This action might not be possible to undo. Are you sure you want to continue?
ON “PERFORMANCE APPRAISAL SYSTEM” At
SUBMITTED FOR THE PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF MASTER’S IN BUSINESS ADMINISTRATION
SUPERVISOR: Mr. AJAI GERA ASSOCIATE MANAGER
SUBMITTED BY: SHRADDHA ROY ROLL NO-5053606036
2007 DEPARTMENT OF MANAGEMENT STUDIES
DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY
I, Shraddha Roy student of MBA 2nd semester in department of management studies, Disha Institute of Management And Technology hereby declare that the project report entitled “Performance Appraisal System with reference to BALCO” is my own work and the matter enclosed has not been submitted for the award of any other degree or diploma in the university or anywhere and is conducted under the supervision of Mr. Ajai Gera (Associate Manager, HR) Balco, Korba. I hereby declare that all the data and information which this project contains is true as per my knowledge. During preparation of the project I was honest about the rules and regulation of Balco and Business ethics. And I think no data of my project harms any reader of my project directly or indirectly.
DATE: PLACE: Raipur
SHRADDHA ROY MBA 2nd SEMESTER
The personnel or human resource of an organization are its most important and valuable assets. Therefore, the management of this resource becomes fundamental to all administrative activities and within the management of resources, performance appraisal occupies a significant niche and the subject matter of this study is Performance Appraisal. Despites this phenomenal progress made in the area of Human Resource Management, the functional and process of performance appraisal continues to remain as major challenges, facing managers everywhere today and in the foreseeable future too. The personnel function in developing countries such as India has several distinct traits. It cannot be compared with the personnel function of advance countries or with that of under-developed countries though it has certain similarities with both. The element that causes these differences is size, ownership pattern, and style of management, government legislation and the socio-culture milieu prevailing in India. It is also necessary to point out that there is no uniformity in the formulation and practice of personnel policies in the country. These variations are caused by some of the factors indicated above as well as by the difference in each organization’s philosophy and approach to its human resources. An attempt has been made to systematically analyze and present relevant research data. The changes that are taking place in existing or traditional personnel functions or practices are due to the increased importance being given to functions, such as selection or training, by organizations wanting to identify and utilize human resources as efficiently as possible. There is now an increasing concern for productivity and better utilization of human resources at the plant level in an increasingly competitive environment. These changes that are more towards expanding the role of the personnel function could also be, to some extent, attributed to behavioral science research into the understanding of human behavior at the work place.
At the brink of achievement of fruits and the endeavors, I am of at a loss of words in expressing the deep regards my heart feels for all those in the world who ought to share the fruits if these accomplishment for their precious contribution. I would like to express my gratitude towards all those who have contributed to this project by providing guidance and information to me. Without their help I would not been able to complete this project. I could not have worked out the idea into reality and lots of hands have helped me to accomplish this work and hence I would like to acknowledge them. I take this opportunity as my privilege to express my deep gratitude to Mr. Ajai Gera (Associate Manager- HR) for his guidance, providing constructive suggestions and devoting his precious time from his busy schedule to my project. My acknowledgement shall remain unfulfilled without paying my regards to my teachers whose teachings helped me at each stage of the project. I am also thankful to my parents for their favorable support and encouragement.
Page No. Chapter -1 Introduction 1.1 Conceptual Framework
1-27 28-42 43-44 45-48
Introduction to BALCO Performance Appraisal System In BALCO Research methodology Statement of the problem Purpose of study Objectives Universe Sample size Sample unit Source of data Sampling Method Data collection tools Questionnaire Statistical technique
Chapter -2 Chapter -3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 Chapter -4 Chapter -5
Data analysis and interpretation Findings Suggestions Limitations
People generally come to work to do a good job. What stands in their way? There are a variety of issues. An organization owes itself the ability to get as much from the minds of its people as it possibly can. Developing an employee and providing a path that leads to higher performance and individual development is often the difference between organizational success or failure. Doing that in a way that is in alignment with the organization’s goals is “How” this can be accomplished. In today’s fast changing world employee appraisal and how to enhancing the Performance of employee is one of the most important issue faced by the Human Resource Development in analyzing and evaluating its employees as well as to retain them. It also gives the employees a chance to look back on what they have been doing. This project is based on enhancing employee performance through constructive appraisal system and thus providing developmental programs. It goes in depth into what Performance appraisal system is, what it stands for and what its impact on employee performance. It tries to explain the advantages and effectiveness of using two way appraisal system in the BALCO. It contains different types of approaches that can be used in different set of conditions. The project also tries to throw light on how theory can be put to practice. The employees who seek development may also seek opportunity. It is easier for them to help grow within their own organization that it is for them to switch organizations and
start new. Given development and room to grow, most employees will repay the investment through their loyalty. Employee assessment serves multiple objectives. It is centrally linked to the motivation of employees. It provides some of the essential components of effective motivational strategies; in particular, feedback that permits an employee to learn how well he or she is performing; goal or objective-setting that specifies what the person should be doing; team building that allows the employee to participate along with peers and his superiors in solving problems that impede his productivity; and monetary incentives that reward good performance. And special concerned to its impact on career planning programmes of BALCO A visit to BHARAT ALUMINIUM COMPANY LIMITED, korba was of great help in my project. BALCO is one of the organizations that are using Self Performance Appraisal system in their organizations. Here I met Mr. Ajai gera, the associate Manager of establishment HR BALCO, who is one of the committee members of this multi-source feedback guideline system. He told me about the feedback system they are using in BALCO, why are they using Performance feedback, what were the programs for career planning of employees, and their development etc. Here the objective of this project is to analyze the effectiveness of current employee appraisal programme which includes employee career planning and employee development strategies adopted by the BALCO and finding out the loopholes in actual practice. The methodology adopted was first of all finding what planning made by organization in terms of employee appraisal and enhancing their performance. A structured questionnaire was prepared and certain GET’s and Executives were interviewed along with SBU Heads and HR professionals. Open questions were also asked to them in order to get their
feedback and suggestion. Sampling was done on the basis of availability and convenience. For the purpose a sample of 300 respondents were selected. In addition to this I also interviewed those employees leaving the organization in this period. Their response and suggestions were analyzed and consolidated to reach to the recommendations. The employee appraisal system in BALCO is up to the mark where as it compare to the other manufacturing sector. The compensation given to the employees is best in the industry and almost all employees are satisfied with that but the following area need more concern subjectivity in performance appraisal not satisfactory, training and development not adequate, no systematic job rotation, no mentoring system. In the interview conducted it was revealed Performance appraisal system should need improvement. Personal interview and 360° appraisal system should be introduced. Better career path for the talented employees is inadequate. There is no description and also there is existence of favoritism in the work place. If these concerns are properly taken care of, then the performance of employee is enhanced. BALCO should develop its employee career and develop them. Enhanced Compulsory job rotation should be introduced up to 25% of employee. Training evaluation should also be there. Role clarity must be brought in the organization by having Job description for each employee, having properly defined reporting relationship and clearly communicating the performance expectations.
CHAPTER ONE INTRODUCTION 1.1 CONCEPTUAL FRAMEWORK
Human Resource are today universally acknowledged as the most valuable assets in any organization, and it is largely due to this that enlightened management are increasingly searching and researching for newer and better techniques of personnel management and administration. Performance Appraisal has acquired a new dimension as a result of the HRD movement. Despites the increasing research done by behavioral scientists, man still remains a very complex person, capable at the same time, however, of extremely high performance levels given the proper environment and motivation. Rao defines HRD as a process that continuously helps the employees in a planned way to acquire and sharpen capabilities needed for present and future work, to help them discover their potential and to develop an organization culture where collaboration and teamwork are valued. Performance Appraisal plays a key role in achieving the objectives of HRD. It can be used for performance planning and culture building. Appraisal can help in identifying development areas and growth potential. It can also be used for performance reviews and counseling. Effective appraisals should help in identifying strength and weakness of employees so that subsequent training and development activities can be used to reinforce strengths and overcome the weaknesses of the employees. Hence the appraisal is not merely a tool to judge the performance of the employees in the previous year, but also an opportunity to tap their potential and discover mechanisms to bring that potential the surface. In simple terms, Performance Appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against
such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed. A formal definition of performance appraisal is: It is a systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development. A more comprehensive definition is: Performance Appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit. Formal appraisal of an individual’s performance began in the Wei dynasty (A.D. 221265) in China, where an Imperial Rater appraised the performance of members of the official family. A formal appraisal program has been perceived to be equally important in Indian business and industry, and a number of firms conduct it in one form or the other. In industry, performance appraisal is a systematic evaluation of personnel by superiors or others familiar with their performance because employers are interested in knowing about employee performance. Employees also wish to know their position in the organization. Appraisals are essential for making many administrative decissions: selection, training, promotion, transfer, wage and salary administration etc. Performance Appraisal thus is a systematic and objective way of judging the relative worth or ability of an employee in performing his tasks well and those who are not and the reason for such performance. In public enterprises, however, personnel management in the early years tends to follow the government procedures, but for the last two decades or so we see managements becoming increasingly aware of the necessity to professionalize personnel administration. The diversity of procedures and techniques for performance appraisal, ranging from much too prosaic too much too elaborate prevailing in the business and industrial establishments is positive staggering.
