ACKNOWLEDGEMENT

Words often fail to express inner feelings of gratitude and indebtedness to one’s
benefactors, but then it is the only readily available medium through which the
undersigned can express her sincere thanks to all those who are associated with her work
in one way of the other.

I feel it my profound privilege to express my most sincere gratitude and indebtedness to

my project guide Mr. Pawan Ponia, HR Officer who was instrumental in providing my
direction, constant encouragement and co-operation in my attempt to take this project to
its logical conclusion.

I also want to thank Mr. Brijesh Mishra, HR Manager for having granted my this
wonderful opportunity to pursue my summer project at DABUR . And to all the
respondents who featured in my survey but remain as nameless entities, I present a deep
bow of gratitude. And also to all those who have been of help directly or indirectly but
have not featured here.

In brevity, it was pleasure working in the organisation, which provided me the most
congenial environment for learning.

RITU SENGAR
MBA
ROLL NO:- 8429610
 TABLE OF CONTENTS

Section 1 EXECUTIVE SUMMARY

Section 2 Daburas FMCG
Section 3 Company Profile
Section 4 Company History
Section 4.1 Milestones to success
Section 4.2 Its Products Worldwide
Section 4.3 Corporate Governance
Section 4.4 IT initiatives
Section 4.5 Future Challenges
Section 4.6 Central Procurement & Planning Department
Section 4.7 Quality Objectives
Section 4.8 Organization Structure
Section 4.9 Dabur Products
Section 4.10 Vision and Mission
Section 4.11 Core Values
Section 4.12 Major Strategic Business Units
Section 5 Research and Methodology
Section 6 Human Resources at Dabur
Section 7 Introduction to Performance Appraisal
Section 7.1 Aims
Section 7.2 Objectives
Section 7.3 Appraisal Techniques28
Section 7.4 Who are raters ?
Section 7.5 What should be rated ?
Section 7.6 Factors determining Performance Appraisal
Section 7.7 Appraisal Methods
Section 7.8 Appraisal Process

Section 8 Performance Appraisal at Dabur

Section 8.1 Systems
Section 8.2 Mechanisms
Section 8.3 Contribution Enhancement Plan
Section 8.4 Objectives of CEP
Section 8.5 Applicability of CEP
Section 8.6 Business Building Objectives (BBO’s)
Section 8.7 BBO’s Identification & Review Processes
Section 8.8 Conduct the Interim Contribution Reviews
Section 8.9 Category of Contribution
Section 8.10 Contribution Grid
Section 8.11 Assessment of Managerial Effectiveness
Section 8.12 Contribution Review Discussion
Section 8.13 Contribution Enhancement Plan (B)
Section 9 Training and Development
Section 10 Analysis and Interpretation
Section10.1 Questionnaire
Section 11 Summary of Findings
Section 12 Recommendations
Section 13 Conclusion
Section 14 Bibliography
Section 15 Exhibits
 LIST OF GRAPHS

Graph Page
Title
No. No.
1. Performance Appraisal is essential

2. Performance Appraisal as responsibility

3. Self-appraisal prior to performance appraisal to get high ratings

4. Feedback of the superior on regular basis

5. Performance appraisal improves employees performance level

6. Capability of attaining set goals

7. DIL making progress towards mission and goals

8. Merit raise when the employees meet the standard

9. Support of co-workers and superiors

10. Superiors responsible for the progress of DIL

 X

1. EXECUTIVE SUMMARY

In today’s scenario, Human capital is acknowledged as one of the most potent sources in
contributing directly and significantly in the growth of any organization.

This project attempts to explore the most effective “HR policies and practices” for
smooth sailing of an organisation.

It was a research conducted to get the feedback of the employees from different
departments about the existing performance appraisal system followed in the
organization.
The main research objective was to understand the relevance of wide variety of methods
and techniques that can be explored towards performance of the organizational goals. In
today’s competitive world every organization is geared towards maximum return with
minimum investment. Human Resource Management plays a vital role towards planning
& controlling cost effective manpower support. This is widely affected by planning and
implementing “Effective Performance Appraisal System” which is the paramount part of
this project

Channelising human energies in a predetermined desirable direction are not possible

unless harmonious relations are maintained among team members involved in business
development. Concept of employee retention was also understood through the project
study. The ways adopted by companies to manage grievances and stress and thereby
motivating the employees and reducing employee turnover were studied through the
project.
 2. DABUR AS AN FMCG COMPANY

Today, the FMCG is the fourth largest sector in the Indian economy and there are many
FMCG companies like HLL, ITC, Britannia, Tata Tea, Nestle, Godrej Consumer, Dabur,
Marico etc.

Dabur India Limited is the fourth largest FMCG company in India. Dabur has five other
subsidiaries- Dabur Foods, Dabur Nepal, Dabur Egypt, Dabur Oncology and Dabur
Pharma.

Business
Dabur’s product range encompasses health care, personal care, ayurvedic specialities and
food segments.

Brands
Well-known brands include Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola, Ll
Dantmanjan, Nature Care, Pudin Hara and Real.

Location
Dabur has been marketing its products in more than 50 countries all over the world. The
company has offices and representatives in Europe, America and Africa. Manufacturing
facilities are spread across three overseas locations.

Turnover
Building on a legacy of quality and experience for over 100 years, today Dabur has a
turnover of Rs.1899.57 with powerful brands.
3. COMPANY PROFILE
 4. COMPANY HISTORY

1884 Birth of Dabur

1896 Setting up a manufacturing Plant
Early 1900s Ayurvedic Medicines
1919 Establishment of Research Laboratories
1920 Expands further
1936 Dabur India ( Dr. S.K Burman) Pvt. Ltd.
1972 Shift to Delhi
1979 Sahibabad fctory / Dabur Research Foundation
1986 Public Limited Company
1992 Joint Venture with Agrolimen of Spain
1993 Cancer treatment
1994 Public issues
1995 Joint ventures
1996 3 separate divisions
1997 Food Division/Project STARS
1998 Professionals to manage the Company
2000 Turnover of Rs 1000 crores
2003 Dabur demerges Pharma Business
2005 Dabur acquires Balsara
2006 Dabur announces Bonus after 12 years
2006 Dabur crosses $2 Bin market cap, adopts US GAAP
 4.1 Milestones to Success

