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INTRODUCTION

Human Resource Management (HRM) is the procurement, allocation,


utilization and motivation of human resources in business. HRM is the process of
bringing people and organizations together so that the goals of each are met. It tries to
secure the best from people by winning their whole-hearted co-operation. HRM is
responsible for the people dimension of the organization. It is a pervasive force,
action-oriented, individually integrative in nature and is a comprehensive function.
HRM mainly covers 3 aspects such as personal aspect, welfare aspect and industrial
aspect. With appropriate HR policies and practices an organization can hire, develop
and utilize best brains in the market place, realize its professed goals and deliver
results better than others. It helps an organization to realize their respective goals thus
At enterprise level, At the individual level, At the society level and At the national
level. This is going to evolve thus Job redesign, Career opportunities, Productivity,
Rewards, Recruitment and Selection, Training and Development, safety and Welfare.
From the organizational standpoint, good HR practices help in attracting and retaining
talent, train people for challenging roles, develop their skills and competencies
increase productivity and profits enhance standard of living.
HR can be source of competitive advantage, when the talent people working in
the company are valuable, rare, difficult imitate and well organized to deliver efficient
and effective results. Strategic HRM is the linking of HRM with the key goals and
objectives with a view to improve business performance and develop organizational
cultures that foster innovation and flexibility. The effective use of people is the
critical factor in the successful accomplishment of corporate goals. An Organization,
whether small or large, be it a business or an industrial enterprise, needs for its
growth, survival and continuance four important M’s

MONEY
MATERIAL
MACHINERY and
MEN

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Primarily, success or failure of an organization mainly depends upon
combination of the above four factors. Of which, I feel, managing men is critical and
challenging task because of the dynamic nature of the people. No two persons area
similar in their mental abilities, traditions, sentiments and behavior and are subject to
many and varied influences, people are responsive; they feel, think and act and
therefore they just cannot be operated like a machine or shifted and altered like a
template in a room layout. Because of these varied traits human beings are complex in
their behavior and in their psychological make-up and when they interact with one
another in a group or an organization, this complexity is multiplied.
To this end, HR manager need to understand the needs, aspirations of the
employees proactively, face the challenges head on and resolve issues amicably in the
years ahead. The importance of the study of the Performance Appraisal System is a
method of evaluating the behavior of employees in the work spot, normally including
both the qualitative aspects of job performance. It indicates how well an individual is
fulfilling the job demands. Performance appraisal as traditionally being used as a
mechanism of controlling employees through salary administration.

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PERFORMANCE APPRAISAL
Performance evaluation or performance appraisal is the process of assessing
performance and progress of employee or of a group of employee on a given job and
his potential for future development. In concept of all formal procedure used working
organization to evaluate personality, contribution and potential of employees.
Definition
Performance evaluation or performance appraisal is the process of assessing the
performance and progress of an employee or of a group of employees on a given job
and his potential for future development. “It is the systematic evaluation of the
individual with respect to his/her performance on the job and his/her potential for
development.”
Performance of appraisal is widely used in the society. However, formal
evaluation of employees is believed to have been adopted for the first time during
First World War. At the inlands of Walter Dill Scott the US army man to man rating
system for evaluating military personal. Once the employee has been selected, trained
the motivated, he is then appraised for his performance. Performance appraisal is the
step where the management finds out how effective it has been at hiring and placing
employees if any problems are identified, steps are taken too communicated to
employee and to remedy them. A performance appraisal is a process of evaluating the
performance appraisal is a process of evaluating the performance and qualification of
employee according to job and its requirement. It is also known as the process of
estimating and judging the value, excellence individually and collectively, it is the
part of all other staffing process, like recruitment, selection, placement, etc.
The major source of data for the Performance appraisal in 3F Industries Limited
was given by the employees is based upon their perception on the different items in
the questionnaires. The questions were asked about their performance levels of
employees regarding the factors, which affect their development of the employee’s
work life. From the above analysis it is clear that the performance of the company is
quite good in all sectors.

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3600 Appraisal System
This is defined as the systemic collection and feedback of performance data on
individual or group, derived from a number of the stakeholders in their performance.
It is done in a systematic way via questionnaires or interviews. This formalizes
people’s judgments coming from natural interactions they have with each other. There
is both a collection and a feedback process. Data are gathered and feedback to the
individual participant in a clear way designed to promote understanding, acceptance
and ultimately changed behaviour. Stakeholders are people who are both affected by
your performance and deal with you closely enough to be able to answer specific
questions about the way you interact with them. This feedback system assesses
managers in terms of the competence they possess or more specifically through the
detailed behaviour which constitutes them. So far, 3600 feedback has concentrated on
people who are at the more senior levels in an organization, example, directors,
managers, senior executives in companies, and partners or principals in the
profession. However, as organizations are beginning to appreciate the power and
value of such measurement, other jobholders are now finding that their behaviours are
coming under the microscope. Engineers, pilots, sales people, HR professionals,
customer service staff, etc., have all participated in this assessment and feedback
process.
Chart – 1.1 Stakeholders

Source: 3600 feedback : A management tool, peter Ward, 199

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NEED FOR THE STUDY

 Creating and maintaining a satisfactory level of performance of employees in


their present job.
 Highlighting employee needs and opportunities for personal growth and
development.
 Aiding in decision making for promotion, transfer, lay-off and discharges.
 Promoting understanding between the supervisor & his subordinates.
 Providing a useful criterion for determining the validity of selection & training
methods and techniques and forming concrete measures for attracting
individual of higher caliber to the enterprise.

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SCOPE OF THE STUDY

The study was conducted to study the performance appraisal procedure and
policies followed in the selected organization. The main focus was to know the
various aspects influencing the policies and procedure of the performance appraisal
process followed by the company. A detailed study has made of the proceedings and
policy formulation of the performance appraisal programme. A questionnaire has
been administered to 54 employees working in the company.

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OBJECTIVES OF THE STUDY

 To study and understanding of performance appraisal system in the


organization.
 To study and assess the employee performance in organization.
 To study and identify the measures needed to improve the performance
appraisal in employees.
 To generate adequate feedback and performance guidelines for improvement
in employees.

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METHODOLOGY OF THE STUDY

After reviewing the literature and conducting a pilot study a questionnaire had been
framed that is relevant to the priority set objectives.

SAMPLING

“A simple random sampling method was adopted to conduct the study”. The
universe for this study consists of all level employees. The sample consists of 54 in
number.

Primary Data:

The primary data based on the objectives determined, a detailed survey was
conducted by interviewing the employees in Ignite Contractors & Engineers Limited

Secondary Data:

The secondary data has been collected by means of the material supplied by the
human resource department regarding the various performance appraisal activities
taken up by the organization. The information for the study was collected from the
standard text books, manuals and the websites of the Ignite Contractors & Engineers
Limited . The present study is taken up as a part of the project work with the broad
aim of understanding overall functions of the management of Ignite Contractors &
Engineers Limited . As such the main of the present study is to evaluate the various
performance appraisal activities taken up in the organization and their contribution to
increase the efficiency of the employees.

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LIMITATIONS OF THE STUDY

 It is limited to small sample that is 54 respondents from a large number of


employees in organization with in a time frame of few days.
 Time is a major constraint.
 More emphasis is on practical work in field rather than on theoretical aspects
regarding appraisal.
 The study is based on primary and secondary data.

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Industry profile

The Construction industry of India is an important indicator of the


development as it creates investment opportunities across various related sectors. The
construction industry has contributed an estimated US$ 308 billion to the national
GDP in 2011-12 (a share of around 19%). The industry is fragmented, with a handful
of major companies involved in the construction activities across all segments;
medium-sized companies specializing in niche activities; and small and medium
contractors who work on the subcontractor basis and carry out the work in the field. In
2011, there were slightly over 500 construction equipment manufacturing companies
in all of India. The sector is labor-intensive and, including indirect jobs, provides
employment to more than 35 million people.

Historically construction industry is one of the oldest and largest industry


in unorganised sector providing ample employment to the people. Before the
independence, the construction activity in India was confined to building of
dwellings, religious places like mosques and temples etc. at individual and
community level, with the use of traditional techniques, which are still being used in
developing countries like India.

The Taj Mahal and Lal Quila are the legandry example of competence of
Indian talent in the field of construction .However very authentic record of the
construction operation of these buildings are not available today. The history of
systematised or organised construction practice in India can be traced back to around
1847 AD when Lord Dalhouise established the Public Works Department, called
PWD, today, to construct civil engineering structure which included road, small dams,
canals etc. The department worked successfully for 100 years.

In 1947, the independent India decided to launch a mammoth


multipurpose river valley project, called Bhakhra Nangal Project on the river Sutlej in
the North West India for irrigation and power generation at a cost of Rs.7750 lakhs in
1952 which amounts today approximately more than Rs.100,000 crore in first five
year plan in which 50% of capital outlay was allotted to construction of civil works.

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The construction of Bhakhra Dam was taken by irrigation wing of PWD of
Punjab with the help of technical knowhow from foreign help on cost plus basis. This
can be considered as a major breakthrough in the field of construction by India as
there were no big construction companies available at that time to take up such
stupendous job and more over network analysis like Construction Planning Method /
also known as Critical Path Method (CPM) and Programme Evaluation & Review
Technique (PERT) had not taken formal shape.