Evaluation of employees is one of the most universal practices of management. It is applied formally or informally to all employee-operatives, technical, professional and executive. Many companies use formal plans primarily in connection with operative employees. The success of formal plans of evaluation depends upon the case with which they are planned, operated and controlled.
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: 1. To effect promotions based on competence and performance. 2. To confirm the services of probationary employees upon completing the probationary period satisfactorily. 3. To assess the training and development needs of employees. 4. To decide upon a pay raise where (as in the unorganized sector) regular pay scales have not been fixed. 5. To let the employees know where they stand insofar as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development. 6. To improve communication. Performance Appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the rater and the ratee. 7. Finally, performance appraisal can be used to determine whether HR programmes such as selection, training, and transfers have been effective or not. Broadly, performance appraisal serves four objectives – (i). Developmental uses- Identification of individual needs. Performance feedback. Determining transfers and job assignments. Identification of individual’s strengths and developmental needs
(ii). Administrative uses/Decisions- Salary Promotion Retention or Termination Recognition of individual’s performance Lay-offs Identification of poor performers (iii) Organizational Maintenance/objectives- HR planning Determining organization training needs Evaluation of organizational goal achievement Information for goal identification Evaluation for HR system Reinforcement of organizational development needs. (iv) Documentation- Criteria for validation research Documentation for HR decisions Helping to meet legal requirements
Performance Appraisal and Competitive Advantage
The objective of performance appraisal, listed above, points out the purposes that such an exercise seeks to meet. What needs emphasis is that performance evaluation contributes to firm’s competitive strength. Besides encouraging high level of performance, the evaluation system helps identify employees with potential, reward performance equitably and determine employee’s need for training. Specifically, performance appraisal helps an organization gain competitive edge in the following way.
Improving Performance Strategy and Behaviour Making Correct Decisions Competitive Advantage Values and Behaviour
Ensuring Legal Compliance
Minimizing Dissatisfaction and Turnover
Improving Performance –
An effective appraisal system can contribute to competitive advantage by improving employee job performance in two ways- by directing employee behavior towards organizational goal and by monitoring that behavior to ensure that the goals are met. Making Correct Decisions – Appraisal is a critical input in making correct decisions on such issues as pay raise, promotion, transfer, training, discharges and completion of probationary periods. Right decisions on each of these can contribute to competitive strength of an organization. If promotion is made on performance, the promote feels motivated to enhance his or her performance. Ensuring Legal CompliancePromotion made on factors other than performance might land up a firm in a legal battle, thus diverting its focus on non-productive areas. Organizations can minimize costly performance –related litigation by using appraisal systems that give fair and accurate ratings. Minimizing Job Dissatisfaction and Turnover – Employees tend to become emotional and frustrated if they perceived that the ratings they get are unfair and inaccurate. Such employees find that the efforts they had put in became futile and obviously get demotivated. Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction is increased turnover. Fair and accurate appraisal results in high motivation and increased job satisfaction. An organization having satisfied and motivated employees will have an edge over its competitors.
Consistency Between Organizational Strategy and Behavior –
An organization needs a strategy consistent with the behavior of its employees if it were to realize its goals. A truism of organizational life is that people engage themselves in behaviors that they perceive will be rewarded. As employees want to be rewarded, they tend to occupy themselves more with those activities on which the organization emphasizes. The performance appraisal becomes not only a means of knowing if the employees behavior is consistent with the overall strategic focus, but also a way of bringing to the fore any negative consequence of the strategy-behavior fit. Thus, the performance appraisal is an important organizational mechanism to elicit feedback on the strategy- behavior link. Organizational Strategy and Performance AppraisalThe performance appraisal system serves many organizational objectives and goals. Besides encouraging high level of performance, the evaluation system is useful in identifying employees with potential, rewarding performance equitably, and determining the employees need for development. These are all the activities that should support the organizations strategic orientation.
Each step in the process is crucial and is arranged logically. The process as shown in figure is some what idealized. Many organizations make every effort to approximate the ideal process, resulting in first-rate appraisal systems. Unfortunately, many other fails to consider one or more of the steps and, therefore, have less effective appraisal system.
Objectives of Performance Appraisal
Establish Job Expectations Design an Appraisal Program
Use Appraisal Data For Appropriate Purpose The Performance Appraisal Process 1. Objectives of Appraisal – Objectives of appraisal includes effective
promotions and transfers, assessing training needs, awarding pay increases, and the like. The emphasis in all these is to correct the problems. These objectives are appropriate as long as the approach in appraisal is individual. Appraisal, in future, would assume system orientation. In the system approach, the objective of appraisal stretch beyond the traditional ones. In the system approach, appraisal aims at improving the performance, instead of merely assessing it. Towards this end, appraisal system seeks to evaluate opportunity factors. Opportunity factors include the physical environment such as noise, ventilation and lightings, available resources such as human and computer assistance; and social
processes such as leadership effectiveness. These opportunity variables are more important than individual abilities in determining work performance. In the system approach, the emphasis is not on individual assessment and rewards or punishments. But it is on how the work system affects an individual’s performance. In order to use a systems approach, managers must learn to appreciate the impact that the system level factors have on individual performance, and subordinates must adjust to the lack of competition among individuals. Thus, if a systems approach is going to be successful, the employee must believe that by working towards shared goals, everyone will benefit. 2. Establish Job Expectations – The second step in the appraisal process is
to establish job expectations. This includes forming the employees what is expected of him or her on the job. Normally, a discussion is held with his or her superior to review the major duties contained in the job description. Individuals should not be expected to begin the job until they understand what is expected from them. 3. Design Appraisal Programme – Designing an appraisal programme
poses several questiones, which need answers. They are, (i) Formal versus informal appraisal; (ii) Whose performance is to be assessed? (iii) Who are the raters? (iv) What problem are encountered? (v) How to solve the problems? (vi)What should be evaluated? (vii) When to evaluate? (viii) What methods of appraisal are to be used? 4. Appraisal the performance – The next step in the appraisal is to measure
the performance. We revert to the moral of the story narrated in the beginning of this chapter. The moral taught us that we need to measure the performance and not mere activities. What then is performance? Performance is essentially what an employee does or does not do. Employee performance common to most jobs include the following elements: • Quantity of output
• • • •
Quality of output Timeliness of output Presence at work Cooperativeness.
In addition to these, other elements that deserve assessment, as told in the beginning of this chapter, are job knowledge, leadership abilities, judgment; supervision, versatility and health assessment should also include one’s potential to performance and not just actual performance. Performance measurement needs to be based on the benchmarks listed above. These benchmarks vary from job to job. The job of a professor needs to be assessed against parameters that are different to those used to evaluate the performance of a sales representative. 5. Performance Interview -Performance interview is another step in the appraisal process. Once appraisal has been made of employees, the raters should discuss and review the performance with the ratees, so that they will receive feedback about where they stand in the eyes of superiors. Feedback is necessary to effect improvement in performance, especially when it is inadequate. Specifically, performance interview has three goals: (i) to change behavior of employees whose performance does not meet organizational requirements or their own personal goals, (ii) To maintain the behavior of employees who perform in an acceptable manner, and (iii) To recognize performance behaviors so that they will be continued. Raters offer feedback to the ratees through several methods – tell and sell, tell and listen, problem solving and mixed. In tell and sell, also called directive interview, the interviewer lets assesses know how well they are doing and sell them on the merits of setting specific goals for improvement, if needed. They tell and listen interview provides the subordinates with chances to participate and establish a dialogue with their superiors. Its purpose is to communicates the rater’s perceptions about the ratee’s strength and weaknesses and let the subordinates respond to those perceptions. In the problem-solving or participative interview, an active and open dialogue is established between the superior
and the subordinate. Not only are perceptions shared, but also solutions to problems are presented, discussed, and sought. Mixed interview is a combination of tell and sell and problem-solving interviews. Whatever be the approach followed, the emphasis in the interview should be on counseling and development and not on critism, witch-hunting and buck passing. Because of the significance of appraisal interview, every effort must be made to make it effective. Guidelines given in the table will help make the interview successful. Guidelines for Effective Appraisal Interview • • • • • • • • • • • • • • • Select a good time Minimize interruptions Welcome, set at ease Start with something positive Ask open-ended questions to encourage discussion Listen Manage eye contact and body language Be specific Rate behavior, not personality Layout development plan Encourage subordinate participations Complete form Set mutually agreeable goals for improvement End in a positive, encouraging note Set time for any follow-up meetings
6. Use of Appraisal Data The final step in the evaluation process is the use of evaluation data. The data and information generated through performance evaluation must be used by the HR department. It may be recollected that the most significant rewards employers offer to employees are: 1. Money to purchase goods and services required not only for current and future survival, but also for the luxuries modern life has to offer. 2. Te opportunity to use innate and learned skills and talents in a productive manner that the individual and his or her managers and co-workers recognize as valuable. 3. Opportunities to interact with other people in a favorable working environment. 4. Opportunities to learn, grow, and make full use of their potential. 5. A sense of performance and stability through the continuing existence of the organization and the job. 6. The opportunity to perform work assignments within an environment that not only protects, but promotes physiological, emotional and psychological health. In one way or another, data and information outputs of a performance-appraisal programme can critically influence these coveted employer-employee reward opportunities. Specifically, the data and information will be useful in the following areas of HRM: 1. Remuneration administration 2. Validation of selection programmes 3. Employee training and development programmes 4. Promotion, transfer and lay-off decisions 5. Grievance and discipline programmes 6. HR planning.