Dabur India Ltd. made its beginnings with a small pharmacy, but has continued to
learn and grow to a commanding status in the industry. The Company has gone a
long way in popularizing and making easily available a whole range of products
based on the traditional science of Ayurveda. And it has very high standards in
developing products and processes that meet stringent quality norms.

o 1884 - Established by Dr. S K Burman at Kolkata

o 1896 - First production unit established at Garhia
o 1919 - First R&D unit established
o Early 1900s- Production of Ayurvedic medicines

Dabur identifies nature-based Ayurvedic medicines as its area of specialization. It

is the first company to provide health care through scientifically tested and
automated production of formulation based on our traditional science.

o 1930 – Automation and Upgadation of Ayurvedic product manufacturing

initiated
o 1936 – Dabur ( Dr. S.K Burman) Pvt. Ltd. Incorporated
o 1940- Personal care through Ayurveda

Dabur introduces consumers to personal care through Ayurveda, with the launch
of Dabur Amla Hair Oil. The product was so popular that it became the largest
selling hair oil brand in India.

o 1949- Launched Dabur Chyawanprash in tin pack

Widening the popularity and usage of traditional Ayurvedic products continues.

The ancient restorative Chyawanprash is launched in packaged form, and
becomes the first branded chyawanprash in India.

o 1957- Computerizations of operations initiated

o 1970- Entered Oral Care & Digestives Segment

Addressing rural markets where homemade oral care is more popular than
multinational brands, Dabur introduces Lal Dant Manjan. With this a
conveniently packaged herbal toothpowder is made available at affordable costs
to masses.

o 1972- Shifts base to Delhi from Calcutta

o 1978- Launches Hajmola tablet

Dabur continues to make innovative products based on traditional formulations

that can provide holistic care in our daily life. An Ayurvedic medicine used as a
digestive aid is branded and launched as the popular Hajmola tablet.

o 1979- Commercial production starts at Sahibabad, the most modern

herbal medicines plant at that time
o 1984- Dabur completes 100 years
o 1988- Launches pharmaceutical medicines
o 1989- Care with fun

The Ayurvedic digestive formulation is converted into a children’s fun product

with the launch of Hajmola Candy. In an innovative move, a curative product is
converted to a confectionary item for wider usage.

o 1994- Comes out with first Public issue

o 1994- Enters oncology segment
o 1994- Leadership in Health care

Dabur establishes its leadership in health care as one of only two companies
worldwide to launch the anti-cancer drug Intaxel (Paclitaxel). Dabur Research
Foundation develops an eco-friendly process to extract the drug from its plant
source .
o 1996- Enters foods business with the launch of Real Fruit Juice
o 1996- Real blitzkrieg

Dabur captures the imagination of young Indian consumers with the launch of
Real Fruit Juices- a new concept in the Indian foods market. The first local brand
of 100% pure natural fruit juices made to International standards, Real becomes
the fastest growing and largest selling brand in the country.

o 1998- Burman family hands over the management of the company to

professionals
o 2000- The 1,000 crore mark

Dabur establishes its market leadership status by staging a turnover of Rs. 1,000
crores. Across a span of over 1000 years, Dabur has grown from a small
beginning based on traditional health care.

o 2001- Super specialty drugs

With the setting up of Dabur Oncology’s sterile cytotoxic facility, the Company
gains entry into the highly specialized area of cancer therapy. The state-of-the art
plant and laboratory in the UK have approval from the MCA of UK. They follow
FDA guidelines for production of drugs specifically for European and American
markets.

o 2002- Dabur record sales of Rs. 1163.19 crore on a net profit of Rs

64.4 crore
o 2003- Dabur demerges Pharmaceutical business

Maintaining Global Standards

As a reflection of its constant efforts at achieving superior quality standards,

Dabur became the first Ayurvadic products company to get ISO 9002
certification.
 Science for Nature

Reinforcing its commitment to nature and its conversation, Dabur Nepal, a

subsidiary of Dabur India, has set up fully automated greenhouses in Nepal. This
scientific landmark helps to produce saplings of rare medicinal plants that are
under threat of extinction due to ecological degradation.

Merger with Balsara

Merger of 3 Balsara Companies- Besta cosmetics, Balsara hygiene Products and

Balsara Home Products to be effective from April 1,2006.

o 2005- Dabur acquires Balsara

o 2006- Dabur announces Bonus after 12 years
o 2006- Dabur crosses $2 Bin market cap, adopts US GAAP

Dabur Worldwide

Dabur’s mission of popularizing a natural lifestyle transcends national boundaries.

Today there is global awareness of alternative medicines, nature based and
holistic lifestyles and an interest in herbal products. Dabur has been in the
forefront of popularizing this alternative way of life, marketing its products in
more than 50 countries all over the world.

4.2 Its Products World Wide

o Offices and representatives in Europe, America and

Africa
o A special herbal health care and personal care range successfully selling in
markets of the Middle East, Far East and several European countries.’
o Inroads into European and American markets that have good potential due
to resurgence of the back-to-nature movement.
4.3 Corporate Governance

In India, the Securities and Exchange of India (SEBI) stipulates corporate

governance standards for listed companies through the Clause 49 of the listing
agreement of the stock exchanges.

Good corporate governance and transparency in actions of the management is key

to a strong bond of trust with the Company’s stakeholders. Dabur understands the
importance of good governance and has constantly avoided an arbitrary decision-
making process. In this pursuit, Dabur has already put in place systems and
procedures and is fully compliant with the revised Clause 49 well before it
becomes mandatory. Thus at Dabur, we believe good governance is key to strong
bond of trust between the company and all its stakeholders.

4.4 IT Initiatives

In Dabur India Limited knowledge and technology are key and efficiency.
Towards this overall goal of technology-driven performance, Dabur is utilizing
the world. It will also cut down costs and increase profitability. Information
Technology in a big way. resources which have helped the Company achieve
higher levels of excellence This will help in integrating a vast distribution system
spread all over India and across.

4.5 Future Challenges

 Forward Integration of SAP with Distributors and Stockists.

