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A Report of Project Work Submitted in Partial Fulfillments of The Requirements for the Award of Degree of


NIMS Institute of Management & Computer Sciences NIMS University Rajasthan Jaipur- 303001 Rajasthan


Jaipur 303 001 RAJASTHAN


It is to certify that the Tripti pandey S/O Mr.Nagina Nath pandey is a bonafide student of this institute with enrolment number BM11/018 Based on the written consent of the faculty guide Associate Prof. Dr. Sandesh kumar Sharma we are forwarding his project report titled ANALYTICAL STUDY OF THE PERFORMANCE APPRAISAL SYSTEM ADOPTED BY APEX HOSPITAL TO ENHANCE PERFORMANCE AND MOTIVATION IN EMPLOYEES for further evaluation to The Controller of Examinations NIMS University, Jaipur Rajasthan.

Ms. PallaviTomar (Director NIMS,IM&CS)

Certified that this dissertation is approved in quality and form

External Examiner

Internal Examiner

This is to certify that the dissertation titled ANALYTICAL STUDY OF THE PERFORMANCE APPRAISAL SYSTEM ADOPTED BY APEX HOSPITAL TO ENHANCE PERFORMANCE AND MOTIVATION IN EMPLOYEES is a bonafide work done by Tripti Pandey S/o Mr. Nagina Nath Pandey under my guidance in partial fulfillment of Master of Business Administration programme of NIMS University Rajasthan. This report has been checked by me on the basis of the rough draft submitted and the view expressed in the report is only that of the researcher and not of this institute.

Date: Place: -

Associate Prof. Dr.Sandesh kumar Sharma




I do hereby declare that the project work title ANALYTICAL STUDY OF THE PREFORMANCE APPRAISAL SYSTEM ADOPTED BY APEX HOSPITAL TO ENHANCE PERFORMANCE AND MOTIVATION IN EMPLOYEES is a record of bonafide work done by me under the supervision of Associate Prof.Dr Sandesh kumar Sharma, NIMS Institute of Management & Computer Sciences Jaipur- 303001 and submitted to NIMS University, Rajasthan in partial fulfillment of the requirements for the award of degree of Master of Business Administration.

Tripti pandey

Though it is difficult to express thanks in words, but it is pleasure to express my gratitude to all those who in their own helped me in accomplishing this work .Firstly I humbly express my respect and full gratitude to Dr. . Sudhinder Singh Chawhan the Principal of NIMS University, Jaipur for providing all the requisites. I am obliged to Director of the APEX Hospital for granting the permission to do my project. I am very much delegated to thank manager of APEX Hospital for being continuous source of inspirations to me. I am grateful to my faculty member Dr.Sandesh Kumar Sharma who have encouraged and guided me throughout my project .At last with special attention I give heartily thank to all the staff members of departments of APEX Hospital under whom guidance, I could perform my work successfully



S.NO 1 2

PARTICULATES Executive Summary Chapter-I Introduction of Topic Chapter-II Profile of The Organization& Literature Review Chapter-III Research Methodology Chapter-IV Data Analysis & Interpretation Chapter-V Finding & Inferences Chapter-VI Conclusion & Recommendation Chapter-VII Bibliography











EXECUTIVE SUMMARY:In many organizations - but not all - appraisal results are used, either directly or directly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses and promotions. The purpose of this study is to determine the opinion of the employees at APEX hospital, jaipur regarding of the performance appraisal that hospital used. Questionnaires were distributed to 20 employees which provided the primary data for this study. The findings show that employees are very familiar with performance appraisal system. However majority of employees felt that adopted performance appraisal system is very good and helps to improve the performance and to achieve the personal goals. Our study shows that the performance appraisal has helped in increasing the performance of APEX hospital employees. To enhance the effectiveness of the existing performance appraisal system, the recommendations are as follows: Defines clearly the standards of performance appraisal system. Hospital should adopt effective monitoring system. The feedback of performance should be at the regular basis. Hospital should provide counseling after performance assessment. Performance appraisal system should be beneficial as a development tool.



INTRODUCTION:A performance appraisal (PA) or performance evaluation is a systematic and periodic process that assesses an individual employees job performance and productivity in relation to certain pre-established criteria and organizational objectives. Other aspects of individual employees are considered as well, such as organizational citizenship behavior, accomplishments, potential for future improvement, strengths and weaknesses, etc. To collect PA data, there are three main methods: a) Objective b) production, c) Personnel and Judgmental evaluation.

Judgmental evaluations are the most commonly used with a large variety of evaluation methods. A PA is typically conducted annually. The interview could function as providing feedback to employees, counseling and developing employees, and conveying and discussing compensation, job status, or disciplinary decisions. PA is often included in performance management systems. Performance management systems are employed to manage and align" all of an organization's resources in order to achieve highest possible performance. How performance is managed in an organization determin es to a large extent the success or failure of the organization. Therefore, improving PA for everyone should be among the highest priorities of contemporary organizations. Some applications of PA are performance improvement, promotions, termination, test validation, and more. While there are many potential benefits of PA, there are also some potential drawbacks. For example, PA can help facilitate management-employee communication; however, PA may result in


legal issues if not executed appropriately as many employees tend to be unsatisfied with the PA process. PAs created in and determined as useful in the United States are not necessarily able to be transferable cross-culturally.