The evolution of Indian construction industry has followed the same


general pattern as happened in other countries, initially founded by the government
and slowly taken over by small and big enterprises. During execution of Bhakra
Nangal dam Indian government realised need of professional competence in the field
of construction and the first professional consultancy company National Industrial
Development Corporation (N I D C) was established in the public sector in 1954
.Subsequently a number of speciality companies in design and Construction came into
existence like Indian Railways Construction Limited (IRCON),National Building
Construction Corporation (N B C C),Rail India Transport and Engineering Services
(R I T E S),Engineers India Limited(E I L) and in private M N Dastur &
Co.Hindustan Construction Company are the name worth to be mentioned. In late
sixties government allowed foreign collaborations in these services .The guidelines
for such collaboration were prepared and issued in 1968 with binding that local
consultant would be the principal contractor in such collaborations .The objective
behind such binding was to develop indigenous design capabilities comparable to in
flown foreign technology and skills. The outcome of this strategy was establishment
of joint ventures in India.

History:

The period from 1970 to mid 60’s witnessed the government playing an active role in
the development of these services and most of construction activities during this
period were carried out by state owned enterprises and supported by government
departments. In the first five-year plan, construction of civil works was allotted nearly
50 per cent of the total capital outlay.

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The first professional consultancy company, National Industrial Development
Corporation (NIDC), was set up in the public sector in 1954. Subsequently, many
architectural, design engineering and construction companies were set up in the public
sector (Indian Railways Construction Limited (IRCON), National Buildings
Construction Corporation (NBCC), Rail India Transportation and Engineering
Services (RITES), Engineers India Limited (EIL), etc.) and private sector (M N
Dastur and Co., Hindustan Construction Company (HCC), Ansals, etc.).

In India Construction has accounted for around 40 per cent of the


development investment during the past 50 years. Around 16 per cent of the nation's
working population depends on construction for its livelihood. The Indian
construction industry employs over 30 million people and creates assets worth
over 200 billion.It contributes more than 5 per cent to the nation's GDP and 78 per
cent to the gross capital formation. Total capital expenditureof state and central govt.
will be touching 8,021 billion in 2011-12 from 1,436 billion (1999-2000).

The share of the Indian construction sector in total gross capital formation
(GCF) came down from 60 per cent in 1970-71 to 34 per cent in 1990-91. Thereafter,
it increased to 48 per cent in 1993-94 and stood at 44 per cent in 1999-2000. In the 21
st century, there has been an increase in the share of the construction sector in GDP
and capital formation.

GDP from Construction at factor cost (at current prices) increased


to 1.745 billion (12.02% of the total GDP ) in 2004-05 from 1,162.38 billion (10.39%
of the total GDP) in 2000-01.

The main reason for this is the increasing emphasis on involving the
private sector infrastructure development through public-private partnerships and
mechanisms like build-operate-transfer (BOT), private sector investment has not
reached the expected levels. The Indian construction industry comprises 200 firms in
the corporate sector. In addition to these firms, there are about 120,000 class A
contractors registered with various government construction bodies. There are
thousands of small contractors, which compete for small jobs or work as sub-
contractors of prime or other contractors. Total sales of construction industry have
reached 428854 million in 2004 05 from 214519 million in 2000-01, almost 20% of
which is a large contract for Benson & Hedges.

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Construction and National Economy:

By just using common sense it can be inferred that economic plans of any
country is prepared to improve any particular sector of economy. Improvement or
emphasis on any particular sector may or may not need help of other sectors like
construction. A microscopic study of economy, irrespective of its state i.e. primary,
secondary or tertiary, reveals that development of most of the sectors need help of
construction. In nutshell, a gap between demand and supply is necessary for the
development of a particular sector.

Thus it can be said that any attention to optimise construction activity will
lead to reduction in waste of material, saving of energy and saving of time. This will
certainly lead to reduction in cost over runs of other projects. Thus, construction
sector is directly or indirectly influences the overall economy of the country.

The pattern of Indian economy of last fifty years shows that


construction work amounts to around 40% of development investment.Approximately
16% of Indian working population depends on construction for its living .The
construction industry creates immobile assets worth over Rs.20000 crore by
employing more than 3 crore people .It enhances nation's GDP by 5% and gross
capital formation of 78%.It is expected that total capital expenditure of state and
centre will be approaching Rs.802087 crores during the period 2011-12. This amount
indicates an enhancement of Rs.658500 crore from the figure of Rs. 143587 in 1999-
2000.In the 21st century there has been an increase in the share of the construction
sector in GDP and capital formation .The GDP from construction at factore cost or at
current prices increased to Rs. 174571 crores (12.02 % of the total GDP)in 2004 -05
from Rs.16238 crores (10.39% of the total GDP in period 2000-01.The increasing
involvement of the private sector in infrastructure development through public private
partnership and the strategy like Build Own Transfer (BOT) can be cited as the main
factor for such increase in GDP. However there is always scope for more active
participation from private sector in this direction through investment. There are
around 200 firms from corporate sector, working in Indian construction industry .The
number of registered class.

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A contractors is around 120000 working for local development authority,
state departments and central government bodies like CPWD.
The number of small contractors and petty contractors working as sub contractors for
principal contractors are enormous. So there is ample scope for expansion of
construction industry at micro as well as at macro level in form of infrastructure
development.

NATIONAL ECONOMY

Construction industry has some peculiar characteristics like any other industry.
Firstly, it is a capital-intensive industry involving current and future outlays of
funds with the expectation of a stream of benefits extending far into the future.
Secondly, construction project takes a long duration to complete e.g. the
Bhakra Dam took fifteen years for its completion (1950-1965) and they also have a
long gestation period.
Thirdly, the useful life of construction project of national importance is very
long usually more than 60 years for most of the major constructions.
Fourthly, in construction project, products and services are combined together. In
construction, product is fixed and machine and men move, contrary to assembly line
production in which product moves.
Fifthly, a large construction needs a large land area. Acquisition of such
land leads to payment of compensation to the owners of the land, which has legal
and political over tones. In some cases like construction of dam, it needs rehabilitation
of nearby villages. Such problems usually do not occur with the other industries.
Sixthly, cost benefit analysis of public infrastructure created by construction
activity such as roads, bridges and dams cannot be done with traditional concept of
profit maximisation alone. Special economic tools like Social Cost Benefit Analysis
(SCBA) and principles of welfare economics are essential for the valuation of such
assets.
Seventhly, two construction projects are not identical in every respect.
Thus, construction project can be considered as a job work of a large magnitude
contrary to any other manufacturing unit producing products at mass scale by a single
machine.

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Eighthly, the human resource working in construction forms a temporary
organisation for the project at the site and disperses in different directions as soon as
the project is over.
Ninthly, experience of generations plays a vital role as most of the
construction material directly used after quarrying are the natural material and
performance or relative merit of such material takes a long time for its
pronouncement, the time may be in decades.
Tenthly, death of workers during the execution phase of project is very
common, so safety and precaution are primary concerns.

Such peculiar characteristics of construction project opened the portals for


the development of special managerial tools, like materials management, CPM and
PERT to handle the project in a professional manner. In India, construction industry is
fragmented and a sizeable construction work is performed by the unorganised sector.
Such peculiar characteristic creates favourable conditions for the establishment of a
new company. If Construction Company is weighed on the basis of men; material and
money following facts come up.As most of the construction is done either on site or
precast members, are fabricated and assembled on the site and most of the
construction equipment are available on rental basis, thus a little capital is invested in
fixed assets and machinery.Construction companies require relatively low working
capital as after award of contract, company realises mobilisation advance from owner
before starting the work.
In India, companies, usually employ labour contractor for the supply of labour
force. So very few employees are on the permanent pay roll of the company.These
factors are responsible for the birth of small to very big construction companies. This
introduces competition in the market. There are pitfalls but a professionally managed
construction company is able to pay rich dividend to its owners/shareholders.
Constructions and National Development:
For any developing country like India, development of infrastructure is the
prerequisite for the economic progress of the country. To achieve this objective
optimised construction is the need of the hour as capital is a scarce resource

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Types of Construction:
Total construction work can be divided into two broad categories viz. public and
private.
The public projects i.e. whose direct beneficiary will be the public, is
usually handled by the government, of course govt. get it done by any contractor or by
construction company by awarding the work through bids and tenders. It is public
money or any financial aid or loan from agencies like World Bank, that is spent.
Dams, Bridges, Canals, Metro Rail, Power Projects, DUDA,SUDA are typical
examples of public projects.
Private projects like house of an individual or construction of a factory, a
nursing home, hotel or project in which taxpayer's money is not involved can be
categorised as a private project. Frankly speaking profit motive is always there in
most of the private projects.
In private projects, capital outlays are less as compared to public projects.
Secondly in Indian working environment one cannot afford delay in private projects
but cost over runs and delays in public projects are an everyday phenomenon in India.
Consumers of Construction Industry:
Following are the consumers of construction industry:
 An Individual
 Group Housing Societies
 Centre, State, Local Government and Development Authorities.
 Corporate Sector
 Other countries at International level.

Individuals:
An individual needs the services of a construction company for the
construction of individual house, which is ordinarily his dream house. In such
construction, company cannot ignore individual taste and preferences. Persons who
are executing the project have to help and arrive at a decision in advance on the item
of choice and colour e.g. colour and size of tile of bathroom, colour, size and quarry
of marble stone etc. if construction has to proceed smoothly.

