Project Report

ON

“Performance

Appraisal”
IN

System for Commercial Vehicles

Submitted to Submitted by

DAV Institute of Management

Faridabad.

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 ACKNOWLEDGEMENTS

First and foremost, I extend my deepest thanks to my mentor and guide Ms. Ritu

Arora for giving me this opportunity to work in such a prestigious organization as well

as for giving me a wonderful project. Without his constant guidance and feedback, I

would have never been able to complete the project in the fashion, I did.

I thank Ms. Mridul Maheshwari, whose consistent support and cooperation showed

the way towards the successful completion of the project His views, advices and

directions have been invaluable during the course of this project.

I thank Ms. Meera Arora, for their support and encouragement. My special thanks to

Ms. Reema Nangia for his valuable inputs in performance appraisal .

The acknowledgement would really be incomplete if I don’t thank those numerous

HR executives of the company whose priceless inputs and direction have paved the

way for the successful completion of the project.

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 TABLE OF CONTENTS
Company Profile
Company Profile……………………………………………………………….5
Board of Directors……………………………………………………9
Worldwide helps for victim…………………………………………11
Purchasing…………………………………………………………..12
Product……………………………………………………………....12
Innovation……………………………………………………………13
System rail vehicle………………………………………………….14
System of commercial vehicle…………………………………….28
Regional offices………………………………………………….….31

Introduction
Management appraisal …………………………………………….35
Terms related to performance appraisal ………………………....36
P. A. Process …………………………………………………….....37
P.A Format…………………………………………………………..38
Techniques of P.A ……………………………………………..……39
Tradition problems with appraisal……………………………….…58
Significance of the problem …………………………………….….60

Review
Review of literature …………………………………………….……62
Focus of project……………………………………………………..64

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 Objective of study…………………………………………………...64

Research Methodology
Research design……………………………………………….…..66
Methods of research……………………………………………….67
 Primary Data……………….. ……………………..….68
 Secondary Data……………………………………….68

Data Analysis …………………………………………………..….69

Recommendations & Suggestions…………………………..…85
Limitations………………………………………………………..…91
Bibliography……………………………………………………...…94
Annexure …………………………………………………………....95

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COMPANY
PROF ILE

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 Company profile

The Barbarian Company is a family- owned business with headquarters in

Munich, founded in 1905

Knorr-Bremse was founded in 1905 in Berlin by inventor Georg Knorr.

The initial basis for the company’s commercial success was provided by an
agreement with the Prussian State Railways to supply single-chamber express
braking systems offering considerably enhanced safety performance compared with
traditional systems. In the early twentieth century, train guards still had to operate
the brakes by hand, from so-called "brake vans". The first pneumatic brakes were of
a basic design, but before long, indirect automatic systems using a control valve
were developed.

The second main area of activity for Knorr-Bremse emerged in 1922, when company
moved into pneumatic braking systems for commercial road vehicles. Knorr-Bremse
was the first European company to develop a new kind of pneumatic system that
applied the brakes simultaneously to all four wheels of a truck as well as its trailer.
The resultant reduction in braking distances made a significant contribution to
improving road safety.
Detailed below are some of the milestones in 100 years of company history.

Georg Knorr

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As the world's leading manufacturer of braking systems for rail and commercial
vehicles, Knorr- Bremse has been pioneering development, production and
marketing of modern braking systems for a variety of applications for 100 years,
making an important contribution to improved safety on the railways and the roads.
The company also produces door systems for rail vehicles and torsion dampers.

In 2003 the Group's workforce of over 11,000 achieved world-wide sales of EUR 2.2
billion. The key to our market success is our local presence and high flexibility - the
result of decentralized, transparent corporate structures, internationally co-
coordinated development and manufacturing operations, and a global service
network. As a forward-looking company we rely on the innovative skills and
commitment of our workforce to retain our lead in the development of state-of-the-art
technologies for rail and commercial road vehicles.

In 2005 the Group's workforce of over 12,100 achieved world-wide sales of EUR 2.7
billion. The key to our market success is our local presence and high flexibility - the
result of decentralized, transparent corporate structures, internationally co-
coordinated development and manufacturing operations, and a global service
network. As a forward-looking company we rely on the innovative skills and
commitment of our workforce to retain our lead in the development of state-of-the-art
technologies for rail and commercial road vehicles.

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 Board Of Director
Executive Board of Knorr-Bremse AG

Heinz Hermann Thiele

Chairman Jens Theuerkorn

Jan Peter Nonnenkamp Dr. Dieter Wilhelm

Supervisory Board of Knorr-Bremse AG

Dr. Hans-Peter Binder

Berg Peter Ratschnig*
Chairman Freising
1st Deputy Chairman
Retd. Member of the Board of
Management of Deutsche Bank Chairman of the General and
AG, Munich Branch Group Works Councils
Dr.-Ing. h.c. Wilfried Lochte
Groß Schwülper
2nd Deputy Chairman

Retd. Chairman of MAN

Nutzfahrzeuge AG and retd. Klaus Gegenfurtner*
Member of the Board of Aidenbach
Management of MAN AG Toolmaker

Dr. Eduard Gerum* Arno Hager*

Rosenheim Berlin
Vice President Representative of the IG Metall
R&D Brake Systems Trade Union, Berlin Office

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Worldwide help for victim of disaster

Knorr-Bremse Global Care e.V. has taken on the task of financing local, direct and

concrete relief projects in the respective crisis areas with donations. The measures

shall be suitable to give the concerned persons again the possibility to independently

earn their living in order to support their families. The most important criterion

resides in "Helping people to help themselves". Our relief projects will be

investments to promote the economic independence of the concerned people in the

future.

