A FINAL RESEARCH PROJECT REPORT ON
PERFORMANCE APPRAISAL IN Indian Farmers Fertilizer Cooperative Limited, New Delhi
SUBMITED TO: PUNJAB TECHNICAL UNIVERSITY JALANDHAR IN THE PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA)
SUBMITED BY: PRASANT PRIYADARSHI ROLL NO: 633222489
This is to be certified that Mr. Prasant Priyadarshi of MBA 4 th Semester has worked on a research project “IFFICO” under my guidance of the Project Guide Dr.M.S. Pabla. To the best of my knowledge this is his own research work which has not been submitted for any other degree/diploma of his university or any other university.
Dr.M.sS. Pabla. (Faculty) SAS Institute of Information Technology & Research Punjab Technical University Mohali Date: ____________
It is a matter of great pleasure to thank all esteemed persons who helped me to complete my final research project successfully otherwise it would not been possible. Acknowledgement is not only a ritual, but also an expression of indebtedness to all those who have helped in the completion process of the project. One of the most pleasant aspects in collecting the necessary and vital information and compiling it is the opportunity to thank all those who actively contributed to it. I like to express my deepest gratitude and thanks to my Project Guide Dr.M.S. Pabla for the valuable guidance and constant encouragement which he extended to me throughout my research project.
PAGE NO. CHAPTER 1: INTRODUCTION TO COMPANY 5-12
• IFFCO: AN EXECUTIVE SUMMARY
• • • • BACKGROUND COMPANY PROFILE PROMOTIONAL AND PUBLICITY ACTIVITIES DISTRIBUTION CHANNELS 13-38
CHAPTER 2: INTRODUCTION TO PROJECT • • • • • • • • • • INTRODUCTON TO PERFORMANCE APPRAISAL WHAT IS PERFORMANCE APPRAISAL PURPOSE WHY PERFORMANCE APPRAISAL LIMITATION OBJECTIVE METHODS DESIGNING OF APPRAISAL PROGRAMME WHO IS TO DO THE APPRAISAL? REQUIREMENTS OF A SOUND APPRAISAL
CHAPTER 3: OBJECTIVES OF RESEARCH • OBJECTIVES OF STUDY
CHAPTER 4: RESEARH METHODOLOGY • RESEARCH METHODOLOGY
CHAPTER 5: DATA ANALYSIS • DATA ANALYSIS
CHAPTER 6: FINDINGS &LIMITATIONS • • FINDINGS LIMITATIONS
CHAPTER 7: RECOMMENDATIONS AND CONCLUSION • • RECOMMENDATIONS CONCLUSION
No. TABLE 1 PERFORMANCE APPRAISAL PREFERRED 2 SATISFIED BY SUBORDINATE'S 3 4 5 6 7 8 PERFORMANCE SATISFIED WITH THEIR OWN PERFORMANCE APPRAISAL IMPROVES PERFORMANCE THE SENIOR PRODUCTION OFFICERS TO THEIR SENIOR ADEQUATE AND FAIR CHANCE PROVIDED TO DEFEND AGAINST ADVERSE ENTRIES REASON FOR BAD PERFORMANCE AWARENESS OF APPRAISAL SYSTEM Page No.LIST OF TABLE & GRAPHS
Sr. 45 46 47 48 49 50 51 52
INTRODUCTION TO COMPANY
devising feedback system. The second part involves designing a moor effective performance appraisal system. The scope of the project involved defining and designing performance appraisal system. Finally. The study is divided into 2 parts . The general methodology adopted for study was primarily collection of primary dative.THE IFFCO: An Executive Summary
IFFCO is one of the largest chemical fertilizer producers in the country/Asian region over a period of 25 years.the first part mainly involves studying and analyzing the current performance appraisal system and identifying the gaps between the current state and the desired-in-state. IFFCO has been concentrating in the production and marketing of nitrogen phosphorus and potassium (NPK) complex and urea and introduced Di-ammonium Phosphate (DAP) in 1981. accounting and internet were also tapped. visibility to employee accomplishments and areas of weaknesses should be used by
. The effort involved designing a guide book on performance appraisal. which throws light on the critical area of managing human performance. employee career growth and development and studying the implications of an effective performance appraisal system on organization’s performance. Survey based. Employees must be constantly aware of their progress as the expectations for their contributions evolve. motivating and rewarding performance. books. Effectively managing performance appraisal has never been more critical then in today’s dynamic business environment. manuals. In order to drive increased productivity managers must consistently monitor team performance and provide meaningful feedback to their subordinates. Some secondary sources like company records.
control and reward employee performance in the best possible manner so as to improve the overall productivity in the organization. Most importantly. Provides completely secure authorization and flexible approval workflow.managers to provide coaching and guidance to their subordinates.