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Group Housing Societies:
The housing demand will be around 31 million by 2015(MPRA 2008)In
planning and designing of an apartment or building blocks for group housing society,
the requirement can be classified into two broad categories.
First requirement is of an individual in his house. In a group housing most
of the finishing items are left for the individual occupant so he could finish the house
as per his choice, taste and preferences.
Second requirement is the preferences of a group of people as a whole or
community. requirement. To fulfil this requirement planner needs knowledge of
architectural sociology, human behaviour, security aspect, and maintenance
engineering practices, generosity of the people and cooperation among the people.
Corporate Sector:
Corporate sector hires the services of Construction Company for
commercial building, for factory or for office building etc.
In such buildings, building economics,cost optimization ,requirement of future
expansion and flexibility of the plan are the key issues.There is ample scope for
creativity and innovation in corporate sector projects.
Government Construction:
Local Development Authorities, CPWD, PWD of various states etc are the
department which look after the construction of government sponsored, civil
engineering works. Here Construction Company is guided by strict rules and
regulations of the state, for such departments, time factor is least important.
International Contract:
After the Second World War under developed, oil-rich countries were busy
in creating infrastructure of the country to boost economic growth. Sometimes even
developed countries need huge construction for the events like Olympic and Asian
games.
These projects are mostly financed by the user country or by some
international financing agency like World Bank. In such cases international bids are
invited. Construction companies from US, Great Britain, West Germany and France
usually take the best part of these contracts.
Now competition is increasing. Companies from Japan, South Korea and
India are also getting business share in these countries in construction and in setting
up of power stations and infrastructure. Those companies who offer turnkey services
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have bright chances of success in the competition when the nature of job is purely
works contract. Here sub contractor is capable of mobilising construction equipments
and manpower and gets subcontracts from principal contractor. Joint venture is a very
common phenomenon in international contracts.
Main Organs of Construction Industry:
There are three main organs of construction industry other than the consumer.
 The Owner
 The Consultant
 The Contractor
The Owner:
Civil Engineering Projects are usually cost intensive. Usually the investor
does feasibility study in advance. Any investor or promoter is worried about two
things. Firstly investor is worried about the rate of return. Secondly the patterns of
cash flow. The ideal situation will be high and early return. i.e. on what date what
amount is required and from where the same will be arranged. The owner or promoter
may be an individual, a government authority, a government department, a corporate
house etc.
The Consultant:
In Civil Engineering Projects, Architect, Engineer, Project Manager and
Chartered Accountant usually form the panel of consultants. These persons advise the
owner on the basis of their knowledge, experience, and know how. It is generally
believed that any person who has experience and knowledge can give advice on a
particular problem of his field.
The basic function of an engineer is to design and do necessary
permutation and combination to optimise the solution. Although consultant should
have experience, knowledge and wisdom that all certainly come with age but people
who are well versed with new material, new technology, new equipment and of
course having a lot of energy and enthusiasm to do something new are also desirable
on the project.
The Contractor:
In Civil Engineering Project, contractor translates the blue print into reality
with the help of work force and material. The practice of contractor ship in civil
engineering is perhaps as old as civil engineering itself. A poorly written contract
agreement is always a good cause of bone of contention. In contracts, one should
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always seek the help of a legal expert. This is imperative that owner himself should
enhance his knowledge on the subjects like laws of contract, negotiable instrument act
and consumer protection act etc.
Regulatory Bodies Related with Construction:
Regulatory bodies related with any business can be classified into two broad
categories viz. general and specific.
Income Tax, Labour Court, Labour Union, Electricity Board are the
departments with which every business organization has to deal, fall in general
category. So every business organization should be well versed with the rules,
regulation ,written and unwritten laws of these departments.
The regulatory bodies specific to construction at local level are following:
(1) Local Development Authority, (2) Pollution Control Board, (3) Water Works and
Conservancy, (4) Local Police.
1. Local Development Authority:
It is the first regulatory body, which is encountered in any
construction. Most of the rules, regulations and byelaws of development authorities of
province of Uttar Pradesh are given in the book "Regulation of Building Operation in
Uttar Pradesh. This very book every construction manager should have and should
always keep himself in touch with the office of the development authority for the
awareness of day-to-day changes in the working and rules and regulation of the
authority.
In fact, rules, regulation and bye laws are framed to provide healthy living
but sometimes these laws are one sided i.e. in favour of government only. Thus, it is
advisable that rules should not be violated in ordinary circumstances.
However, there is always a provision for the compounding. This is to be
weighed by the owners i.e. gain or loss on an unauthorised construction.
2. Pollution Control Board (PCB):
Now a days regulation regarding environmental pollution have become
very stringent in India to, like in advanced countries. Sometimes large projects like
construction of power plant, multipurpose river valley project are stopped or even
abandoned due to environmental considerations. Most common projects that have
been in trouble in the recent past include Tehri Dam in Uttranchal and Narmada in
Madhya Pradesh.

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Clearance from PCB is also necessary for construction of a factory or
fabrication of a processing plant. The days are over when effluents were directly
discharged into the river. There is no harm in conforming to PCB norms but
sometimes these regulations are difficult to obey and PCB acts as a hassle. Planners
are advised to incorporate PCB recommendation right from site selection to project
formulation.

3. Water Works and Conservancy:


If construction is to be done in urban area then very first question comes to
mind is what will be the source of water during construction. If municipal water
supply is used , municipality charges additional tariff on it. So it is advisable that first
and foremost job of construction manager is to get a water pump installed and inform
the municipality that public water is not being used for construction.
The second thing in case of projects like hotel and apartment is the
disposal of wastewater and night soil. It is obligatory upon liaison officer of the
construction company or construction manager to initiate the issue for the permission
of connection of sewer of the building to the municipal sewer.
4. Local Police:
Local police plays an important role in any construction project in India
because development authorities always take the help of police to meet their
objectives or in case of mishappening on the site local police has to be taken into
confidence. It is obligatory on the part of construction manager to maintain good
relations with local police station and police officers of that area. Of course
maintenance of such relations, always lead to additional expenditure on the
construction company.

Business Opportunity in Construction Industry:


Construction of infrastructure like road network, canals, urban development,
extension and renovation of existing facility are few activities through which capital
formation takes place in most of the countries of the world. So there is always ample
opportunity for construction from village level to international level for the
construction companies, depending upon size and ability and experience of the
company.

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Management in Construction:

Based on work experience, it has been observed that most of the


construction contractors manage their business in a very unorganised manner. This
ultimately leads to failure of business. The numbers of small and medium size
companies' failures are much more.

Construction industry has been characterized as weak inefficient, nebulous,


backward and slow to incorporate changing conditions. In a nutshell majority of
construction companies are poor absorber of management knowledge. The
explanation given for it may be as under.

Every construction project is unique in itself and does not need very strict
technical standardization. An operation in construction work involves many skills and
talent, mostly of non-repetitive nature. Remote location of the project, poor means of
transportation and varying productivity of labour are some factors, which are beyond
the contractor's control. Thus construction business is volatile in nature with many ups
and downs.

Any construction activity is basically a manufacturing process. So the


decision-making people are very few. Any delay in on the spot decisions, increases
the cost and hampers the progress of construction. Such complexities lead to a
managerial challenge. It does not mean management problems of construction are
entirely different from other management problems.

Like any other industry, construction industry is also experiencing


cutthroat competition. Products and services of construction industry also face
temporal variation in demand and supply.

Such conditions necessitate the learning of managerial practice specific to


construction. Today skilled management is necessary for the survival of construction
industry. This maxim has not received adequate attention in construction firms in
India. The result is high incidence of failure.

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Failures of Construction Company:

Any construction activity starts from scratch and passes through various
intricate processes and finally project ends in a built up facility or reaches to start up
phase of the project and finally project becomes operational. Like other business in
construction business also ,there are many slips between cup and lip. The failure of
construction business is a subject of analytical inquiry and a matter of concern. So
many investigators have examined the issue. A few are being reported here.
Dun & Bradstreet (1985-1994) have studied the failure of Construction
Company for many years (10 years). They list the following reasons for the failures.
 Incompetence
 Unbalanced experience
 Lack of managerial experience
 Lack of experience in particular line
 Neglect
 Fraud
 Disaster
The first four items listed in above list account for over 90 percent of the
failures. This fact exhibits that financial success of Construction Company depends
almost entirely upon the quality of its management. Sometimes prolonged work, poor
profit margin, lack of proper accounting procedure can be cited as reason for the
failure. If we club all these reasons, it points towards poor management.

The Construction Managers:


The construction manager is the most critical resource in implementation
phase of the project. He is supposed to discharge basic functions like organizing,
staffing, directing, planning and controlling. A good performance of construction
manager is necessary for the growth, development and success of Construction
Company.
Although the managers do not normally, carry out the construction work with
their own hand, Yet they are responsible for keeping the project on schedule within
the cost limits. They should have telescopic as well as microscopic vision on each and
every step of construction operation, right from preliminary estimates and various
types of costs to the final inspection and payment.
22
In managing any construction project, personality of construction manager
plays a vital role. This very trait can never be ignored. Mustapha and Naoum (1998)
have investigated factors, which influence effectiveness of site managers. They are of
strong opinion that personal variables as a whole have an impact on effectiveness of
site managers.
The construction manager should also be capable of handling crisis and
contingencies at site. Crisis and contingency do arise at construction site. Managers
should be well equipped to deal with such emergencies. To deal with such
contingencies collective effort is needed. Loosemore (1998) has identified effective
responsibility and teamwork is the basic managerial tool to handle the crisis.