Problem of criterion
Differentiating between individuals is easy provided one knows what aspects to take into account. A very broad definition of criterion is “that refers to the evaluative standards
which measures a person’s performance, attitudes, etc.” At the lower levels of an organization, there are specific jobs, and certain tangible and objective standards of performance can be identified. Further up in the hierarchy, jobs become more complex and clear-cut, tangible standards of performance are difficult to specify. Irrespective of the level, by and large, most companies use eleven performance measures : quantity of work, quality of work, waste and breakage, money earned, job knowledge, job tenure, absenteeism, rate of advancement, self-judgment by supervisors. These measures can be classified into three broad categories: 1. Personal Data 2. Production Data 3. Judgmental Data Personal Data: This includes personal history, number of times one has been absent, number of grievances, accidents, breakage, etc., all of which are often used to differentiate between good and bad performers, they studied what personal variables made them “good” or “bad” performers. However, there is little evidence to suggest that personal data can predict job performance. It is extremely risky to use personal data as an indicator of performance. In fact, several studies suggest that the relationship between personal data measures and production measures is often very often very low. Thus, if these factors are used to define job success they should be considered relevant criteria in their own right, rather than simple substitutes for more direct measures of job productivity. Production Data: Rate and quality of work, and money earned, are direct measures of performance. These can range from units produced per hour to money earned or lost. Production data are useful for evaluating the performance of people only in some jobs and at some levels. Staff jobs vis-à-vis line jobs, higher level jobs vis-à-vis lower level ones, and performance in service organizations vis-à-vis production or engineering organizations are difficult to evaluate, if production is the only thing to be considered .
Despites the fact that clear-cut output measures are available for some jobs; production data are not the most frequently used measure of performance. They have been used less extensively that can be expected. Initial studies on production as a measure of performance suggest that the time period between measures can make a substantial difference to the accuracy of the data. To get correct pictures of production and output, several samples over a number of time periods should be taken. Judgmental Data: These include self-judgment, judgment by peers and superiors, and sometimes knowledge of the job. It is one of the most commonly used indicators of performance, and probably the one most loaded with errors and problems. Most of the problems arise because it is based on subjective assessment either by the individual, or by another individual for him. It is almost impossible to objectify subjective judgments. Merely giving two persons an answer to an essay test, and examining the reason for their evaluation can gauge the difficulty of using this indicator.
Performance Appraisal Methods:
1. Confidential Report: This is the traditional way of appraising employee performance. A confidential report by the immediate supervisor is still a major determinant of the subordinate’s promotion or transfer. The supervisor writes about a paragraph on his subordinate’s strengths, weaknesses, intelligence, attitude to work, attendance, conduct and character, work efficiency, etc. The format and pattern of the report varies with each supervisor. Form-1 and Form-2 gives examples of both unstructured and structured confidential report simply asks supervisors to estimate personal qualities and capabilities-particularly reliability, judgment, adaptability, etc. The superior is free to combine them in assessing the performance of the employee. The sample in form-2 gives 15 traits and characteristics and is so structured that the supervisor can give his comments on each one of them specifically and separately. The latter type of confidential
report generates more data and information, in well-defined categories, then does the former variety. 2. Rating Scales: Merit rating or appraisal of the performance is an important tool in the hands of superiors to assess their subordinates. It is a systematic evaluation of an employee by some other qualified person who is familiar with the employee’s performance. These methods assess the degree of certain qualities required for the job such as industriousness, reliability and dependability. The degree is usually measured on a scale, which can vary from 3 points (good, average, and poor) to several points. This appraisal form defines not only traits and characteristics, but also scales positions. To some extent, it overcomes the abstractness of numerical scales. Common limitations of improperly designed merit rating system are: - it is just a record of opinion - there are zones of uncertainty - rating seldom tells the whole story - rating depends on raters ability and personal bias. 3. Ranking System: One of the disadvantages of the rating system is that it permits similar total scores for two or more individuals. The ranking system obviates this problem. The rater simply ranks employees in order of merit, which determines the employee’s ratings. Ranking can be determined either by looking at the total individual and then ranking him in relation to others; or by first identifying several relevant traits, ranking employees separately on each of these traits, and then cumulating these trait rankings to arrive at the final employee ranking. The ranking system is simple, natural and useful when the number of employee evaluated by the same superior is small. Two disadvantages of the ranking system are:
1. It is difficult to rank employees apart from and between the top and bottom extremes; finer judgment has to be exercised here, which increases chance of errors. 2. The task of ranking individuals is difficult when there are over 20 or 25 cases. 2. Paired comparison method: It is much simpler; requiring the rater to judge which of the two workers is superior, instead of having to arrange members of a large group of workers in order of excellence. It makes the rater compare one employee systematically with the others individually. The supervisor is provided with a bunch of slips each containing a pair of names. The rater puts a tick mark against the individual whom he considers the better of the two. The maximum number of pairs is indicated by the formula N(N-1)/2 , where N=total number of this method is that in a permutations and combinations increases, requiring more time from the evaluator. One disadvantage of this method is the number of permutations and combinations increases, requiring more time from the evaluator. 3. Forced Choice Method: The forced choice rating forms contains a series of groups of statements and the rater checks how effectively the statements describes each individual being evaluated. The rater is required to choose from several sets of adjectives or phrases, which best characterize the officer and which are most descriptive. This is also sometimes called a check list statement. The forced choice method attempts to make performance evaluation more objective. 4. Critical Incident Method: This involves three steps: A list of noteworthy (good or bad) on-the-job behavior, usually of specific instances, is first prepared. A group of experts then assign scale values to them. A group of experts then assign scale values to them, depending upon the degree of desirability for the job. The third step is constructing a checklist that includes incidents that define “good” and
“bad” workers. Subsequently, superiors use these list for evaluating the worker. This method has to identify key areas in which employees are weak or strong. It emphases rating on objective evidence rather on the subjective evolution of trades. Finally, the supervisor finds counseling easier since he knows his subordinates weakness. 5. Forced distribution method: In this the rater is forced to distribute his subordinates into performance categories such as outstanding, good, poor, etc. the rater distribute his subordinate his subordinates on scale locations which can be top 10 percent to bottom 10 percent, or any variation of percentages with values in between. The most often used distribution is 10, 20, 40, 20, 10 percent, which equates with a normal distribution. This method is useful for rating a large no.of employee.
Problems in Performance Appraisal:
None of the methods for appraising performance is absolutely valid or reliable. Those appraisal methods involve judgments of one kind or the other. The error of “central tendency” and the error of leniency are inherent in the process. The central tendency error refers to the tendency of not using extreme scale scores on the judgment scales; most of the rates are clustered in the middle. Errors of leniency are caused by the tendency of the lenient rates to put most of the ratees on the higher sides of the scale, while the tough rater places them on the lower side of the scale. Another problem is the “halo effect” or the tendency to allow the assessment on one trait to influence assessment on others. This arises when traits are unfamiliar, ill defined, and involves personal reaction. Another source of errors in performance evaluation is criterion contamination and bias because of variety of circumstances and functions beyond the control of the rater and the ratee. These are critical biases, and must be taken into account to make appraisals as objective as possible. Blum and nylon discuss the source of bias:
Opportunity bias: This results when the amount of output is influenced by factors beyond the control of employees. Some employees have better working conditions, supportive supervisors, more experienced co-workers, and hence their output may be greater than those others working on identical tasks. Group characteristics bias: The characteristics of an individual’s group make a dent in his performance. Cohesive group with high morale can produce more than less cohesive groups. Since the individual’s performance is greatly determined by the group’s definition of a fair day’s work, this factor must be kept in mind while evaluating the individual employee’s performance. Knowledge of predictor bias: A rater’s knowledge of the performance of an employee on predictors can influence his appraisal rating. An employee who topped in the selection list might leave the impression that he is the best among the employees, and hence may railroad the rater to better evaluation despite a moderate performance. The rater should never be permitted to have access to the employee’s solutions data. Bias in rating: The rater’s own biases and competence in rating can influence the objective of performance appraisals. The halo effect, rater’s training, central tendency errors, etc are examples of this “contamination”. Although all appraisal methods are subject to validity and reliability tests there is very little evidence on these two counts. Since most appraisal methods involve personal judgment, it is difficult to ascertain their reliability and validity. Group appraisal methods and rating by multiple judges are some techniques, which can make evaluations reliable and valid. However there success is highly debatable.
