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Performance Appraisal

A project on “performance
With relevance to appraisals at
sharekhan limited.


Performance Appraisal



3 Meaning and Definition 12

4 Methods of Performance Appraisal 13

5 Types of Appraisal Interviews 23

6 Advantages of Performance Appraisals 28

Disadvantages of Performance
7 30
8 Introduction to Sharekhan Limited. 31

9 Services Offered by Sharekhan Ltd. 36

Performance Appraisal Criteria at
10 37
Sharekhan Ltd.
Structure of Performance Appraisal at
11 40
share khan ltd
12 43

Performance Appraisal Process at Share

13 44
khan limited.

Benefits of Performance Appraisal to

14 54
Share khan Ltd.
Performance appraisal feedback
15 48
16 Self Appraisal System 51
Annexure -Questionnaire
17 54

18 Findings 57
19 60

Performance Appraisal


In the business world investment is made in machinery,

equipment and services. Quite naturally time and money is spent
ensuring that they provide what their suppliers claim. In other words
the performance is constantly appraised against the results expected.

When it comes to one of the most expensive resources

companies invest in, namely people, the job appraising performance
against results is often carried out with the same objectivity. Each
individual has a role to play and management has to ensure that the
individual’s objectives translate into overall corporate objectives of the
company. Performance Management includes the performance
appraisal process which in turn helps identifying the training needs and
provides a direction for career and succession planning.

Understanding Performance Management




What is Performance?

Performance Appraisal

How is Performance managed?

Good performance by the employees creates a culture of

excellence, which benefits the organization in the long run. The activity
includes evaluation of jobs and people both, managing gender bias,
career planning, and devising methods of employee satisfaction etc.
the efforts are to make to generate the individual’s aspirations with the
objectives of the organization.

Organization has to clear the way of career advancements for

talented and hardworking people. Fear of any kind from the minds of
the employees should be removed so that they give best to their
organization. Allow free flow of information. Communication network
should be designed in such a way no one should be allowed to become
a hurdle. This enables the managers to take correct decisions and that
too quickly.

Performance Appraisal

Why Performance Appraisal?

Today’s working climate demands a great deal of commitment

and effort from employees, who in turn naturally expect a great deal
more from their employers. Performance appraisal is designed to
maximize effectiveness by bringing participation to more individual
level in that it provides a forum for consultation about standards of
work, potential, aspirations and concerns. It is an opportunity for
employees to have significantly greater influence upon the quality of
their working lives. In these times of emphasis on “quality”, there is a
natural equation: better quality goods and services from employees
who enjoy better quality “goods and services” from their employers.

Performance appraisal must be seen as an intrinsic part of a

manager’s responsibility and not an unwelcome and time-consuming
addition to them. It is about improving performance and ultimate

Performance appraisal is a systematic means of ensuring that

managers and their staff meet regularly to discuss post and present
performance issues and to agree what future is appropriate on both

Performance Appraisal

It should also be understood that pushing a previously prepared

report across and desk cursorily inviting comments, and expecting it to
be neatly signed by the employee is not appraisal - this is merely a
form filling exercise which achieves little in terms of giving staff any
positive guidance and motivation.

Meaning and Definition of Performance



The meaning of the word “appraisal” is “to fix a price or value for
something”. This is used in finance in terms such as project appraisal
or financial appraisal where a value is attached to a project. Similarly
performance appraisal is a process in which one values the employee
contribution and worth to the organization.

In simple terms, 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

Performance Appraisal


A formal definition of performance appraisal is:

“It is the systematic evaluation of the individual with respect to
his or her performance on the job and his or her potential for


A] Past-oriented methods

1) Rating Scale

The rating scale method offers a high degree of structure for

appraisals. Each employee trait or characteristic is rated on a bipolar
scale that usually has several points ranging from “poor” to “excellent”
(or some similar arrangement).
The traits assessed on these scales include employee attributes such
as cooperation, communications ability, initiative, punctuality and
technical (work skills) competence. The nature and scope of the traits
selected for inclusion is limited only by the imagination of the scale’s
designer, or by the organization’s need to know.
The one major provision in selecting traits is that they should be
in some way relevant to the appraisee’s job.

Performance Appraisal

Instructions: For the following performances factors, please indicate on the rating
Scale your evaluation of the employee named below:

Employee’s Name: Department

Rater’s Name Date.