A central reason for the utilization of performance appraisals (PAs) is performance improvement (initially at the level of the individual employee, and ultimately at the level of the organization). Other fundamental reasons include as a basis for employment decisions (e.g. promotions, terminations, transfers), as criteria in research (e.g. test validation), to aid with communication (e.g. allowing employees to know how they are doing and organizational expectations), to establish personal objectives for training


programs, for transmission of objective feedback for personal development, as a means of documentation to aid in keeping track of decisions and legal requirements and in wage and salary administration. Additionally, PAs can aid in the formulation of job criteria and selection of individuals who are best suited to perform the required organizational tasks. A PA can be part of guiding and monitoring employee career development. PAs can also be used to aid in work motivation through the use of reward systems.



communication in organizations

is considered an essential function of worker motivation. It has been proposed that feedback from PAs aid in minimizing employees perceptions of uncertainty. Fundamentally, feedback and management-employee communication can serve as a guide in job performance. b) ENHANCEMENT

behaviors, thoughts, and/or issues may distract employees from their work, and trust issues may be among these distracting factors. Such factors that consume psychological energy can lower job performance and cause workers to lose sight of organizational goals. Properly constructed and utilized PAs have the ability to lower distracting factors and encourage trust within the organization. c) GOAL

organizations find it efficient to match individual workers goals and performance with organizational goals. PAs provide room for discussion in the collaboration of these individual and organizational

goals. Collaboration can also be advantageous by resulting in employee acceptance and satisfaction of appraisal results.




well constructed PAs can be valuable expectations. At have reported the

tools for communication with employees as pertaining to how their job performance organizational relationships stands level, between with organizational studies resource

numerous human

positive (HRM)


practices" and performance improvement at both the individual and organizational levels. e) DETERMINATION

Employee training and

development are crucial components in helping an organization achieve strategic initiatives. It has been argued that for PAs to truly be effective, post-appraisal opportunities for training and development in problem areas, as determined by the appraisal, must be offered. PAs can especially be instrumental for identifying training needs of new employees. Finally, PAs can help in the establishment and supervision of employees career goals.


Human resource management (HRM) conducts performance management. Performance management systems consist of the activities and/or processes embraced by an organization in anticipation of improving employee performance, and therefore, organizational performance. Consequently,

performance management is conducted at the organizational level and the individual level. At the organizational level, performance management oversees organizational performance and compares present performance with

organizational performance goals. The achievement of these organizational performance goals depends on the performance of the individual organizational members. Therefore, measuring individual employee performance can prove to


be a valuable performance management process for the purposes of HRM and for the organization. Many researchers would argue that performance appraisal is one of the most important processes in Human Resource Management. The performance management process begins with leadership within the organization creating a performance management policy. Primarily,

management governs performance by influencing employee performance input (e.g. training programs) and by providing feedback via output (i.e. performance assessment and appraisal). The ultimate objective of a performance management process is to align individual performance with organizational performance. A very common and central process of performance management systems is performance appraisal (PA). The PA process should be able to inform employees about the organization's goals, priorities, and expectations and how well they are contributing to them.


Performance appraisals (PAs) are conducted at least annually, and annual employee performance reviews appear to be the standard in most American organizations. However, it has been acknowledged that appraisals conducted more frequently (more than once a year) may have positive implications for both the organization and employee. It is suggested that regular performance feedback provided to employees may quell any unexpected and/or surprising feedback to year-end discussions. In a recent research study concerning the timeliness of PAs, one of the respondents even suggested that the performance review should be done formally and more frequently, perhaps once a month, and recorded twice a year. Other researchers propose that the purpose of PAs and the frequency of their feedback are contingent upon the nature of the job and characteristics of the employee. For example, employees of routine jobs


where performance maintenance is the goal would benefit sufficiently from annual PA feedback. On the other hand, employees of more discretionary and non-routine jobs, where goal-setting is appropriate and there is room for development, would benefit from more frequent PA feedback. METHODS DATA:There are three main methods used to collect performance appraisal (PA) data: objective production, personnel, and judgmental evaluation. Judgmental evaluations are the most commonly used with a large variety of evaluation methods.





The objective production method consists of direct, but limited, measures such as sales figures, production numbers, the electronic performance monitoring of data entry workers, etc. The measures used to appraise performance would depend on the job and its duties. Although these measures deal with unambiguous criteria, they are usually incomplete because of criterion contamination and criterion deficiency. Criterion contamination refers to the part of the actual criteria that is unrelated to the conceptual criteria. In other words, the variability in performance can be due to factors outside of the employees control. Criterion deficiency refers to the part of the conceptual criteria that is not measured by the actual criteria. In other words, the quantity of production does not necessarily indicate the quality of the products. Both types of criterion inadequacies result in reduced validity of the measure. Regardless of the fact that objective production data is not a complete reflection upon job performance, such data is relevant to job performance. THE HAPPY-PRODUCTIVE WORKER HYPOTHESIS


The happy-productive worker hypothesis states that the happiest workers are the most productive performers, and the most productive performers are the happiest workers yet, after decades of research, the relationship between job satisfaction and job performance produces only a weak positive correlation. Published in 2001 by Psychological Bulletin, a meta-analysis of 312 research studies produced an uncorrected correlation of 0.18. This correlation is much weaker than what the happy-productive worker hypothesis would predict. There is no clear relationship between job satisfaction and job performance.

The personnel method is the recording of withdrawal behaviors (i.e. absenteeism, accidents). Most organizations consider unexcused absences to be indicators of poor job performance, even with all other factors being equal; however, this is subject to criterion deficiency. The quantity of an employees absences does not reflect how dedicated he/she may be to the job and its duties. Especially for blue-collar jobs, accidents can often be a useful indicator of poor job performance, but this is also subject to criterion contamination because situational factors also contribute to accidents. Once again, both types of criterion inadequacies result in reduced validity of the measure. Although excessive absenteeism and/or accidents often indicate poor job performance rather than good performance, such personnel data is not a comprehensive reflection of an employees performance.