 Backward Integration of SAP with Suppliers.
 Implementation of new POS system at Stockist point and integration with
SAP-ERP.
 Implementation of SAP HR and payroll.
 SAP Roll-out to DNPL and other new businesses
4.6 Central Procurement & Planning Department

Dabur has established a Central Procurement & Planning Department (CPPD) to

take care of all high value purchases across the company. The CPPD is housed at
the Kaushambi Corporate Office (KCO) and is headed by the head- CPPD. Low
value purchases are de-centralized at he manufacturing units. A Unit Purchase
Heads the Purchase Department at the manufacturing units.

Dabur India Limited has also set up a cross-functional Purchase Committee to

guide and oversee the purchasing function at the KCO. The purchase committee
comprises of the following:

• Head – CPPD
• Head – Marketing
• Deputy General Manager – Operations
• Chief Financial Officer

4.7 Quality Objectives

• To focus on customer and successfully meet their needs and requirements.

• To manufacture effective personal care, ayurvedic and food products at
competitive prices and improve the quality of life of common masses.
• To implement system to ensure prevention of errors rather than detection
of errors.
• To ensure global competitiveness by striving to achieve Current and Good
Manufacturing Practices (CGMP)
 4.8 Organization structure

DaburIndia
India Ltd
.
Corporate Office

Chairman
(VivekC Burman
)

Executive Director (Operations) Unit Heads

Chief Executive Officer
SunilDuggal

Heads (Marketing)

Head Head Head Head

(Finance & Commercial) (Human Resources) (Quality Control) (Mfg. & Shop Maintenance)
• Regional Managers)
• Branch Manager
• Marketing Executives • Manager (Accounts)
• Customer Support • Asst. ManagerComm
( ) • Assistant Manager • Assistant Manager
• HR Manager
Officers • Accounts Officer • Senior Officers • Senior Officers
• HR Executive
• Assistants • Sr. Executive (Stores) • Officers / Supervisors • Officers / Supervisors
• HR Sup.
4.9 Dabur Products

• Dabur Health Care Product Range

Health Supplements

 Dabur Chyawanprash
 Dabur Chyawanshakti
 Glucose-D

Digestives

 Hajmola Yumstick
 Hajmola Mast Masala
 Anardana
 Hajmola
 Hajmola Candy
 Pudina hara
 Dabur Hingoli

Natural Cures

 Shilajit Gold
 Nature Care
 Ring Ring
 Itch Care
 Back-aid
 Shankha Pushpi
 Dabur Balm
 Sarbyna Strong
• Dabur Baby Care Product Range

Baby Care

 Dabur Lal Tail

 Dabur baby Olive oil
 Dabur Janma Ghunti

• Dabur Personal Care Product Range

Hair Care-Oil

 Amla Hair Oil

 Amla Lite Hair Oil
 Vatika Hair Oil
 Anmol Sarson Amla

Hair Care- Shampoo

 Anmol Silky Black Shampoo

 Vatika Henna conditioning Shampoo
 Vatika Anti-Dandruff Shampoo

Skin Care

 Gulabari
 Vatika Fairness Face Pack

• Dabur Oral Care Product Range

Oral Care

 Dabur Red Gel

  Babool Toothpaste
 Dabur Red Toothpaste
 Dabur Lal Dant Manjan
 Dabur Binaca Toothbrush

• Dabur Foods Product Range

Real

 Real Fruit Juice

 Real Active

Homemade

Lemoneez

 Natural Lemon Juice

Honey

 Pure Natural Honey

Capsico

 A fiery red-pepper sauce

Dabur Ayurveda Product Range

 Dashmularishtha
 Ashokarishtha
 Lauhasava
 Mahanarayan Tail
 Juritap
 Madhuvani
 Lavan Basked
4.10 Vision and Mission

• Founding Thought: “ What is that life worth which cannot bring comfort
to others.
• Vision: “ Dedicated to the health and well being of every household”.
• Mission: “ To become a leading nature-based health and family care
Products Company”.

4.11 Core Values

Ownership : Accept personal responsibility, and accountability

to meet business needs.

Passion for Winning : Leaders in the area of responsibility, with a deep

commitment to deliver results. Determined to be the
best at doing what matters most.

People Development : People are the most important asset. Add value
through result driven training, and we encourage &
reward excellence.

Customer Focus : Superior understanding of consumer needs and

develop products to fulfill them better.

Team Work : Work together on the principle of mutual trust &

transparency in a boundary-less organisation.
Intellectually honest in advocating proposals,
including recognizing risks.
4.12 Major Strategic Business Units

In India, the Company’s business is carried out by three Strategic Business Units
(SBUs) namely:

• Consumer Care Division, with a share of 82% in its total sales.

• Consumer Healthcare Division, with a share of 8% in its total sales.

Dabur Foods Limited as a wholly owned subsidiary with a share of 10% in its total
sales.

% share in Domestic Revenues

Food
10%
CHD
8%

Food
CHD
CCD

CCD
82%
 5. RESEARCH AND METHODOLOGY

Research is an organized inquiry designed and carried out to provide information to solve
the problem. The fact, search is an art of scientific investigation of a certain problem.
“Research is the process of systematically obtaining accurate answers to significant and
pertinent questions by the use of the scientific methods gathering and interpreting
information”.

a. Sample size:
Sample size is 50. Data was analyzed by surveying employees from different
departments.

b. Sample design:
This part is done through discussing and analyzing with my project guide and
referring to the subject regarding this topic. It was a random sampling.

c. Mode of analysis:
The methods used to analyze the data are as follows:
1) To study the importance of performance appraisal in the organization.
2) To find out whether the employees are satisfied with the present
performance appraisal system or not.
3) Interpret and analysis of the data and present it in a proper manner.
4) Uses of Microsoft excel for preparation of graph.
Title of the study

The title of the study is ‘Performance Appraisal’ at Dabur India Limited, Ghaziabad
(U.P)

Objective of the study

1) To study the performance appraisal system in the organization.

2) To find out how the performance of employees is assessed.
3) To review how the performance appraisal system helps in placement, selection,
promotion and transfer of the employees.
4) To find out the problems faced by the staff in preparing their BBO’s (Business
Building Objective).
5) To offer suggestions and recommendation regarding the existing performance
appraisal system in the company.

Limitations of Performance Appraisal

1) The opinion of staff and manager are often in opposition, causing de-motivation.
2) The process is usually manager driven and the staff member is expected to be
compliant in the interview.
3) The process usually involves manager giving their opinion and the staff member
having to defend the position, rather than a positive discussion.
4) There is no room for remedial action during the year.
5) The process is usually done in a rushed manner to meet the budget development
process and therefore loses its relevance to performance.
 SOURCES OF DATA

Data Collection is the collection of necessary detail to gain further information. This
requires both primary and secondary data.