Construction Sector: Current Scenario and Emerging Trends


After recording a spectacular growth of over 12%, more than the country’s
GDP in the past half decade, the Indian construction sector all of a sudden lost stream
in last fiscal largely due to global financial turmoil. Not just this, the turmoil tremors
created multiplier impact across sectors including steel, cement, power, petroleum,
aluminum, IT and ports, besides badly Bruising the Indian economy.

But few sectors such as telecom, urban infrastructure, railways, oil and gas,
which are also generating large share of construction activities have not been affected
badly. These segments have registered a noticeable growth in project orders from
centre, states, and local firms. However, orders from overseas firms have drastically
dwindled.
Current Global Scenario

Currently, the global economy is in severe slowdown mode amidst


deepening credit crunch and upsetting developmental targets of economies across the
world. In the prevailing scenario, infrastructure remains a top priority for addressing
developmental gaps as it is considered omnipotent with potentials of lifting
economies out of the financial turmoil. The governments around the world are
pumping money to generate demands for goods and services by creating jobs through
higher spending into physical and social infrastructure. Likewise, the Indian
government on its part is not lagging behind on this score and has taken concrete steps
to revive the sector to regain its past glory.
23
Speeding Infra Spending

The government has initiated innumerable initiatives to lift the sector from its current
dormant conditions. The measures include authorizing the Indian Infrastructure
Finance Company Limited (IIFCL) to raise Rs.100 billion by issuing of tax free bonds
to make highways and port projects funding worth Rs. 250 billion available to the
sector. In order to finance projects worth Rs. 750 billion over the next 18 months, the
IIFCL has been given permission to raise additional funds worth Rs. 300 billion.

Other measures include liberalization of the external commercial borrowing (ECBs)


policy, revision in the cap for home loans to Rs. 2 million from Rs. 0.5 million
through inclusion in the priority sector, increase in foreign institutional investors limit
in rupee denominated corporate bonds from $6 billion to $15 billion exemption of
countervailing duty on cement and TMT bars and structural, close monitoring of the
government spending to expedite expenditure for all schemes and programmes.

The Planning Commission has estimated that an investment of about $492 billion will
be required for the infrastructure sector during the Eleventh Five Year Plan. Whereas
private investment seems difficult to come by in the current scenario, public
investment can be expected to materialize or even increase. While it is essential that
the government plays a vital role in improving the pace of implementation of key
projects, construction companies need to upgrade their project management expertise
and ensure that there is adequate capacity to undertake and execute projects on time.

Construction Equipment Industry

The ancillary industries including $3.1 billion construction equipment


industry has also witnessed a slowdown. Prior to the crisis, the Indian equipment
market was growing at a rate of about 35% for almost seven years. However, during
October-December 2008 quarter, the growth rate declined by 30%.

24
The new equipment purchases have slumped due to a lack of funds since
buying involves large upfront payments. According to available reports, equipment
sales have taken a hit of about 18 to 25%. While equipment already leased out is
unaffected, the decline in the number of new projects has led to a significant fall in
new leasing contracts. This situation is expected to continue for the next couple of
months. Many construction equipment companies have cut down production and are
approaching their respective governments for financial support.

To complete critical projects, developers are resorting to selective leasing


and renting of equipment. Rental rates have consequently firmed up, benefiting
companies involved in the rental business. Further, the price of major input material
such as cement and steel has declined significantly, thus somewhat mitigating project
costs.

In fact, the fundamentals of the Indian growth story are sound, and the
demand for infrastructure and industrial activity continues to be strong. With the
government stepping up its support to the infrastructure sectors along with adequate
monetary measures aimed at increasing credit flow, the situation is likely to stabilize
in the equipment sector, though expectedly with some lag.

Roads & Highways

Given the importance of road connectivity to the economic and social


development, the road network in India is not up to the mark. The network spans
about 3.3 million km but has road densities of 2.75 km per 1,000 people and 770 km
per 1,000 sq km as compared to world averages of 6.7km and 840 km respectively.
Further, about 15% of the network carries 80% of the traffic.

But with the setting up of an effective public-private partnership (PPP)


model by the government to expand the road network, this sector witnessed rapid
growth in the past few years and it has become the top contributors to the construction
industry. Moreover, the National Highways Development Programme (NHDP) has
created the biggest construction opportunity in the road and highways sector.

25
The programme aims at developing 50,000 km of national highways in seven
phases by 2015 with an investment of over Rs. 3,000 billion at 2007 prices.
Till January 2009, projects covering 33,000 km under phases I, II, III A and V
have been under development out of which about 10,000 km has been four-lane. The
Golden Quadrilateral, providing four-lane connectivity to four metros is near
completion and the North-South-East West (NSEW) corridor is around 45%
complete, whereas Phases III, V and VI are under– implementation. Phases IV and
VII are at initial stages of implementation. Strikingly, the policy and regulatory
framework has gone a sea change in the past 10 years wherein funding share of
private investment has registered a marked increase and share of traditional sources
declined drastically. In the prevailing circumstances public spending in the road sector
through budgetary sources or the CRP will not be impacted by the crisis. The
projected commitment of Rs. 131.73 billion for financial year 2008–09 under the CRF
is expected to be met. But the PPP investments under the NHDP have been impacted
by the crisis. Nearly 60% of the future funding requirements of the NHDP Rs.
3,014.88 billion till 2015 are expected to come from the private sector.

The PPP projects for which funds have already been tied up might also face
difficulty in drawing down as the risk perception of the sector has risen. Available
reports suggest that about 60% of the awarded national highway projects yet to
achieve financial closure. In the current scenario, the new highways projects in the
private sector may find it tough to achieve financial closure.

Moreover, future prospects for private sector investments in roads would


hinge on the effectiveness of the stimulus package in terms of persuading tenders to
reassess the risks associated with the sector. National and state level investments in
the sector are unlikely to be impacted though the economic slowdown may impact toll
collections.But the road sector, which has already seen a massive shift in the process
and mindset, is expected to undergo a further change in the next couple of years. New
domestic companies are expected to foray into road development, international
players are also expected to enter the Indian road sector and existing players are
churning out new strategies to retain their stronghold. With increasing competition,
only players with strong organizational structures and project management
capabilities are expected to gain ground in the long-term.
26
Urban Infrastructure
To boost urban infrastructure across the country, the government has
initiated multiple measures to lift the infrastructure and construction sectors from the
ongoing slowdown and has allocated Rs. 11,842 crore under the Jawaharlal Nehru
National Urban Renewal Mission (JNNURM), which is much higher than Rs. 6870
crore sanctioned in the previous budget. The funds aimed at integrated development
of urban infrastructure and services in rural areas and urban cities to boost allied
sectors including construction material, steel and cement. In addition, the government
has also set aside Rs. 40,900 crore for 2009–10 for its Bharat Nirman initiative. This
is a time bound plan for the development of housing, rural roads, power, irrigation,
telephony, and drinking water supply. This would in turn boost business opportunities
to small and large players alike in the construction and infrastructure as they would
offer sizeable scope for contractual work for the local populace.

That apart, the decision of the government to continue with a corpus of Rs.
4,000 crore for rural roads in the Interim Budget has brought cheer to the companies
engaged in construction, infrastructure, logistics and transport segments. The move is
expected to bring a shift in the supply-chain pattern and improve the delivery of
construction materials as due to lack of such facilities in the countryside, the delivery
is inadequate both in term of quantity and quality. Today, most of the tier II and III
towns are emerging as rural market hubs of production, consumption and distribution.

The government has also launched the Urban Infrastructure Development


Scheme for Small and Medium Towns (UIDSSMT) with an outlay of Rs. 64 billion to
address infrastructure needs of 5,098 small towns and cities with an outlay of about
Rs. 1,064. The JNNURM outlay of over Rs.1 trillion is targeted at augmenting urban
infrastructure needs of over 65 mission cities under which the government provides
grants ranging from 35% to 90% of the project cost, depending upon the size of the
city with state governments and private players contributing the rest. Moreover, the
emphasis on creating infrastructure in villages through Rural Infrastructure
Development Fund (RIDF) has raised hopes for construction and consumer
companies hopping that the growing demands from the rural heartland will boost the
sagging sectors.

27
Most construction and infrastructure companies from power to roads,
airports, ports and urban transport are asking for more in the final budget. Likewise
oil & gas, civil aviation, ports, bridges, and semi-urban areas are set to offer lot of
opportunities to the construction industryalso to its important constituents like
construction equipment, real estate and allied building activities. The measures are
bound to lift the commodity linked industries including cement, steel, aluminum,
glass, paint, stones, and titles.The government recent measures focused on
encouraging banks to fund PPP projects. This is a positive and progressive move at a
time when the financing options of infrastructure players have shrunk in the backdrop
of global credit crisis, delaying financial closures. Initially, the banks were demanding
a higher equity proportion compared to earlier norms. The refinancing measures will
provide better comfort to banks in lending to the infrastructure sector.

Similarly, the fiscal sops and stimulus and classified loans under Rs. 20
lakh as priority sector lending are all set to brighten the prospects of housing sector.
The new classification of loans is aimed at encouraging banks to lend. The Rs. 4000
crore refinance facility for NHB will ensure availability of loans for the sector. The
reduction in home loans rates by PSU banks to Rs. 5 lakh and 9.5% for loans in the
range of Rs. 5 to 20 lakh has prompted large private players such as HDFC and ICICI
bank to cut rates, the development will again encourage housing activities which will
again boost the business of steel and cement and construction companies.