Judgmental evaluation appears to be a collection of methods, and as such, could be considered a methodology. A common approach to obtaining PAs is by means of raters. Because the raters are human, some error will always be present in the data. The most common types of error are leniency errors, central tendency errors, and errors resulting from the halo effect. These errors arise predominantly from social cognition and the theory in that how we judge and


evaluate other individuals in various contexts is associated with how we acquire, process, and categorize information. An essential piece of this method is rater training. Rater training is the process of educating raters to make more accurate assessments of performance, typically achieved by reducing the frequency of halo, leniency, and central-tendency errors. Rater training also helps the raters develop a common frame of reference for evaluation of individual performance. Many researchers and survey respondents support the ambition of effectual rater training. However, it is noted that such training is expensive, time consuming, and only truly functional for behavioral assessments. Another piece to keep in mind is the effects of rater motivation on judgmental evaluations. It is not uncommon for rating inflation to occur due to rater motivation (i.e. organizationally induced pressures that compel raters to evaluate ratees positively). Typically, raters are motivated to give higher ratings because of the lack of organizational sanction concerning

accurate/inaccurate appraisals, the rater's desire to guarantee promotions, salary increases, etc., the rater's inclination to avoid negative reactions from subordinates, and the observation that higher ratings of the ratees reflect favorably upon the rater. The main methods used in judgmental performance appraisal are:a) GRAPHIC RATING SCALE: graphic rating scales (see scale (social sciences)) are the most commonly used system in PA. On several different factors, subordinates are judged on 'how much' of that factor or trait they possess. Typically, the raters use a 5- or 7-point scale; however, there are as many as 20-point scales. b) EMPLOYEE-COMPARISON METHODS: rather than subordinates being judged against pre-established criteria, they are compared with one


another. This method eliminates central tendency and leniency errors but still allows for halo effect errors to occur. The rank-order method has raters ranking subordinates from best to worst, but how truly good or bad one is on a performance dimension would be unknown. The pairedcomparison method requires the rater to select the two "best" subordinates out of a group on each dimension then rank individuals according to the number of times each subordinate was selected as one of the "best". The forced-distribution method is good for large groups of ratees. The raters evaluate each subordinate on one or more dimensions and then place (or force-fit, if you will) each subordinate in a 5 to 7 category normal distribution. The method of top-grading can be applied to the forced distribution method. This method identifies the 10% lowest performing subordinates, as according to the forced distribution, and dismisses them leaving the 90% higher performing subordinates. c) BEHAVIORAL CHECKLISTS concerns specific

SCALES: behaviors are more definite indicative of good or bad job

than traits. The critical incidents method (or critical incident technique) behaviors performance. Supervisors record behaviors of what they judge to be job performance relevant, and they keep a running tally of good and bad behaviors. A discussion on performance may then follow.

The behaviorally anchored rating scales (BARS) combine the critical incidents method with rating scale methods by rating performance on a scale but with the scale points being anchored by behavioral incidents. Note that BARS are job specific.



SELF ASSESSMENTS:-While most judgmental PA research is

evaluated by a superior (e.g. supervisor, manager), peer assessments are evaluated by ones colleagues. With self-assessments, individuals evaluate themselves.



PEER ASSESSMENTS : members of a group evaluate and appraise the performance of their fellow group members. There are three common methods of peer assessments. Peer nomination involves each group member nominating who he/she believes to be the best on a certain dimension of performance. Peer ratings has each group member rate each other on a set of performance dimensions. Peer ranking requires each group member rank all fellow members from best to worst on one or more dimensions of performance.


SELF-ASSESSMENTS : for self-assessments, individuals assess and evaluate their own behavior and job performance. It is common for a graphic rating scale to be used for self-assessments. Positive leniency tends to be a problem with self-assessments.


360-DEGREE FEEDBACK: 360-degree feedback is multiple evaluations of employees which often include assessments from superior(s), peers, and ones self.










A study on effectiveness of Performance appraisal of employees at APEX HOSPITAL.

OBJECTIVE OF STUDY: To study performance appraisal system. To understand and evaluate performance appraisal mechanism in operation. To evaluate the effectiveness and satisfaction level of the employees towards performance appraisal system in APEX. SCOPE OF THE STUDY: The study covers employees of APEX. Survey was conducted on the method of performance appraisal system that was used in APEX. The study focused no evaluation of design, implementation, feedback, participation, parameters of the appraisal system only. To help the management plan foe development and growth. The target samples of 50 technical employees were selected at random from the same level.




HOSPITAL PROFILE:Apex Hospital is multi-specialty, 102 bedded, state-of-art medical center, in Jaipur (Rajasthan, INDIA). Established in year 1994, Apex became one of the first institutes in India to attain ISO 9001 under the leadership of the Managing Director, Dr S.B. Jhawar, a renowned name in the field of medicine over the entire belt of Rajasthan. Dr. S.B. Jhawar, M.D. (Medicine), worked in different hospitals in Dept. of Medicine/Geriatric Psychiatry in England (1975-76). He is one of the first practitioners to start and pioneer Ultrasonography in Rajasthan. From 1994, over the next few years, the hospital gained momentum by leaps and bounds as an impressive team of well known doctors joined in. Apex, since its beginning, set continual expansion and enrichment as its goal. Today, apex is one of the very few medical centers in the region with multispecialty facilities for Cardiac care, Renal transplant, Joint replacement, Obesity surgeries etc. under one roof. We are committed to deliver high quality medical care at an economic price. Apex hospital is authorized by state government and other institutes ( Refer complete list ). The hospital is under process of getting NABH accreditation. A quick glance at Apex Hospital Large building with 30,000 sq. ft. built up area Total number of beds: 102 Intensive Care Unit: 15 beds Fully equipped Neonatal ICU 5 operation theatres 200 full-time employees 35 eminent consultants Cath labs & angiographies Kidney Transplants Obesity / Weight loss Surgery Medical Tourism Initiatives Featuring Tele-medicin


Apex hospital is equipped with most modern technology & machines to provide authentic diagnostic services.