Excellent Good Acceptable Fair Poor

5 4 3 2 1

1. Dependability ------ ------ ------ ----- -----

2. Initiative ------ ------ ------ ----- -----

3. Overall Output ------ ------ ------ ----- -----

4. Attendance ------ ------ ------ ----- -----

5. Attitude ------ ------ ------ ----- -----

6. Co-Operation ------ ------ ------ ----- -----

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

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

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

20. Quality of Work ------ ------ ------ ----- -----

Performance Appraisal

TOTAL + + + +


2) Check-list Method

Under this method, checklist of “Statements of Traits” of employee

in the form of Yes or No based questions is prepared. Here, the rater
only does the reporting or checking and HR department does the
actual evaluation. The rater concerned has to tick appropriate answers
relevant to the appraisees. When the check-list is completed, it is sent
to HR department for further processing.

Various questions in the check list may have either equal weight
age or more weight age may be given to those questions which are
more important. The HR department then calculates the total scores
which show the appraisal result of an employee.

Table: - Checklist for Operators

1. Is the employee really interested in the job? - -
2. Does he or she possess adequate knowledge - -
about the job
3. Is his or her attendance satisfactory? - -
4. Does he/she maintain his/her equipment in good - -
5. Does he/she co-operate with co-workers? - -

Performance Appraisal

6. Does he/she keep his/her temper? - -

7. Does he/she obey orders? - -
8. Does he/she observe safety precautions? - -
9. Does he/she complete what he/she commences? - -
10. Does he/she evade responsibility? - -

3] Force Choice Method

In this, the rater is given a series of statements about an
employee. These statements are arranged in blocks of 2 or more, and
the rater indicates which statement is most or least descriptive of the
employee. Typical statements are:
1. Learns fast _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ works hard
2. Work is reliable_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ performance is a good
example for
3. Absents often_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ others usually tardy.
As in the checklist method, the rater is simply expected to select the
statements that describe the rate. Actual assessment is done by the
HR Department.
This approach is known as the forced choice method because the rater
is forced to select statements, which are readymade. The advantage of
this method is the absence of personal bias in rating. The disadvantage
is that the statements may not be properly framed – they may not be
precisely descriptive of the ratee’s traits.

4) Force Distribution Method

One of the problems faced in large organizations is relative

assessment tendencies of raters. Some are too lenient and others too
severe. This method overcomes that problem. It forces every one to do
a comparative rating of all the employees on a predetermined
distribution pattern of good to bad. Say 10% employees in Excellent

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Grade, 20% in Good Grade, 40% in Average Grade, 20% in Below

Average Grade and 10% in unsatisfied grade.

The real problem of this method occurs in organizations where

there is a tendency to pack certain key departments with all good
employees and some other departments with discards and laggards.
Relatively good employees of key departments get poor rating and
relatively poor employees of laggards’ departments’ get good rating.

5) Critical Incident Method

In this method, only critical incidents and behavior associated

with these incidents are taken for evaluation. This method involves
three steps. A test of noteworthy on the job behavior is prepared. A
group of experts then assigns scale values to them depending on
the degree of desirability for the job. Finally, a checklist of incidents
which define good and bad employees is prepared.
• Advantages ---
This method is very useful for discovering potential of employees
who can be useful in critical situation.
• Disadvantages ---
a) Negative incidents are, generally, more noticeable than
positive ones.
b) The recording of incidents is a core to the superior and may be
put off.

c) Overly close supervision may result.

6) Essay Method

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In the essay method approach, the appraiser prepares a written

statement about the employee being appraised. The statement usually
concentrates on describing specific strengths and weaknesses in job
performance. It also suggests courses of action to remedy the
identified problem areas. The statement may be written and edited by
the appraiser alone, or it be composed in collaboration with the

7) Grading

In this method, certain categories of abilities of performance are

defined well in advance and person are put in particular category
depending on their traits and characteristics. Such categories may be
definitional like outstanding, good, average, poor, very poor or may be
in terms of letter like A, B, C, D etc with A indicating the best and D
indicating the worst. This method, however, suffers from one basic
limitation that the rater may rate most of the employees at higher

8) Performance Tests & Observations:

This is based on the test of knowledge or skills. The tests may be

written or an actual presentation of skills. Tests must be reliable and
validated to be useful.

• Advantage – Tests only measure potential and not attitude. Actual

performance is more a function of attitude of person than potential.

• Disadvantages – Some times costs of test development or

administration are high.

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Performance Appraisal

9) Confidential Reports

Though popular with government departments, its application in

industry is not ruled out. Here the report is given in the form of Annual
Confidentiality Report (ACR). The system is highly secretive and
confidential. Feedback to the assessee is given only in case of an
adverse entry. Disadvantage is that it is highly prone to biases and
regency effect and ratings can be manipulated because the
evaluations are linked to future rewards like promotions, good
postings, etc.

10) Comparative Evaluation Method (Ranking & Paired


These are collection of different methods that compare

performance with that of other co-workers. The usual techniques
used may be ranking methods and paired comparison method.

• Ranking Method:
Superior ranks his worker based on merit, from best to worst.
How best and why best are not elaborated in this method. It is easy
to administer.