. Is fully integrated with goal setting and compensation planning. Supports meaningful formal and informal performance appraisal base on goal accomplishments and competency attainments. The reality is that without adequate performance appraisal tools. motivate. The proposed study and the outcomes will give insights to the HR managers about how to plan. The performance appraisal application allows for an ongoing meaningful feedback mechanism between managers and their subordinates. Provides a framework for ongoing coaching and development to improve future performance and productivity requirements. manage.
Ensures employees understand the merits and standard upon which they are evaluated promoting a sense of fairness and equality. any and all of these requirements are difficult to fulfill. the improved effectiveness of the overall process has been proven to increase employee morale and overall productivity. It helps transform the often rushed and tedious once-a-year performance review into an ongoing performance appraisal process that ties employee performance to bottom line business results.
3) To overcome this lacuna and to bridge the demand supply gap the farmers of the country through their own cooperative societies created this new institution to safeguard their interest. The society is primarily engaged in production and distribution of fertilizers.
1) During mid-sixties cooperative sector was responsible for distribution of 70 percent of fertilizers consumed in India and had adequate infrastructure. 4) IFFCO was registered of November 3. 2) It had no production facilities of its own and hence dependent on public or private sectors for suppliers. 5) A cooperative society associated with iffco has risen from 57 in 1967 to more than 36.000 now. 1967 as a multi unit cooperative society.
The cooperative system has not grown to the extent of absorbing all the additional volumes offered by IFFCO and KRIBHCO .COMPANY PROFILE & ITS PRODUCTS
IFFCO has built its present structure based on three broad objectives defined by its founders. Service to the farmer by way of transferring to them the knowledge of modern agriculture has been one of the core activities since the inception of IFFCO’s marketing activities in the seeding programme launched in Rabi 197071.principle and provision in the by laws .5 lakh ton.The volume of production has increased from 20. These volume are expected to increase further in the years and will reach about 53Lakh tones by 2000-01. .5lakh ton NPK. These are (A) production of quality chemical fertilizers-UREA.As a matter of philosophy .Cooperative societies have been the focal point for IFFCO’s activities in the rural areas. IFFCO has assumed the status of the largest chemical fertilizer producer in the country /Asian region over a period of 25 years.IFFCO has to continue to market its products through the cooperative system. The target for the current year (1998-99) is 49. The market scenario is changing fast. While there is shortage of phosphoric and potassic fertilizers currently in the market. there is a glut situation with respect to urea . NPK and DAP (B) Service to the farming community (C) making fertilizers available close to them withstand competition.000t NPK in 19701971(Imported material from USA under seeding programme) to 40. IFFCO has been concentrating on the production and marketing of NPK complex and urea and introduced DAP in 1981. DAP and Urea (1997-98). The private trade is growing faster to come
and trying to make inroads in the cooperative system. Service to the farming community by way of various educational programmes for the transfer of modern agricultural technology and subjects like Fertilizer Use Efficiency. Balanced Fertilization and IPNS approach have to and to be spread in the interior of rural India. IFFCO has to a relook at its marketing strategy and modify/strengthen the cooperative system in the particular to face the competition from the private trade. Under these circumstances. be more effective
CROP FILM Appreciating the importance of the electronic media and popularization of video presentations. This includes crop folder. wall paintings etc.. Fairs and exhibitions. Mass media approach is followed in fertilizers promotion. This medium has a mass appeal. HOARDING AND ROADSIDE SIGNBOARD IFFCO is effectively making use of state an national highway and market places for promoting the concept of balanced fertilizes use by erecting hoardings and roadside sign boards. IFFCO has been taking the advantage of this media for promotion of fertilizers use. DOORDARSAN AND PRESS
These are powerful and effective medium of communication and the message is conveyed even in remote and in accessible areas in a short time. IFFCO’s staff field staff often deliver talks over AIR and production are also published in local and national level newspapers. IFFCO has developed 8 crop films depicting the practices for the
. The objective is to create awareness about fertilizers and improve technical information on improved agricultural practice and fertilizers use so as to increase productive and use efficiency.PROMOTIONAL AND PUBLICITY ACTIVITIES
Fertilizer promotion is one of the important components in fertilizer marketing. which give brief accounts on crop production technology. and exhibitions are organized at the local and national level to appraise the farmers about achievements in agricultural development through audio / visuals aids. fairs.
AIR. TECHNICAL LITERATURE Publication and updating of technical literature from time to time-n regional language on crop production practices and fertilizer use is very important. leaflets and pamphlets etc.
As a matter of philosophy and policy. This film are of 15 minutes duration each and covers important crops like rice. however. in exceptional circumstances other intuitional agencies could also be involved. soybeans. IFFCO is. However. and mustard seed. not proposing its production through private trade. cotton. maize. wheat.benefit of farmers. sugarcane. IFFCO has provided in its byelaws channelising its entire production through the cooperative system.
INTRODUCTION TO THE PROJECT
This leads us to the topic of performance appraisal. appraisal of these factors must be done to achieve the full appreciation of every employee merit. the degree of success that individual employees have in reaching their individual goals is important in determining organizational effectiveness. a fair determination of the worth of an employee can take place only by appraising numerous factors some of which are highly subjective. there is a great need to have suitable performance appraisal system to measure the relative merit of each employee.