Product

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Expertise and passion - combined with 100 years of experience with braking
systems - these are the ingredients in the Knorr-Bremse success story. As the
preferred supplier of manufacturers and operators of rail vehicles throughout the
world, we not only produce complete braking systems for all types of rail vehicles but
also door systems, toilets, air-conditioning, couplings and windscreen wipers.

The customer is the central focus of all our activities - and sales and service centers

in 22 different countries around the globe mean we are always available when

needed. Whatever you require, we offer an expert, one-stop, locally based service

ranging from initial advice to skilled maintenance and repair services.

Foremost in our minds is the competitiveness of our customers' and business

partners' rail vehicles - with tailor-made solutions guaranteeing maximum safety,

comfort and economy.

Quality
Brake systems from Knorr-Bremse play a crucial role in vehicle safety, and stringent quality

standards are applied throughout all development, production and delivery processes. But

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our responsibility continues even after the customer has taken delivery: we offer quality-

focused training and service throughout a product’s entire life. To be able to offer such

levels of quality we have to ensure complete control of all core business processes, together

with associated management and support functions, and subject these to continuous

improvement.

Rail vehicle manufacturers and operators all have their own distinctive profiles - profiles as

unique as the external overhaul, maintenance, and repair needs of their vehicles. Through

railservices, Knorr-Bremse offers the ideal customized service package for every

conceivable requirement - for freight cars, streetcars, metros or commuter rail networks,

locomotives or high-speed trains. Performance, quality, and proximity are the cornerstones

of a service offering that - in this form - is unique in the European marketplace

Performance
The railservices portfolio offers exactly what rail vehicle
manufacturers and operators want: value-for-money solutions
tailored to their specific needs - from repairs of brake cylinders to
complete overhauls of complex braking systems. And the focus
is always on getting the vehicles back on the track as fast as
possible - without compromising on quality.

Quality
Locomotives and freight or passenger cars should be out and
about - not standing in the workshop. The uncompromising high
quality offered by railservices ensures maximum availability of
rail vehicles in the passenger and freight sectors alike.

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 Proximity
Regardless of the size and scope of their operations, rail vehicle
manufacturers and operators all appreciate a service partner with
a local presence. The railservices portfolio is available right
where the customer needs it: close at hand.

Platform screen doors

New platform doors for enhanced safety.

Platform screen doors are closed glass constructions in underground stations that form a

barrier between the platform edge and the track that protects passengers from the moving

train and effectively eradicates the danger of anyone falling on to the rails by accident. They

also reduce the air turbulence as the train enters or leaves the station by isolating the

platform from the tunnel. This makes it possible to heat or air-condition the waiting area

much more economically than before. Platform screen doors make underground stations

safer, cleaner, quieter and therefore more attractive for the travelling public.

Advantages

- improved passenger safety

- passenger management

- effective environmental control

- enhanced comfort

- attractive platform environment

Windscreen wipers

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 All clear ahead

Designed for the specific requirements of rail vehicles,

Knorr-Bremse pneumatic or electrical windscreen wiper

and washer systems guarantee a clear view ahead at all

times.

Clear view for all

We can supply systems for every kind of rail vehicle - from trams and metros to locomotives

or high-speed trains. Products range from compact systems to one, two or three-arm wipers.

And, of course, all of them are exclusively equipped with components tried and tested by

Knorr-Bremse.

Advantages

Knorr-Bremse windscreen wiper and washer systems are virtually maintenance-free and

therefore extremely economical to operate. They also take up very little space and minimize

interference in the driver's view of the track.

Functions (optional):

- variable wiper speed

- various settings for interval wiping

- simultaneous wash/wipe mode

- optional automatic on/off using rain sensors

Train safety

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Better safe than sorry

Whether you are carrying passengers or transporting dangerous goods by rail,

safety is paramount. Knorr-Bremse supplies two types of derailment detectors that

enhance the active safety of rail vehicles: an electronic and a pneumatic system,

both suitable for installation in a wide variety of vehicle types.

Applications

- long-distance passenger cars

- metros and urban railways

- multiple units

- transportation of dangerous goods

- freight cars in general

HVAC

Breathingfreely

Whatever the climate, whatever part of the world you are in, air conditioning,

ventilation and heating systems from MERAK have been offering flexible solutions

for high-speed trains, coaches, urban and underground trains for almost forty years.

And from the very outset, environmental protection has been a priority in all

manufacturing, maintenance and disposal processes.

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Main product

- heating and air-conditioning systems

- static converters for fluorescent lighting

- electronic systems

--protection from compression waves

--charge protection units

--alternative starter compressors

Furtherinformation

We will be pleased to answer any questions you may have about particular systems or

areas of application. Please contact:

MERAK

e-mailmerak@merak-sa.com

www.merak-sa.com/

Quality

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Knorr-Bremse systems are of crucial importance for vehicle safety and therefore

have to meet the most stringent quality requirements. This applies to more than just

the development, production and delivery process - our responsibility continues even

after delivery. We offer quality-focused training and service throughout the entire life

of our products.

Expertise
A combination of decades of experience of braking technology and the company’s global
development activities has enabled Knorr-Bremse to gather a vast quantity of specialist
expertise and innovative capacity. All our development projects draw on our combined skills
in three main areas of technology – mechanical and electronic engineering and pneumatics.

State-of-the-art development tools, simulations and rigorous testing ensure that the
name Knorr-Bremse remains synonymous with extremely rugged systems offering
safe and reliable braking even under the harshest conditions.

Innovative products such as the ESP electronic stability program, pneumatic disc
brakes and compressors equipped with energy-saving devices set new standards in
brake technology.

Services
We offer more
As well as supplying innovative products, Knorr-Bremse offers a comprehensive
support program throughout their operating life that includes product training,
diagnostic and repair tools and a comprehensive spare part supply network.