• Paired Comparison Method:

In this method each employee is paired with every other employee

in the same cadre and then comparative rating done in pairs so
formed. The number of comparisons may be calculated with the
help of a formula – N x (N-1) / 2. The method is too tedious for large

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departments and often such exact details are not available with

B] Future-Oriented Methods

1) MBO (Appraisal by Results)

The use of management objectives was first widely advocated in
the 1950s by the noted management theorist Peter Drucker. MBO
(management by objectives) methods of performance appraisal are
results-oriented. That is, they seek to measure employee performance
by examining the extent to which predetermined work objectives have
been met.
Usually the objectives are established jointly by the supervisor
and subordinate. Once an objective is agreed, the employee is usually
expected to self-audit; that is, to identify the skills needed to achieve
the objective. Typically they do not rely on others to locate and specify
their strengths and weaknesses. They are expected to monitor their
own development and progress.

2) Assessment Center Method

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Performance Appraisal

This technique was first developed in USA and UK in 1943. An

assessment centre is a central location where managers may come
together to have their participation in job related exercises evaluated
by trained observers. It is more focused on observation of behaviours
across a series of select exercises or work samples.

Assesses are requested to participate in in-basket exercises,

work groups, computer simulations, role playing and other similar
activities which require same attributes for successful performance in
actual job.

3) 360o Appraisal

It is a technique in which performance data/feedback/rating is

collected from all sections of people employee interacts in the course
of his job like immediate supervisors, team members, customers,
peers, subordinates and self with different weight age to each group of

This technique has been found to be extremely useful and

effective. It is especially useful to measure inter-personal skills,
customer satisfaction and team building skills.

One of the biggest advantages of this system is that assesssees

cannot afford to neglect any constituency and has to show all-round
performance. However, on the negative side, receiving feedback from
multiple sources can be intimidating, threatening, and expensive and
time consuming.

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3) Psychological Appraisals

These appraisals are more directed to assess employee’s potential

for future performance rather than the past one. It is done in the form
of in-depth interviews, psychological tests, and discussion with
supervisors and review of other evaluations.

It is more focused on employees emotional, intellectual, and

motivational and other personal characteristics affecting his
performance. This approach is slow and costly and may be useful for
bright young members who may have considerable potential.

However quality of these appraisals largely depends upon the skills

of psychologists who perform the evaluation.

Each of these has its own combination of strengths and weaknesses

and none is able to achieve all the purposes for which management
institutes Performance Appraisal System. Nor is any one technique
able to evade all the pitfalls. The best anyone can hope to do is to
match an appropriate appraisal method to a particular Performance
Appraisal goal

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Performance Appraisal

Types of Appraisal Interview

Managers never assume that only one type of appraisal interview

in appropriate for every review session. Rather, they should be able to
use one or more of the interview types depending on the topic being
discussed or the behavior being appraised. Feedback is necessary to
effect improvement in performance, especially when it is inadequate.

Specially, performance interview has three goals:

1. To change behavior of employees whose performance does

not meet organizational requirements or their own personal goals?

2. To maintain the behavior of employees who perform in an

acceptable manner, and

3. To recognize superior performance behaviors so that they

will be continued.

Three distinct types of interview are commonly used

 Tell and sell

 Tell and listen
 Problem solving and mixed.

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1. Tell and sell

♦ It is also called as directive

interview; the interviewer lets assessees know how well they are
doing and sells them on merits of setting specific goals for
improvement, if needed.

♦ Has little provision for

employee participation

♦ Generally consists of three


→ Manager lets employee know how the latter is doing.

→ The employee’s acceptance of this evaluation is sought.
→ The employee agrees to follow a pre-determined plan for improved
job performance.

♦ This method does not require much of anyone’s time but is of little
use if the improved behavior does not eventuate.

♦ There is no opportunity for employee participation and over time, it

is likely that employees will only perform to conform to their
manager’s wishes.

♦ The role of the supervisor / manager is one of ‘judge’ and ‘jury’.

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Performance Appraisal

2. Tell and listen

♦ Tell and listen interview provides the subordinates with chances to

participate and establish a dialogue with their superiors. Its
purpose is to communicate the rater’s perceptions.

♦ It is the most commonly used interview technique.

♦ As with “Tell and Sell”, the manager lets the employee know how
he or she is doing.

→ Communicate strong and weak points of an employee’s job


♦ The employee has a chance to respond to the assessment and

present his/ her views.

→ Employee’s feelings of the appraisal are thoroughly explored.

♦ BOTH views are then considered together, a conclusion reached

and a plan for future performance is developed.

♦ This is much more flexible approach, however, the type of reaction

provoked may strongly affect the success of the interview

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→ For example, if the manager’s remarks are perceived as unfair.