. it is necessary for management to know these differences so that the employees having better abilities may be rewarded and the wrong placements of employees may be rectified through transfers. The objective factor can be assessed accurately on the basis of records maintained by the Human resource or personnel Department. However. These differences are natural to a great extent and cannot be eliminated even by giving the same basic education and training to them. as for instant. while others are highly subjective. attendance. attitude and personality. Notwithstanding this.INTRODUCTION TO PERFORMANCE APPRAISAL
Since organizations exist to achieve goals. The assessment of how successful employees have been at meeting their individual goals. therefore. Therefore. The individual employee may also like to know the level of his performance in comparison to his fellow employees so that he may improve on it. Thus. There will be some differences in the quality and quantity of work done by different employees even on the same job. The basic purpose of performance appraisal is to facilitate orderly determination of an employee’s worth to the organization of which he is a part. but there is no device to measure the subjective factor precisely. People differ in their abilities and aptitudes. becomes a critical part of HRM. as for instant.
” The comparison of performance with job requirements helps in finding out the merit of individual employees in a week group. Performance appraisal is a formal programme in an organization. It employs various rating techniques for comparing individual employees in a work group. merit evaluation. Supervisor or an independent appraiser may do rating. There are no two opinions about the necessity of performance appraisal. progress rating. etc. To quote dale Yoder. in term of personal qualities or deficiencies and the requirements of their respective jobs. It is a continuous process to secure information necessary for making correct and objective decisions on employees.WHAT IS PERFORMANCE APPRAISAL?
Performance appraisal goes by various names such as performance evaluation. which can meet requirements of the management to achieve the organizational goals. we shall use the terms performance appraisal and merit rating to denote the appraisal of the performance of the employees of an organization. but aims at spotting the potential also. Performance appraisal means systematic evaluation of the personality and performance of each employee by his supervisor or some other person trained in the techniques of merit rating.
. But in this chapter.” performance appraisal includes all formal procedures used to evaluate personalities and contribution and potential of group members in a working organization. merit rating. which is concerned with not only the contribution of the members who form part of the organization. The satisfactory performance is only a part of the system as a whole and the management needs more information than mere performance ratings of the subordinates.
Generally. Performance appraisal is concerned with determining the differences among the employees working in the organization.Performance appraisal is the systematic evaluation of the individual with respect to his performance on the job and his potential for development. the individual’s immediate superior in the organization and whose performance is reviewed in turn by his superior does the evaluation. in terms of personal qualities or deficiencies and the requirements of their respective jobs. Thus. everyone in Performance appraisal employs rating techniques for comparing individual employees in the work group.
In an organization. demotions and discharges. layoffs. Such actions can be justified if they are based on performance appraisal. It is to the common interest of both the management and employees to promote employees onto position where they can most effectively utilize their abilities. It is mismanagement to promote employees into position where they cannot perform effectively at the time in question. such actions are called for because of unsatisfactory performance while in other cases it may be called for due to economic conditions over which the organization has no control because of changes in production process.
c) Wage and Salary Administration
In some cases. A properly developed and administered performance appraisal system can aid in determining whether individuals should be considered for promotions.
. it may be necessary to consider various types of personnel actions such as transfer. and 2) Self-improvement
1) ADMINISTRATIVE OBJECTIVES a) Promotions
This is the most important administrative use of performance appraisal. In some cases.Purpose of Performance Appraisal
The objective of performance appraisal fall in two categories: 1) Administrative. the wage increases are based on the performance appraisal reports. In some cases. appraisals and seniority are used in combination. The system must rate the ratee for the present job and his potentialities for the higher job. A person performing the job well does not necessarily mean that he is fit for promotion.
The manager’s selection will often be improved by this emphasis on the whole managerial job.
. Various theories in human relationship are outcome of efforts to find out the cause and effect relationship between the personnel and their performance. thus pointing out general training deficiencies which presumably should be corrected by additional training. Performance appraisal can also help in spotting the talented employees so as to train and develop them to create an inventory of executive skills. devise ways of attracting it.
e) Personnel Research
Performance appraisal helps in research in the field of personnel management. discussions. or financial knowledge. translate his ideas into action. A promotion minded individual could ask for the target programmes of a position he seeks and use the information given by performance appraisal to prepare him for the job and enhance his candidacy. It can also provide the areas where the employees/executives could be further trained and positioned to meet retirement and expansion situations. or counseling. Performance appraisal also helps to spot out a person’s ability to see an organization problem.
2) SELF IMPROVEMENT OBJECTIVES
The performance appraisals bring out the deficiencies and shortcomings of the employees. Performance appraisal helps human resource development in a way.d) Training and Development
An appropriate system of performance appraisal can be helpful in identifying the areas of skills or knowledge in which certain employees are not up to par. It highlights a sort of total managerial action in contrast to things they customarily factor out as conceptual entities-things such as planning function. incorporate new information as it arises and carry his plans through the results. leadership ability.