Are Performance Appraisals Still Beneficial And Appropriate?
It is sometimes fashionable in the ‘modern age’ to dismiss traditional processes such as performance appraisals being irrelevant or unhelpful. Be very wary however if
considering removing appraisals from your own organizational practices. It is likely that the critics of the appraisal process are the people who can’t conduct them very well. It’s a common human response to want to jettison something that one finds difficult. Appraisals – in whatever form, and there are various – have been a mainstay of management for decades, for good reasons. Think about everything that performance appraisals can achieve and contribute to when they are properly managed. • • • • • • • • • • • • • • • • Performance measurement- transparent, short, medium and long term Clarifying, defining, redefining priorities and objectives Motivation through agreeing helpful aims and targets Motivation through achievement and feedback Training needs and learning desires – assessment and agreement Identification of personal strengths and direction – including unused hidden strengths Career and succession planning – personal and organizational Team roles clarification and team building Organisational training needs assessment and analysis Appraisee and manager mutual awareness, understanding and relationship Resolving confusions and misunderstandings Reinforcing and cascading organizational philosophies, values, aims, strategies, priorities, etc Delegation, additional responsibilities, employee growth and development Counseling and feedback Manager development – all good manager should be able to conduct appraisals well – it’s a fundamental process The list goes on… People have less and less face-to-face time together these days. Performance appraisals offer a way to protect and manage these valuable face-to-face opportunities. My advice is to hold on to and nurture these situations, and if you are under pressure to replace
performance appraisals with some sort of (apparently) more efficient and cost effective method, be very sure that you can safely cover all the aspects of performance and attitudinal development that a well-run performance appraisals system is naturally designed to achieve. There are various ways of conducting performance appraisals, and ideas change overtime as to what are the most effective appraisals methods and systems. Some people advocate traditional appraisals and forms; other prefer 360 degree type appraisals. In fact performance appraisals of all types are effective if they are conducted properly, and better still if the appraisal process is clearly explained to, agreed by, the people involved.
Purpose of Performance Appraisal and How to make it easier
Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed into business planning. Formal performance appraisals are generally conducted annually for all staff in the organization. Staff members are appraised by their line manager. Directors are appraised by the CEO, who is appraised by the chairman or company owners, depending on the size and structure of the organization. Annual performance appraisals enable management and monitoring of standards, agreeing expectations and objectives and delegation of responsibilities and tasks. Staff performance appraisals also establish individual training needs and unable organizational training needs analysis and planning. Performance appraisals also typically feed into organizational annual pay and grading reviews, which commonly also coincides with the business planning for the next trading year. Performance appraisals generally review each individual’s performance against objectives and standards for the trading year, agreed at the previous appraisal meeting. Performance appraisals are also essential for career and succession planning for individuals, crucial jobs, and for the organization as a whole.
Performance appraisals are also important for staff motivation, attitude and behavior development, communicating and aligning individual and organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual’s performance, and a plan for the future development. Job performance appraisals- in whatever form they take- are therefore vital for managing the performance of people and organizations. Managers and appraisees commonly dislike appraisals and try to avoid them. To these people the appraisal is daunting and time consuming. The process is seen as a difficult administrative chore and emotionally challenging. The annual appraisal is maybe the only time since last year that the two people have sat down together for a meaningful one to one discussion. No wonders then that appraisal are stressful- which then defeats the whole purpose. There lies the main problem and the remedy. Appraisals are much easier, and especially more relaxed, if the boss meets each of the team members individually and regularly for one-to-one discussion throughout the year. Meaningful regular discussion about work, career, aims, progress, development, hopes and dreams, life, common interests, etc., whatever, makes appraisals so much easier because people then know and trust each other which reduces all the stress and the uncertainty. Put off discussions and of course they loom very large. So don’t wait for the annual appraisal to sit down and talk. The boss or the appraisee can investigate this. If you are an employee with a shy boss, then take the lead. If you are a boss who rarely sits down and talks with the people – or whose people are not used to talking with their boss- then set about relaxing the atmosphere and improving relationships. Appraisals (and work) all tend to be easier when people communucate well and know each other.
So sit down together and talk as often as you can, and then when the actual formal appraisals are due everyone will find the whole process to be far more natural, quick, and easy – and a lot more productive too.
Challenges of Performance Appraisal
With the increase significance of performance appraisal, confronting the system is mounting. One serious challenge facing the performance appraisal system relates to assessment of self managed teams. Popularly called empowered teams, these selfmanaged teams create special challenges for performance appraisal- empowered teams performs without supervisors. Historically, if one recalls, it is the supervisor who assesses the performance of his or her subordinates. Another challenges is that both, individual and team performance, need to be measured. A suitable device needs to be enhancing productivity. Other challenges are: • • • • • • • • Creates a culture of excellence that inspires every employee to improve and lend himself or herself to be assessed Align organizational objectives to individual aspirations Clear growth paths for talented individuals Provide new challenges to rejuvenate careers that have reached the plateau stage Forge a partnership with people for managing their careers Empower employees to make decisions without the fear of failing Embed teamwork in all operational processes Debureaucratise the organization structure for ease for flow of information.
Appraisals, Social Responsibility and the Whole Person Development
There is increasingly a need for performance appraisals of staff and especially managers, directors and the CEO’s, to include accountabilities relating to corporate responsibility, represented by various converging corporate responsibility concept including: the ‘Triple Bottom Line’ (‘profit people planet’); corporate social responsibility (CSR);
Sustainability; corporate integrity and ethics; Fair Trade, etc. The organization must decide the extent to which this accountability is reflected in job responsibilities; which would then naturally feature accordingly in performance appraisals. More about this aspect of responsibility is in the director’s job descriptions section. Significantly also, while this appraisal outline is necessarily a formal structure this does not mean that the development discussed with the appraisee must be formal and constrained. In fact the opposite applies. Appraisals must address ‘whole person’ development – not just job skills or the skills required for the next promotion. Appraisals must not discriminate against anyone on the grounds of age, gender, sexual orientation, race, religion, disability, etc. It is particularly important to avoid any comments, judgments, suggestions, questions or decisions that might be perceived by the appraisee to be based on age. Age along with the other characteristics stated above, is not a lawful basis for assessing and managing people, unless proper ‘objective justification’ can be proven. When designing or planning and conducting appraisals, seek to help the ‘whole-person’ to grow in whatever direction they want, not just to identify obviously relevant work skills training. Increasingly, the best employers recognize that growing the ‘whole person’ promotes positive attitudes, advancement, motivation, and also develops lots of new skills that can be surprisingly relevant to working productively and effectively in any sort of organization. Developing the whole person is also an important aspect of modern corporate responsibility, and separately, whole person development is a crucial advantage in the employment market, in which all employers compete to attract the best recruits, and to retain the best staff. Therefore in appraisals, be creative and imaginative in discussing, discovering and agreeing ‘whole person’ development that people will respond to, beyond the usual job skill-set, and incorporate this sort of development into the appraisal process.
What factors make Performance Appraisal legally defensible?
One reason companies use performance appraisals is to have some legally defensible means of making employment and job decisions that will Discourage frivolous law suits in the first place, or (A) Ensure the company is likely to win a court decision if the law suits goes to court. Performance appraisals can provide some protection provided they are done properly. If they are not done properly, then they become weapons for the other side in court cases, particularly in the areas of discrimination accusations and EEOC complaints. Keeping in mind that it is always the courts that decide, and they decide on the merits of a particular case, and that this should not be construed as legal advice, what are the characteristics of performance appraisal systems that are legally defensible? • • • • • • Employees are involved in establishing performance standards for their position Standards used are relevant to the essential elements of the job, and are clearly documented in writing Employees are informed of, understand, and sign off on critical job requirements and expectations before the appraisal The system should not be based on comparisons between employees The performance appraisal is done annually and documentation of performance discussions is done properly Employees are allowed and encouraged to add their comments and responses any performance appraisal documentation. Managers who do performance appraisals must be provided with training • Employees are informed of any performance reviews, and given an opportunity to advance of the formal performance reviews, and given an opportunity to rectify the problems.
Why Performance Appraisal fails is summarized as follows:
1. The supervisor plays the dual and conflicting role of both judge and helper. 2. Too many objectives often cause confusion. 3. The supervisor feels that subordinate appraisal is not personally rewarding. 4. A considerable time gap exists between two appraisal programs. 5. The skills required for daily administration and employee development are in conflict. 6. Poor communication keeps employees unaware about what is expected from them. 7. There is a difference of opinion between the expectations of a supervisor and a subordinate, reflecting the latter’s performance. Some other studies found: 1. Greater variation between raters than between ratees. 2. Feedback on appraisal is generally unpleasant for both supervisor and subordinates. 3. Very few supervisors possess the tact and insight to tell employees constructively how to improve their performance. The observations imply that supervisors in appraising their subordinates, and that pay little attention is paid by supervisors in appraising their subordinates, and that a gulf exists between decisions and their actual execution. Any appraisal program will involve time and money. The wise manager should plan a program with the minimum cost to give the maximum benefit. The rationale for using any particular method should be determined by the size, financial resources, and philosophy of the organization. Confidential report, peer rating or self-appraisals, requires less time and resources compared to some other methods. Besides self-appraisal generates self-growth. It is often said that supervisors avoid playing the role of judge.