Recently, the centre has given a major incentive to the states to engage
private developers by agreeing in doling out 25% of the total cost of external services
such as drainage, roads, sewage and a water supply as grant to state governments.
Consequently, the meltdown may soon make housing for the masses a reality. The
Centre has been awaiting a reply from state governments on its Rs. 5,000 crore
package to create on million affordable houses across the country. In the recent past,
developers have also announced plans to foray into the affordable housing segment.
The leading players in the real estate business have also unveiled plans to build
houses in the 20 lakh category. In fact, the meltdown may soon make housing for the
masses a reality.

28
Conclusion
Now the construction activities have started picking up. Recently, the
Government has issued contracts worth Rs 1,861 crore relating to projects in mining,
railway, infrastructure, commercial buildings, and some of the construction
companies are also coasting along with a steady flow of contracts. About 90% of
these contracts are from the Government agencies and this is going to be the mainstay
of business in construction sector for some time to come till such orders start flowing
from the private sector. It is indeed to the credit of some of the construction
companies that despite odds, these companies have shown exemplary perseverance in
tackling recession to carry out construction work, others would also ride well through
the present dull phaseas the situation improves.

It is expected that sooner rather than later, the sleepy construction project
sites would pulsate with construction work once again and one would see trucks loads
of men, materials and machinery moving to and fro with men and women working on
a war footing to translate country’s development vision into a concrete reality.
Shedding its initial pessimism, the construction equipment sector is also getting into
optimistic mode and is busy in giving final touches to their expansion plans to add
new manufacturing facilities sensing a demand pull in the next 6-8 months. All in all,
the construction industry was no doubt down but not out.
The next 2-3 years are going to be the moment of reckoning for the
construction industry to demonstrate its managerial, financial and technical prowess
to establish new benchmarks in construction management, construction quality,
imparting value addition to its products and services in critical construction
equipment product line. To resist such like present global meltdown, the industry has
to look within to develop its competitiveness across segments through enhancing their
capabilities in R&D to leverage innovation through indigenous capability and
expertise. They need to exploit and build on their own inherent labor and material cost
advantage and resource savings to manage crisis. The present time is the best time to
revisit some of these and other strategies and explore new growth avenues not only to
mere recover from such situations, but also to prepare itself for new global shocks.
With or without stimulus packages, the best means for the well being and growth
come from within. What matters most is to put one’s best foot forward in recession,
recover fast and emerge stronger than ever.
29
COMPANY PROFILE

Ignite Contractors & Engineers (ICE), incorporated in April 2011 by a


couple of young professionals is now running with an order book of 90crs. We have
built concrete reputation for delivering in timeat competitive price. Primarily we
engaged in designing, construction of water treatment plants, Industrial building
including different type of foundations, residential buildings, high raised tank,
OHBRS, Water Pipe line both PVC & HDPV, residential layout
development,mechanical related jobs such as fabrication and erection,Earthen &
Concrete Storage Tanks we also delivered high volume of excavation etc. Our
commitment to offer a superior quality range of civil structuresand to deliver efficient
maintenance services has provided us an edge over our competitors. This commitment
has motivated us to emerge as a renowned service provider in the field of
construction.
Empowering and entrepreneurial environment directed toward providing
clients with creative and value oriented construction solutions.Our commitment to
innovation and excellence invariably results in a successfully completed project for
both contractor and client. We understand and promote the idea of working as a
partnership with our clients to ensure their goals are met.
Industrial construction is a very important component of the construction
industry. Processes in these industries require highly specialized expertise in planning,
design and construction. At ICE, we bring a refreshing approach to the entire Design
and Build process and have value additions at every stage. Our team of engineers are
proactive with a "WE CAN" attitude which means that all projects are successfully

30
delivered within the budget and matching the highest standards expected by
ourclients.
We undertake a variety of projects for a wide range of cliental – from small
private developments to large Industrial projects. Our unique and flexible project
management systems ensure that a positive outcome is achieved regardless of size or
nature of the project.
Our Team consists of well qualified& experienced professionals in different fields
like Civil, Mechanical and administration under the guidance of Mr. Ch Raju, having
25Years’ experience in UAE in all kind of High raised building, industrial works, and
mining works
Vision & Mission
 To extend our wings in Major Residential projects / Township.
 To extend our specialization in Water treatment plants.
 To become first & best choice to our client in reaching their goals
 Major Industrial construction
 To uphold the highest standards of business ethics and lead the way in
fulfilling social responsibilities.
 To implement the best practices in areas of health & safety for all our
employees.

Highlights of ICE
 We have completed the Major Civil works within 9 months of time in 170
MLD WTP Warangal water Grid project which is highest capacity of water
treatment plant under Mission Bhagiratha
 We are proud to say that we are the first contractor to complete Intake well
Floor slab incl bridge slabs in Telangana mission bhagiratha works under
adilabad water grid kaddam project.
 Multipurpose distillery and co-generation plant civil works completed in
6Months (Present plant in running condition )
 90KL OHBR -30M High tank completed in 4Months
 Construction of 30,000KL Clear Water Reservoir
 25Acrs Layout development completed in 3Months incl BT Roads – Now it
was treated as landmark development in our clients works
 Construction of 2nos 4MLD water treatment plants in tanuku
31
 As a social responsibility we have constructed 210 toilets at kesavaram village
without charging profit & overheads.

Pillars of ICE:-

Varma SNK, Managing Partner & Founder of ICE


B-Tech Civil Engineer, Diploma in Railway Engineering

Pose more than 14years experience inthe field of Construction management,


perversely worked in MNC Companies like DLFLOR, NCC& GMR.
A Young Entrepreneur leading the company with gradual growth of order
book and delivering the projects in time. He also created a strong team &
motivated them for long relationship with ICE.

Mr. ChAnnpurana Raju, Operations


Pose more than 25years experience in the field of Construction/Civil
Engineering works in all kind of civil engineering works like high raised
buildings, bridges, national high ways etc

Mr. Pavan Kumar, Design Head


M-tech Structures from AU.

Pose more than 8years experience in the field of Designing of multilevel


Residential Building & Industrial Foundation etc

32
Major Ongoing works Client wise (substantial / completed stage) :-
M/s Mega Engineering Infrastructures Ltd. Hyderabad
1. 170MLD Water Treatment Plant at Maripeda (Warangal Dist)

 30,000 KL CWR (Biggest in TSWG Work)

In CWR 75,000 Cum Blasting is done in 60 Days.


 WTP 170 MLD RSF with Scada System (Biggest in TSWG
Work)
2. 23MLD Water Treatment Plant at Kaddam (Adhilabaddist)

 Intake wall at kaddam reservoir from 17.5M below (incl.


Coffer dam, Dewatering etc )
 Bridge of 85M
 As we said we work with a proper planning it was best
example. Since our intake area will be submerged in the month
of June we have planned our project accordingly we have
completed the risk part. Now balance 23MLD WTP area are in
finishing stage
3. M/s. Madhucon Sugar & Power Industries Limited

 Phase – 2 , Grain Milling Section for Distillery


 TG Building
 Boilers Foundations
 65MLD Distillery Plant Completed.

4. M/s SwathiPromoterspvt.Ltd

 45acrs Layout development works at RJY in Progress


 101Acrs Layout development work at VSKP Completed
5. M/s. Sri Sarvaraya Sugars Limited (M/s Coco Cola)

 ETP Tank
 Loading shed Pump House cum Fire water Sump
33
Major Completed works Client wise:-
M/s Mega Engineering Infrastructures Ltd. Hyderabad
 4MLD Water Treatment Plant at Konala
 4MLD Water Treatment Plant at Mandapaka

M/s. Madhucon Sugar & Power Industries Limited


 Multipurpose distillery and co-generation plant
 27M DIA Molasses tank with dyke wall
 29M Dia Molasses Tank with dyke wall
 Sugar godown
 Boiler Foundation for Distillery plant

M/s swathipromoterspvt.ltd
 24.5acrs Layout development works at RJY in Progress
 101Acrs layout development works incl CC Roads/ BT Roads- VSP

M/s. Sri Sarvaraya Sugars Limited (M/s Coco Cola)


 Fire water tank incl Pump house at Vemagiri bottling unit.
 120M Loading Shed Civil works in Floorings at Kesavaram bottling unit.
 ETP Tank at Kesavaram Bottling Unit

M/s. Suvarnabhoomi Developers Pvt Ltd


 43 Acrs Layout devlopemtn at andanpuram VSP
 95 Acrs layout only WMM Roads

M/s International Paper Mill (APPML) Rajahmundry


 16000 SFT , Civil & Mechanical : Construction of Coal shed of size
72MX20M

ESTEEMED CLIENTS
 M/s. MADHUCON SUGAR AND POWER INDUSTRIES
LIMITEDRAJESWARAPURAM, Nelakondapally , KhammamDist

 M/s. LAILA SUGARS PVT LTD.,


Khanapur Belgaum, Karnataka.
 M/s. SUVARNABHOOMI DEVELOPERS PVT LTD ,

34
SreenivasaNilayam, Seethammadhara, Visakhapatnam
 M/s NAVJYOTI COMMODITY MANAGEMENT SERVICES LTD
3rd Floor, Uptown Banjara, Banjara Hills, HYD -34
 M/s. SUNGDO ENGINEERING & CONSTRUCTION PVT
LTD.Hyderabad.