5) Ratings can be used to evaluate the effectiveness of training programmes. 6) Performance appraisal provides an incentive to the employees to better their performance in a bid to improve their rating over others. Merit rating reveals weaknesses of employees and the training programmes can be modified accordingly. he may be transferred to some other job.Why Performance Appraisal?
The important reasons or benefits. he can be recommended for promotion. 2) Performance rating helps in guiding and correction of employees. 4) Performance appraisal can be used as a basis of sound personnel policy in relation to transfers and promotions. If the performance of an employee is better than others. The supervisor may use the results of rating for the purpose of constructively guiding employees in the efficient performance of work. are as under: 1) A good system of performance appraisal helps the supervisor to evaluate the performance of his employees systematically and periodically. 7) Systematic appraisals will prevent grievances and develop confidence amongst the employees if they are convinced of the impartial basis of evaluation. The
. which justify the existence of a system of performance appraisal in an enterprise. but if a person is not doing well in a job. 3) The ability of the staff is recognized and can be adequately rewarded by giving them special increments. It also helps to assign that work to individual for which they are best suited.
record of merit rating is available in permanent form to protect the management against subsequent charges of discrimination. The objective of appraisal is to derive the point to the appraisee without inviting his resentment or drawing back into the shell or taking defensive attitude. The appraisal brings prominently to the attention of supervisors or executives the importance of knowing their subordinates as human being. The necessity of performance appraisal leads the appraiser to a thoughtful analysis of people rated and tends to make him more alive to opportunities and responsibilities in developing the subordinates. Performance Appraisal has a beneficial effect on both the persons doing the appraisal and being appraised. which might be leveled by the trade union leaders.
LIMITATIONS OF PERFORMANCE APPRAISAL
Performance appraisal may not yield the desired results because of the following deficiencies: 1) If the factor included in the assessment is irrelevant.
. 2) Different qualities to be rated may not be given proper weightage certain in cases. the result of merit rating will not be accurate. So the ratings are likely to be biased. Sometimes. they are guided by their personal emotions and likes. so the actual rating may not be on scientific lines. 4) Supervisors often do not have critical ability in assessing the staff. 3) Some of the factors are highly subjective like initiative and personality of the employees.
2. Performance appraisal rates the man and not the job as it is concerned with assessing of the abilities of the individuals. It considers the abilities and performance of individuals. Performance appraisal is concerned with the differences among the employees in terms of their performance. As a matter of fact. It considers the requirement of various jobs in terms of jobs description and job specifications. promotion. It does not take into account the individual abilities of the job-holder.
. Performance appraisal is used as a basis of personnel policies as regards transfer and promotion
4. This facilitates fixation of wages for various jobs.
The purpose of merit rating is to appraise the performance of individuals to take decisions like increase in pay.
Job evaluation is the analysis of various jobs to know the demands. Job evaluation analyses the job to determine their relative worth and fix their wage levels that are fair and equitable. which should be imparted to the employees. It is also termed as merit as it is concerned with the comparative merit of individuals. to determine the worth of the job on the basis of demands made by a particular job on the average worker. it measures the worth of different employees to the organization. The purpose of job evaluation is limited. which the normal performance of particular jobs make on average employees. transfer. It also serves as guidelines for the management to consider the type of training. etc. Job evaluation is used to shape the wage policy of the organization.Difference between Performance Appraisal and Job Evaluation:
To identify training and development needs and to evaluate effectiveness of training and development programmes.
To maintain individual and group development by informing the employee of his performance standards.OBJECTIVES
To enable an organization to maintain an inventory of the number and quality of all managers and to identify and meet their training needs and aspirations. To suggest ways of improving the employee’s performance when he is not found to be up to the mark during the review period.
. and provide a reliable index for promotions and transfers to positions of greater responsibility. human resources planning based on potentialities.
To determine increments rewards. To plan career development.
There are seven traditional methods of appraisal. However. Critical incidents. They are: Unstructured appraisal. versatility. judgment. initiative. loyalty. etc.
1) Traditional Methods
Traditional methods are very old technique of performance appraisal. knowledge of job.METHODS OF PERFORMANCE APPRAISAL
There are various methods of merit rating may classified into: 1) Traditional Methods and 2) Modern Methods. the appraiser is required to write down his impression about the person being appraised in an unstructured way.
. Employee ranking. Forced distribution. Graphic – rating scales. leadership. Field review. Check – lists. reasons for specific job behaviors. Evaluation of employees is done on the basis of standards of personal traits or qualities such as attitudes. and development needs. punctuality. personality traits. comments are required to be grouped under specific headings such as quality of job performance. in some organizations. They are based on trait-oriented appraisal. dependability. This system is highly subjective and has its merit in its simplicity and is still in use especially in the small firms.