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Regional offices

Munich (Germany)

Berlin (Germany)

Switzerland

Modling (Austria)

United kingdom

France

Italy

Spain Sweden

Hungary

Poland

NY (USA)

MD (USA)

Canada

Brazil

South Africa

Faridabad (Haryana- India)

Tokyo (Japan)

South Korea

Hong Kong ( China)

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INRODUCTION

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The history of performance appraisal is quite brief. Its roots in the early 20th
century can be traced to Taylor’s pioneering Time and motion studies. But this is
not very helpful, for the same may be said about almost everything in the field of
modern human resources management.

As a distinct and formal management procedure used in the evaluation of work

performance, appraisal really dates from the time of the Second World War- not
more than 60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of
things historical, it might well lay claim to being the world’s second oldest
profession!

“ There is, a basic human tendency to make judgments about those one is
working with, as well as oneself.” The human inclination to judge can create
serious motivational, ethical and legal problems in the workplace. Without a
structured appraisal system, there is title chance of ensuring that the judgments
made will be lawful, fair, defensible and accurate.

Performance appraisal system began as simple method of income justification.

That is, appraisal was used to decide whether or not the salary or wage of an
individual employee was justified.

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 that the supervisor excepted, 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.

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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.

These observations were confirmed in empirical studies. Pay rates were important,

yes; but they were not the only element that had an impact on employee

performance. It was found that other issues, such as morale and self-esteem,

could also have a major influence. As a result, the traditional emphasis on reward

outcomes was progressively rejected. In the 1950s in the United States, the potential

usefulness of appraisal as tool for motivation and development was gradually

recognized. The general model of performance appraisal, as it is known today,

began from that time.

MODERN APPRAISAL

Performance appraisal may be define 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 the help determine reward outcomes. That is, the appraisal results are
used to identify the better performing employees who should get majority of
available merit pay increases, bonuses and promotions. By the same token,
appraisal results are used to identify the poorer performers who may required some
form of counseling, or in extreme cases, demotion, dismissal or decreases in pay.

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TERMS RELATED TO PERFORMANCE APPRAISAL

PERFORMANCE APPRAISAL :- the regular (usual annual ) process where

an employees performance for the year is assessed by manager and/or employee. It

is only one part of the performance management.

PERFOMANCE MANAGEMENT: - The larger process of defining what

employees should be doing, ongoing communication during the year, linking of

individual performance to the organization needs, and the evaluating of appraising of

performance.

RANKING SCALE:- A way of evaluating staff by comparing them to each

other, so that there is a best, a second best and so on. This is REAL SERIOUS

TROUBLE, and almost always destructive.

STANDARDS OF PERFORMANCE:- Mutually agreed upon criteria used to

describe how WELL an employee must perform, written to reduce subjective

judgment

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PERFORMANCE APPRAISAL PROCESS

Performance Information

Evaluation performance
Areas

Supervisor Reviews
Appraisal

HR Reviews Appraisal

Appraisals/ Presentation of
Documents to HR Appraisal

Time lines/ objectives

Established

Evaluation Time lines/

goals

Follow up Meeting Continued

Termination
objectives Monitoring

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Defined by schneier and Beatty as,” ….the process of identifying, measuring

and development human performance in organizations,” performance appraisal

tries to:

Give feedback to employees to improve subsequent performance.

Identify employee-training needs.

Document criteria used to allocate organizational rewards.

Form a basis for personal decisions- salary (merit) increases, disciplinary

actions, etc.

Provide the opportunity for organizational diagnosis and development.

Facilitate communication between employee and administrator.

Validate selection techniques and human resource policies to meet federal

Equal Employment Opportunity requirements.

APPRAISAL FORMATS

Many different formats and procedures have tried to meet these multiple objectives.

For each of these purposes, someone in the organization must make some

decisions about the kinds of characteristics of people or their performance to be

evaluated and about the manner in which the evaluation will be done, by whom, and

how well. There are relatively few special rules or special principals applicable only

to the special purposes.

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Regardless of the types of format used, the following criteria are recommended as

important components of an effective performance appraisal.

Examples of outstanding performance;

Identification of areas needing improvement;

Discussion of goals and objectives for upcoming year;

Opportunity for the employee to furnish information on achievements and

performance;

Appraisal of participation in programs such as diversity initiatives,

Employee safety, performance appraisal of subordinates, affirmative action,

departmental, mission, etc.

Feedback from training and professional development opportunities for

upcoming year;

The most commonly used appraisal techniques includes:

Essay appraisal.
Graphic rating scale.
Field review.
Forced- choice rating.
Critical incident appraisal.
Management- by- objectives approach.
Work- standards approach.
Ranking methods.
Assessment centers.

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Each of these has its own combination of strengths and weaknesses, and none is

able to achieve all the purposes for which management institutes performance

appraisal system. Nor is any one technique able to evade all of the pitfalls. The best

anyone can hope to do is to match an appropriate appraisal method to a

particular performance appraisal goal.

Essay Appraisal

In the essay method approach, the appraiser prepares a written statement about the
employee being appraised.

The statement usually concentrates on describing specific strength and weaknesses

in the job performance. It also suggests courses of action to remedy the identified
problem Areas.

The statement may be written and edited by the appraiser alone, or it be composed

in collaboration with the appraiser needs.

Graphic rating scale

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

consistent and reliable typically, a graphic scale assesses a person on the

quality and quantity of his work (is he outstanding above average, or

unsatisfactory) and on a variety of other factor that vary with the job but usually

include personal traits like reliability and cooperation. It may also include specific

performance items like oral and written communication.