→ (Or critical) by the employee, defense mechanism and face saving,
rather than constructive responses might still be the outcome.
♦ The “Tell and Listen” method assumes that the opportunity to
release frustrated feelings will help reduce or remove them.

3. Problem solving and mixed

♦ 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.

♦ Differs markedly from the methods above.

→ Although recommended by some, since the objective of appraisal is

normally to stimulate growth and development in the employee.
→ It is used more widely in ‘counseling’ and is an unstructured

♦ The skills are consistent with the non-directive procedures of the

“Tell and Listen” method in that listening, accepting and
responding to feelings are essential.

→ However, it goes beyond an interest in the employee’s feelings.

→ It seeks to stimulate growth and development in the employee by
discussing problems, needs innovations, satisfactions and
dissatisfactions encountered since the last appraisal.

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♦ A work – related situation is presented and both the manager and

the employee discuss a solution.

♦ The manager assumes the role of a ‘Helper’ or ‘Facilitator’ rather

than a judge and emphasis is on the work situation, not the
business of the individual.

♦ Can lead to a wide range of changes in work practices, patterns of

supervision and individual attitudes.

♦ Managers need to have the following characteristics

→ Be well prepared
→ Show trust
→ Be active listeners
→ Discuss frankly any areas where performance is not up to standard,
backing this with specific examples.
→ Conversely good performance should be praised, again using
specific examples.

♦ It is also important for the employee not to leave the interview with
any issues unsolved.

Whatever is the approach followed, the emphasis in the

interview should be on counseling and development and not on
criticism, witch – hunting and buck passing. Because of the significance
of appraisal interview, every effort must be made to make it effective.
Guidelines given will help make the interview successful.

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Advantages of Performance Appraisals to

the Organization and the Employee

The objectives of performance appraisal, listed, point out the

purpose which such an exercise seeks to meet. What needs emphasis
is that performance evaluation contributes to firm's competitive

Besides encouraging high levels 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 ways (see Fig below)

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Improving Making
Strategy and Performance correct
Behavior decisions


Values and
Minimizing Legal
dissatisfaction Compliance
and turnover

Fig: How Performance Appraisal can contribute to Firm's

Competitive Advantage?

• Improving Performance

An effective appraisal system contribute to competitive

advantage by improving employee job performance in two ways-by
directing employee behavior towards organizational goals, as was done
by the second beekeeper (see opening case), and by monitoring that
behavior to ensure that the goals are met.

• Making Correct Decisions:

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Performance Appraisal

As stated above, appraisal is a critical input in making decisions

on such issues as pay raise, promotion, transfer, training, discharges
and completion of probationary periods. Right decision on each of
these contributes to competitive strength of an organization. If
promotion, for example, is made on performance, the promotee feels
motivated to enhance his or her performance.

• Minimizing Job Dissatisfaction and Turnover:

Employees tend to become emotional and frustrated if they

perceive that the ratings they get are unfair and inaccurate. Such
employees find that the efforts they had put in became futile and
obviously get de-motivated. Dissatisfaction in the job sets in and one of
the outcomes of job dissatisfaction is increased turnover. An
organization having satisfied and motivated employees has an edge
over its competitors.

Disadvantages of Performance Appraisals

to the Organization and to the Employees

Obstacles to the success of formal Performance Appraisal

programs is to be familiar to most managers, either from painful
personal experience or from the growing body of critical literature.
Here are the most troublesome and frequently cited drawbacks.

 Performance Appraisal programs demand too much from

supervisors. Formal performance appraisal obliviously requires at
least periodic supervisor observation of subordinate’s

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 Standards and ratings tend to vary widely and often. Unfairly,

some ratees are tough, while some are lenient. Some
departments have highly competent people, others have less
competent people.

 Personal values and bias can replace organizational standards.

An appraiser may not lack standards, but the standards he uses
are sometimes wrong ones.

 Because of lack of communication, employees may not know

how they are rated. The standards by which employees think
they are being judged are sometimes different from those their
supervisors actually use.

 No performance appraisal system can be very effective for

management decisions, organization development, or any other
purpose until the people being appraised know what is expected
of them and by what criteria they are being judged

Introduction of Sharekhan Limited.

Sharekhan is the retail broking arm of SSKI, an organization with

more than eight decades of trust & credibility in the stock market.