It permits comparison of all employees in any single rating group regardless of type of work. i. They fail to evaluate the poor.e. 20% ‘below average’. The other difficulty with this method is that it does not indicate the degree of difference between the first man and the second man. and so on.outstanding. average or poor. This system is based on the presumption that employees can be divided into five point’s scale of . It has an advantage over the paired comparison system in that two or more employees can be given equal ratings. and 10% ‘poor’. All workers are judged on the same factors and they are rated on the overall basis with reference to their job performance instead of individual assessment of traits. This method obviously eliminates the room for subjective judgment on the part of supervisors. average. The forced distribution system is devised to force the appraiser to fit the employees being appraised into predetermined ranges of scales.
Forced Distribution Method
Some appraisers suffer from a constant error. In this way. below average and poor. the appraiser is asked to distribute the employees into these categories in such a way that about 10% of the men are in group ‘outstanding’. Asking the appraiser to rank employees on certain desirable traits can reduce the subjective ness in this method.. 20% ‘above average’. above average. which is open to criticism.
Ranking is a simple process of placing in a rank according to their job performance. Subjectively of the appraiser may enter into his judgments. they either rate all workers as excellent. The objective of this technique is to spread out ratings in the form of a normal distribution. The difficulty of this system is that the rater is ranked to consider a whole person. the best in placed first in the rank and the poorest occupies the last rank. In this system. This system is easy to understand and administer. average or excellent employees clearly. 40% ‘average’.
The selection of factors to be measured on the graphic rating scale is an important point under this system.
Since certain area of job performance cannot be objective measured. cooperativeness.Graphic Rating Scales
Under this method. it is likely that graphic scales will continue to use a mixture of both characteristics and contributions. Five degrees are established for each factor and general definitions appear at points along the scale. If a man scores for attendance. A supervisor may tend to rate him men high to avoid criticism from them. Generally. and Contributions. Graphic scales impose a heavy burden upon the supervisor. one means of ensuring that the rater has based his scoring upon substantial evidence is to leave space on the form after each factor and require him to explain the reason for his rating. However. etc. The main drawback of this system is that the rater may be biased. attitude. It permits the statistical tabulation of scores in terms of measures of central tendency. In effect. He must report and evaluate the performance of his subordinate on scales involving as many as five degrees on perhaps ten different factors. The scores presumably reveal the merit or value of every individual. the rating tends to cluster
. Frequently. There are two types: 1) 2) Characteristics. However. There is an implication that a high score of one factor can compensate for a low score on another. such as quantity and quality of work. skew ness and dispersion. he is asked to give example of the ratee’s behavior that justifies the assigned rating. It permits a ready comparison of scores among employees. this method has certain serious drawbacks. the rater is supplied with a printed form.
The graphic rating method is easy to understand and easy to use. one for each person to be rated. scales are established for a number of specific factors and qualities. such as initiative and dependability.
When this process is over. the rating up to this level is gathered on the rating sheet. rating is placed on separate cards. Weights are then assigned to the statements in accordance with the way they are ranked by the raters. various statements are prepared in such a manner that they describe various types and levels of behavior for a particular job. After the weights and values are attached to the individual traits. Under this method. For
. Each statement is attached with a scale value. Then the weights are averaged and employee is evaluated.
It also consists of two techniques: a) b) Weighted check list. the rater is forced to choose between descriptive statements of seemingly equal worth describing the person in question. b) Forced Choice This method is used particularly with the objective of avoiding scope for personal prejudices. Statements are chosen of both the sides (favorable as well as unfavorable). A supervisor may tend to rate his men high so that they may receive high share of pay raises in some cases. the supervisor just collects and checks all the statements. and Forced choice. At the time of rating the employees. Then raters who actually observed the accomplishment of the work sort these cards. They rank the employee from poor to excellent. The weighted check – the persons thoroughly acquainted with job and perfect at preparing and weighing statements should prepare list.
a) Weighted Check List: Under this method.on the high side under this system.
Welcome new ideas. These are recorded in a specially designed notebook. The main advantage of establishing this system of performance appraisal is that it has greater objectivity than most other methods. Suggested an improvement in the work method’ Tried to get a fellow worker to accept the management decision. but he must select the one that is more descriptive. This method requires every supervisor to record all such significant incidents in each employee’s behavior.
Critical Incident Method
A critical incident means a significant act by an employee exceeding or failing any of the requirements of his job. d) Shows favoritism to some employees. Examples of such type of job requirements of worker a are judgment.example. which indicate effective or successful action and those. Daily recording of these items
. which indicate ineffective or poor behavior. Refused to help a fellow worker. bias removed from the appraisal process. which contains categories or characteristics under which various behaviors can be recorded. Became upset over work. c) Makes promises that he knows he cannot keep. Resisted the implementation of change. learning ability. as for instance. b) Can be dependent upon to complete any job assigned. responsibility and initiative. Only one of the statements in each pair is correct in identifying the better performances and this scoring key must be kept secret from raters. dependability. In this way. the following two pairs of statement from each pair that is represented by supervisor. accuracy of work. productivity. It represents an exceptional behavior of an employee at work. a) Gives clear instructions to his subordinate. The rater may feel that neither of the two statements in a pair is applicable.