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The graphic scales have come under frequent attack, but remain the most widely

used rating method. In a classic comparison between the “ old- fashioned “ graphic

scales and the much more sophisticated forced- choice technique, the former proved

to be fully as valid as the best of the forced-choice forms, and better than most of

them. It is also cheaper to develop and more acceptable to raters than the

forced- choice form. For many purposes there is no need to use anything more

complicated than a graphic scale supplemented by a few essay questions.

Field Review

When there is reason to suspect rater bias, when some raters appear to be using

higher standards than others, or when comparability of ratings is essential, essay or

graphic ratings are often combined with a systematic review process. The field

review is one of one of several techniques for doing this. A member of the

personnel or central administrative staff meets with small groups of raters from each

supervisory unit and goes over each employee’s rating with them to (a) identify

areas of inter-rater disagreement, (b) help the group arrive at a consensus, and (c)

determine that each rater convinces the standards similarly.

This group- judgment technique tends to be more fair and more valid than

individual ratings and permits the central staff to develop an awareness of the

varying degrees of leniency or severity as well as bias- exhibited by raters in

different departments. On the negative side, the process is very time consuming.

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 Forced- choice rating

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

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

intervention of a third party. Although there are many variations of this method,

the most common one asks raters to choose from among groups of statements

those which best fit the individual being rated and those which least fit him. The

statements are then weighted or scored, very much the way a psychological test is

scored. People with high scores are, by definition, the better employees; those with

low score are poorer ones. Since the rater does not know what the scoring weights

for each statement are, in theory at least, he cannot play favorites. He simply

describes his and someone in the personal department applies the scoring weights

to determine who gets the rating.

The rationale behind this technique is difficult to fault. It is same rationale used in

developing selection test batteries. In practices, however, the forced-choice

method tends to irritate raters, who feel they are not being trusted. They want to

say openly how they rate someone and not be second- guessed or tricked into

making “honest” appraisals.

A few clever raters have even found ways to beat the system. When they want to

give average employee Harry Smith a high rating, they simply describe the best

employee they know. If the best employee is Elliott Jones, they describe Jones on

Smith’s forced-choice from. Thus, Smith gets a good rating and hopefully a raise. An

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additional drawback is the difficulty and cost of developing forms.

Consequently, the technique is usually limited to middle and lower management

levels where the jobs are sufficiently similar to make standard or common form

feasible.

Finally, forced-choice forms tend to be of little value- and probably have a

negative effect- when used in performance appraisal interviews.

Critical incident appraisal

The critical incident technique looks like a Natural to some people for performance

review interviews, because it gives a supervisor actual, factual incidents ti discuss

with an employee. Supervisors are asked to keep a record, a “little black book”, on

each employee and to record actual incidents of positive or negative behavior.

Instead of arguing over traits, the discussion deals with actual behavior.

There are, however, several drawbacks to this approach. It requires that supervisor

jot down incidents on a daily or, at the very least, a weekly basis. This can

become a chore. Furthermore, the critical incident rating technique need not, but

may, cause a supervisor to delay feedback to employees. And it is hardly desirable

to wait six months or a year to confront an employee with a misdeed or mistake.

Finally, the supervisor sets the standards. If they seem unfair to a subordinate, might

he not more motivated if he at least has some say in setting, or at least agreeing to,

the standards against which he is judged?

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 Management by Objectives (Results Method)

The use of management objectives was first widely advocated in the 1950s by the

noted management theorist Peter Drucker.

MBO (Management by objectives) method of performance appraisal are

results- oriented. That is, they seek to measure employee performance by

examining the extent to which predetermined work objectives have met.

Usually the objectives are established jointly by the supervisor and subordinate.

once an objective is agreed, the employee is usually expected to self- audit; that is

to identify the skill needed to achieve the objective.

Typically they do not rely on others to locate and specify their strengths and

weaknesses. They are expected to monitor their own development and progress.

Advantages

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

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

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

outcomes, and not on their potential for success, or on someone’s subjective opinion

of their of their abilities.

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

observed, whereas the traits and attributes of employees (which may or may

not contribute to performance) must be guessed at or inferred.

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

so many consitituent parts- as one might take apart an engine to study it. But put all

the parts together and the performancemay be directly observed and measured.

Disadvantages

MBO methods of performance appraisal can give employees a satifying sense of

autonomy and achievement. But on the downside, they can lead to unrealistic

expectations about what can and cannot be reasonalbly accomlished.

Supervisors and subordinates must have very good “reality checking” skill to use

MBO appraisal methods. They will need these skills during the initial stage of

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

Unfortunately, reasearch studies have shown repeatedly that human beings tend

to lack the skills needed to do their own “reality checking”. Nor are these skills

easily conveyed by training. Reality itself is an intensely personal experience, prone

to all forms of perceptual bias.

30
One of the strenghts of the MBO method is the clarity of purpose that flows from

from a set of well-articulated objectives. But this can be a source of weaknessalso. It

has become very appearent that the modern organisation must be flexible to

survive. Objectives, by their very nature, tend to impose certain rigidity.

Work- Standards Approach

Instead of asking employees to set their own performance goals, many

organizations set measured daily work standards. In short the work standards

technique establishes work and staffing targets aimed at improving

productivity. When realistically used, it can make possible an objective and

accurate appraisal of the work of employees and supervisors.

To be effective, the the stadards must be visible and fair. Hence a good deal of time

is spent observing employees on the job, simplifying and improving the job where

possible, and attenmpting to arrive at realistic output standards.

It is not clear, in case, that work satndards have been integrated with an

organisation’s performance appraisal programme. However, since the work-

standards program provides each employee with a more or less complete set of his

job duties, it would seem only natural that supervisors will eventally relate

performance appraisal and interveiw comments to these duties. The use of work

standards should make performance interveiws less threating than use of personal,

more subjective standrads alone.