They feel uneasy criticizing a subordinate’s performance and are anxious least their adverse appraisal might hold up a promotion, salary increase or an unwanted transfer.
Evaluation whether positive or negative can be very useful if it is communicated to the employee. Many organizations require their supervisors, managers, and other raters to have periodic discussions with employees about their performance and particularly to communicate any negative evaluation so that the employee gets a chance to “explain”. Appraisal interview serves these broad purposes: 1. They provide feedback to the employee that helps him ensure appropriate performance in future. 2. They help the organization to get some idea of its working. Often problems and issues raised by employees, difficulties faced in the execution of their duties, and way and means to improve the functioning, are brought to the surface. 3. The organization can ascertain the training needs of its employees, which is very important. Given the socio economic conditions in India, employer has a social obligation to ensure continuity of jobs for their employee. An appraisal interview gives an opportunity to the rater to access the abilities of the employee and if necessary, suggest suitable remedial measures.
Management By Objectives:
Whatever may be the nature and strength of resistance to the performance appraisal, managements cannot relinquish this practice. Without employee appraisal, salary increase, reassignments or promotions cannot be administered rationally. Each of these areas has its specific problems and one of the solutions of modern times has been offered by Peter Drunker’s concept of management by objectives (MBO). MBO calls on the subordinate to set his short-term performance goals in consultation with his superior, the subordinate appraises his own performance by evaluating it vis-àvis the goals. Before establishing a goal, the individual studies his job, assesses his
potentialities, and formulates some specific plans to reach the goals. The supervisor is not the evaluator, but directs the goal setting process to ensure that it matches the objectives of the organization. MBO differs significantly from the traditional approach, for it shifts the emphasis from “appraisal” to “analysis”. The subordinate is no longer examined by his superior for his weaknesses, but examines himself to ascertain his strength and potential. It assumed that the individual knows, or is capable of learning, more than any one else about his own needs, strength and weaknesses. Employees cannot bear criticism and discussion of their personality traits, mannerisms, etc. In MBO, the accent is on performance – the actions related to the goals rather than to the individual’s personality. The superior helps the subordinate reach his own goals by specifying the steps. One major problem that companies face in implementing MBO is in defining objectives. In the same organization, the purpose of the worker is different from that of management. Once this hurdle is overcome, implementing MBO becomes easier.
CHAPTER ONE 1.2 COMPANY PROFILE
Production of aluminum is second highest after steel. Has established it’s utility in every field of our life. The entry requirement of aluminium was imported before 20th century. The bauxite mining was just started during this century. In 1912, Indian Aluminium Company was found in Chennai to fabricate sheets from imported metal. Six years later, another company was formed at Kolkata, which along with the Indian aluminium company amalgamated with “ALCON GROUP in 1939. The foundation of primary aluminium industry was laid in 1943 with the establishment of 2500 tones capacity aluminium smelter by Indian aluminium company (INDAL) at Kerala with it’s operation based on imported aluminium, in 1944, aluminium corporation of India setup an integrated aluminium plant at west Bengal second Smelter at Hirakund, Orissa was setup in 1959 with the production capacity of 10000 tones per annum that was raised to 20000 tones in 1961. Hindustan Aluminium corporation (Hindalco) was setup it’s integrated aluminium complex with a capacity of 20000 tones of primary metal. Madras aluminium Company (MALCO) was setup a Smelter unit in Tamilnadu in 1965. Al these companies were in private sector management and operated with financial holding & technological tie-ups with foreign companies. Bharat Aluminium Company Limited (BALCO) is the first producer of aluminium in public sector at an initial cost of Rs. 350 Crores & Authorized capital of Rs. 500 Crores. From government of India with its registered office at New Delhi.
Bharat Aluminium Co. Ltd. (BALCO) was incorporated in the year 1965 as a Public Sector Undertaking (PSU). BALCO has several “firsts” to its credit. It is the first public sector enterprise in the country, which started producing aluminium in 1975. In 1987-88, a captive power plant of 270 MW was added to cater to the power requirement of the unit. BALCO has been the first in the Indian Aluminium Industry to produce the Alloy Rods, which is a Feedstock for all Aluminium Alloy Conductors, needed for today’s power transmission lines. Till 2001, BALCO was a public sector enterprise owned 100% by Government of India (GoI). In the year 2001, GoI divested 51% equity and management control in favor of Sterlite Industries (I) Limited. In the last 41 years, BALCO has built up a production capacity of 200,000 tonnes per annum of alumina production capacity, 350,000 tonnes per annum of smelting capacity and expanded its fabrication facility to include three Properzi Rod Mills, three pig casting machines, integrated hot and cold rolling mills, and captive power plants of 810MW capacity Bharat Aluminium Company Ltd. (BALCO) has been closely associated with the Indian aluminium industry, playing a pivotal role in making aluminium a leading metal with myriad uses ranging from household and industrial requirements to aerospace applications. BALCO is part of Vedanta Resources, a London listed metals and mining major with Aluminium, Copper and Zinc operations in UK, India and Australia.
A number of events & decision as well as lack of decision were responsible for the situation confronting the new CMD in Oct. 1991. Balco was conceived as an primary Producer of Aluminium inclusions ding ingots, wire rods, extrusions & rolled products. The company was formed in 1965, & the project was subsequently formulated. The Alumina plant (2 lakhs TPA capacity) was set up with the technical Collaboration with erstwhile USSR co. consequently until 1982, BALCO operated only one Pot line. After considerable debate, the captive power plant was located adjacent to the NTPC super thermal power station at KORBA in order to share some common infrastructure facilities & not inside the premises of BALCO. The plant was procured form GECALSTOM and Commissioned in 1987. Mean while, a high-powered committee (copula) visited BALCO in 1982 and ordered the supply power to BALCO from the super thermal power station of NTPC to enable commissioning of the second Pot line. Though all the units of the plant were not completely commissioned, manpower had been recruited. Since its inception in 1965, BALCO has had all chief executives inducted from outside the industry. Until 1989, the demand for Aluminium was in excess of supply and Aluminium was a controlled commodity. The company was unprepared for this, being the highest cost
Producer, with few value added products, little contact with end users and no experience in selling.
“To achieve global standards of excellence in productivity and customer satisfaction” The Bharat Aluminium Co. Ltd. (BALCO) culture finds expression in its five core values: 1. Commitment to excellence 2. Commitment and competence of the people 3. Customer satisfaction 4. Globally one of the lowest cost producers 5. Team work At BALCO, there is a constant effort to improve in all areas of operations. Plans are afoot to modernize the existing infrastructure to bring it on par with the best in the world.
B – Building on Teamwork A – Ambitious Targets L – Leadership Pursuits C – Customer Delight O – Operational Excellence
Government of India set up BALCO in 1965. Integrated Aluminium Complex producing Aluminium metal from Bauxite. Present capacity to produce 100,000 TPA of Aluminium, 200,000 TPA of Alumina and has value added facilities for Properzi wire rod, sheets and coils and extruded products. BALCO was the first big ticket disinvestments in the country. Number of steps taken for turn around of BALCO. Major capacity expansion involving 6000 Crores under execution.
Nearest town and railway station is Korba. Korba is well connected with Champa (55 km by road) and Bilaspur (115 km) by state highway. Both Bilaspur and Champa are important stations on Mumbai- Howrah route. Nearest airport is Raipur about 220 km by road
HIGHLIGHTS Capacity of 200,000 tpa of calcined Alumina, 350,000 tpa of aluminium metal and 810MW power plants. Produced 219,485 tones of calcined Alumina and 173,743 tones of hot metal in FY 200506 and sold 171,206 tones of aluminium. Fully computerized Cold Rolling mill installed, which has precise temperature controls. Hot Rolling Mill, widest 4 high hot rolling facility. Received ISO 9001:2000 for manufacture and supply of calcined alumina, aluminium ingots/billets, aluminium rods and aluminium rolled products.
MAJOR ACHIEVEMENTS OF BALCO AFTER DESINVESTMENT
Bauxite Total Bauxite requirement is catered by in – house mining (stopped purchase from outsides) saving Rx. 200 lacs/ years. Mining cost reduced @ Rs. 75/ton: saving Rs. 450 lacs/ year. Entry tax Bauxite levied by state commission reduced from 10% to 1.5%. Alumina An independent agency has made a study for improvement of production and reduction of cost. Lime has been substituted by caustic soda in the process thus saving of Rs. 200 lacs/year. Achieved ever-highest Alumina hydrate production record of 195189 MT during august, 2003. Power consumption has been reduced by more than 25%. Smelters Hot metal production has crossed 8000 MT during august, 2002 for the first time after disinvestments. Various efforts have been made to improve the productivity viz. 1. Total control on quality of raw material. 2. Strict shop floor discipline. 3. Improved house keeping. 4. Involvement of workmen in production processes. Fabrication Achieved the designed capacity in the wire rod mill for the first time.