Gerald Whitlock designed a specimen checklist. and the possible plans of action in cases requiring further consideration. the level of performance of each subordinate. The expert questions the supervisor to obtain all the pertinent information on each employee and takes notes his notebook. it may be difficult for a supervisor to decide what the critical or exceptional incident is. The supervisor is required to give his opinion about the progress of his subordinates. The interviewer questions the supervisor about the requirements of each job in his unit and about the performance of each man in his job. The workers are usually classified into three categories .uncommonly. but overall ratings are obtained. The number of such performance behaviors ranges from 80 to 150 incidents. there is no rating form with factors or degrees. good points. an expert from the personnel department interviews the supervisors. Thus. The usual procedure in constructing the specimen checklist is to collect behavior incidents from certain experts in this area. ineffective. This method suffers from the defect that outstanding incident happens so frequently that individual’s appraisal may not vary markedly between any two time periods. or effective job behavior. the supervisor may forget the incidents with his subordinates. which consists of a number of behavior incidents. If the critical event does not happens’ it will be difficult to rate an employee. his weaknesses. equally divided between effective and ineffective specimens.seems to be essential because. promotion ability.
Field Review Method
Under this method. otherwise. It has been observed that most of the time the employees have neither positive nor negative incidents. He probes to find out only how a man is doing but also why he does that way and what can be done to improve or develop him. outstanding ability.outstanding. Moreover. satisfactory and unsatisfactory.
. The questions are asked and answered verbally. which are considered to be an example of . To rectify this defect.
Tendency: This error occurs when the rater is in doubt about the
subordinates or has inadequate information about them or is giving less
. In this manner. The personal judgment is always subjected to personal bias or prejudice as well as pressure from certain other areas.
Criticism of Traditional Methods:
The general criticism of traditional performance appraisal systems is that they are two subjective in nature because all of them are on personal judgment of the rater. The appraiser may not be able to judge the competence of the employees because of lack of training. which are discussed below:
Halo Error: This type of error occurs when the rater allows one aspect of a
man’s character or performance to influence his entire evaluation. he can contribute significantly to accurate appraisal. Many supervisors tend to give an employee approximately the same rating on all factors. The error can be recognized quite easily on factors scales.
Because of the judgment role of the supervisors under the traditional system. The rating scale technique of performance appraisal is particularly susceptible to the halo supervisor judge all of his subordinates on a single factor or trait before going to the next.The success of field review method depends upon the competence of the interviewer. If he knows his job. It is the tendencies of many raters to let the rating they rating to one characteristic excessively influence their rating on all subsequent characteristics. he can consider all of the men relative to a standard or to each other on each trait. performance ratings are frequently subject to a number of errors and weaknesses.
Supervisors will tend to rate their subordinates near the middle of the spectrum if their bosses put pressure on them to correct the worker’s average rates or to get rid of the subordinates.
Recent Behavior Bias: Often some raters evaluate persons on the basis pf
their performance in recent few weeks. religion or nationality. the rater may give higher ratings because he thinks that it would look bad for him if employees in the other department received higher pay increases than his pay.
Leniency or Strictness: Some supervisors have a tendency to be easy raters
and others have a tendency to be harsh in their ratings. average behavior is not checked. he may play it safe by neither condemning nor praising. It is possible for this type of rating i. Because of these reasons.e. So he may rate them ‘average’.. Lenient or easy raters assign consistently high values or scores to their subordinates and strict or harsh raters give consistently low ratings.
Miscellaneous Biases: In many cases. but its probability is less than its frequency. Some supervisors show bias against members of the opposite sex or of another caste. generally the raters are reluctant to rate people at the outer ends of the scale.attention and effort to the rating process. Some employees being aware of this tendency show better results when they feel that they are being observed and the report of their performance is to be compiled soon. They also give higher ratings to senior employees because they are too ready to admit that they have not
. Both the trends can arise from varying standards of performance among supervisors and form different interpretations of what they observe in employee performance. The rater knows that he has to appraise his subordinates at periodic intervals but if he is unfamiliar with some of the subordinates or does not have sufficient time to devote to the rating process. all average to be a true rating.
which he called “management by objectives and selfcontrol”. which are used by the modern concerns. which is based on the behaviour of the subordinates. He was concerned with the fact that most traditional appraisal systems involved rating of traits and personal qualities that he felt were highly unreliable. The first is management by objectives. Besides. the use of such trait ratings produced two main difficulties: a) The manager was uncomfortable about using them and resisted making appraisal. Goal setting approach or “management by objectives” (MBO) is the same as behavioral approach to subordinate appraisal. Douglas McGregor further strengthened this approach. The second is behaviorally anchored rating scale. The application of goal setting approach to performance appraisal involves the following steps: 1) The subordinate discusses his job descriptions with his superior and they agree on the contents of his job and the key results areas.improved under their leadership. b) It had a damaging effect on the motivation and development of the subordinates. Many a times. a rater is influenced by organizational positions and may give higher ratings to those holdings the higher positions. actually called “Work planning and review” in case of General Electric Co. an employee is not appraised by his recognizable traits. Under this approach. which represents result-oriented appraisal. 2) Modern methods There are two important methods of performance appraisal.