DIAGNOSTIC SERVICES a) Cardiology: Cath Lab Angiography Angioplasty Echo, colour Doppler, CTMT, ECG.

b) ENDOSCOPY: Gastro-duodenoscopy and Sclerotherapy Varicial ligation Sigmoidoscopy Coconoscopy ERCP Bronchoscopy and alveolarlavage Cystoscopy


CT Scan Digital X-ray Barium studies Intravenous pyelography Ultrasound, HSG

a) CYTOLOGY AND HISTOPATHOLOGY: Analysis of all types of body fluids Histological assessment of various biopsy specimens FNAC Tru cut Biopsy & Laparoscopic Biopsy


OTHERS:A) ENDOCRINOLOGY : Thyroid function test Growth hormone Prolactin ACTH, Cortisol assay

B) OPHTHALMOLOGY : Complete evaluation with Slit lamp Bimicroseopy Automated refraction Ultrasound scan, Contact lens

C) NEUROLOGY: EEG EMG Nerve Conduction Studies

D) BIOCHEMISTRY: Blood Sugar, GTT, Blood urea, Creatinine, SGOT/PT, Bilirubin Total protein AG ratio Alkaline Phosphatase Acid Phosphatase, Calcium and Phosphate Electrolyte, Total Lipids Profile Amylase and Lipase, Cardiac enzymes (PK, MB, TropT, LDH, etc)




GRAM's Stain Infection Control

F) PULMONARY MEDICINE: Lung function tests ABG

FACILITIES: 24 hours Emergency State of art advanced Cath Lab ( Siemens Artis Zee ) with fully equipped 8 bed CCU Fully equipped Neonatal ICU, Phototherapy, Radiant warmer, & Exchange transfusion. All vaccinations & Nebulizer therapy for asthmatic children Five highly equipped operation theatres with a separate labour room. Super deluxe & deluxe rooms (with A/C, Balcony, TV, Fridge, Telephone) Cafeteria, Dormitory with bath / toilet for the attendants 24 hrs. Medical shop, Ambulance, Laboratory and Radiology services Evening OPD ( 5- 7 PM): Dentistry, ENT, Gynecology, Medicine, Ophthalmology, Physiotherapy, Surgery. Aerobics Center : Fat to Fit with Fun MLC Approved service.


HUMAN RESOURCE DEPARTMENT IN APEX HOSPITAL:Apex hospital is a multispecialty small set up of 102 bedded, in which 200 employees are on regular working basis. The human resource department in apex hospital is not so large but it handles all the employees properly. Human resource department is an indispensable organ in any organization. Human resource department provides appropriate employees to the organization for achieving the predetermined goal of the organization. it also helps the employees to achieve the personal goals. Human resource department coordinate the goals of the organization with the employees goals. The human resource advisory service focuses on identifying the manpower needs of the hospital in line with the planned clinical and administrative services portfolio. It also addresses specific job profiles, approach to recruitment and training needs. A hospital is a microcosmic community that operates like a small city, presenting the same issues with a stronger dynamic due to the human interaction factor. With functions that cover everything from performance management to safety, Human Resources Management plays a vital role in the health care workplace in ensuring the delivery of health care services and facilitating optimal patient outcomes. In any health care setting, the Human Resource department fills a variety of personnel needs that both employers and employees encounter. The role of this department is to manage all aspects of operations that are personnel related. Examples of Specific Human Resources Management Functions Include: - Hiring - Physician and Nurse Recruitment - Employee Orientation - Personnel Management - Benefits & Compensation Management - Counseling - Claims Handling - Training and Performance Monitoring - Professional Development Programs - State and Federal Regulations Education - Work place Safety and Sanitation - Labor Mediation - Administration Employee Meetings - Staff Morale & Retention




LITERATURE REVIEW:Organizations exist to achieve goals. Goals are only met when individual employees efforts matches with policy of the organization and thus bringing out success and effectiveness. The assessment of how successful employees have been at meeting their individual goals therefore becomes a critical part of HRM and here comes Performance Appraisal System. Performance appraisal is an important component of the information and control system. In todays flexible organizations, performance evaluation provides an important way for managers to clarify performance goals and standards and to enhance future individual performance. Thus the purpose of performance appraisal is to improve the organizations performance through the enhanced performance of individuals. The performance appraisal system: Is an organizational necessity Is based on well defined objective criteria Is based on careful job analysis Uses only job related criteria Is supported by adequate studies Is applied by trained qualified raters Is applied objectively throughout the organization Can be shown non discriminatory as defined by law. OBJECTIVES OF PERFORMANCE APPRAISAL There are mainly two purposes for which performance appraisal is used by an organization: (1) To improve the work performance of employees by helping them realize and use their full potential in carrying out the firms missions; and (2) To provide information to employees for use in making work related decisions, More specifically, appraisals serve the following purposes. 1) Appraisals generate information to support administrative decisions. Promotions transfers and reassignments, demotions and terminations are action based at least in part on performance. 2) Appraisals provide feedback to employees and thereby serve as vehicle for personal or career development because feedback provides:


etc.) Recognition of the importance and value of their performance. 3) Once the development needs of employees are identified appraisals can help establish objectives for training programmes. Thus evaluations provide a basis for changing performance plans, including objectives and standards of behaviors as business plans and conditions change. 4) As a result of proper specifications of performance levels, appraisals can help diagnose organizational problems. They do so by identifying training needs and the knowledge, abilities, and other characteristics to consider in hiring, and they also provide a basis for distinguishing between, effective and ineffective performers. 5) Appraisals are used as criteria in test evaluations. The rationale for differential treatment of employees needs to be consistent with companys values, philosophy and strategy. It also needs to be balanced with the desire for collaboration, rather than competition and conflict, sought in TQM. NEW OBJECTIVES OF PERFORMANCE APPRAISAL Performance appraisal system can serve the following purposes if designed properly Help each employee to understand more and more about his role and become clear about his functions. Helps each employee to understand his own strengths and weaknesses with respect to his role and functions of the company. Helps identifying the developmental needs of employees. Helps increase mutuality between employee and his superiors. provides an opportunity to the employees for self reflection and individual goal setting Helps in preparing employees for performing at high levels by continuously enforcing the required qualities. Creates a healthy environment in the organization.