 M/s. ARTHA ENGINEERING & CONSULTANCY


KPHB Colony, KukatpallyHyd -72
 M/s International Paper Mill, (Rajahmundry Andhra paper mill)
Rajahmundry. East Godavari Dist
 M/s Mega Engineering Infrastructure Ltd , Hyderabad

 M/s Sri Sarvaraya Sugars Limited , Coco Cola Plant – Vemagiri

 M/s Rural water supply and sanitation –Telangana

35
INDUSTRIAL PROJECTS

36
65MLD DISTILLERY PLANT INCL BOILER & TG BUILDING

37
38
ETP TANKS & LOADING SHEDS AT M/S COCO COLA –
KESAVARAM UNIT

39
170MLD / 23 MLD & 4MLD TREATMENT PLANTS

170MLD
WTP

170MLD WASH WATER TANK AND FILTER HOUSE

40
170MLD LAYOUT INCL 30000 KL SUMP (BIGGEST IN
TELANGANA)

41
170MLD LAYOUT INCL 30000 KL SUMP SLAB
SCAFFOLDING

42
23MLD WTP

43
Foot Bridge

Intake well and Foot Bridge

44
REALESTATE WORKS

45
46
OTHER INFRA WORKS

47
48
49
AWARD FOR INTIME COMPLETION

FROM M/s Madhucon Director for completion of 65MLD


Distillery

FROM M/s SWATHI PROMOTERS, CHAIRMAN

50
PERFORMANCE APPRAISAL

Performance of appraisal is widely used in the society. However, formal


evaluation of employees is believed to have been adopted for the first time during
First World War. At the inlands of Walter Dill Scott the US army man to man rating
system for evaluating military personal. Once the employee has been selected, trained
the motivated, he is then appraised for his performance. Performance appraisal is the
step where the management finds out how effective it has been at hiring and placing
employees if any problems are identified, steps are taken too communicated to
employee and to remedy them. A performance appraisal is a process of evaluating the
performance appraisal is a process of evaluating the performance and qualification of
employee according to job and its requirement. It is also known as the process of
estimating and judging the value, excellence individually and collectively, it is the
part of all other staffing process, like recruitment, selection, placement, etc.
Definition
Performance evaluation or performance appraisal is the process of assessing the
performance and progress of an employee or of a group of employees on a given job
and his potential for future development. “It is the systematic evaluation of the
individual with respect to his/her performance on the job and his/her potential for
development.”

According to Flippo
“Performance Appraisal is the systematic, periodic and an impartial rating of an
employee’s excellence in matters pertaining to his present job and his potential for a
better job.”

Concept of Performance Appraisal

Performance evaluation or performance appraisal is the process of assessing


performance and progress of employee or of a group of employee on a given job and
his potential for future development. In concept of all formal procedure used working
organization to evaluate personality, contribution and potential of employees.

51
The Main Characteristics of Performance Appraisal
 It is the systematic examination of employee’s strength and weakness in terms
of jobs.
 Performance appraisal is the scientific or objective study. Formal procedure is
used in the study the same approach is adopted for all job holders for that
result is comparable.
 It is an organizing or continuous process where in the valuation is arranged
periodically according to a definite plan.
 Main process performance appraisal is to secure information necessary for
making objective and correct decision on employees.
Objectives of Performance Appraisal
 To provide a valid data base for personnel decision concerning placements,
pay, promotion, transfer, punishment, etc.
 To diagnosis the strength and weakness of individuals so as to identify further
training needs.
 To provide coaching, counseling, career planning and motivation to
subordinates.
 To develop positive, superior-subordinate relations and there by reduce
grievances.
 To facilitate research in personnel management.
 To test the effectiveness of the recruitment, selection, placement and induction
program.
Uses
 It provides valuable information for personnel decisions such as pay increases,
promotions, etc.
 It helps to judge the effectiveness of recruitment, selection, and placement and
orientation system of the organization.
 It is useful in analyzing training and development needs.
 It can be used to improve performance thought appropriate feedback, working
and counseling to employees.
 It facilitates Human Resource Planning, career planning and succession
planning.
 A competitive sprit is created and employees are motivated to improve their
performance.
52
Process of Performance Appraisal
 Establishing performance standards
The appraisal process begins with the setting up of criteria to be used for
appraising the performance of employees. The criteria are specified with the help
of job analysis, which reveals the contents of job. This criteria should be clear,
objective and in writing.
 Communicating the standards
The standards are conveyed to the employees and the evaluators. A feedback
regarding the standards should be obtained from the evaluators and the employees for
revision or modification.
 Measuring performance
This requires choosing the right technique of measurement, identifying the
internal and external factors influencing performance and collecting information on
results achieved.
 Comparing the actual with the standards
Actual performance is compared with the predetermined performance
standards. Such comparison will reveal the deviation, which may be positive or
negative.
 Discussing the appraisal
The results of the appraisal are communicated to and discussed with the
employees. Along with the deviations, the reason behind them are also analyzed and
discussed. Such discussion will enable the employee to know his weaknesses and
strengths.
 Taking corrective actions
Through mutual discussions with employees, the step required to improve
performance are identified and initiated. Training, coaching, counseling, etc., are
examples of corrective actions that help to improve performance.

Methods of Performance Appraisal


Several methods and techniques are used for evaluating employee performance.
These may be classified in to Traditional and Modern methods.

53
 Traditional Methods
 Ranking Method
In this is technique, evaluator assigns relative ranks to all employees in the
same work unit doing the same job. Employees are ranked from the best to the poorest
on the basis of overall performance. The relative position of an employee is reflected
in the numerical rank. It is one of the simplest methods. It is time saving and
comparative evaluation technique of appraisal.
 Man-to-man comparison method
In this method, certain factors are selected for the purpose of analysis and the
rater for each factor designs a scale. A scale of man is also created for each selected
for each factor. Then each man to be rated is compared with the man in the scale, and
certain scores are awarded to him. In other words, a whole man is compared to a “key
man” in respect of one factor at a time. This method is used in job evaluation and is
known as the factor comparison method.

 Paired comparison method


This is a modified form of man to man ranking. Herein, each employee is
compared with all others in pairs on at a time. The number of times an employee is
judged better then other determines his rank. Comparison is made on the basis of
overall performance.
 Forced distribution method
In these techniques the rater appraises an employee according to a pre-
determined distribution scale. It is assumed that it is desirable to rate only two factors
by this method that is Job performance and promo ability. For this purpose a five
poking performance scale is used without any descriptive statement& employees are
placed between two extremes of good and bad performance.
 Graphic rating scales method
It is a numerical scale indicating different degrees of a particular train. The
rater is given a printed form for each employee to be rated. The form contains several
characteristics relating to the personality and performance of employee. Intelligence,
attitude, quality of world, leadership skills judgment, etc. are some use characteristics.
This method is widely used as it is easy to understand. It allows a statistical tabulation
of scores and, a ready comparison of scores among the employees is possible. The

54
approach is multi-dimensional as several significant dimensions of the job can be
considered in evaluation.
 Critical incident method
In this method the superior keeps a written record or critical (either good or
bad) events and how different employees behaved during such events. The rating of
the employee depends on the positive or the negative behaviors during these events.
These critical incidents are identified after through study of the job and discussions
with the staff. This method helps to avoid vague impressions and general remarks as
the rating is based on actual records of behavior.
 Group appraisal method
Under this method, a group of evaluators assess employees. This group consists
of the immediate supervisors of the employee, other supervisors having close contact
with the employer’s work, head of the department and a personnel expert. The group
determines the standards of performance for the job, measures actual performance of
an employee, analysis the causes of poor performance and offers suggestions for
improvements in future.
 Grading method
Under this method, the rater considers certain factors, and marks them
accordingly to a scale. The selected factor may be analytical ability, co-operation,
dependability self-expression, job knowledge. They may be grades as ‘A’ –
outstanding, ‘B’- very good, ’C’-good/average, ‘D’-fair, ‘E’- poor. The actual
performance of an employee is then compared with these grade definitions and he is
allotted the grade which best described his performance.
 Forced choice Distribution method
In this method, the rating elements are several sets of pair’s phrases or
adjectives relating to job proficiency or personal qualification. The rater is asked to
indicate which of the phrases is most and least descriptive of the employee.

 Checklist method
In this method, series of questions are presented concerning an employee’s
behavior. Here rater does not evaluate employee performance; he supplies reports
about it and the personnel department does the final rating.