Management by objectives
It was peter drucker who proposed goal setting approach to performance appraisal. but by his performance with respect to agrees goals or objectives..
thought and the superior and the subordinate. it will not be possible for the superior to have discussion with each and every subordinate for setting up mutually agreed goals. The goal setting approach has done away with the judgmental role of the superiors in the appraisal of their subordinates. It is argued that critical evaluation and modification to improve are incompatible. This approach mainly emphasizes counseling. This approach is not easy to administer.
The Goal setting approach suffers from the following limitations:
The subordinates can apply this approach only when the goal setting is possible.2) The subordinate prepares a list of reasonable objectives for the coming period of six to twelve months. 3) He sits with his superior to discuss these targets and plans. greater comfort and less tension and hostility between the workers and the management. If the span of supervision is quite large. This approach has also got a built – in device of self – appraisal by the subordinates because they know their goals and the standards by which their performance will be measured. It emphasizes training and development of individuals. It is problem-solving approach rather than tell and sell approach. This approach is considerably superior to the traditional approach of performance appraisal. greater agreement.
. 5) The superior and the subordinate meet at the end of the period to discuss the result of the subordinate’s efforts to meet the targets mutually established. It is doubtful if such a procedure can be applied for the blue color workers. It has led to greater satisfaction. and a final set is worked out. training and development. It involves considerable time. 4) Check – points are established for the evaluation of progress. and the ways of measuring progress are selected.
Because it is job. and to describe the more effective and less effective job behavior for getting results. By anchoring the scales behaviorally. performance. the BARS approach was expected to produce more valid and reliable results by reducing measurement errors (leniency.
Behaviorally Anchored Rating Scales
Behaviorally Anchored Rating Scales (BARS) are designed to identify the critical areas of performance for a job. Empirical studies of Behaviorally Anchored Rating Scales (BARS) have provided a fertile ground for study by both theorists and practitioners. and consequently is able to provide a basis for setting developmental goals for the employee. etc. As a result.
. and results. it is not possible to forge the critical aspect of performance appraisal.). it is a more reliable and valid method for performance appraisal. halo effect. Proponents of BARS claim many advantages of this approach. central tendency. Performance is evaluated by asking the rater to record specific observable job behaviors of an employee and then to compare these observations with a “behaviorally anchored rating scale”. They argue that such a system differentiates among behavior. in practice.-specific and identifies observable measurable behavior. Operative workers cannot understand this approach and moreover. This approach is appropriate for the appraisal of executives and supervisory personnel who can understand it in a better way.But. a vast majority of them do not want to take initiative in setting their own goals. the supervisor is in a position to compare the employee’s actual behavior with the behavior that has been previously determined to be more or less effective.
Sometimes.Designing an Appraisal Programme
Determining the Objective of ‘performance Appraisal’. The objective of the appraisal programme may be either to appraise the actual performance of individuals to higher jobs or both. the appraiser is the immediate superior of the man to be appraised.
Who is to do the Appraisal?
Generally. It should be noted that performance standards are relative to the group and the organization. definite standards of accomplishment. That is why some organizations try to obtain two or more ratings on each employee.
Establishing Standards of Performance. But again the difficulty may arise because
. performance appraisal programmes are associated with specific objectives like training and development.
Before any performance appraisal programme is initiated. transfer and promotion. Such a method will take it possible for both supervisor and his subordinate to reach agreement on just what is expected in terms of performance. increase in pay. But there are certain limitations of appraisal by one person. in writing.
For effective rating of employees. The expectation of management is also higher in some organizations than in others. which the employee can reasonably be expected to meet. an approach that is more preferable is to establish. He is most familiar with the employee’s work and is in contact with him and so he is considered to be able to appraise him well. it is necessary to establish standard on performance against which their performance should be compared. it is essential to determine its objectives. but the talents of manpower also varying from organization to organization. etc. However. Not only are the needs of each organization different.
monthly. which fits into the objectives of the older ones. Idea frequency is one. Whosoever the appraiser may be. technical and supervisory. the subjectivity invariably steps in. Performance forms may be classified as those involving comparative ranking and others involving the comparison of each employee’s actual performance with predetermined standards. quarterly. therefore he is able to judge them better. The first category of forms is designed to evaluate employee performance for the purpose of making
. their immediate superiors may offer their rating in conjunction with ratings.
Designing of Forms
This is an important step in performance appraisal to design the rating forms to be utilized in the programme. A well-adjusted person is less subject to projecting himself into other than a poorly adjusted person and. which may consist of a number of supervisors and specialists from personnel department and a representative of the worker. mechanical. The possibility is the constitution of a rating committee. When this is done. All require a different evaluation form. There are not spot appraisals. The committee will rate each individual collectively. and six monthly or yearly appraisals. The forms should be related to job families such as clerical.