A. Secondary data:
My HR guide, Mr. Pawan Ponia in Dabur India Limited, helped me in secondary
data collection.

Field Work:

Fieldwork is done for the purpose of collection of data. The fieldwork involved here are:

• Regular research to gather information on the relevant topic and have them
compiled according to the project specification.
• For getting proper guidance for the project, often discussion with the guide.
]
 6. HUMAN RESOURCE AT DABUR

Dabur places great deal of confidence on its excellent pool of human resources, which it
realizes is the key to its further growth strategy. The company continued its efforts to
further align its HR policies, processes and initiatives to meet the business needs.

In line with its focus on international operations, Dabur implemented a uniform HR

structure across all the groups company’s operations. This will enable seamless
transaction s between domestic and overseas position. Also the integration of the
personnel of the erstwhile Family Products Division (F.P.D) & Healthcare Products
Division (H.C.P.D) was implemented efficiently to suit the requirements well within
time. Major initiatives taken were:

• Dabur implements performance metrics for all key positions based on two aspects
of the Balanced Score Card Approach- Financial and Internal Business Process.
This approach clearly outlines the expectation from each position and will be
upgraded to include two more aspects for any key managerial positions in future.
• The Company institutionalized the “Assessment and Development
Center”(A.D.C) approach to all positions from staff to officer cadre and also at the
senior levelsto objectively identify, develop and promote the talent from within,
and to provide individual feedback for development of the participating
employees.
• To encourage learning, the Company is planning to set-up a learning center,
which will be equipped with a library, I.T & Web based sources of knowledge. It
is also in the process of setting up a knowledge management portal and a
leadership and capability development cell
• Dabur is committed to attract fresh talents. Towards this end, the company
required over 20 candidates from leading management and engineering institutes
in the country, who will be inducted.
 7. INTRODUCTION TO PERFORMANCE APPRAISAL

This is a technique, not universally accepted, of assessing the performance of employees

against agreed targets. The personnel practitioners would be most likely to be involved in
designing the procedures, leaving the line managers normally to administer the process.

Performance Appraisal is the systematic evaluation of the individual with respect to his or
her performance on the job and his or her potential for development.

7.1 Aims of Performance Appraisal

The following aims might be considered when examining a performance appraisal

system:

• Use reliable, fair and objective measures of performance, compare actual

with planned performance, and provide feedback to the appraisee.
• Make provision for the allocation of both extrinsic rewards (performance related pay) and
intrinsic rewards (opportunity to enhance one’s skills) following the assessment process.
• Recognize that performance management is the heart of the general management process.

7.2 Objectives of Performance Appraisal

Data relating to performance assessment of employees are recorded, stored and

used for several purposes. The main purposes of employee assessment are:

• To effect promotions based on competence and performance.

• To confirm the services of probationary employees upon their completing the
probationary period satisfactorily.
• To assess the training and development needs of employees.
• To decide upon a pay raise where regular pay scales have not been fixed.
7.3 Appraisal Techniques

Certain techniques are available to evaluate the performance of the employee.

• Written report: The appraiser writes about the strengths, weaknesses, previous
performance and potential of the appraisee, with suggestions for
improvement. It is important that the appraiser is perceptive with
reasonable writing skill.
• Critical incidents: The appraiser highlights incidents or key events that show
the appraisee’s behavior as exceptionally good or bad in relation to
particular outcomes at work. This exercise would depict desirable
behaviors as well as behavior that signal a need for improvement.
• Graphic Rating Scale: This is a popular appraisal technique and it lends itself
to quantitative analysis and comparison of data. A set of performance
factors id identified, including such characteristics as quality of work,
technical knowledge, cooperative spirit, integrity, punctuality and
initiative. The appraiser would go through the set of factors rating them,
for e.g., on a scale 1 to 5 where the highest number would denote the best
rating.
• Multi-person Comparison: This technique is relative rather than an absolute
measure, is used to assess one person’s performance against one or more
other individuals.
• Multi-rater Comparative Evaluation: The total appraisal process consists of
interviews, psychometric testing, simulations of relevant work activities,
peer appraisals and appraisals by trained assessors.
• Self-appraisal: Self-appraisal has introduced as a mean for empowering
employees, enhancing teamwork and raising awareness of quality. The
employees are given appraisal forms on which they evaluate themselves
against criteria such as attendance, productivity, quality, safety, teamwork
and commitment.
7.4 Who are Raters?

Raters can be immediate supervisors, specialists from the HR department,

subordinates, peers, committees, clients, self-appraisals, or combinations of
several. Immediate supervisor is the most fit candidate to appraise the
performance of his or her subordinates as no one is more familiar with the
subordinate’s performance than his or her superior. Subordinates can assess the
performance of their superiors. This helps in assessing an employee’s ability to
communicate, delegate work, allocate resources, disseminate information and
resolve intra-personal conflict. Peers are in a better position to evaluate certain
facts of job performance, which the subordinates or superiors cannot do.

Where superiors, subordinates and clients, make the appraisal it is called 360-
degree system of appraisal.

7.5 What should be Rated?

• Quality: The degree to which the process or result of carrying out an activity
approaches in terms of fulfilling the activity’s intended purpose.
• Quantity: The amount produced, expressed in monetary terms, number of
units or number of completed activity cycles.
• Timeliness: The degree to which an activity is completed or a result produced
at the earliest time desirable
• Cost Effectiveness: The degree to which the use of organization’s resources is
maximized in the sense of getting the highest gain by minimizing the losses.
• Need for Supervision: The degree to which a job performer can carry out a job
function.
• Interpersonal Impact: The degree to which a performer promotes feeling of
self-esteem, goodwill and cooperation among co-workers and subordinates.
7.6 Factors Determining Performance Evaluation