EVOLUTION OF PERFORMANCE APPRAISALS IN INDIA:First Phase of Performance appraisals began in the early sixties were prepared in the form of Annual Confidential Reports (ACR0, also known as Employee Service Records (ESR) in some organizations. Negative remarks in the ACT or ESR were considered damaging for career growth. It was thus important to keep the boss in good humor so that the ACR or ESR did not get spoiled. The ESR was largely trait based and the traits used were sincerity, punctuality, dynamism, job-knowledge, loyalty, initiative, leadership etc. The ACR and it was this strict confidentiality that was supposed to serve as the motivating force for them. This may be considered as Phase 1 of the performance appraisal systems in India. In the Second Phase that spanned late sixties and early seventies, the main change was in communication of adverse remarks to the employees. It was felt that unless this system of communicating to the employees in writing any quality or trait on which they got a rating of 33 per cent or less. Even though the communication was sent to the employer by the personnel department or the establishment section in a routine manner, the employees took it very seriously because it required office played a key role in moderating the assessment, and he normally had all the powers to overrule the ratings of the reporting officer of the employee. In the Third Phase of appraisals, the employee was given a scope to state his own accomplishments in the confidential report form. The term annual confidential report was replaced during this period by Performance Appraisal. The appraisal process began at the end of the year with a statement by the appraise about his significant accomplishments during that year. Some organizations later turned this opportunity given to the appraisee to express his significant achievements as self-appraisal. However, this term was a misnomer as there was no scope for the appraisee to appraise himself. A few organizations subsequently developed this part of the appraisal by adding other questions about difficulties faced, plans for improvement next year etc. Everything else remained the same. The formats became a little more elaborate and in few cases, the appraisal included the details of the actual work done, largest achieved etc. The confidentiality, however, was maintained as before. In most cases, there was no communication to the appraisee about the performance assessment. In a few of them, a column of training needs was introduced. The appraisals continued to be control oriented and not developmental. It was really in the Fourth Phase that the system of performance appraisals underwent a quantum leap. This phase began in the mid-seventies and in a way


was initiated in India by Larsen & Turbo Limited, followed by the State Bank of India , Bharat Earth Movers and few other organizations. This phase witnessed a shift from control to development, appraisal to analysis, strong links to training, confidentiality to openness and traits to quantifiable tasks and targets. The movement towards open and development oriented appraisal systems was initiated by L&T when it adopted a system making appraisal more performance based, participative (dialogic and interactive), open and developmental. It required the employee and his reporting officer to plan the performance (the term key performance areas or KPAs was introduced) or the appraisee in the beginning of the year, review it after six months with the boss, analyze the factors affecting performance, discuss developmental needs, have performance counseling and share the ratings with the appraisee. The system required active participation of the appraisee and was intended to be a performance planning, performance reviewing. And performance developing system. In the late seventies and early eighties, most organizations wee fascinated by this open and development oriented system. Some of them even started new HRD departments by appointing HRD managers having the skills to design, monitor and implement the system. While a few organizations switched over to this system, it took about 10 years of experience to fully understand its intricacies and dynamics. The change process was slow largely because the employees were not used to the openness introduced by the new system, the HRD managers did not have enough skill base to monitor it, and the top management lacked patience and perspective about its potential advantages. Several organizations could not get out of the mindset created by earlier confidential report system. They continued to use it for promotions, which were considered as the most important indicators of development. It is only by the mid eighties that organizations started setting down and feeling comfortable with the open appraisal systems. Phase Fifth has started only in last three years with organizations showing some maturity and growth in terms of their understanding of appraisals. This phase is characterized by a movement towards development in spirit and form. This is symbolized by the substitution of the term performance appraisal by performance review system, performance development system, performance analysis and development to rewards and from comparative assessment to assessment in relation to plans. There is a movement from rewards and controls to culture building and development and the new phase also indicates a shift towards appraisal by multiple sources rather than by only the reporting officer.





Performance appraisal in its traditional from known as ACR-Annual Confidential Report is often misused than used. Performance appraisal has now been recognized as a HRD function. In the last decade many organizations have reviewed and changed their managerial appraisal systems. 1) There is a trend away from the composite appraisals with multiple objectives (e.g. performance planning, development rewards and promotions)to separate systems for different systems for different clusters of objectives. 2) There is a move away from isolated appraisal system to the business linked one . 3) There is shift away from closed confidential type to open dialogue and discussions based system. 4) There is a movement quantitative (pseudo objective) to qualitative (interactive, improvement and process oriented) system. 5) There is a movement away from boss assessed feedback to 360-degrees feedback involving customers, peers, team members, subordinates etc. in addition to supervisors. 6) There is also a trend away from elaborate systems to simple ones. 7) There is a shift from standard systems to flexible and group specific ones. 8) There is a movement from result oriented systems to process oriented system. 9) There is a movement from the assessment of individual performance to the development of team performance. 10) There is also a movement from complacency to experimentation through continuous research change. Performance appraisal refers to the assessment of an employees actual performance, behavior on jobs, and his or her potential for future performance. Appraisal has several objectives but the main purposes are to assess training needs, to effect promotions, and to give pay increases. Appraisal of performance proceeds in a set pattern. The steps involved are defining appraisal objectives, establishing job expectations, designing the appraisal programme, conducting performance interview, and using appraisal data for different HR activities. Two


important contemporary techniques of performance appraisal include 360 appraisal and goal setting approach to appraisal also known as Managing by Objectives. Currently most of the companies are using one of the following Performance Appraisal Methods:

1). 360 Degree Appraisal Method 2). Rating Scale Method 3). Management by Objective Method Under the 360 Degree appraisal method the employee is rated from all angles i.e., by the superiors, subordinates, peers, suppliers, distributors, customers and clients. Under the Management by Objective method the employee goals are set mutually by the employee's and the management. And the employees are rated based on the accomplishment of these goals. Under the Rating Scale method each employee trait or characteristic is rated on a scale that usually has several points ranging from "poor" to "excellent" (or some similar arrangement).The traits assessed on these scales include employee attributes such as work quality, cooperation, initiative, punctuality and technical competence, etc. The selected traits should be in some way relevant to the appraisee's job. 360 APPRAISAL AND FEEDBACK The 360 degree appraisal involves rating of an employee or manager by everyone above, alongside and below him. Corporate like General Electric India (GE), Reliance Industries Ltd. (RIL), Crompton Greaves, Godrej Soaps, Wipro, Infosys, Thermax and Thomas Cook are all using this tool to find out truths about their managers. Although deployed mostly as a fact-finding technique, 360 appraisals are also used to design promotion and reward system in the organization. Concept of 360 Appraisal According to Milliman and others, 360-degree appraisal is the process of systematically gathering data on a persons skills, abilities and behaviors from a variety of sources the manager, peers, subordinates and even customers and clients.