31
The most serious drawback appears to be problem of comparability. If people are

evaluated on different standards, how can the ratings be brought together for

comparision purposes when decision have to be made on promotions or on salary

incraeses? For these purposes some from of ranking is necessary.

Ranking Methods

The rating scale method offers a high degree of structure for appraisals. Each

employee traits or characteristic is rated on a scale that usually has several points

ranging from” poor” to excellent” (or some similar arrangement).

The traits assessed on theses scales include employee attributes such as

cooperation, communications ability, initiative punctuality and technical (work

skill) competence. The nature and scope of the traits selected for inclusion is

limited only by the imagination of the scales designer, or by the organization’s need

to know.

The one major provision in selecting traits is that they should be in some way

relevant to appraisee’s job.

Assessment Centers

in any placement decision and even more so in promotion decision, some prediction

of future performance is necessary. How can this kind of prediction be made most

validly and most fairly? One widely used rule of thump is that “ what a man has done

32
is the best predictor of what he will do in the future”. But suppose you are picking a

man to be a supervisor and this person has never held supervisory responsibility?

Or suppose you are selecting a man for a job from among a group of candidate,

none of whom has done the job or one like it? In these situations, many

organizations use assessment centers to prediction future performance more

accurately.

Typically, individuals from different departments are brought together to spend two

or three days working on individual and group assignments similar to the observers-

sometimes derived by paired comparison or alternation ranking- leads to an order-

of- merit ranking for each participant. Less structured, subjective judgments are also

made.

There is a good deal of evidence that people chosen by assessment center methods

work out better than those not chosen by these methods. The center also makes it

possible for people who are working for department of low status or low visibility in

an organization to become visible and, in the competitive situation of assessments

center, show how they stack up against people from more well- known departments.

This has the effect of equalizing opportunity, improving morale, and enlarging the

pool of possible promotion candidates.

33
3600-degree performance Appraisal

Boss

Self Tea
Peer
m

Client

3600 Feedback is a proven method of helping individual their performance through

the eyes of their working colleagues.

The individual first complete a self- assessment, rating themselves over a serious

of specific behaviors. They select a number of working colleagues and categorize as

e.g. Manager, Colleagues, and Team Member. Each selected person then assesses

the individual for their current performance under the same series of behaviors using

a simple rating scale mechanism.

The feedback is then summarized and collected for the individual as a series of

reports. Each report is deigned to emphasize a different aspect of the feedback e.g.

strengths, Development Areas, opinion differences. Once the individual has received

the report they are in a position to identify which behaviors are seen as in need of

improvement and to choose appropriate development actions. 360 feedback is often

used as a support aid for management development training. Managers can use the

34
360 report to focus on areas of the course which have been highlighted by

colleagues.

360 feedback is also highly effective as a self development tool as it provides

managers with key information which they would otherwise find hard to obtain.

Some common pitfalls

Obstacles to the success of formal performance appraisal programs:

Performance appraisal programs demand too much from supervisors.

Formal performance appraisals obviously require at least periodic supervisor

observation of subordinates’ performance. However, the typical first- line

supervisor can hardly know, in a very adequate way, just what each of 20, 30, or

more subordinates is doing.

Standards and ratings tent to vary widely and, often, unfairly. Some raters

are tough, others are lenient. Some departments have highly competent people;

others have less competent people. Consequently, employee subject to less

competition or lenient ratings can receive higher appraisals than equally

competent or superior associates.

Personal values and bias can replace organizational standards..

35
 Because of lack of communication, employees may not know how they are

rated. No performance appraisal system can be very effective for management

decisions, until the people being appraised know what is expected of them and

by what criteria they are being judged.

in many cases, the validity of ratings is reduced by supervisory resistance to

making the rating. Rather than confront their less effective subordinates with

negative ratings, negative feedback in appraisal interviews, and below- average

salary increases, supervisors often take more comfortable way out and give

average or above- average ratings to inferior performers.

Performance appraisal ratings can boomerang when communicated to

employees. Negative feedback not only fails to motivate the typical employee,

but also can cause him to perform worse. Only those employees who have a

high degree of self- esteem appear to be stimulated by criticism to improve their

performance.

Performance appraisal interviews tend to emphasize the superior position of

the supervisor by placing him in the role of judge, thus countering his equally

important role of teacher and coach. This is particularly damaging in

organizations that are attempting to maintain a more participative

organizational climate.

36
 Traditional problems with appraisals

Halo Effect:- One trait of the individual affects the others bias. Graphic

forms are susceptible to this problem.

Central Tendency:- Supervisors tend to play it safe and rate everyone

generally so that they do not get questioned about their judgment.

Leniency/ Strictness:- Some supervisors constantly under or over rate

their staff.

Making performance appraisal relevant…

Performance appraisal programs can be considerably more effective if management

will fit practice to purpose when setting goals and selecting appraisal techniques to

achieve them. Then he shows how they can be used singly and in cobination with

different performance appraisal objectives. He maintains that if management will

undertake this matching effort, many familiar pitfalls of appraisal programs can be

avoided.

These frequently voiced goals of performance appraisal programs underscore the

importance of much programs to such programs to any observe their subordinates

more closely and to do a better coaching job.

Motivate employee by providing feedback on how they are doing.

Provide back-up data for management decisions concerning merit increases,

transfers, dismissals, and so on.

37
 Improve organization development by identifying people with promotion

potential and pin- pointing development needs.

Establish a research and reference base for personnel decisions.