• Halo Error: A halo error takes place when one aspect of an individual’s
performance influences the evaluation of the entire performance of the
individual. Rating employees separately on each of a number of performance
measures and encouraging raters to guard against the halo effect are the two
ways to reduce the halo effect.
• Leniency: Every evaluator has his own value system, which acts as a standard
against which he makes his appraisals. Relative to the true or actual
performance an individual exhibits, some supervisors have a tendency to be
liberal in their ratings.
• Central Tendency: This occurs when the evaluator assigns average or middle
ratings to the employees. The attitude of the rater is to play safe. This safe-
playing attitude stems from certain anxieties and doubts about the behavior of
employee. Such tendency distorts the evaluation.
• Rater Effect: This includes favoritism, stereotyping and hostility. Excessively
high or low scores are given only to certain individuals or groups based on the
rater’s attitude towards the rate. Age, sex, race and friendship biases are
examples of this type of error.
• Perceptual Set: This occurs when the rater’s assessment is influenced by
previously held beliefs. If supervisor, for example, has a belief that employees
hailing from one particular region are hard working, his subsequent rating of
an employee hailing from that region tends to be favorably high.
• Spillover Effect: This refers to allowing past performance appraisal ratings to
unjustifiably influence current ratings. Past ratings, good or bad, result in
similar rating for the current period although the demonstrated behavior does
not deserve the rating good or bad.
• Status Effect: It refers to overrating of employees in higher level job or jobs
held in high esteem, and underrating employees in lower level job or jobs held
in low esteem.
7.7 Appraisal Methods

The last to be addressed in the process of designing an appraisal program is to

determine methods of evaluation. Numerous methods have been devised to
measure the quantity and quality of employee’s job performance. Broadly, all the
approaches of appraisal can be classified into:

 Past oriented Methods, and

 Future oriented Methods

Past Oriented Methods

• Rating Scale: This is the simplest and most popular technique for
appraising employee performance. The typical rating scale consist of several numerical
scales, each representing a job related performance criterion such as dependability,
initiative, output, attendance, attitude, co-operation, and the like. Each scale ranges from
excellent to poor. The rater checks the appropriate performance level on each criterion,
and then computes the employee’s total numerical score. The number of points scored
may be linked to salary increase. The disadvantages of this method are several. The
rater’s biases are likely to influence evaluation.
• Checklist: Under this method, a checklist of statements on the traits of the
employee and his or her job is prepared in two columns i.e., a ‘Yes’ and a ‘No’ column.
All that the rater should do is tick the ‘Yes’ column if the answer to the statement is
positive and in column ‘No’ if the answer is negative. After ticking off against each item,
the rater forwards the list to the HR department where the actual assessment of the
employee takes place. The advantages of a checklist are economy, ease of administration,
limited training of rater and standardization.
• Essay Method: In the essay method, the rater must describe the employee
within a number of broad categories, such as:

i) The rater’s overall impression of the employee’s performance,

ii) The promotability of the employee,
iii) The jobs that’s the employee is now able or qualified to perform,
iv) The strengths and weaknesses of the employee,
v) The training and the development assistance required by the employee

The strength of the Essay method depends on the writing skills and
analytical ability of the rater. A problem with this method is that the ratees
may be rated on the quality of the appraisals that they give.

• Ranking Method: In this, superior ranks his or her subordinates in the

order of their merit, starting from the best to the worst. The HR
department knows that A is better than B. The ‘how’ and ‘why’ are neither
questioned nor answered. This method is subject to the halo effects. Its
advantage includes ease of administration and explanation.
• Forced Distribution Method: One of the errors in rating is leniency-
clustering a large number of employees around a high point on a rating
scale. This method seeks to overcome the problem by compelling the rater
to distribute the ratees on all points on the rating scale. The method
operates under an assumption that the employee performance level
conforms to a normal statistical distribution. The major weakness of the
forced distribution method lies in assumption that employee performance
levels always conform to a normal distribution.
 Future Oriented Appraisal

• Management by objective: I t was Peter Drucker who gave first the

concept of MBO to the world way back in 1954.. Application of MBO in the field of
performance appraisal is a recent thinking. One comment made against the approach is
that it is not applicable to all jobs an all organization. Objectives are agreed and
formulated at the beginning of the period under review, and the appraisee is given the
necessary assistance and training to facilitate the achievement of those objectives.
• Psychological Appraisal: Large organization employs full-time industrial
psychologists. When psychologists are used for evaluations, they assess an individual’s
future, potential and past performance. The appraisal normally consists of in-depth
interviews, psychological tests, discussions with supervisors and a review of other
evaluations. The psychologist then writes an evaluation of the employee’s intellectual,
emotional, motivational and other related characteristics that suggest individual potential
and may predict future performance. From these evaluations, placements and
development decisions may be made to shape the person’s career.
• Assessment Centers: Mainly used for executive hiring. Assessment centers
are now being used for evaluating executive or supervisory potential. An assessment
center is a central location where managers may come together to have their participation
in job-related exercises evaluated by trained observers. Assesses are requested to
participate in in-basket exercises, work groups, computer simulations, role playing and
other similar activities. After recording their observations of ratee's behaviors, the raters
meet to discuss these observations. Self-appraisal and peer evaluation are also thrown in
for final rating.
• 360-Degree Feedback: Where multiple raters are involved in evaluating
performance, the technique is called 360-degree appraisal. The 360-degree technique is
understood as systematic collection of performance data on an individual or group,
derived from a number of stakeholders- the stakeholders being the immediate
supervisors, team members, customers, peers and self. The 360-degree appraisal provides
a broader perspective about an employee’s performance. However, there are drawbacks
 associated with the 360-degree feedback. Receiving feedback on performance from
multiple sources can be unapproachable. It is essential that the organization create a non-
threatening environment by emphasizing positive impact of the technique on an
employee’s performance and development. More and more number of firms are using
360-degree appraisal technique to assess the performance of their employees.

7.8 Appraisal Process

The figure outlines the performance appraisal process. Each step in the process is
crucial and is arranged logically.

Per

8. PERFORMANCE APPRAISAL AT DABUR

A
8.1 The System

Performance Appraisal of Grade VI and below in Dabur is carried out through

‘RATING METHOD’. Their immediate superior does performance appraisal and
HR department reviews it. Performance Evaluation is done by Contribution
Enhancement Plan (CEP) at the end of the year. CEP forms the core of
Performance Appraisal system of employees (Grade VI and below in Dabur)

The performance appraisal of executives in Dabur is carried out through rating

system of performance appraisal by their immediate supervisor and then reviewed
by latter’s boss. The performance appraisal system followed at Dabur is ‘Rating
Method’ and ‘Action by Objectives Method’.
The broad structure of the system can be laid down as:

Eval
Ass

Assessment
5

Discuss

Computatio
Use
The performance appraisal of executives in Dabur is carried out through rating system of
performance appraisal by their immediate supervisor and then reviewed by latter’s boss.
The performance appraisal system followed at Dabur is ‘Rating Method’ and ‘Action by
Objectives Method’.