Thus, appraisal of an employee is done by his superior, his peers, his subordinates and clients or outsiders with whom he interacts in the course of his job performance. In 360-degree appraisal, besides appraising the performance of the assesses, his other attributes such as talents, behavior, values, and technical capabilities are also appraised. Besides the employee himself, superior, subordinates and peers play an important role in the appraisal. Structured questionnaires are used to collect responses about the employee from his superiors, peers and subordinates. Several parameters relating to performance and behavior are used in the questionnaires. Each manager is assessed by a minimum of fifteen colleagues, at least two of them being his bosses, four of them peer, and six of them subordinates. Even the important customers or clients of the firm may also be requested to give their assessment of the concerned employee. The responses are presented collectively to the assesses in the form of charts and graphs. Comments and interpretations are presented later. Counseling sessions are arranged with the employee to remove the weaknesses identified in the 360 degree assessment. Merits of 360 Appraisal:The merits of 360 appraisal are as under: (i) The 360 degree appraisal leads to greater self-awareness of those appraised. It reveals strengths and weaknesses in their working styles. (ii) The gap between self assessment and the views of ones colleagues of peer group in reduced. (iii) It facilitates empowerment of subordinates who get a say in the appraisal of their bosses. (iv) Inflexible managers are forced to initiate self-change. (v) Facts about organizational culture and ambience are brought to light by the multiple appraisals. Limitations of 360 Appraisal The system of 360 appraisal suffers from the following limitations: (i) The 360 degree appraisal system ignores performance in terms of goals. (ii) The candidate being appraised may not accept negative feedback from the subordinates and peers. He might feel humiliated.


(iii) Responses from colleagues often tend to be biased. (iv) Linking rewards to findings under 360 degree appraisal can prove to be unfair. (v) The subordinates and peers might not be fully competent in appraisal.

Guidelines for Better Use of 360 Appraisal The use of multisource appraisal can be effective if the following guidelines are followed: (i) Involve people. Ask them who should serve as raters, and give them an opportunity to review and interpret the results. This will strengthen their commitment to both the overall process and the specific decisions. (ii) Ensure that relevant data are being collected. Focus on behaviors and outcomes that raters are capable of observing and are competent to evaluate. (iii) Ensure that no single rater can dramatically affect the outcome. Use a large enough sample or eliminate the highest and lowest scores to ensure that no one rater can skew the data. (iv)Train raters in what and how to observe. The better people understand what they look for and how to record critical incidents (specific things the person said and did that can be used as examples to support their ratings, and better the quality of the information that will be collected. (v) Ask raters to support their evaluations. Whenever possible, raters should discuss their observations and evaluations with other raters. These discussions should trigger thoughts and combat selective memory. Raters should also be required to provide a rationale for their rating to other raters. This would prevent people from using the process to act on personal grudges. (vi)Move slowly and start small. Any organization considering using 360 feedbacks in the appraisal process should begin by using it for development purpose only and then gradually to make it a part of appraisal system. Even then, the focus should be on the goal-setting portion of the appraisal. People need to get comfortable with the idea of multisource feedback as a development tool before they can accept it as part of the formal performance management process. A lot of organizations seem to be hurrying to integrate 360 feedback into the human resource management system. Multisource feedback really does have the


potential to enhance human resource management system. However, 360 feedback wont fix a system that does not work. (vii) Develop a culture that supports open feedback. Not surprisingly, 360 feedback works best in companies where the environment is participatory rather than authoritarian, where giving and receiving feedback are the norm and are seen as valuable sources of information. If the current system (where only the supervisor does the appraisal) is not working due to lack of straight talk and hesitancy to give direct feedback, it is essential to introduce openness in the organization. (viii) Clear and agreed on performance measures and behaviors. When 360 feedback is used for development only, the organization may be able to settle the list of behaviors and skills that have reasonable face validity and general support: coaching or team building, for instance. However, when the feedback is being used to determine performance ratings, the result and behavior for which people are held accountable must be clear, unambiguous and specific. (ix)The users must support the system and be willing to invest the time required to make it work. The introduction of 360 feedback makes an already timeintensive appraisal process even more demanding. It means more data to collect and more information to process for the additional feedback. (x) Sound feedback process. While the way the data are collected and presented are always important, two aspects of sound 360 feedback procedure are particularly relevant when the data are used for appraisal purpose: the validity and reliability of the practices for which people will be measured and the confidentiality of the raters. Elements of 360 Appraisal Program The elements of 360 appraisal program are as follows: (i) Appraisal by Superior/ Boss. This is the most important element of the 360 degree appraisal. Here the focus is to provide constructive feedback on employees performance and his development needs. It is the responsibility of the superior to ensure that employee sets goals not only in the area of business performance but also in the areas that are vital to the organization. These are called corporate thrust areas and may include relationship management, safety and quality development. If the working style of the employee is a concern area and needs improvement for enhancing effectiveness then goal may be set for style of functioning such as, from short-term to long-term orientation.