Installation of new machine for better capacity. Substantial reduction in “WIP”. Significant efforts have been made to achieve better quality and packaging. Quality Stringent control on the inspection of products in the factory. Attend customer complaint on highest priority. The company has obtained certification on “ ISO 9002” for environment and “OHSAS 18001” for safety. TQM Teams have been formed for continuous improvement across all functional areas. Periodic quality check is done in the company. Information Technology Computerized accounts, purchase, stores and security system. Computerized attendance recording system and outsourcing of pay roll. Implemented internal online communication through lotus notes and local intranet. SAP R (3) and ERP techniques are being implemented.
THE DRIVING PHILOSOPHY
Market- driven innovation. Winning in quality growth markets worldwide. Inspiration and reward of talented people. Excellent performance in safety and health. Responsible care for the environment. Relentless pursuit of operational excellence.
MINES:- Total bauxite requirement is catered through captive mining. ALUMINA:- Capacity –2 lakh TPA. SMELTER :-Capacity-1 lakh TPA Hot Metal, 408 pots. FABRICATION:-Existing Capacity Properzi – 72600 TPA Caster – 18800 TPA HRM – 60000 TPA CRM – 30000 TPA NCRM – 7200 TPA Raw Material Comes From – Menpat. - Kawardha.
Balco Product Mix:
The following are our main products :a. Ingot (EC/ CG/ ALLOY) b. Wire Rod (EC/ CG/ ALLOY) c. Rolled Product Hot Rolled Coil Hot Rolled Plate Cold Rolled Sheet, Coil, Chequered (Flooring & Panneling) Sheet & Corrugated (Roofing) Sheet.
Structure of BALCO
BHARAT ALUMINIUM COMPANY
Plant- I 1.15 LTPA
Plant-II 2.50 LTPA
Power 810 MW
Pot Room Alumina Cast House Smelter Carbon Fabrication CPP-II 540 MW CPP-I 270 MW
Logistics Commercial Marketing QA Regions IT
HR Mines Finance
TOP 10 ALUMINA PRODUCING COUNTRIES
COUNTRY Australia USA China Jamaica Brazil Russia India Venezula Ukraine Canada Others
PERCENTAGE 31% 10% 9% 7% 7% 6% 6% 3% 3% 3% 15%
35% 30% 25% 20% 15% 10% 5% 0% PERSENTAGE
Australia USA China Jamaica Brazil Russia India Venezula Ukraine Canada Others
ALUMINA – PRESENT & FUTURE CAPACITIES
Manufacturers YEAR NALCO HINDALCO UTKAL INDAL BALCO MALCO TOTAL
Capacities, Lac MT 2003-2004 15.75 6.60 4.50 2.00 0.70 29.55 2004-2005 15.75 6.60 4.50 2.30 0.78 31.23 2005-2007 21.00 6.60 10.00 4.50 8.30 0.84 51.24
60 50 40 30 20 10 0 2003-2004 2004-2005 2005-2007 NALCO HINDALCO UTKAL INDAL BALCO MALCO TOTAL
HR STRUCTURE OF BALCO
PRESIDENT HR Mr. Pramod Suri
AVP HR Mr. S.K Goyal
HR HEAD P-I Mr. B. Prasad
AGM - HR Mr. Ajay Gera
AGM – HR BLC Mr. S. K. Upaddhaya
AGM – HR Mr. K. K. Nair
CSR Mr. R.K Kher
AM – HR Ms. Suverna Mishra
AM – HR Mr. Prakhar Khandelwal
AM – HR Mr. Ranjeet Nath
AM – HR Mr. P. C. Panda
MFabrication Mr. H. K. Bhatia
AM Alumina Mr. Vishwas Saxena
M – Alumina Mr. Kushas
AM –Alumina Ms. Nitasha Jha
Induction of Young Professionals Activation of – People Involvement process. Organizational Building – Competency, Career Planning. Performance System in Place – Rewards linked to level of performance. Identification of Star performers. Reprofiling the quality of workforce – Induction of BSc. graduates. Improvements & Quality of life – Sports / Club & Cultural activities.
( Employee of the Month/ Suggestion Schemes/ Task force/ TQM)
Robust Performance system.
CULTURE AND HRD
Achievement of global excellence demands formulation of effective strategies and cultivations of a supportive culture. The culture of an organization also influences implementation of new technology, strategies, and systems. Future change of culture requires internalization of core values of the company. Moreover, global standards of excellence also depend on the competence of the people. Decision taken at the workshop can be divided into three categories1. Manpower planning, 2. Training and Development 3. Performance. 1. Manpower Planning Provide trained manpower to match with technological improvements. Selectively induct new manpower with a view to correct the age mix and fill skill gaps keeping in view the anticipated retirements.
Identify and develop people for succession planning, especially at HOD level, and provide them suitable training in advance. Reduce contract labour by mechanization of labour intensive operations and redeployment of surplus manpower. 2. Training Use planned job rotation for development of executives. Continuously communicate the core values and other decisions of the management through the in-house journals. Develop modules on training to improve- interface management, leadership skills and teamwork. 3. Performance Review and modify performance appraisals and promotion policy. Introduce a system of job definition of executives in terms of expected results Review and revise the reward systems to provide more transparent link with performance.
CHAPTER TWO PERFORMANCE APPRAISAL SYSTEM IN BALCO
Performance Planning and Appraisal System of BALCO
BALCO has its won performance Appraisal system “Participative Performance Appraisal System” this the system where one’s performance is appraised through discussion with his or her superior where both take active participation on deciding the actual performance by the degree of achieving prescribe objectives and his/her key performance Area (KPAs). The following objectives have been envisaged: • • • To set clear Performance Goals for each employee. To ensure commitment to perform and To enable objective performance appraisal.
Activities Performance plans, which will form the basis for appraisal, will be prepared for each appraisee in two parts a) Main activities / objectives to be accomplished /accomplished during the year (KPAsKey Performance Areas, Key Result Areas, or Objectives). b) Competencies required/possessed for accomplishing the objectives. The activities are briefly described below: Main activities, objectives to be accomplished during the year. KPAs are the main functions or activities an employee is expected to perform during the plan period in order to fulfill the company’s goals and objectives. Individual (appraisee) will identify his/ her KPAs using the following steps: • • Listing the entire main activates in the job / role. Prioritizing the activities based on importance, time taken, dependence on the other activities, value addition etc.
Finalizing the main activities, KPAs in consultation with the superior (Appraiser). Dividing these KPAs further into KPAs for routine activities.
The appraisee in format given in appendix will make entries. There may be some activities, which are not planned in the beginning of the year but are to be accomplished. These also should be included. Instead of calling KPAs, these activities may be called “main activities”.
Evaluation of performance, merit rating, or annual review... The idea of a merit rating is alluring. The sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise. The performance appraisal will be used as a tool to recognize and record the achievements, for rewards and promotions and for the identification of training and development needs in BALCO. The performance appraisal period will be April to March of the succeeding calendar year and the increment will be released before April of the year concerned. The appraisal forms should be sent to the respective heads of the department in February by the HR Department for evaluation and recommendations. The completed forms will be received by the HR department by First Week of March. The final consolidation of assessments will be put up to the Unit Head for approval by the third week of March and the individual letters of Increments Promotions will be issued on 1st April. The form consists of the following parts
PART A: SELF-APPRAISAL – To be filled in by the appraisee PART-B: PERFORMANCE APPRAISAL – To be filled in by the Reporting Authority/Superior
PART C: PERFORMANCE COUNSELING – To be filled in by Reporting Authority and to be discussed with the appraisee along with person in charge. PART D: SUMMARY OF ASSESSMENT – To be filled in by Review Committee/Authority. PART E: POTENTIAL APPRAISAL – To be filled in by the HOD / Unit head in consultation with the reporting Authority. PART F: DEVELOPMENT NEEDS - TO BE FIELD BY THE REVIEW AND
EMPLOYEE I.E STRENGTHS, AREA OF IMPROVEMENT, TRAINING AND DEVELOPMENT ,CAREER GROWTH
PERFORMANCE APPRAISAL FOR TRAINEES:
The trainees will be appraised at least on a six-monthly basis during their training period. On successful completion of the training period the trainees will be placed on probation of 6 months. Before the completion of the probation the candidates will be appraised for their job performance as well as their grasp of Safety and Quality standards and procedures. For both the above processes the appraisal form used is given as. The respective heads of the department and the HR department will do these appraisals. Areas of strength of the trainees and the ability to understand the company’s objectives and becoming a team player is given emphasis in deciding about the absorption of a trainee. On successful completion of the probationary period the candidates will be confirmed in the respective grades.