The broad structure of the system can be laid down as:

Fixing of Business Building O bjectives

(BBOs) at the beginning of the year

Assessment of actual results at the end of

The year

Performance evaluation and finalizing of

Rating through the use of Contribution
Enhancement Plan (A)

Rewarding executives on the basis of

Performance through CEP (A) & CEP (B)

8.2 Mechanism

The evaluation under CEP consist of following steps:

i. Appraiser does the rating after considering individual assessment parameters

of every employee.
ii. Scores are given against each assessment parameter of an individual in the
rating column on the basis of 5-point rating.
iii. Rating is reviewed with the reviewer.
 iv. Total score is computed by adding all the scores.
v. The rating category corresponding to the appropriate range of total scores is
selected as overall final performance rating of employees from rating scale
table.
vi. The individual development form is filled by the Appraisee, which is further
utilized for training and development needs of employees, besides giving a
direction to his/her career growth in the organization.
vii. After completing the appraisal, a constructive feedback should be given to
the Appraisee by the Appraiser in presence of reviewer.

Finally, Contribution Enhancement Plan discusses rating for deciding upon the
performance rewards in the form of:

• Annual Rewards
• Promotions

8.3 Contribution Enhancement Plan

Contribution Enhancement Plan or CEP is a process, which will enable Dabur to

improve organizational contribution through enhanced contribution of individual.
It aims to establish formal individual objectives and to review subsequent
contribution in order to reinforce successful behaviors, to correct shortfalls and to
plan training and development activities. The system will ensure that all
management staff employees are aware as to what is expected from them. This is
a developmental plan for the improvement in contribution of executives towards
organization’s or SBU’S achievement of objectives and its development. It is
categorized into 2 parts:

• Contribution Enhancement Plan {(CEP)A}

• Contribution Enhancement Plan {(CEP)B}
 Contribution Enhancement Plan (A) evaluates the contribution of an individual and
decides revision in fixed pay and Contribution Enhancement Plan (B) is concerned
with variable pay.

8.4 Objectives of CEP

i) To establish formal contribution standards.

ii) To establish a system that is fact based and minimizes subjectivity in the
assessment of an individual’s contribution.
iii) It should provide constructive feedback for development of an employee.
iv) Enable the individual to evaluate his/her own areas of strengths and areas
of improvement for being a better manager.

8.5 Applicability of CEP

i) The system is applicable to Grade V and above employees of the

company.
ii) Setting of 3 to 5 BBO’s, which are measurable.
iii) Related to area/position in which employees operates.
iv) Evaluation of contribution and focus on employee development.

8.6 Business Building Objective (BBO’s) Process

Business Building Objectives (BBO’s) are mutually agreed objectives between an

employee and his/her superior. These are tangible business targets, which are
measurable.

The first stage is for the person initiating the review cycleto understand the
business plan so that there is clarity about the direction and priorities of the
organization. This will help ensure that individual BBO’s support the overall
business plan.
8.7 BBO’s Identification and Review Processes

BBO’s needed to be established the light of the annual business plan. The set
objectives must be relevant in context with each individual role.

The employees must prepare in advance his/her draft objectives for the next year
and contribution against objectives set for the past year. The same need to be
carried by the appraisee for discussion with the appraiser. The appraiser will also
come prepared with BBO’s (both past and future) for the employee. At the
meeting they will discuss the year ahead and seek agreement on various
objectives. During the same meeting they will also discuss the contribution
against the past year’s BBO’s. Once the objectives for the next year are set and
agreed upon the same need to be communicated to the employee in writing. The
employee shall be evaluated against BBO during mid-year at the end of
assessment year.

BBO’s identification, assessment and review of contribution, assessment of traits

and skills, training and development needs and plans will be joint responsibility if
the appraisee and the appraiser. The reviewer needs to be satisfied that the key
elements of the process have done correctly.

8.8 Conduct the Interim Contribution Review/s

In the mid of the assessment year the appraiser and the appraisee should meet to
review the progress against the set BBO’s. This should include a discussion of an
assessment of whether any BBO’s should be amended, deleted or introduced. The
Interim Contribution Review is a formal opportunity to reinforce effective
behaviors, identify and correct any problems, give general feedback/advice, and to
ensure the annual assessment will be fair. This should be recorded in writing and a
copy is given to the individual.
8.9 Category of Contribution

The Contribution rating is to be done on a 5-point scale for each set BBO. Their
ratings are as follows:

Rating Qualitative Description Score

Consistently exceed job expectations and
standards.

Employee contribution has been exemplary and

Outstanding (OS) 5
has displayed good grasp of the job and handles
additional responsibilities with confidence and
ease, while overcoming exceptional challenges
or applying unique solutions.
Very good contribution and often exceeds job
Strong (ST) expectations. A good learner who can handle 4
the job with minimum supervision.
Meet expectation on most of the set objectives.
Good (GD) Requires occasional supervision and has 3
adequate knowledge of the job.
Inconsistent in meeting the set objectives.
Needs regular guidance. Has knowledge about
Satisfactory (ST) 2
the job however the same needs to be brushed
up
Contribution is much below the set targets.
Below Expectations (BE) Constantly needs supervision and guidance. 1
Processes low level of job knowledge and skills

8.10 Contribution Grid

The contribution grid for arriving at final rating is as follows:

Final Rating Total Score Range

Outstanding 4.26-5.00
Strong 3.51-4.25
Good 2.51-3.50
Satisfactory 1.51-2.50
Below Expectation <1.50

8.11 Assessment of Managerial Effectiveness

 CEP forms pertains to evaluation of managerial competencies. Performing each
job requires application of certain behavior traits/skills. Therefore, it is desirable
to assess the appraise on traits/skills. The appraiser will pick the relevant
traits/skills applicable to the job/function. Minimum of 6 and maximum of 8
traits/skills must be chosen after careful thought and thereafter rated on 5-point
scale as mentioned below:

Skills/Traits Ratings
Strongly Demonstrated 5
Fairly Demonstrated 4
Present but not constantly demonstrated 3
Require significant development 2
Not up to the expectation 1

8.12 Contribution Review Discussion

The Contribution Review Discussion is intended to be an enriching process both

for Appraise and Appraiser. This is a critical and final stage of the entire CEP and
therefore has to be handled with utmost sensitivity, so that maximum value
addition is derived from this interaction between Appraise and Appraiser.