It is expected of the superior to put career aspirations of the employee in proper perspective. Firstly, superior must communicate to the employee in a clear way what the organization plans for the employee. Secondly, if the employee has unrealistic aspirations, then also it is superiors responsibility to share with the employee the realistic picture given his/ her strengths, development areas, experience, qualifications, and the organizations ability to provide growth. This is how the superiors appraisal has a very significant role to play. (ii) Appraisal by the Peer Group. The peers play an important role in the life of an employee in the organization. The can also provide a deep insight into the personality make up, attitude and style of working of the employee. For better results, it is essential to select the right peers for the purpose of appraisal. They must include peers both from within the department as well as from the other departments, which are directly connected with the working of employees department. The concept of internal customers comes handy here. Three to five internal customers should normally be chosen for peer appraisal. In order to achieve the purpose of 360 appraisal, the peer group appraisal must strive to get the feedback on (a) employees working style, (b) sensitivity towards others, (c) spirit of co-operation and collaboration, and (d) ability to work as a team member. (iii) Appraisal by the Subordinates. Another distinctive feature of 360 appraisal is the role of subordinates in appraisal. It signifies two things. Firstly, it is a clear expression from the organization that it encourages openness and that feedback is a two-way process. Secondly, it is a systemic recognition of the fact that an employees subordinates do play a vital role in his appraisal. Thus, the purpose of subordinates appraisal is to get first hand assessment of how the subordinates perceive their superior to be in terms of: (a) Delegation of authority, (b) Guiding and training of subordinate, (c) Motivation of subordinates, (d) Team building, etc. Upward appraisal provides an opportunity to the subordinates to give feedback to their superior on the kind of things they would like him/ her to continue doing (status quo), things they would like him/ her to stop doing (areas for corrective action), things they would like him/ her to start doing (areas for new initiatives). (iv) Self Appraisal. Any program of 360 appraisal would not be complete without self appraisal by the employee whose performance is being appraised. Self appraisal facilitates the employee to identify his/ her strengths and weaknesses and provides an opportunity to assess the performance. In a well


established system, employees use the self appraisal very effectively and organizations also find that employees often are their own strongest critics and display very high degree of objectivity. Self appraisal also provides an opportunity to the employee to express his career moves for the future. However, this is only for gathering information and that under the given organizational constraints, it may not be possible to provide the career progression desired by the employee. Nevertheless, it is in the organizations interest to at least know on a first hand basis the aspirations of its employees.





Appraisal system:Performance appraisal design :-

1 Design: -

Personal interaction. Questionnaire.

2 Observation: -

Personal observation. Indirect observation.

SAMPLING DESIGN:Sampling is the process of obtaining about an entire population by examining only a part of it. Sampling plans calls for three decisions. a) Sample unit b) Sample size c) Sampling procedure

The design to be adopted for the study will be based on convenient sampling. The population for the study will consist of employees in the APEX hospital.



SAMPLE SIZE 20 Employees SAMPLING PROCEDURE:For the study, respondent were selected on the basis of random sampling.

TYPE OF THE STUDY:The study is a descriptive study. It is based on data collected through structured questionnaire from the respondent. SOUCE OF THE DATA:The study requires both primary and secondary data. PRIMARY SOUCE: Questionnaires Interviews SECONDARY SOURCE: Indirect observation Library and research work Internet, web pages and blogs Articles Books

Secondary data will be used to analyze the primary data in light of real world situations. ANALYSIS OF THE DATA:The primary data will be analyzed with the help of statistical tools and techniques. DATA PRESENATION TOOLS USED:Primary data was collected through the questionnaire by distributing questionnaires; questionnaires with both close ended and open ended questions have been used as sample respondents. On the basis of the tables, the facts are presented in the form of various charts. LIMITATIONS OF STUDY:-


The study is confined to APEX only. The interpretations and recommendations applicable to this cooperative. The study was conducted on the assumptions that the information is given by respondent all are correct. Sample size is restricted to 20 respondents. Time constraints.




DATA ANALYSIS & INTERPRETATION:Q.1. Are you aware about performance appraisal system of hospital? 1) Yes 2) No 3) Cantsay
20 15 10 5 0 yes no cant'say

Interpretation:Pie figure shows that 95% employees are aware about performance appraisal system of the hospital. Q.2. In your Opinion Performance Appraisal is? a) Evaluation of Employees b) Promotion of Employees c) Job Satisfaction of Employee d) Motivation
16 14 12 10 8 6 4 2 0 A B C D

Interpretation:Figure shows that 69% employees are aware about the objective of the performance appraisal and 31% employees are not aware


Q.3. Which method of performance appraisal is implemented in the organization? a) Merit cum seniority b) Seniority cum merit c) Merit only d) Seniority only e) Other
9 8 7 6 5 4 3 2 1 0 Merit cum seniority Seniority cum merit Merit only Seniority only ) Other

Interpretation:Figure shows that the seniority cum merit method of performance appraisal system is implemented in the organization and then merit cum seniority. Q.4. Who appraise you? a) Appraisal committee c) Self appraisal
18 16 14 12 10 8 6 4 2 0 Appraisal committee Your immediate Self appraisal supervisor 360 degree appraisal

b) Your immediate supervisor d) 360 degree appraisal

Interpretation:Figure shows that in apex hospital appraisal committee appraise the employees. but in some cases the performance is appraised by immediate supervisor .


Q.5. In your opinion does it identify the training needs? a) To a large extent b) To some extent c) Can say d) Not at all

Not at all 42%

To a large extent 26% To some extent 16%

Can say 16%

Interpretation;Figure shows that 42% employees assume that performance appraisal system does not identify the training need of the employees in organization.

Q.6. Is the promotional policy linked with the performance appraisal? a) Yes b) No
cant'say 5% no 15%

c) Cant say

yes 80%

Interpretation:Figure shows that most of the employees assume that performance appraisal system is linked with promotional policies of the organization.


Q.7. Are the issue like career planning and succession planning a part of company policy? a) Yes b) No c) Cant say

cant'say 20% no 15%

yes 65%

Interpretation:Figure represents that 65% employees assume that company policy consists issues like career planning and succession planning, while 15% employees assume that company does not consist such kind of policies in their master policy plan and 20% employees have no idea about these issues. Q.8. Does the system helps you in aligning your goals with those of the organization? a) Yes b) No
cant'say 10%

c) Cant say

no 25% yes 65%

Interpretation:Figure shows that 65% employees assume that performance appraisal system is aligning with goals of employees, while 25% dont think so.