It has been estimated that over three fourths of U.S. companies now have

performance appraisal programs. Appraisal programs. In actual practice,

however, formal performance appraisal programs have often yielded

unsatisfactory and disappointing results, as the growing body of critical literature

attests. Some critics even suggest that we abandon performance appraisal as a

lost hope, and they point to scores of problems and pitfalls are evidence.

But considering the potential of appraisal programs, the issue should not be

whether to scrap them; rather, it should be how to make them better. One reason

for failures is that companies often select indiscriminately from the wide battery of

available performance appraisal techniques without really thinking about which

particular technique is best suited to a particular appraisal objective.

38
SIGNIFICANCE OF THE PROBLEM

Performance appraisal has described as America’s number one management

problem and yet one of the most critical responsibilities of human resources

management. Organizations regularly expend scarce resources to train supervisor

on how to effectively conduct performance appraisals. Both practitioners and

empiricists have generated volumes of literature investigating and or reporting how

to, how often, and who should give performance feedback to a worker.

Experts and researchers that the have analyzed performance appraisal have

suggested two broad uses of appraisal in organizations.

Performance appraisals serve as administrative purposes in areas such

as reward allocation (salary increases, bonuses), and assignment decision

(promotions, transfers, demotions).

evaluation also contributed to employee development, because it allows

the identification of their strengths and weaknesses, provides performance

feedback, and facilitates exchanges with supervisors.

However, many surveys of both employee and managers indicate dissatisfaction

with performance appraisals. Since organizations will most likely continue to make

personnel decisions based on performance appraisals, this problem must be

reconciled. Hence, the purpose of the study is the determine whether effective

communication took place during the appraisal process from both the managerial

and employee perspective.

39
REVIEW OF LITRATURE

Job performance is a fundamentally important construct in organizational practice

and research. Performance appraisals also play a central role in most personnel

decisions, and are also used as an important source of developmental feedback.

The performance appraisal process has been known to leave employees embittered,

dejected, and unfit for productive work for many weeks after the rating. They have

also been known to elicit negative psychological responses such as resistance,

denial, aggression, or discouragement, particularly if the assessment is negative.

Evidently, something must be done to address the problems with process.

Assessment of employees’ reactions toward their performance appraisal is

important for many reasons. These reasons include:

a). The notion that reactions represent a criteria of great interest to

practitioners and

b). The fact reactions have been theoretically linked to determinants of

appraisal acceptance and success but have been relatively ignored in

research.

Many researchers have suggested that appraisal reactions play an important role in

the appraisal process because they are vital to the acceptance and use of an

appraisal system as well as a contributing factor to the validity of an appraisal.

40
Thus, it seems vital to organizations that researchers continue to address the issue

of employee appraisal reactions to help bridge the gap between science and

practice in performance appraisal.

With dissatisfaction, and feelings of unfairness in process and inequity in

evaluations, any appraisal system will be doomed for failure. If not accepted and

supported by its users, an appraisal system will ultimately be unsuccessful. Clearly,

there is general consensus among performance appraisal researchers that the

assessment of appraisal reactions is important. Satisfaction has been the most

frequently measured appraisal reaction. One advantage of using satisfaction, as a

measure of individual reactions is that it appears to assess both fairness cognitions

and simple affect, thus affording a broader indicator of individuals’ reaction to

appraisal than more specific, cognitively orientated criteria.

Appraisal satisfaction has been primarily conceptualized in three ways:

i.) Satisfaction with the appraisal interview or session

ii.) Satisfaction with the appraisal system

iii.) Satisfaction with performance ratings.

The study highlighted some of the benefits associated with allowing performance

appraisal systems to become more involvement orientated through employee

participation in the process. Employee participation was positively related to

employee satisfaction with the appraisal session, the appraisal system, perceived utility

of the appraisal, motivation of employees to improve performance, and perceived fairness of

the system. There were at least five ways empirically identified including allowing employees

to voice their opinions (e.g. value- expressive participation), allowing them to influence the

41
appraisal through voicing their opinions ( instrumental participation), allowing influence the

appraisal, and allowing them to participate in goal setting in then appraisal process.

Most notable of these operationalisation of participation was value- expressive participation.

The value- expressive explanation suggests that employees perceive the chance for self-

expression as periodically just, regardless of appraisal outcomes. This explanations states

that attitudes are affected because the opportunity to voice one’s opinions is a desired end

in itself. Value- expressive participation was more strongly related to positive reactions than

instrumental participation. Appraisal is a communication process and therefore, the quality

of communication cannot be neglected regarding satisfaction. Therefore, in this study, we

will be looking at satisfaction with the appraisal session in the context of communication.

Focus of the project

The project has been designed mainly to focus on to understand the performance

management system prevailing in the organization and an effort to design a better

performance management system for the organization keeping in view the practical

aspect of the applicability.

42
Objectives of the project

To understand the performance management system at

the organization.

• To analyze problem in the exiting performance

management system.

• To provide feedback to the employees regarding their past

performance.

• Provide information to assist in the other personal

decisions in the organization.
Provide clarity of the expectations and responsibilities of the

functions to be performed by the employees

To design performance appraisal forms for three main

levels viz…

i.) Workmen (Factory Staff)

ii.) Supervisory

43
 iii.) Managerial ( Executive)

Research Methodology

44
 What is research?

Research is an active, diligent and systematic process of inquiry in order to discover,

interpret or revise facts, events behaviors, or theories or to make practiceal

application with the help of such fact6s, laws or theories. The term “research” is also

used to describe the collection of information about a particular subject.

A research design is a specification of methods and procedures for acquiring the

information needed. It is overall operation pattern and the framework of the project

that stipulates what information is to be collected from which source and by what

procedure.