8.13 Contribution Enhancement Plan B (CEP B)

After evaluation under Contribution Enhancement Plan (B), variable for each
executive is compared through (CEP B). Variable pay is a lump sum amount to be
paid to appraise once a year on the basis of the performance.
The assessment of variable pay is done using the following table:

% of fixed amount if
Criterion
criterion is 100 fulfilled
Company’s performance 33%

Unit/SBU’s performance 33%

Individual performance 34%

If the company’s performance meets the targeted performance then it will be

calculated as: (company’s actual performance/company’s targeted performance)*
100%.
 9. TRAINING AND DEVELOPMENT

Dabur should hire professionals from outside to head key positions to become a player of
repute. In 1998, business was not big and being a family-owned company, there were
issues in hiring. Dabur was hiring literally at the rate of 20-30%. They started hiring from
campuses only in 1996-97. They went to the campuses and carried out serious brand
building exercise. Today their lateral hiring has come down to around 10-15%. Dabur
expanded their business and went to IIM for hiring. They also evolved new strategies and
a more structured hiring process. This was a huge success and they hired close 100
people in the last two years. The attrition rate at management level is 10% while at the
field staff level its 16%. Dabur has also introduced Esops for freshers to address the
retention issue right at the entry level. Currently, the annual training spend is around
Rs 1.5 crore.

Training and Development plays a vital role in CEP, which pertains to identification of
training needs through a joint process of discussion between Appraise and Appraiser. The
employee himself does this through guidance, feedback counseling and task force
assignment including self-development initiatives.
 10. ANALYSIS AND INTERPRETATION

Q1. Do you think that Performance Appraisal is essential for the employees of the
company?

a) Fully
b) Partially
c) Not at all

Graph1. Performance Appraisal is essential

Not at all
Partially 0%
20%

Fully
Partially
Not at all

Fully
80%
Analysis and Interpretation:

It shows 80% of the employees agree that performance appraisal is essential for the
employees of the company and 20% of the employees partially agree.

Currently annual appraisal system in Dabur India Limited is carried out for the employees
at executive levels and above only. The target set may be reviewed quarterly so that
strengths and weaknesses, if any, can be assesses and remedial measures suggested
accordingly.

Q2: Performance appraisal has been described as the responsibility, which is not liked
by the superiors. Do you think so?
a) Yes
b) Partially
c) Not at all

Graph2: Perfromance Appraisal is described as

responsibility

Not at all
Yes
27%
27%

Yes
Partially
Not at all

Partially
46%
Analysis and Interpretation:

46% executives say that they consider performance appraisal as the responsibility they
liked the least. 27% executives agree that it is a responsibility not liked by them and
remaining 27% denies about any such probability.

Considerable amount of time is spent for getting the appraisals done as per the existing
system. The company should improve the existing system by designing and
implementing departmental performance review system on a quarterly basis.

Q3: Do you agree that self-appraisal prior to performance appraisal facilitates you to
get high ratings?
a) Completely
b) Partially
c) Not at all

Graph3: Self appraisal prior to perfromance appraisal

facilitates to get high ratings.

Completely
Not at all
27%
27%

Completely
Partially
Not at all

Partially
46%

*
 Analysis and Interpretation:

45.5% of the employees say partially self-appraisal facilitates to get high ratings, 27.3%
employees agree completely and other 27.2% say self-appraisal does not help in high
ratings in performance appraisal.

Many FMCG companies (eg. Britannia) have implemented the self-appraisal system.
This has proved helpful in identifying the needs for in-house group
discussions/counseling methods/training and development programs.

Q4: Does your supervisor give you effective feedback on a regular basis?
a) Yes
b) Depends on the employees
c) Not at all

Graph4: Does superior gives effective feedback on regular

basis

100
90
Yes
80
70 Depends on the
60 employees
Percentage 50 Not at all
40
30
20
10
0
Yes Depends on the Not at all
employees
 Analysis and Interpretation:

It is clear in the graph that 100% of the employees say that the superior gives them
effective feedback on a regular basis.

Any company should give feedback to the employees periodically. They can also extend
proper diagnostic tips/ counseling methods at the required level.

Q5: Do you think that performance appraisal is the tool that improves employees’
performance level?
a) To a great extent
b) To some extent
c) Not at all

Graph5: Performance appraisal improves employees

perfromance level

Not at all
To some extent
8%
18%

To some extent
To a great extent
Not at all

To a great extent
74%
Analysis and Interpretation:

The graph shows 74% employees agree that up to a great extent, 18% say that to some
extent and 8% of the employees believe performance appraisal not at all improves
performance appraisal.
Currently the company’s existing appraisal system is on annual basis. This may be
reviewed on a quarterly basis, which will help in assessing the strengths and weaknesses
of executives and role modifications can be suggested accordingly.

Q6: Are you capable of achieving goals set for you?

a) Consistently
b) Occasionally
c) Never

Graph6: Capability of attaining the set goals

100%
90%
80%
70%
60%
50%
40% Consistently

30% Occassionally
Never
20%
10%
0%
Consistently Occassionally Never
Opinion of employees
 Analysis and Interpretation:

The graph shows 100% of the employees are consistently capable of attaining their set
goals.

The target achieved by the employees may be vis-à-vis the target achieved last year. The
company should endorse proper diagnostic mapping for role modifications/ training and
development needs.

Q7: To what extent is the Dabur India Limited making progress towards its mission
and goals?
a) To a great extent
b) To some extent
c) No opinion

Graph7: Dabur India Limited making progress

towards its mission and goals

No opinion
To some extent
0%
18%

To some extent
To a great extent
No opinion

To a great extent
82%
Analysis and Interpretation:

In this graph 82% of the employees say that Dabur India Limited is making progress
towards its mission and goals to a great extent and 18% employees say that only to some
extent company is making progress towards mission and goals.