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• Amongst pioneers of investment research in the Indian market

• In 1984 ventured into Institutional Broking & Corporate Finance.
• Leading domestic player in Indian institutional business
• Over US$ 1 billion of private equity deals


• Among the top 3 branded retail service providers (Rs 650 crs avg
daily vol- Apr-Dec’04)
• No. 2 player in online business
• Largest network of branded broking outlets in the country
servicing 81,000 clients

SSKI Group Companies:

• SSKI Investor Services Ltd (Sharekhan)

• S.S. Kantilal Ishwarlal Securities
• SSKI Corporate Finance
• Idream Productions

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SSKI – Corporate Structure:

Serving Institutional Investors –Domestic / International:

• In the Indian securities business since 1922….

• Our institutional Research team is rated as one of the best in the
• Rated 1st by Asia Money

Research Coverage:
• Amongst the widest coverage’s among broking houses in India.
• Total coverage exceeds some 100 stocks spread over 20 sectors
• Sector wise investment strategies are in place
• Stock ideas are presented from time to time, in tune with overall

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• Active coverage of political developments, economy changes

The Sharekhan way of life:

• People driven –
• Fleet footed
• Growth driven
• Values and ethics

And we have a vision:

• To be the best retail broking brand in the Indian

Equities market.


• By educating and empowering the individual investor

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Customized Research Reports

Investment advice for a diverse set of investment


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Serving customers via multiple channels

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The Services Sharekhan offers…

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Performance Appraisal Criteria at


Here the work is divided into 2 groups i.e. Back office work and
front office work. Back office undertakes office/paper work called as
Operations. Front office is called as Relationship Manager i.e.
maintaining relation with customers.

Thus ‘Performance Appraisal’ plays an important role in

Sharekhan. Performance Appraisal is conducted thrice in a year:-

1. Quarterly basis,
2. Half Yearly basis,
3. Yearly basis

And when an employee

completes his/her probation
period performance appraisal
takes place.

Performance appraisal is mainly based on targets and KRA i.e.

Key Result Area, if the targets are achieved appraisal and incentives
are given along with salary.

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Besides Appraisals are also based on Balanced Scorecard, which tracks

the achievement of employees on the basis of targets at four levels —

 financial
 customer
 internal
 Learning and growth

The financial perspective quantifies the employee’s contribution in terms of

revenue growth, cost reduction, improved asset utilization and so on.
The customer perspective looks at the differentiating value proposition offered
by the employee.
The internal perspective refers to the employee’s contribution in creating and
sustaining value.
The learning and growth are self-explanatory.
The weight age given to each attribute is based on the function the employee

Based on their individual achievements, employees are rated on

a scale of one to five (five = “superstar”). If employees get a low rating
(less than two) in two consecutive appraisals, the warning flags go up.
“If the poor performer continues getting low scores then the exit option
may be considered”

Over the years ShareKhan has found the pattern that leads to
the maximum decline in performance — boredom. If employees work
for more than two years on the same project, typically either their
performance dips or they leave the organization.

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To avoid that, ShareKhan shuffles its employees between

projects every 18 months or so. “Performance drops if motivation

At the heart of an employee's satisfaction lies the fact that his

performance is being appreciated and recognized. ShareKhan’s
performance management system has metamorphosed into one that
emphasizes objectivity and a system that mandates performance
evaluation against pre-determined criteria.

What deserves special mention is the active participation of the

senior management in the determination of guidelines for the
performance appraisal process. The process ensure buy in of the
employees since the guidelines for the rating system and its
conversion into money terms is not unilaterally decided by HR but is a
consensus of a cross functional team with representation from all

ShareKhan’s performance appraisal system is supported by an

online system called the Human Resource Management System- an
Oracle Developer 2000 based tool. The system records every moment
of the individual, right from his biographical details to his projects
performance. An employee's performance history at the click of a
button and this accurately maintained for 14000 employees!

Right from his entry, an employee in ShareKhan gets formal

performance feedback once every two months till such time that he is
confirmed after which the performance feedback is provided twice
every year on a formal basis. ShareKhan however widely encourages
informal feedback discussions between Project Leaders and Team
Members and this concept has found an overwhelming appeal among
the people.

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Structure of Performance Appraisal for

Branch office and Head office:


Cluster Head Branch Managers

Branch Managers Employees

Structure at Branch office for Performance Appraisal

Head Office

Head of Department Employees

(Top Level Managers)



Structure at Branch Office & Head office for Performance


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Structure of Performance Appraisal in


1. Branch office:
In this performance appraisal interview is taken of Cluster
Heads and Branch Managers. Then Cluster Heads takes a performance
interview of Branch Managers and Employees while on the other side
Branch Manager takes a performance interview of Employees.

2. Head Office:
In this performance appraisal interview is taken of Head of
Department (HOD’s) Supervisors Assistant
Managers. While on the other side Head Department takes a
performance interview of Employees.