Supervision in the human services is a role, which usually requires periodic

appraisal of employee performance. How that appraisal is conducted in human

services agencies in two mid- sized American cities is the subject of this study

For present study the research design has been descriptive. It is descriptive

because of analysis of exiting performance management system.

45
Methodology research design

Through study of the exiting performance management system in the

organization.

Study of the levels/ bands in the organization.

Study of behavioral skills at various levels in the organization.

To study flaws in the exiting performance management system.

To design performance appraisal forms for three levels of the organization

viz…

1.) Workmen (Factory staff)

2.) Supervisory

3.) Non supervisory (Executive/ Managerial)

Hypothesis was developed on the basis of methodology adopted as above.

Concrete Suggestions/ Recommendations.

46
Universe & survey population

For the accomplishment of the project the universe and the survey smple both are

the organization itself. The universe is the organization in the sense that the project

of performance appraisal is designed for the company and so the survey sample is

the organization itself.

Data collection

The data collected for the research is undertaken through primary as well secondary

data methods. This can be illustrated in the following way:

Primary data

The primary data has been collected from the various mediums like:

review of exiting performance appraisal system in the organization

Telephone survey.

Survey data

The secondary data has been collected from the mediums like:

 Information acquiring through Internet.

 Articles on the relative topics in various books, magazines, newspapers.

47
 Micro
Analysis

48
 Table No. 1
Is performance appraisal necessary

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE

Yes 36 72

No 14 28

TOTAL 50

Is performance appraisal necessary:

Out of the total respondents 72% believed that performance appraisal is necessary for growth
of the company whereas 28% do not believe it.

49
 IS P E R F O R M A N C E A P P R A IS A L N E C E S S A R Y

No
28%

Y es
No

Y es
72%

Table No. 2
Importance of performance appraisal

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE

Motivation 26 52

Competitive feel 8 16

Distinction 16 32

Importance of performance appraisal:

50
52% respondents think that performance appraisal is important to motivate an employee,
32% think that performance appraisal helps to distinguish between efficient staff from non-
efficient ones.

IM PO RTANCE O F PERF ORM ANCE APPRAISAL

32%

Motivation
C om petitive feel
52% D is tinction

16%

Table No. 4
Form of performance appraisal

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE

Monetary rewards 13 26

Non monetary 37 74

Form of performance appraisal:

Among all the officials, 74% prefer non monetary rewards like challenging jobs, appreciation
whereas 26% prefer monetary rewards like bonus, incentives, etc.

51
 F O R M O F P E R F O R M A N C E A P P R A IS A L

M o n e t a ry re w a rd s

26% 74% N o n m o n e t a ry re w a rd s

Table No. 5
Method for performance appraisal

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE
Graphic rating scale 18 36
Ranking method 20 40
Paired comparison 5 10
Group appraisal 7 14

Method for performance appraisal:

52
40% respondents prefer ranking method to be adopted, 36% are in favour of graphic rating
scale and the least are in favour of group appraisal.

M E T H O D F O R P E R F O R M A N C E A P P R A IS A L

14%

10% 36%
G ra p h ic ra t in g s c a le
R a n k in g m e t h o d
P a ire d c o m p a ris o n m e t h o d
G ro u p a p p ra is a l

40%

Table No. 6
Type of performance appraisal

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE

Group appraisal 9 18

Individual appraisal 41 82

Type of performance appraisal:

Among all the respondents 82% prefer individual appraisal in comparison to group appraisal.

53
 T Y P E O F P E R F O R M A N C E A P P R A IS A L

18%

G ro u p a p p ra is a l
In d ivid u a l a p p ra is a l

82%

Table No.7
Considerations during performance appraisal

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE
Achievement 6 12
Leadership 15 30
Teamwork 11 22
Presentation skills 9 18
Customer orientation 9 18

54
Considerations during performance appraisal:
30 % officials consider leadership important for performance appraisal, 22% consider
teamwork important and achievement is considered as least important for performance
appraisal.

C O N S ID E R A T IO N D U R IN G P E R F O R M A N C E A P P R A IS A L

12%
18%

A c hievem ent
Leaders hip
Team work
18% 30%
P res entation s k ills
C us tom er orientation

22%

55
 Table No.8
Grades & achievements

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE

Yes 18 36

No 32 74

Grades & achievements:

74% respondents do not agree that previous years grades & achievements should be taken
into consideration for current year’s appraisal whereas 36% are in the favour of the same.

G R AD ES & AC H IEV E M E N TS

36%

Ye s
No

64%

56
 Table No.9
Best Form to give appraisal

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE
Promotion 9 18
Bonus 6 12
Challenging work 20 40
Appreciation 15 30

Best Form to give appraisal:

Challenging work is considered as the best way to give appraisal, 40% respondents are in its
favour. 30% prefer appreciation, 18% are in favour of promotion.

B E S T F O R M T O G IV E A P P R A IS A L

18%
30%
P ro m o tio n
12% B onus
C h a lle n g in g p ro je c ts
To k e n o f a p p re c ia t io n

40%

57
 Table No.11
Prime factor to measure performance

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE
Attendance 13 26
Punctuality 7 14
Execution of plans 19 38
Convincing power 11 22

Prime factor to measure performance:

According to 38% execution of plans is the prime factor to measure the performance of
officials, 26% says attendance is important whereas only 14% consider punctuality as the
prime factor for measuring performance.

P R IM E F A C T O R T O M E A S U R E P E R F O R M AN C E

22% 26%

A ttend anc e
P unc tuality
E x ec utio n of plans
C onvin c ing pow er
14%
3 8%

58
 Table No.12
Major problem during appraisal

CATEGORIES NO. OF TOTAL NO. OF

RESPONDENTS PERCENTAGE
Lack of competence 19 38
Biasness 14 28
Resistance 17 34

Major problem during appraisal:

The major problem faced during the performance appraisal is lack of competence according
to 38%, 34% say it is resistance and 28% consider biasness as the major problem.

