every person equally and provide the all information about PAS so that they understand the importance of performance appraisal system 2. According to my suggestion a yearly calendar of performance standard should be printed and distributed among all employees. So that they know what is expected from them. 3. The employers should provide proper & complete knowledge about Key Result Area (KRA) to their employees. 4. A psychological system should be maintained for employees so that they could improve their performance. 5. Periodic survey to know the opinion of employees should be conducted and findings should be implemented. 6. Performance appraisal should be transparent. 7. For fair and impartial appraisal, senior should be provided with sufficient training to the employees. 8. Feedback is the true indicator to improve the performance of employees. 9. Performance Appraisal System should be fair and equal for each and every employee.

62

CONCLUSION
Majority of the employees have a clear understanding of PAS. A very small percentage seems to be clear regarding the same. It is compulsory to each and every employee to know about the PAS as it plays a very important in the development and the job satisfaction of the employees hence step should be taken to make each and every employee aware of the same. The employees know what they KRAs are what they do not have a very clear idea about it. Majority of the employees are neutral about their inputs being considered for setting up their target which shows that their inputs are not completely incorporated which will lead to a kind of dissatisfaction among employees. Again employees are neutral and some employees agrees that KRAs set for them realistic this can be due to the fact that their inputs are not completely considered while setting up their target. The employees do not seem to be completely satisfied about it.

The PAS is efficient in meeting the developmental need of the sample size. Majority of the surveyed employees feel that PAS is effective in meeting their training needs and also in preparing them to take up greater challenges and .responsibilities. Though many employees agree that PAS gives a fair reflection but an almost equal no of employees remain neutral. This should be taken seriously as this is a deterrent to their work and demotivates them. Again this point out that feedback system should be strength further. Majority of the employees agree that the PAS helps them in the improving their performance and making them more efficient at their work place but many from the sample size disagrees or remain neutral to the same. Thus through discussion and counseling session should be undertaken for the same

63

BIBLIOGRAPHY

BOOKS: VSP Rao; Human Resource Management CB Gupta; Human Resource Management

WEBLIOGRAPHY:

www.punjabchemical.com tt://findarticals.com/p/articles/mi_m3495/is_2_49/ai_6040868/

ttp://en.wikipedia.org/wiki/performance_appraisal

htt:/www.hr.com/SITEFORUM?t=/default/gateway&i=1116423256281 &application=story&active=no&parented=1119278074870&storyID=11 19655847078&xaref=http://www.goole.co.in/search%3Fhi%Den%26%3 Dwhat+is+an+Effective+performance+management+system%26btnG%3 Dsearch%26meta%3D%26aq%3Df%26oq%3D

64

ANNEXURE

65

QUESTIONNAIRE APPRAISAL SYSTEM):

Dear sir /madam

(PERFORMANCE

I am doing study on the effectiveness of Performance Appraisal System (PAS) . Kindly contributed to this for the benefit of employees at the as well as for me by filling this questionnaire.

Name (optional): Department: Designation:

Please tick answer to questions based on the following rating:-

SA- Strongly Agree A- Agree N- Neither Agree nor Disagree (neutral) D- Disagree SD- Strongly Disagree

66

SA 1. I have clear understanding of my KAR 18. My development needs are satisfied with --the current PAS . 19. I have clear understand of my KRAs -20. My development needs are satisfied with ---the current PAS . 21. PAS gives me a fair reflection of my --Performance -------

A ----

S DI

---- ---- -------------

----

----

---- -----

----

---- ----

----

----

----

----- ----

22.

PAS is positively affects the efficiency of ---the individual and deptt level

------ ------

------ -----

23.

I want to learn about psychology appraisal --

---- -----

----- ----

---

24.

I feel psychology appraisal will be great -help to me

---- -----

----

---- --

25.

Psychological appraisal could be incorporate ---

----- -----

----- ----- --

67

26.

My needs are properly identified as a result -of PAS

----

----- ----

---- --

27.

The current PAS system at PCCPL is fair -and just

----- ----- ----

----- ---

28.

The current PAS system at PCCPL is ---fair and just

----

-----

-----

-----

29.

The feedback I get for my response is ----

----

-----

-----

----- -

30.

Feedback is the true indicator for improving --my performance

----- -----

----- ----- --

31.

I am fully satisfied about the feedback ---I get from

----- ----- ------ ----- --

32.

After what time period the feedback Should be given to employees for their performance ----- ------ ----- ----- ------

33.

What kind of feedback do should ----

----- ------ ----- ----- --

68

for PAS?

34.

In your opinion is your compensation tied ---to PAS?

------ ------ ------ ------ --

69