Sharekhan’s Performance Appraisal is followed by

Rating Method:-

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While conducting Performance Appraisal employees

are been informed about the appraisal process, in the
following ways:

• Circular is been given in the office by the Human Resource

• Circular includes day, date, timings and way of performance
• Rating method with the help of questionnaire format is given in
the circular by the Human Resource Department.
• How the rating will be done and what kind of rewards will be
given to the employees.
• All the above database is included in the circular
• Lastly it is closed by head of Departments signature and Top
level manager.
• After all this things during performance appraisal
recommendation is taken.
• Then after conducting performance appraisal forms are been
checked by top level managers, Cluster heads and by HR

Rating takes place in this way:

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Excellent 30%-40%  To review the

Very Good 20% performance of
Good 15% the employees
Average 10% over a given
period of time.
Below Average 0%

 To judge the gap between the actual and the desired


 To help better current performances.

 To help in development of the


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 To determine training and development needs.

 To provide feedback to the employees regarding their past


 To provide clarity of the expectations and responsibilities of the

functions to be performed by the employees.

 To reduce the grievances of the employees

 To review performance for salary purposes.

Performance Appraisal Process in


The Performance Appraisal Process consists of six steps. Each

step in the process is crucial and is arranged logically. The process
shown in the below figure is some what idealized. Many organizations
make every effort to approximate the ideal process, resulting in the
first-rate appraisal systems. Unfortunately, many others fail to consider
one or more of the steps and, therefore, have less - effective appraisal

Performance Appraisal

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Establishing Performance Standards

Communicating Standards to Employees

Measuring Actual Performance

Comparing Actual Performance with the Standards Set

Discussing Actual Performance with the Employee

( Appraisal Interview)

Offering Guidance for Improving Performance (Follow – up


Benefits of Performance Appraisal At


Perhaps the most significant benefit of appraisal at Sharekhan is

that, in the rush and bustle of daily working life, it offers a rare chance
for a superior and subordinate to have to “time out” for one – on – one
discussion of important work uses that might now otherwise be

The Company believes that Appraisal offers a valuable

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

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 Motivation and Satisfaction:

The management of ShareKhan believes that Performance

appraisal has profound effect on levels of employee’s motivation and
satisfaction - for better as well as for worse.

Performance appraisal provides employees with recognition for

their work efforts. The power of social recognition as an incentive has
been long noted. In fact, there is evidence that human beings even
prefer negative recognition in preference to no recognition at all.

If nothing else, the existence of an appraisal program indicates to

an employee that the organization is genuinely interested in their
individual performance and development. This alone has a positive
influence on the individuals’ sense of worth, commitment and

The strength and prevalence of this natural human desire for

individual recognition is been overlooked. Absenteeism and turnover
rates in some organizations might be greatly reduced if more attention
were paid to it. Regular performance appraisal, at least, is a good start.

 Training and Development :

Performance appraisal offers an excellent opportunity – perhaps

the best that it will ever occur - for a supervisor and subordinate to
recognize and agree upon individual training and development needs.

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During the discussion of an employee’s work performance, the

presence or absence of work skills has become very obvious – even to
those who habitually reject the idea of training for them!

Performance appraisal makes the needs for training more pressing

and relevant by linking it clearly to performance outcomes and future
career aspirations.

From the point of view of the organization as a whole consolidated

appraisal data form a picture of the overall demand for training. This
data is analyzed by variables such as sex, department etc. in this
respect, performance appraisal provides a regular and efficient training
needs audit for the entire organization.

 Recruitment and Induction:

Appraisal data is used to monitor the success of the organization’s

recruitment and induction practices. For example, how well are the
employees performing who were hired in the past two years?
Appraisal data is also used to monitor the effectiveness of changes
in recruitment strategies. By following the yearly data related to new
hires ( and given sufficient numbers on which to base the analysis) it
is possible to assess whether the general quality of the workforce is
improving staying steady, or declining.

 Employee Evaluation:

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Though often understated or even denied, evaluation is a

legitimate and major objective of performance appraisal.
But the need to evaluate (i.e to judge) is an on going source of
tension, since evaluative and development priorities appear to
frequently clash. Yet at its most basic level, performance appraisal is
the process of examining and evaluating the performance of an
Though organizations have a clear right – some would say a duty –
to conduct such evaluations of performance, many still recoil from the
idea. To them, the explicit process of judgment can be dehumanizing
and demoralizing and a source of anxiety and distress to employees.

“It is said that appraisal cannot serve the needs of evaluation and
development at the same time; it is one or the other”

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The Appraisal Feedback Interview at


At ShareKhan, the Management believes that Performance

appraisal process is incomplete without the feedback given to the
employee about his appraisal and his performance. But the way of
giving as well as receiving the feedback differs from person to person
and their way of handling and their outlook towards the issue.
According to a popular saying:



Whatever method of
appraisal, may be used by an
organization, it is crucial to allow for
‘employee feedback’.
An interview between the
manager and the employee is the
main way of achieving this. This is called the Appraisal Feedback
This interview provides the opportunity to discuss an
employees’ performance and explore areas of possible improvements
and growth. It also provides an opportunity to identify attitudes and
feelings more thoroughly and thus improve communication.
Fundamental to the success of the appraisal interview is the
relationship between the two participants in the process.