M A J O R P R O B L E M D U R IN G P E R F O R M A N C E A P P R A IS A L

34%
38%
Lac k of c om petenc e
B ia s n e s s
R e s is t a n c e

28%

59
OBSERVATIONS & SUGGESTIONS

60
OBSERVATIONS & SUGGESTIONS

Yearly performance reviews are critical. Organizations are pressed to find good

reasons why they can’t dedicate an hour- long meeting once a year to ensure the

mutual needs of employee and organization are being met. Performance reviews

help supervisors feel more honest in their relationship with their subordinates and

feel better about them self in their supervisor roles. Subordinates are assured clear

understanding of what expected from them their own personnel strengths and area

of development and solid sense of their relationship with their supervisors. Avoiding

performance issues ultimately decreases morale, decreases credibility of

management, decreases the organization’s overall effectiveness and wastes more of

management’s time to do what isn’t being done properly. Conduct the following

activities.

1. Design a legally valid performance review process; consider these legal

requirements of the performance review process: Patricia king, in her book,

performance planning and appraisal state that the ;law requires that performance

appraisal be:

Job- related and valid;

Based on a through analysis of the job;

Standardized for all employees;

Not biased against any race, color, sex, religion, or nationality and;

61
 Performed by people who have adequate knowledge of the person or job. Be

sure to build in the process, a route for recourse if an employee feels he or

She has been dealt with unfairly in an appraisal process, e.g. that the

employee can go to his or her supervisor’s.

2. Design a standard from for performance appraisals, and include the

following

Name of the employee,

Date the performance from was completed

Dates specifying the time interval, over which the employee is being

evaluated,

Performance dimensions (include responsibilities from the job description,

any assigned goals from the strategic plan, along with needed skill, such

as communications administration etc.)

A rating system (e.g. poor, average, good, excellent)

Space for commentary for each dimension, a final section for overall

commentary,

A final section for action plans to address improvements, and lines for

signatures of the supervisor and employee.

Signature may either specify that the employee aspects the appraisal or

has been it, depending on warding on the from.

62
 3. Schedule the first performance review for six months after the employee

starts employment. Schedule another six months later, and then every year

on the employee’s anniversary date.

4. Initiate the performance review. Tell the employee that you’re imitating a

schedule performance review. Remind them of what’s involved in the

process. Schedule a meeting about two weeks out.

5. Have the employee suggest any update to the job description and provide

written input to the appraisal

Have them record their input concurrent to the recording theirs.

Have them record their input on their own sheets (their feedback will be

combined on the official from later on in the process).

You and the employee can exchange each of your written feedback in the

upcoming review meeting. (Note that by now, employees should have

received the job descriptions and goals well in advance of the review, i.e

year before.

The employee should also be familiar with the performance appraisal

procedure and from.

6. Record your input to the appraisal—appraisal reference the job description

and associated formal goal for basis of review. Be sure you are familiar with the

job requirements and have sufficient contact with the employee to be making valid

judgments

63
 Don’t comment on the employee’s race, sex, religion, nationality, or a

handicap or veteran status.

Record major accomplishments, exhibited strengths and weaknesses

according to the dimensions on the appraisal from, and suggest actions and

training or development to improve performance.

Use example of behaviors, whereas you can in the appraisal to help avoid

counting on hearsay.

Always address behaviors, not characteristics of personalities.

The best way to follow this guideline is to consider what you saw with your

eyes. Be sure to address only the behaviors of that employee, rather than

behaviors of other employees.

7. Hold the performance appraisal meeting. State the meeting’s goals of

exchanging feedback and coming to action plans, where necessary. In the meeting

let the employee speak first and give their input. Respond with your own input. Then

discuss areas where you disagree.

Attempt to avoid defensiveness; admitting how you feel at the present time,

helps a great deal.

Discuss behaviors, not personalities.

Avoid final terms such as “always” , “never”, etc.

Encourage participation and be supportive.

Come to terms on actions, whe5re possible.

64
 Try to end the meeting on a positive note.

8. Update and finalize the performance appraisal form. Add agreed- to

commentary on to the from. Note that if the employee wants to add attach written

input to the final from, he or she should be able to do so. The supervisor signs the

from and asks the employee to sign it. The form and its action plans are reviewed

every few months, usually during one- on- one meeting with the employee.

9. Notes that if that supervisor has been doing a good job supervising, then

nothing should be surprising to the employee during the appraisal. Any

performance issue should have been conveyed when they occurred, so nothing

should be a surprise in the review meeting.

65
LIMITATIONS
The report had to work under some constraints and limitations, as nobody is

interested in disclosing the HR related policies and procedures and when it comes to

performance appraisal process it becomes ill at ease.

Respondents may not have been true in answering various questions and may be

biased to certain other questions. Some respondents were however not willing to

share there views and were reluctant to give any information. Also as the

performance appraisal was designed for exiting organization, the sample size was

the only organization.

Respondents were also reluctant to answer some questions are they took thm as

personal.

66
But all is well that ends well …. In spite of the above limitation I was able to complete

the project successfully and it was highly appreciated as a sincere effort of my hard

work.

Bibliography

67
Bibliography
www.hrm.neu.edu/from/paform

www.perfomance-appraisal.com

www.knorr-bremse.com

www.unep.org

www.acas.org.uk.

www.qualintra.com

www.businessballs.com

www.tata.com

www.indiacars.com

Personnel / Human Resource Management, David and Stephen Robinson’s

Personnel Management, R.S.Dwivedi

Human Resource Management, V S P Rao

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69