For the further progress of company’s mission and goals organizational planning and
development department should be involved for quarterly analysis of the feedback
received.

Q8: Do you get merit raise when the performance evaluation indicates that you are
meeting the set standard on the job?
a) To a great extent
b) To some extent
c) Not at all

Graph8. Merit raise when the employees meet the

standard

Not at all
10%

To some extent
20% To a great extent
To some extent
Not at all
To a great
extent
70%

Analysis and Interpretation:

 70% of the employees say up to a great extent they get merit raise, 20% employees say
that up to some extent they get merit raise and minority of 10% employees agree they do
not get any merit raise.

Apart from the merits awarded based on the performance indicators, HR should introduce
system for proper recognition rewards to such employees.

Q9: Do your co-workers and superiors help you to cope up with your poor
performance?
a) To a great extent
b) To some extent
c) Not at all

Graph 9: Support of co-workers and superiors

Not at all
0%

To some extent
To some extent
47%
To a great extent To a great extent
53% Not at all

Analysis and Interpretation:

 The graph shows 53% of the employees say up to great extent their co-workers and
superiors help them to cope up with their poor performance and 47% say to some extent.

Dabur India Limited can also concentrate on designing and implementing proper in-house
counseling program through group discussions/ personal interaction.

Q10: In your opinion to what extent are the superiors responsible for the progress of
Dabur India Limited?
a) To a great extent
b) To some extent
c) Not at all

Graph10: Superiors responsible for the progress of Dabur

India Limited

To some extent
Not at all 28%
35%

To some extent
To a great extent
Not at all

To a great extent
37%

Analysis and Interpretation:

The graph shows 37% of the employees believe to a great extent superiors are responsible
for the progress, 28% are responsible to some extent and 35% say the superiors are not at
all responsible for the progress of the company.
For the progress of the company the performance appraisal of the top-level management
are also to be carried on a quarterly basis. Competency skills are to be assessed and
effective role modification areas are to be suggested.
10.1 QUESTIONNAIRE ON PERFORMANCE APPRAISAL

Name:
Age:
Gender:
Qualification:
Experience:
Department:

Q1: Do you think that Performance Appraisal is essential for the employees of
the company?
a) Fully
b) Partially
c) Not at all

Q2: Performance appraisal has been described as the responsibility, which is

not liked by the superiors. Do you think so?
a) Yes
b) Partially
c) Not at all

Q3: Do you agree that self-appraisal prior to performance appraisal facilitates

you to get high ratings
a) Completely
b) Partially
c) Not at all

Q4: Does your supervisor give you effective feedback on a regular basis?
a) Yes
b) Depend on the employees
c) Not at all
Q5: Do you think that performance appraisal is the tool that improves
employees’ performance level?
a) To a great extent
b) To some extent
c) Not at all

Q6: Are you capable of achieving the goals set for you?
a) Consistently
b) Occasionally
c) Never

Q7: To what extent is the Dabur India Limited making progress towards its
mission and goals?
a) To a great extent
b) To some extent
c) No opinion

Q8: Do you get merit raise when the performance evaluation indicates that you
are meeting the set standard on the job?
a) To a great extent
b) To some extent
c) Not at all

Q9: Do your co-workers and superiors help you to cope up from your poor
performance?
a) To a great extent
b) To some extent
c) Not at all
Q10: In your opinion to what extent the superiors responsible for the progress of
Dabur India Limited?
a) To a great extent
b) To some extent
c) Not at all
 11. SUMMARY OF FINDING

• Presently, Dabur India Limited is following annual appraisal system for

employees at the executive and the above level only. The target may be reviewed on a
quarterly basis.

• Time is a crucial factor. Company can delegate the responsibility to employees by

designing and implementing performance review system on a quarterly basis.

• The self-appraisal system is widely adopted by other FMCG companies, which is

helpful in identifying need for in-house group discussions/ counseling methods.

• Superiors should give feedback to employees periodically. They can also provide
proper diagnostic tips/ counseling methods at required level.

• Dabur has an existing system on annual basis. They can review on quarterly basis.

• Dabur India Limited can endorse proper diagnostic mapping for role
modifications/ training and development needs.

• Company can also involve organizational planning and development department

to achieve its mission and goals.

• For the merit raise, HR should introduce system for proper recognition rewards to
such employees.

• Company should mainly concentrate on in-house counseling program through

group discussions/ personal interaction for the better performance of employees.

• Competency skills should be assessed and effective role modification areas can be
suggested for the better progress of the company.
 12. RECOMMENDATION

• In order to have a better liaison within the co-workers and their superiors the
company should have a well-planned communication system and employees’ views
should be taken into consideration.

• While working under pressure the employees performance is affected so it

becomes necessary that the management should try to analyze the strengths and
weaknesses of the employees.

• Teamwork should be assigned to employees, which will be helpful in establishing

leadership qualities and also becoming aware of other’s problems.

• Employees should be given proper training and development programs to learn

new concepts and technologies as to expand their capabilities, knowledge, skills etc.
 13. CONCLUSION

In the new millennium when the corporate world is designing newer techniques for
developing employees and retaining them, Dabur India Limited is no way behind and the
organizational structure is such that people works hand in hand to align the organizational
goals with the individuals’ goals.

Evaluation of employees’ performance is helpful as to strengthen the employees’

productivity, their promotion, transfer, training and development needs etc. The
organization has implemented the evaluation process not only to evaluate the
performance of employees but also for their increment and promotion. The company
follows a transparent performance appraisal system with no personal bias because it is
wholly based on individuals’ contribution towards the organization. But there are some
loopholes in the system that should be analyzed and corrective measures should be taken.

To sum it up, this project has provided me with opportunities to learn different areas of
the HR function and has given me stepping-stones to climb up to reach the summit of HR
at the end of my career.
 14. BIBLIOGRAPHY

For the purpose of this study, some broad sources of literature were referred to:
• Textbooks
i) Human Resource and Personnel Management- By K.Ashwathappa
ii) The essence of Human Resource Management- By Eugene Mc Kenna
iii) Organizational Theory- By Gareth Jones
iv) Organizational Behavior- By Stephen Robbins

• Magazines and Newspapers

i) The Economic Times
ii) The Week

• Internet Portals
 www.dabur.com
 www.google.com
 www.humanresourcesmagazine.com.au
 Intranet of Dabur