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Points to be noted, while the Feedback Interview

takes place:

On the part of the person receiving the feedback, the following points
are important to be taken care of:

 The employee should have a positive attitude towards the

feedback process

 He should listen to the suggestions of the appraiser calmly and

try to incorporate them in his plans.

 He should not hesitate to ask for the help of his superiors.

 Should have a co-operative attitude during the feedback


 Don’t judge the appraiser as a person.

 Should take the feedback objectively.

 Should not judge the appraiser as a person on the basis of the


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On the part of the appraiser or the manager / person giving the

feedback, the following points are to be taken care of:

 The appraiser should make the receiver feel comfortable during

the feedback meeting.

 The appraiser should make it a two – way conversation i.e. let

the employee speak.

 Listen to the employee and note his points, suggestions,

problems etc.

 Provide a constructive feedback to the employee i.e. in a way

which will motivate him to perform better.

 Have a positive attitude towards the process

 Try to understand the reasons of his failure.

 Be fair and objective

 Make the appraisal feedback meeting useful and productive for

the organization and the employee.

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Self Appraisal System in Sharekhan

ShareKhan follows The Performance Appraisal system. It is done

at three levels. First by the employee itself followed by his superior and
then by the reviewing authority.

The appraisal process is based on Performance and is subjective

in nature. In Self Appraisal, the Appraisee is asked to highlight his best
performances and also list the areas where he feels he is not up to the

The Appraisee is also asked to highlight problems he’s faced and

opportunities he is required to improve his performance. He is also
asked to mention any outstanding performance he’s done outside the
organization but for the organization.

The Self Appraisal is followed by the appraisal done by the

superior (appraiser). This appraisal basically includes analyzing various
business dimensions related to financial aspects.

It also includes qualitative aspects of business such as attitude,

customer service, etc. The appraisal also gives feedback on Key
Responsibility Areas (KRA’s), which includes:

♦ The primary responsibilities

assigned to the appraisee and
♦ Managerial dimensions for
operational and non-
operational assignments.

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Managerial dimensions for operational and non- operational

assignments include:

• Job knowledge

• Leadership

• Decision Making

• Administrative skill

• Public Relation marketing Skills and

• Integrity and Honesty

The Appraiser gives comments on:

• Conceptual activities

• Emotional Strength

• Responsiveness to corporate concerns

• Willingness to assume Responsibilities

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• Creativity and Innovativeness

• Communication Skills

• The several assessment of performance is done Operational and

Non - operational assignments. This assessment is done by both
appraiser and receiving authority.

The operational assignments include:

 Business Dimensions, which has 30 marks,

 Qualitative Aspects of Business, which has 20 marks,

 Managerial Dimensions, which has 40 marks and

 Outstanding Performance, which has 10 marks.

Non – Operational assignments include:

 Key Responsibility Areas, which has 50 marks,

 Managerial Dimensions, which has 40 marks and

 Outstanding Performance, which has 10 marks.

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From the above scores, given by the appraiser, and reviewing

authority. Performance is rated on the scale of:

• Outstanding (80 – 100);

• Good (60 – 79);

• Average (40-59) and

• Below Average (Below 40)

After the information so obtained from the assessment of

performance, the company is able to provide training needs and in
able to find out the potentiality of the employees.

The final appraisal is done by the reviewing authority, which

includes remarks and comments on the appraisal done.

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Q. What is the purpose of performance appraisals?

• Performance appraisals help to strategically review the

performance of the employees, their strengths, weaknesses and
accomplishments during the year. Performance appraisal allows
deciding the goals, objectives and the desired performance standards
for the employee for the upcoming year.

Q. How should the self appraisal be used?

• Self appraisal or self evaluation is the review of the performance

by the employee himself. The self evaluation is discussed with the
employee and if appropriate, is incorporated in the final rating.

Q. Is there any comprehensive formula to calculate the overall


• No, there is no comprehensive formula for doing so. The overall

rating is based on a number of factors like the extent of goals
achieved, the overall performance of the employee, his competencies

Q. How should the ratings be given if there has been a change

of supervisor or manager during the period of the appraisal?

• To complete the performance appraisal subjectively and fairly,

we consult the previous supervisor or manager. If this is not possible,
we consult the supervisor’s superior to get his views and inputs.