55
 Free Essay Method
In this method, the supervisor makes a free form, open-ended appraisal of an
employee in his own words and puts down his impression about the employee. The
description is always as factual and concrete as possible.
 Field review method
In this method, a trainer employee from the personnel department interviews
line supervisors to evaluate respective subordinates. The supervisor is required to give
his opinion about the progress of his subordinates and his plan of action in cases
requiring for consideration.
The traditional methods given above focus on the traits of an employee than
an his job performance , In the absence of predefined performance criteria or
standards , the personal bias or subjectivity of the evaluator affects the ratings . This
approach caused the following responses.
 The very nature of the appraisal system led to criticism.
 Criticism exercised a negative impact on goal attainment.
 Criticism increased antagonism and defensiveness among employees resulting in
inferior performance.
 Managers generally are not qualified to assess personality traits.
 Some managers discourage good performances by over emphasizing shortcomings
and almost neglecting good work.
 Modern Methods
 Assessments center method
An assessments center is a group employee drawn from different work units.
These employees work together on assignments similar to the one they would be
handlings when promoted. The most important feature of the assessments center is
job-related simulations. Evaluators observe and rank the performances of all
participants. This group evaluates all employees are both individually and collectively
by using simulations techniques like role- playing, business games and in-basket
exercises? Employees are evaluated on the basis of job related characteristics
considered important for job success. The evaluators prepare a summary report and
feedback is administered on a face-to-face basis to the employees who ask for it. An
assessment center generally measures interpersonal skills, communicating ability to
plan and organize, etc. Assessments centers are not only methods of appraisal but help

56
to determine training and development needs of employees and provide data for
human resource planning.
 Human resource accounting method
Human resources are a valuable asset for any organization. This asset can be
valued in terms of money. When competent and well-trained employees leave an
organization the human asset ids decreased and vice versa. Under this method
performance is judged in terms of costs and contributions of employees. Costs of
human resources consist of expenditure on human resource planning, recruitment,
selection, induction, training, compensation, etc. Contribution of human resources is
the money value of labor productivity or value added by human resources. Difference
between cost and contribution will reflect the performance of employees. This
method is still in the transitory stage and is, therefore, not popular at present.
 Behavioral Anchored Rating Scales (BARS)
This method combines graphic rating with critical incidents method. BARS are
descriptions of various degrees of behavior relating to specific performance
dimensions. Critical areas of job performance and the most effective behavior for
getting results are determined in advance. The rater records the observable job
behavior of an employee and compares these observations with BARS. In this way an
employee’s actual behavior is judged against the desired behavior. The steps
involved are as follows.
 Identify critical incidents
Persons with knowledge of the identify job to be appraised describe specific
examples of both effective and ineffective job behaviors.
 Select performance dimensions
The persons then cluster the behavioral incidents into a smaller set (usually 5-
10) of performance dimensions.
 Retranslate the incidents
Another group of knowledgeable persons assign each incident to the dimension
that it best describes. Incidents for which there is less than 75% agreement with the
first group are not retranslated.

57
 Assign scales to incidents
The second group rates each incident on a 7 or 9 point scale. Rating is done on
the basis of how well the behavior described in the incident represents the
performance on the appropriate dimensions. Means (average) and standards
deviations are then calculated for the scale values assigned to each incident.
 Develop final instrument
A subset of the incidents that meets both the retranslation and standard
deviation criteria is used as a behavioral anchor for the final performance dimensions.
A final BARS instrument typically comprises a series of vertical scales that are
endorsed by the include incidents. Each incident is positioned on the scale according
to its mean value.

Steps for Making Appraisal Successful


 Existence of an atmosphere of confidence and trust.
 The results of performance rather than personality traits should be given due
weight.
 The supervisor should analyze the strengths and weaknesses of the employee
and advise him.
 The appraisal programmed should be less time-consuming and less costly
 The results of appraisal should be immediately communicated to the
employee.
 A post appraisal interview should be arranged.
 Training can be used to improve the standards of performance appraisal.
 The right appraisal tools should be chosen to minimize arising problem.
Preamble
This tool requires the Managers/reviewers to be true to the ethics of fairness,
truth and integrity while facilitating the system. The Managers shall also uphold and
promote values through the system.
Objective, Philosophy and Rights
Performance is essentially focused towards employees’ development. This
means that the Manager has to necessarily take a predominantly developer or coach
role vis-à-vis the employee. This also implies that the focus is on performance
improvement/growth &employee alignment with organization strategy & values and

58
not merely on rewards and discrimination. A performance rating is an element but
not the primary aim of the performance process.
Philosophy
 To align people with organizational strategy and values.
 To be perceived as transparent & fair in the process.
 To be oriented to people development and yet, permit the onus of development
on the individual.
 To encourage teamwork and collaboration.
 To create a system of assessment by team rather than individuals.
 To differentiate among team members based on performance and potential.
 To raise the performance bar.
 To show intolerance to mediocrity.

Fundamental Rights
 The employees are guaranteed the following rights under performance
 The manager shall treat the worker with respect at all times. This means that
the Manager does not have a right to publicly criticize/ridicule the employee.
 The Manager shall spend a reasonable amount of time dialoguing with the
employee and take an active coach role to enhance employee’s performance.
 The Manager shall give continuous performance feedback to the employee and
not surprise him at the end of the year.
 The Manager shall take a long-term view of the employees’ development and
not be guided only by the here and now needs of his/her team/role.
Significant Contributor (SC)
Significant contributor is one who
 Consistently demonstrates above average achievements both in terms of
quality and quantity of output.
 Comes close to the top performers in his/her peer (similar role holders) group.
 Maintains stretch performance in critical areas.
 Shows high degree of initiative, commitment, energy and performance
orientation.
 Has good people orientation.
 Focused on his/her targets and strives hard to achieve them.

59
Contributor (C)
Contributor is one who
 Largely meets requirements of quality and output.
 Has not met stretch performance requirements consistently.
 Has potential, but not used his/her strengths.
 Shows short-term approach at times.
Partial Contributor (PC)
Partial contributor is one who
 Has met only few of the assigned targets.
 Performance has not met the acceptable standards of the company.
Low Contributor (LC)
Low contributor is one who
 Has not met most of his set targets.
 Has shown no understanding or interest in his role.
 Has not focused on the objectives.
 Has a negative attitude towards performance.
Feedback and Consequence Management
It is likely that some employees would be disappeared when they receive the
final rating. It is the job of the Manager to manage the aspirations of different levels
of performers and keep them with the employees and explain the relational behind the
rating. For all Low Contributor (LC) performers, a detailed 90 days rolling
performance improvement plan needs to be drawn up to brings them up to desired
level of performance. HR will help facilitate this process.

Role of HR
HR has to support and educate the line mangers (Managers and workers) in all
administrative and technical areas like coaching and feedback as well as dealing with
performance problems. HR would facilitate discussion at the Apex Review
Committee, ensure implementation of performance philosophy and monitor overall
quality of performance. HR would also help in implementing the development in
Section VII and analyze the closure section for monitoring quality of feedback. HR
would assist in reminding line mangers about the timelines on goal setting / half-
yearly feedback / final review and would follow up for the same. HR shall also carry
audits on the performance process periodically.
60
1. Does the management prepare the performance plans for organization
improvement every year?

TABLE-1

S.No. Options Respondents Percentage of


respondents
1 Strongly agree 10 18.52
2 Agree 28 51.85
3 Disagree 5 9.26
4 Strongly disagree 11 20.37
5 Total 54 100.00

CHART-1

Percentage of Respondents

60
50
40
30
20
10
0
Strongly agree Agree Disagree Strongly
disagree

INTERPRETATION
The table indicates percentage of employees’ feelings towards the performance
plans for organization improvement. For this, 18.52 percent of employees exposed to
strongly agree, 51.85 percent of employees exposed to agree, 9.26 percent of
employees exposed to disagree and 20.37 percent of employees exposed to strongly
disagree.

61
2. Do you regularly receive feedback about your performance from higher
level official?

TABLE-2

S.No. Options Respondents Percentage of


respondents
1 Strongly agree 21 38.89
2 Agree 5 9.26
3 Disagree 17 31.48
4 Strongly disagree 11 20.37
5 Total 54 100.00

CHART-2

Percentage of Respondents

40
35
30
25
20
15
10
5
0
Strongly agree Agree Disagree Strongly
disagree

INTERPRETATION
The table indicates percentage of employees’ feelings towards receive their
potential feedback from higher level officials with regular intervals. For this, 38.89
percent of employees exposed to strongly agree, 9.26 percent of employees exposed
to agree, 31.48 percent of employees exposed to disagree and 20.37 percent of
employees exposed to strongly disagree.

62
3. Do you believe the appraisal system helps in the growth and development
of an individual?

TABLE-3

S.No. Options Respondents Percentage of


respondents
1 Strongly agree 29 53.70
2 Agree 15 27.78
3 Disagree 5 9.26
4 Strongly disagree 5 9.26
5 Total 54 100.00

CHART-3

Percentage of Respondents

60
50
40
30
20
10
0
Strongly agree Agree Disagree Strongly
Disagree

INTERPRETATION
The table indicates percentage of employees’ feelings towards the appraisal
system helps their individual growth and development. For this, 53.70 percent of
employees exposed to strongly agree, 27.78 percent of employees exposed to agree,
9.26 percent of employees exposed to disagree and 9.26 percent of employees
exposed to strongly disagree.

63
4. Are you satisfied with the training inputs given by the organization in the
areas where your performance is low?

TABLE- 4
S.No. Options Respondents Percentage of
respondents
1 To large extent 38 70.37
2 To some extent 11 20.37
3 Very little extent 5 9.26
4 Not at all 0 0
5 Total 54 100.00

CHART-4

Percentage of Respondents

80
70
60
50
40
30
20
10
0
To large extent To some Very little Not at all
extent extent

INTERPRETATION
The table indicates that 70.37 percent of employees agreed that the training
inputs given by the organization to improving their performance up to large extent,
20.37 percent of employees exposed to some extent, 9.26 percent of employees
exposed to very little extent and no answers were given to infavour of any
satisfaction.

64
5. Appraisal system provides for frank discussion between the appraiser and
the appraisee.Do you agree?