Q.9. Do the employees get the feedback of performance appraisal? a) Yes, every time b) Only when required b) Often, but not always d) Rarely
Yes, every time 11% Never 26% Rarely 5%

e) Never
Often, but not always 5%

Only when required 53%

Interpretation:Figure shows that 53% reply that only when require they got the feedback of performance appraisal, 26% never, 11% yes every time and 5% often but not always. Q.10. Does the organization provide counseling after the appraisal? a) Always b) Often c) Rarely d) Never
Always 10% Never 25%

Often 15%

Rarely 50%

Interpretation:Figure shows that 50% employees assume that organization rarely provides counseling after performance appraisal, while 25% employees assume that never employees are called for counseling after performance appraisal.


Q.11. What kinds of remedies measures are taken? a) Job rotation c) Counseled
10 9 8 7 6 5 4 3 2 1 0 Job rotation Sent to training Counseled programmes Any other

b) Sent to training programmes d) Any other kindly specify..

Interpretation:Figure shows that 45% employees assume that after performance appraisal remedies measure is job rotation 30% assumed counseled and 25%employees are sent to the training programmes. Q.12. How do you rate the overall assessment of performance appraisal? a) Outstanding b) Very good c) Good d) Satisfactory
Outstanding 10% Satisfactory 15% Poor 15% Very good 40%

e) Poor

) Good 20%

Interpretation:Figure shows that 40% employees assume that performance appraisal system is very good,20% employees assume good, 10% outstanding, 15% satisfactory and 15% poor.


Q.13. Do you receive any increment in your salary after performance Appraisal. a) Yes b) No

no 40% yes 60%

Interpretation:Figure shows that 60% employees assume that they get increment after good performance and 40% assume that they did not get any increment in salary. Q.14. Do you think that performance Appraisal help to provide an atmosphere where all are encouraged to share one another burden. a) Yes b) No

no 25%

yes 75%

Interpretation:Figure shows that 75% employees assume that performance appraisal system encourages to share one another burden.


Q.15. Do you think performance appraisal helps people set and achieve meaningful goals. a) Yes b) No

yes 40% no 60%

Interpretation:Figure shows that 60% employees assume that appraisal system did not helps people set and achieve meaningful goals. Q.16. Do you think performance appraisal give constructive criticism in a friendly and positive manner? a) Yes b) No

no 36% yes 64%

Interpretation:Figure shows that 64% employees assume that performance appraisal did not give constructive criticism in a friendly and positive manner.


Q.17. Do you think that performance of employees improve after process of performance appraisal? a) Yes b) No

no 7%

yes 93%

Interpretation:Figure shows that 93% employees assume that after performance appraisal employees improve their performance. Q.18. Do you think performance appraisal improves motivation and job Satisfaction. a) Yes b) No

yes 40% no 60%

Interpretation:Figure shows that 60% employees assume that performance appraisal did not improve motivation and job satisfaction.


Q.19. Do you think performance appraisal helps to change behavior of Employees. a) Yes b) No

no 23%

yes 77%

Interpretation:Figure shows that 77% employees assume that performance appraisal helps to change behavior of employees and 23% employees dont think so. Q.20. In your opinion Performance Appraisal system of your organization is related to which of the follow in? a) Retention of Employees c) Organizational Culture b) Recruitment System d) Motivation
Retention of Employees 22%

Motivation 45%

Recruitment System 11% Organization al Culture 22%

Interpretation:Figure shows that 45% employees assume that performance appraisal system helps in motivation of employees, 22% for retention of employees, 22% for organizational culture and 11% for recruitment system.


Q.21. After performance appraisal improvement in your performance. a) Yes b) No

no 17%

yes 83%


Figure shows that 83% employees assume that after performance appraisal their performance improve, while 17% employees dont think so.


Findings& Interferences


Findings& interferences:The primary data, which is collected with the help of questionnaire represent many essentials findings about the performance appraisal system of the APEX hospital. In apex hospital most of the employees are aware with the performance appraisal system of organization. They are also well know the objectives the performance appraisal system Apex hospital has a performance appraisal committee which oversees the overall performance of the employees and according to their performance employees are permoted on the seniority cum merit basis. The performance appraisal system in apex hospital is very good .the performance appraisal system motivates the employees to improve their performance. It also helps to change in behavior. The performance appraisal system in apex hospital provides job rotation as a kind of remedies, if performance is not up to the mark. Performance appraisal system in apex hospital helps to some extent identifies the training needs for employees. The performance appraisal system consists or linked with promotional policy. It has the issue like career planning and succession planning and it helps employees to get increment in their salary according to their performance, it acts as motivation for employees in hospital to improve their performance. Performance appraisal system of apex hospital helps employees in aligning their goals. In apex hospital the employees get feedback of performance appraisal only when required. Performance appraisal system in apex hospital helped the employees to improve their performance


CHAPTER-6 Conclusion& Recommendations


Conclusion:1. This hospital proves that a major amount of work towards developing an effective and efficient performance appraisal system has not been accomplished to the fullest. 2. It seems that the organization is genuinely interested in improving the efficiency and utility of performance appraisal system to succeed in todays dynamic environment. 3. The performance appraisal system in apex hospital helps employees to improve their performance .it also motivates employees to achieves their personal goals 4. Performance appraisal system in apex hospital identifies the training needs for the week employees and motivates the employees to improve their performance. 5. Performance appraisal system is according to the dynamic environment of the hospital industry. In the recent scenario the hospital industry is fast growing and diversified field in which the effective performance appraisal provides the ways to achieve the goals of hospital.


RECOMMENDATIONS:1. The company should try to avoid employee resistance, which is associated with change worlds true change follows instance. This for all kinds of systems be it Performance Appraisal. 2. The HR Dept should attempt to obtain the maximum agreement of employees in respect of needs and objectives and purpose of the systems. 3. More stress relieving packages should be offered to the mentally stressed staff. 4. Overtime should be taken care of at time of performance appraisal, which would motivate the employees to perform better for longer hours. 5. Performance appraisal should after at proper span of time. 6. Performance appraisal should be done by expert person. 7. Clearly defined performance standards. 8. An effective monitoring system should be implemented. 9.Perfomance appraisal system should be beneficial as a development tool.