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Q. How can input/feedback be collected for the appraisal


• Different input forms are used for taking the feedback from the
various sources like the superior, peers, customers, vendors and the
employee himself. All the perspectives thus received are combined in
the appropriate manner and to get an overall, complete view of the
employees’ performance. Observation is done by the superior to obtain

Q. What if the employee refuses to agree or/and accept the


• First of all, we ensure that the employee has got a chance to

review his completed appraisal form. If the employee refuses to accept
his appraisal, we try to sort out the problem by discussing his reasons
of dissatisfaction with him calmly. If the employee refuses to co-
operate, then pass the documents to the HR department with a note
on it that the employee has refused to accept and let them take the
necessary action.

Q. How do you deal with an average or a non-performer?

• Provide constructive feedback and try to motivate the employee.

• Keep the focus on the performance, not the personality of the


• Provide training and development opportunities to the employee

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• Discuss and take the employee’s inputs on how to solve the


• Plan the course of action and standards in agreement with the


• If no improvement takes place, inform the human resources or

your superior about the problem.

Q. Should the review be confidential?

• The Individual performance reviews is kept confidential and is

not accessible to other employees. It is also stored at a safe place with
limited access. Outdated reviews are destroyed. The appraisal is kept
as a part of the HR records of the employee.

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Section I. SELF ASSESSMENT FORM: (April – March)

Employee Name : Department:

Key Code & DOJ (dd/mm/yy) Location
Designation Head of Department

(Please answer all questions in point form. Be as specific as

possible. If you need more space to answer, you may use a
blank sheet and attach it to this form. )

1. What were your targets for the last year? List your
targets/objectives/performance areas for last year in the left-
hand column.

Note your actual achievements in the right hand column. Specify

whether the objectives set were reached or not. Use this column to
also note missed opportunities for the last year, or targets that in your
opinion should have been included.

Objectives/Targets Actual Achievements

A. Quantitative Targets

B. Non Quantitative Targets

2. What were the factors, if any, for non-achievement of your

targets/objectives for last year? For each factor, you may explain

3. What, in your opinion, are your strengths that contribute to your

effective performance as an individual and your entire

4. What, in your opinion, are your weaknesses and how do they

affect your performance?

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5. a. Indicate the peer group interactions in which you received

positive assistance.

5. b. Indicate where you did not receive such cooperation?

6. Indicate the areas in which you need training that would enhance
your performance?

• Organization/Supervisory Skills
• Communication/Presentation Skills
• Technology Related Training
• Technical Skills pertaining your job - be specific

• Others - be specific
7. What other assistance do you require from the management to
be able to achieve your targets?

8. Outline your targets/objectives for next year?

(April 2006-March 2007)Objectives/Targets

Signature of employee:______________

Date __________


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Employee Name: Department:

Key Code & DOJ (dd/mm/yy) Location
Designation Head of Department

Date: ____________

1. Evaluate the overall performance of the employee.

2. What, in your opinion, are the areas of strength for the employee
and how have they contributed to performance?

3. Outline the areas that require future improvements.

4. What are your recommendations for the employee? (For eg. Job
Rotation, Training Needs, other actions.)

5. Modification to Targets/Objectives set by employee for April 2006 -

March 2007..

6. a. Overall Ranking of Employee

12 3 45

6. b. Relative Ranking of Employee as compared to his/her peers

12 3 45

(Use the following rating scale to rate the employees:

Rating Scale 1-5. 1: Excellent, 2: Very Good, 3: Good, 4: Average, 5:

Below Average)

Signature of superior: ___________

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“Feedback is the breakfast of champions.”


• In the whole appraisal system, often superiors assume the role

judges. In contrast the aim is to develop employees; managers
need to be counselors, helpers and teachers.

• Maximum employees in the organization were of the opinion that

the performance appraisal is a positive step taken by the
organization to help them to improve their own performance.

• Employees were hopeful that after the performance appraisal is

over they will be properly rewarded for their work and that it was a
way to ensure that their efforts don’t go unnoticed.

• The employees showed eagerness to learn from their mistakes

which they hoped to rectify and perform better.

• Although the employees believe that performance appraisals are

their betterment, in the beginning they had doubts in their minds
about issue of bias being a factor in the process of evaluation.

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Name : - Mr. Edwin Rozario

Designation :- Executive HR
Address of the Company
Visited:- Sharekhan Limited,
Sharekhan SSKI,
A-206, Phoenix
Phoenix Mills
Lower Parel, (West)
Mumbai 400 013

Website: -

Referred Online Book:-

Ten Minute Guide to


Appraisals by

Dale Furtwengler
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Books referred: -

♦ Human Resource and Personnel Management by Tata McGraw

Hill Publishing Company Limited.

- K Aswathappa

♦ Organizational Behavior.

- Stephen Robbins

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