CHAPTER THREE RESEARCH METHODOLGY 3.1 RESEARCH
Research is a common parlance refers to a search for knowledge. It is a scientific and systematic search for pertinent information on a specific topic. According to Clifford Woody – “research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions.” Research methodology is the way to systematically solve the research problem. Research methodology just does not deal with research methods but also consider the logic behind the methods. It may be understood as a science of studding how research is done scientifically and systematically. In it, we study the various steps that are generally adopted by the researcher in study of his research problem along with logic behind them. It is necessary for researcher to know the research method, technique He must also clearly understand the producer would apply to problem given to him. All this means that it is necessary for the researcher to design methodology from problem to problem. Research methodology is a way to solve systematically the research problem. In it the researcher studies the various steps that are generally adopted by researcher in studying his research problem along with the logic behind them.
3.2 REVIEW OF RELATED LITRATURE
Review of related literature means researcher should undertake extensive literature survey connected with the problem for this purpose, the abstracting and indexing journals and published or unpublished bibliographies are the first place to go to. Academic journals, conference proceeding, government reports books etc. must be tapped depending on the nature of the problem. In this process, it should be remembered that one
source would lead to another. The earlier studies, if any, which are similar to the study in hand, should be carefully studied. A good library will be a great help to the researcher at this stage.
3.3 PURPOSE OF STUDY
To study the performance appraisal system of BALCO.
• • • • •
OBJECTIVES OF STUDY
To study the appraisal system in BALCO. To analyze performance appraisal system. To identify the effectiveness of the appraisal process. To identify activeness of participation. To analyze the system in developing competency.
During the research, researcher has considered following things according to her convenience.
Sum total of all the units that confirms to some designated part of specification is called universe. Researcher while conducting research work has selected Bharat Aluminium Company as universe.
The sample is the representative unit of population. The researcher has taken the employees as sample for this research. Since in this research the researcher has collected the sample according to her own convenience. So the sample is convenient sample and the sample size of the research is 300.
3.6.1 Size of the Sample
This refers to number of items to be selected from the universe to constitute a sample. The size of the sample should neither be excessively large, nor too small. It should be optimum. An optimum sample size is one, which fulfills the requirement of efficiency, representativeness, reliability, and flexibility.
3.7 SAMPLE UNIT
Sample unit is the part of the universe taken from the universe for testing hypothesis. Researcher has taken the 100 SBU Heads, 100 Executives and 100 workers as sample unit.
3.8 SAMPLING METHOD
The researcher adopted convenient Sampling Method. In this method the sample units are chosen primarily on the basis of convenience to the investigator. In this type of sampling, the researcher selects items for the sample deliberately; his choice concerning the items remains supreme. In other words, under this sampling the organizers of the inquiry purposively choose the particulars unit of the universe for constituting a sample on the basis that the small mass that they so select out of a huge one will be typical or representative of the whole.
SOURCE OF DATA
The task of data collection begins after a research problem has defined. Researcher should keep in mind two types of data, primary data and secondary data. The primary data are those, which are collected afresh and for the first time, and thus happen to be original in character. The secondary data, on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical process. Researcher while conducting the research work has used primary source of data.
3.10 DATA COLLECTION TOOLS
These are the tools used for collecting data. Researcher has gathered the data by administering questionnaire.
The term questionnaire refers to a self-administered process whereby the respondent himself/herself reads the questions and records his/her answers without assistance of an interviewer. Although the instrument is essentially question asking and data gathering tool. A questionnaire is more structured and standardized. The questionnaire consists of a number of questions printed or typed in a definite order on a form or a set of forms. This method of data collection is quite popular in case of big enquiries.
3.11 STATISTICAL TECHNIQUE
Percentage Method & Technique of Central Tendency was used by the researcher in the analysis of the data in his research. Percentage refers to a special kind of ratio. Percentages are used in making comparisons between two or more series of data. Percentages are used to describe relationships. Percentages can also be used to compare the relative terms, the distribution of two or more series of data. Measures of Central Tendency tell us the point about which items have a tendency to cluster. Such a measure is considered as the most representative figure for the entire mass of data. Measure of Central Tendency is also known as ‘Statistical Average’.
CHAPTER FOUR DATA ANALYSIS AND INTERPRETATIONS
Que.1 Are you aware of the performance appraisal system prevailing in BALCO?
Awareness of appraisal system
100% 80% 60% 40% 20% 0% Yes 89% No 8% 8% Confused 3% 3% 89%
Awareness of Appraisal system Series1
Interpretation:- It has been concluded that at around 89% approx employees are aware of the appraisal system in their organization and 3% among them are little confused about the process and 8% of employees does not know about the process
Que.2 Does the appraisal system forms a two way participative process?
Two Way Participative Process Agree Partially Agree Disagree
91% 7% 2%
Interpretation:-91% of the employees believe that the appraisal system is a two way participative process and a ranking method but rest 7% partially agrees to it and 2% totally disagrees.
Que.3 Are you satisfied with the current appraisal system?
Satisfaction level of employees
Yes No To some extend 73%
Satisfaction level on appraisal system Yes 73% No 9% To some extend 18%
Interpretation: During the research it was concluded that satisfaction level of appraisal system was considerable and 73% of the employees were satisfied but yet few employees were not satisfied.
Que.4 Is the appraisal system fair enough to judge a persons skills ?
Performance Appraisal System
58% To some extent To v large extent ery To large extent Not at all
Interpretation: In BALCO, ranking system is fair enough to judge a persons capability, but some of the employees still thinks that some more transparency should be made in process.
Que.5 What is the purpose or benefit of Appraisal Process?
Performance Appraisal System To some extent To large extent To very large extent Not at all 17% 58% 21% 4%
Purpose of appraisal system
Identification of training needs Increase in pay scale
29% Promotion Transfer 52% Termination
Purpose of appraisal system Identification of training needs Increase in pay scale Promotion Transfer Termination 13% 52% 29% 4% 2%
Interpretation: Appraisal system assists an individual to have an increase in pay scale and also to identify the training needs if any.
Que6. How many times performance appraisal does take place?
A ppraisal Process
Once a year
Twice a year
Thrice a year
Appraisal takes place in Once a year Twice a year Thrice a year Not known 18% 77% 3% 2%
Interpretation: In BALCO appraisal process takes place after every 6 months for executives and it happens early for officers.
Que.7 Does performance appraisal assisted you in your personal growth?
Personal Growth through appraisal
To some extent 13% 6% 29% To large extent To v large ery extent Not at all
Personal Growth through PA To some extent To large extent To very large extent Not at all 29% 52% 13% 6%
Interpretation: Employees believe that appraisal helps them to have their personal growth but still some more should be changed.
Que.8 Does performance appraisal helps to develop competency in your organization?
C petency throu A om gh ppraisal
3% 0 Ys e N o 6% 2 8 % T so e e n o m xte t
Developing competency Yes No To some extent 62% 8% 30%
Interpretation: In BALCO appraisal helps to increase level of competency and hence they get a chance to improve their working.
Que.9 Does PA system helps you to clear your objectives and assist you with proper aid?
Perform ance A ppraisal system
Ye s N o T so e exten o m t 7 7%
Clearance of objectives Yes No To some extent 77% 5% 18%
Through ranking system employees got cleared of their roles and objectives.
Que.10 Does the PA system motivates you in your work?
M otivation through A ppraisal
46% 53% 1%
Yes N o T som extent o e
Motivation through PA Yes No To some extent 53% 1% 46%
Interpretation: The ranking system fair enough to motivate the employees.
Que.11 Does Performance Appraisal system guides to realize potential of an individual?
A p is l a s tin inre lizin p ra a s is g a g p te tia o n l
7 % Ys e N o 9% 3
Realization of potential Yes No 93% 7%
Interpretation: Appraisal process assists to realize the potential of the employees.
Que.12 Does your superior guide you about your performance?
Communication of appraisal results
6% 0% Yes No To some extent 94%
Communication of results Yes No To some extent 94% 0% 6%
Interpretation: In BALCO the appraisal process is a two way
process and the results are communicated through one to one interviews.
Que.13 Does the self-assessment form assist you to realize your strength and weakness?
S lf A p is l F rm e p ra a o s
Ys e N o T so e e n o m xre t 6% 9
Effectiveness of self appraisal form Yes No To some extent 69% 21% 10%
Interpretation: Self appraisal forms has been proved to be beneficial to evaluate ones own developmental areas.
Que.14 Does the reward system after appraisal satisfies you?
A ppraising through rewards
11% 3% Yes N o T som extent o e 86%
Reward System In Appraisal Yes No To some extent 86% 3% 11%
Interpretation: The employees of BALCO are satisfied enough through the reward system in their organization.
FINDINGS, CONCLUSION AND SUGGESTIONS
The process of performance appraisal helps the employees and the management to know the level of employee’s performance compared to the standard/predetermined level. It was viewed that performance appraisal was useful to decide upon employees promotion/transfer, salary determination and the like. It has become the basis of employee development. Performance appraisal indicates the level of desired performance level, level of actual performance and the gap between the two. Organizations are likely to develop performance-oriented cultures, in which high performers are seen to receive extra rewards and lower performers receive lower rewards. If an employee’s performance were found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration was given to the developmental possibilities of appraisal. Findings through questionnaire: • • • • • • In BALCO the appraisal process is a two-way participative process and it happens at every 6 months. Superior communicates their performance and the area of lacking. At about 73% of the employees are satisfied with the current appraisal system in the organization. The communication level is very good in the organization and thus helps to achieve the target easily. 94% employees believe that performance appraisal has contributed to their personal growth. 62% employees believe that appraisals develop a high level of competency among them.