TABLE- 5
S.No. Options Respondents Percentage of
respondents
1 Strongly agree 20 37.04
2 Agree 16 29.63
3 Disagree 13 24.07
4 Strongly disagree 5 9.26
5 Total 54 100.00

CHART-5

Percentage of Respondents

40
35
30
25
20
15
10
5
0
Strongly agree Agree Disagree Strongly
disagree

INTERPRETATION
The table indicates percentage of employees’ feelings towards the frank
discussion between the appraiser and the appraise. For this, 37.04 percent of
employees exposed to strongly agree, 29.63 percent of employees exposed to agree,
24.07 percent of employees exposed to disagree and 9.26 percent of employees
exposed to strongly disagree.

65
6. Are you want to empowered and has the autonomy to plan, organize do
your work?

TABLE- 6
S.No. Options Respondents Percentage of
respondents
1 Strongly agree 15 27.78
2 Agree 23 42.59
3 Disagree 5 9.26
4 Strongly disagree 11 20.37
5 Total 54 100.00

CHART-6

Percentage of Respondents

45
40
35
30
25
20
15
10
5
0
Strongly agree Agree Disagree Strongly
disagree

INTERPRETATION
The table indicates percentage of employees’ feelings towards employee’s
autonomy in their work. For this, 27.78 percent of employees exposed to strongly
agree, 42.59 percent of employees exposed to agree, 9.26 percent of employees
exposed to disagree and 20.37 percent of employees exposed to strongly disagree.

66
7. Will you agree that appraisal system plays a vital role in identifying the
development needs of an employee?

TABLE- 7

S.No. Options Respondents Percentage of


respondents
1 Strongly agree 22 40.74
2 Agree 27 50
3 Disagree 5 9.26
4 Strongly disagree 0 0
5 Total 54 100.00

CHART-7

Percentage of Respondents

50

40

30

20

10

0
Strongly agree Agree Disagree Strongly
disagree

INTERPRETATION
The table indicates percentage of employees’ feelings towards importance of
the appraisal system in identifying developmental needs of their employment. For
this, 40.74 percent of employees exposed to strongly agree, 50 percent of employees
exposed to agree and 9.26 percent of employees exposed to disagree.

67
8. Does the Management provides direction to employees in terms of their
work?
.
TABLE - 8
S.No. Options Respondents Percentage of
respondents
1 Strongly agree 34 62.96
2 Agree 15 27.78
3 Disagree 5 9.26
4 Strongly disagree 0 0
5 Total 54 100.00

CHART-8
\

Percentage of Respondents

70
60
50
40
30
20
10
0
Strongly agree Agree Disagree Strongly
disagree

INTERPRETATION

The table indicates percentage of employees’ feelings towards direction of


management in terms of their work. For this, 62.96 percent of employees exposed to
strongly agree, 27.78 percent of employees exposed to agree and 9.26 percent of
employees exposed to disagree.

68
9. Does management accept the innovative ideas given by you?
.

TABLE - 9
S.No. Options Respondents Percentage of
respondents
1 To large extent 22 40.74
2 To some extent 10 18.52
3 Very little extent 22 40.74
4 Not at all 0 0
5 Total 54 100.00

CHART-9

Percentage of Respondents

45
40
35
30
25
20
15
10
5
0
To large extent To some Very little Not at all
extent extent

INTERPRETATION
The table indicates that 40.74 percent of employees agreed that the acceptance
of their innovative ideas by management up to large extent, 18.52 percent of
employees exposed to some extent, 40.74 percent of employees exposed to very little
extent and no answers were given regarding to infavour of any satisfaction.

69
10. Do you think that Job rotation is necessary in the organization in order to
develop potential in all the areas?

TABLE – 10
S.No. Options Respondents Percentage of
respondents
1 Strongly agree 5 9.26
2 Agree 27 50
3 Disagree 10 18.52
4 Strongly disagree 12 22.22
5 Total 54 100.00

CHART-10

Percentage of Respondents

50
40
30
20
10
0
Strongly agree Agree Disagree Strongly
disagree

INTERPRETATION
The table indicates percentage of employees’ feelings towards Job rotation for
develop their potential in all the areas. For this, 9.26 percent of employees exposed to
strongly agree, 50 percent of employees exposed to agree, 18.52 percent of employees
exposed to disagree and 22.22 percent of employees exposed to strongly disagree.

70
11. Which pattern do you prefer for promotion?

TABLE - 11
S.No. Options Respondents Percentage of
respondents
1 Merit 27 50
2 Seniority 11 20.37
3 Both 5 9.26
4 None 11 20.37
5 Total 54 100.00

CHART-11

Percentage of Respondents

50

40

30

20

10

0
Merit Seniority Both None

INTERPRETATION
The table indicates percentage of employees’ feelings towards preference of
pattern in promotion. For this, 50 percent of employees exposed to merit, 20.37
percent of employees exposed to seniority, 9.26 percent of employees exposed to both
and 20.37 percent of employees exposed to none.

71
12. How do you find rewards, remuneration and other systems for employee
motivation in the organization?
.
TABLE - 12
S.No. Options Respondents Percentage of
respondents
1 Excellent 25 46.30
2 Good 18 33.33
3 Average 11 20.37
4 Poor 0 0
5 Total 54 100.00

CHART-12

Percentage of Respondents

50

40

30

20

10

0
Excellent Good Average Poor

INTERPRETATION
The table indicates percentage of employees’ feelings towards the rewards,
remuneration in the organization. For this, 46.30 percent of employees expressed that
the rewards, remuneration in the organization were excellent, 33.33 percent of
employees exposed to good, 20.37 percent of employees expressed their satisfaction
and no answers were given in favour of any satisfaction.

72
13. Is the appraisal system helpful in achieving objectives or goals of the
organization?
TABLE - 13
S.No. Options Respondents Percentage of
respondents
1 Strongly agree 28 51.85
2 Agree 10 18.52
3 Disagree 11 20.37
4 Strongly disagree 5 9.26
5 Total 54 100.00

CHART-13

Percentage of Respondents

60
50
40
30
20
10
0
Strongly agree Agree Disagree Strongly
disagree

INTERPRETATION
The table indicates percentage of employees’ feelings towards the appraisal
system to achieve the organization goals. For this, 51.85 percent of employees
exposed to strongly agree, 18.52 percent of employees exposed to agree, 20.37
percent of employees exposed to disagree and 9.26 percent of employees exposed to
strongly disagree.

73
14. Are the ratings of the competencies done correctly during estimating the
employee performance?

TABLE - 14
S.No. Options Respondents Percentage of
respondents
1 To large extent 17 31.48
2 To some extent 26 48.15
3 Very little extent 11 20.37
4 Not at all 0 0
5 Total 54 100.00

CHART-14

Percentage of Respondents

50

40

30

20

10

0
To large extent To some Very little Not at all
extent extent

INTERPRETATION
The table indicates that 31.48 percent of employees agreed that rating the
appraisal system within the organization up to large extent, 48.15 percent of
employees exposed to some extent, 20.37 percent of employees exposed to very little
extent and no answers were given to infavour of any satisfaction.

74
15. How is the whole appraisal system in the organization?

TABLE -15

S.No. Options Respondents Percentage of


respondents
1 Very good 28 51.85
2 Good 11 20.37
3 Satisfactory 15 27.78
4 Poor 0 0
5 Total 54 100.00

CHART-15

Percentage of Respondents

60

50

40

30

20

10

0
Very good Good Satisfactory Poor

INTERPRETATION
The table indicates percentage of employees’ feelings towards the whole
appraisal system in the organization. For this, 51.85 percent of employees exposed to
very good, 20.37 percent of employees exposed to good, 27.78 percent of employees
expressed their satisfaction and no answers were given to in favour of any
satisfaction.

75
FINDINGS

 It is observed that most of the respondents were satisfied with the performance
plans in the organization improvement.
 It is found that most of the employees were agreed that there was a regular
feedback given procedure in the organization about their performance.
 More than half of the employees were agreed that the appraisal system helps
their individual growth and development.
 The employees were satisfied with the training inputs given by the organization
to improving their performance.
 Most of the employees were agreed that there was an acceptance of innovative
ideas given by them by the management.
 It is found that most of the employees were accepted that job rotation was used
for their potential development in all the areas.
 Most of the employees expressed that the management gives promotions based
on merit.
 Employees expressed that rewards and remuneration in the organization were
excellent.
 Rating the appraisal system in the organization was good and most of the
respondents were satisfied.
 It is observed that most of the respondents were satisfied with the whole
performance appraisal system in the organization.

76
SUGGESTIONS

 The human resources manager should try to analyze the strengths and weakness of
an employee.
 The management should act as a mediator in between employees at the time of
conflicts and create a harmonious relationship between them.
 The manager and employee should have confidence and trust so that they offer
suggestions, which may benefit the work.
 The manager should discuss an employee’s work from time to time.
 The manager should motivate employees from time to time to reach their targets.
 To suggest some more improvement in performance appraisal system in the
organization, it is advantage both employee and management.

77
BIBLIOGRAPHY

TEXT BOOK AUTHORS PUBLISHERS

Research Methodology R.C. Kothari New Age

International
Human Resource Management N.K.Singh Excel
Publications

Human Resource Management Dwivedi &Agarwal Vikas

Essentials of Human Resource P.Subba Rao Himalaya


Management & IR

WEBSITE

www. ignite contractors and engineers limited.com


www.citehr.com

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