• • • • • • • •
77% believes that it help to clear their objectives and what their superior wants to get from them. 53% of the employee believes that it has always motivated them. 96% believes that it helps to realize potential of an employee. Self-appraisal form also helps to realize the employees potential. 58% believes that current performance appraisal system is fair enough to evaluate their potential and workings. 67% of the employees believe that implementing 360 degree performance appraisal would be beneficial to the employees and the organization. During survey it was found that Employees were getting confused when asked about the awareness related questions. Performance appraisal definitely set goals and objectives for employees work and get them promoted and rewarded as per but it does not provide much opportunity to set employees future career planning and recognizing the talents.
No compulsory job rotation practice exists in Balco. Employees are partially satisfied by their performance appraisal procedure. They are not very much motivated by their ratings and cannot get their development through these.
Almost all employees accept that the training and development program is very good of Balco but the main problem is that training need assessment is not done properly and many times the same employees are given training again and again ignoring the training needs of others.
Every department head has to follow the performance bell and during every appraisal, the employees would be classified in different tiers. The department head decided to classify the employees not on Performance but just on quota system. The purpose of the performance appraisal and classification is not at all achieved.
For each employee Job description should be made in which duties and responsibilities of the employee should be clearly mentioned. The Knowledge,
skills and abilities required to perform the work should be stated clearly. This will bring more transparency in the job.
Performance appraisals are an integral part of managing performance, and unmanaged performance simply cannot be allowed to happen. The process of managing performance is essentially one of their performances. It starts with the setting of performance expectations and ends with sanction-rewards and penalties on appraised performance. Relationship and mutual understanding develops more quickly with greater frequency of meetings between manager and staff members.
360-degree appraisal system can be introduced as a powerful developmental method and quite different to traditional manager-superior appraisal and can stand alone as developmental method.
• • • •
Ensure that 360-degree appraisal method is introduced and applied from top-down and not bottom up. Staff members can be better prepared for the formal appraisal, giving better results, and saving management time. Training and development actions can be broken down into smaller programs, increasing success rates and motivational effect as a result. Performance appraisal should be used not only for giving performance-based incentives but also to identify average and below average employees and train and develop to make them good performers.
• • • • •
Appraisal should be done twice a year for executives. Training need assessment should be done strictly and training should be given on that basis because different employees have different training needs. Employees should be motivated regularly by their superiors and SBU heads to come up with their training needs. Motivational training should be given to all employees at least in every quarter and it should be made compulsory for each employee to attend it. Appraising talent which involves exploring the actual results achieved by employees within those areas where they’re held accountable and to examine the level of skills or competencies deemed critical to current and future jobs and organizational success. In relation to a talent management programme, certain specific areas are important. For example, the appraisal will not only include an examination of performance, but will also inevitably include a forecast of potential, which is a prediction of how many job levels an employee can reach within the organization based on their past or current performance approaches, training or development needs, career preferences and actual and projected competency levels. Here, scales are often used in reporting potential to attain
managerial or leadership skills, as well as in the delivery of organizational objectives • 360° Appraisal system should be used in place of the current system in which in addition to the superiors, colleagues and subordinate all around the employee will also appraise him. This will reduce the personal biases occurring due to superior subordinate relationship. The details of appraisal report should be kept confidential including the rating. Proper training should be provided to the appraisers regarding the process and proper method of conducting performance appraisal. • The company has recently started Global leadership program in which key employees are exchanged in different companies of the group for a term of 1 or more year which provide them international exposure and experience. • Individual development report of these key employees are made by the management and SBU head based on his past performance and according to his/her KRA future track record for the employee is planned. • • • For special achievements and extra effort CEO kitty (cash reward) is given to the employees in order to motivate them further. Key employees are sent abroad for training to enhance their skill and knowledge on written bond of 1-3 years. Rotate employees to provide them new challenges and new assignments. Companies practicing off shoring need to provide new challenges and opportunities for skills development through training or job rotation. It may become the only reason your best employees stay with you. • For each employee Job description should be made in which duties and responsibilities of the employee should be clearly mentioned. The Knowledge, skills and abilities required to perform the work should be stated clearly. • Provide your best employees with challenging work, show consequences to those employees who are underperforming and respond to employees' work-family balance and other needs.
• • • •
Reward Managers who help good employees grow within the company. Conducting the performance appraisal in a timely fashion, as close as possible, or even before the employee's scheduled review date. Offering a balanced evaluation of both the employee's strengths and of their weakness Including a review of key performance areas or projects where an employee has performed well. A bit of praise can go a long way to lifting an employee's morale and feelings of success on the job.
Natural interaction during the performance appraisal process - give the employee a chance to speak their mind as well as help come up with future goals, as well as steer areas of improvement.
Set goals for the next appraisal period that is quantifiable and achievable. If you have specific projects in mind use those as a measure of the performance. If you made a list of goals from the last review period, go over these with the employee as well and talk about how the employee achieved or failed to achieve the goals and why. Don't tie the employee’s performance to a salary increase. It is normal for the employee to expect that a review will also include an increase as this is traditional, but you should clearly state that the review is about performance and not about salary.
To implement Executive Management Development Programme . In order to improving the employee career planning in BALCO management should develop a programme named above. The criterion for selection must be certain standard.
• Due to some strict rules of the company, all documents cannot be accessed.
• • • •
Due to the busy schedules of SBU Heads and employees, they are unable to impart time to us. Sometimes respondents were roaming from one plant to another so they are not available to guide us. Due to low awareness of worker they are unable to give proper view. Due to poor communication level between employees and workers accurate results cannot be founded.
GOOD MORNING/AFTERNOON/EVENING sir/madams I am Shraddha Roy from Disha Institute of Management and Technology, Raipur. Currently doing my summer internship here in BALCO for the period of 2 months in the HR department and working on project named Performance Appraisal System and its role in enhancing employee performance at BALCO under the guidance of Mr Ajai Gera (Associate Manager-HR), for this I would like to know your views on certain things. • • • • • • • • • • • • • • Are you aware of the appraisal system in your organization? When does appraisal process takes place in your organization? Are you satisfied with the appraisal system in your organization? Does appraisal system benefit you? If yes then how? Does it assist you in your personal growth? Does it help to develop certain level of competency in your organization? Does it help you to clear your objectives| and job roles? Does it acts as a motivating agent in your work? Is the process effective enough to realize your potential? Is the process fair enough to communicate your performance rating? Does the self assessment form assist you to realize your potential? Does the reward system helps you to get satisfaction through your performance? What is the performance level that you expect from your employees? Does the employee perform according to your expectation? Do you feel that if employee career planning and development is done properly then it will result in improving the performance of employee? If yes give suggestion in this regard. • Do you think that employee working under you understand their goals and duties properly? What is being done to ensure this?
How frequently job movements take place in your division? Do frequent internal job movement’s helps in increasing the productivity of the job or the person development? What are the programs and processes that facilitate the internal job movements? Do you have any suggestion in this regard?
Is the HR department supporting the employee career development efforts? Why do you feel so? Give suggestion how can this be done effectively? Do you think that tools and training provide employees with opportunities to grow in their current job? Why do you feel so? What are the tools and training require for providing employees with opportunities to grow in their current job as well as in their career?
• • • • • • • •
Do you feel that you are adequately planning for developing high performers? What kind of recognition you want for this? Do you think that employee require some more development programs for their career growth? Any suggestion in this regards? Do you satisfied with the current employee appraisal strategies and policy made HR department? Do you think that employee assessment program is implemented properly? Give suggestion how can this be done effectively? Do you feel that job rotation and job enrichment is the best tool for individual career assessment and development? If yes then it should be encouraged more? How do you help your staff develop their career competency in your company? By courseware, by training, or teaching? Or? Do you feel that training programme helps in increasing the performance? Do you feel that training programme helps in career growth for an employee? What can you do to help your employees achieve best performance?
Thank you, sir/ma’am for sparing time out of your busy schedule and improving me with your valuable inputs.
• • • • • • Arun Monappa & Mirza S Saiysdain : Personnel Management, Tata Mc Graw Hill Publishing Company Limited, New Delhi, 11th edition, 1991. Arun Monappa & Mirza S Saiysdain : Personnel Management, Tata Mc Graw Hill Publishing Company Limited, New Delhi, 2nd edition. Rudrabasavaraj. M.N : Dynamic Personnel Administration- management of human resource, Himalaya Publishing House. Lakshmipathy. V : Performance Appraisal In Public Enterprises, Himalaya Publishing House, 1st edition, 1985. Jucius. J. Michael : Personnel Management, D.B. Taraporevala Sons & Co. Private Ltd. Chatterjee .N.N : Performance Appraisal Systems- in public enterprise, Scope Publications.
Websites: www.google search.com www.BALCOINDIA.com
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.