Frequency of Appraisal
The frequency of appraisal differs from organization and with the nature of duties performed. sales. But most of the organizations conduct yearly or half – yearly appraisals because more frequent appraisals besides taking away time of the appraiser or raters. Some people feel that employee should be allowed to rate themselves. may create a sense of fear amongst the ratee’s.the second rater may not have the necessary contact with the individual who is to be rated. It is often assumed that qualified psychologists are more capable than laymen of making unbiased judgments since they receive training in the dynamics of the personality and also in the correct manner of making the judgment.
. employees may not understand it fully and may look at the plan with suspicion. etc. It should be ensured that the appraisers are honest. behavior. When the appraisal system is complicated. uniform and non – variable.
Requirements of a Sound Performance Appraisal Programme
A sound system of performance appraisal must fulfill the following essentials: 1) The appraisal plan should be simple to operate and easy to understand. expected of them. 5) The appraisal plan should take into account the appraisal practices prevailing in other units in the industry as well as the latest thinking on performance appraisal. lay offs. A personal between the appraiser and the employee has to be developed to achieve mutual understanding of the criteria of evaluation. just and equitable. This will increase their commitment to the plan and their understanding of expected performance. 3) The employees should be made aware of the performance in terms of goals. fair. promotions. The plan should not be very timeconsuming. and second category of forms is used to improve the performance of workers on their present jobs. 2) The performance appraisal system should be performance based. targets. 4) The appraisal plan should be devised in consultation with the subordinates. rational and objective in their approach. judgment and behavioral orientation.wage adjustments. It should fit in the structure and operations of the organization. etc.
6) The top management must create a climate of reliable appraisal throughout the organization. Goal – orientation. open communications. The results of appraisal must be discussed with the rates so that they may get an opportunity to express their feelings on their progress reports. are the basic elements of such a climate. etc. transfer. mutual trust informal relationships.
. etc. In some cases. training. performance appraisal is linked with specific objectives like pay raise. 9) There should be provision of appeals against appraisals to ensure confidence of the employees and their associations or unions. 8) The appraisers should be selected and trained properly so that they have no personal bias and possess the necessary capabilities for objective evaluation of employees. 7) The appraisal plan should be designed to achieve specific objectives. In order to ensure objectivity in appraisal. The number of factors to be considered and the data to be collected should be tailor-made to achieve the objective of the appraisal. more persons may rate an individual independently. The objectives of the appraisal programme may be to evaluate current performance on the job and to determine the potential for higher jobs. promotion.
CHAPTER: 3 OBJECTIVES OF RESEARCH
OBJECTIVES OF STUDY
Next. To find out the performance dimensions relevant to the strategic plan of the company. To identify the potential areas for the scope of improvement in the current system and thereby in the organizational performance.
. To identify the key performance indicators and critical success factors for achieving organizational excellence.
THE MAIN OBJECTIVES OF STUDY ARE: To study the current performance appraisal system of the organization and identify the gaps between the current state and the desired-in-state. the methodology adopted to collect the information required will be dealt with.Any survey report begins with stating the objectives of the study. Secondary can provide a range of information and should be consulted first. data sources include secondary and primary sources. General. therefore. the first step in the survey analysis deals with the objectives. To study the implications of an effective performance appraisal system on the productivity of employees and the organizational performance as a whole. If they do not provide necessary information to the research problem then primary data is to be collected. the survey design will be described. that is.
good research methodology ensures the completion of project efficiency and affectivity. Since there are many aspect of research
. It is the blue print that is followed in completes the study. Thus.CHAPTER: 4 RESEARCH METHODOLOGY
Research methodology is simple framework or plan for the study that is as guide in collection and analyzing the data.
newspapers. where and from whom researcher will collect the data.e. the line of action has to be chosen from the variety of alternatives. the data used is secondary in nature and is collected from published sources i.methodology. Develop the research plan: To makes the plan for overall research as how. Keeping in view the above stated objectives the following methodology was adopted:
The Marketing Research Process: Define the problem and Research Objectives: -
The first and main step of any research is to define the relevant problems or objective for which the researcher wants to do research. journals. websites. Sources of Data Collection In order to carry out the resent study. how the research problem has been formulated what data has been collected.
Analyze the information: -
. what particular technique if analyzing the data has been used and lot of similar type question are usually answered when we talk of research problem in study. business magazines. when. Research methodology gives the researcher an opportunity to put forward his argument for having opted for certain alternatives and also at the same time he can justify his ruling out some other possibility likes. to choose the suitable method through the assessment from various alternatives. etc. Why research study has been undertaken.
Present the findings: To make a summary on the basis of analyzing the collect data and find out the situation.
METHODS OF DATA COLLECTION:• Primary data: Primary data is the data collected specially for a specific purpose. The methods used for its collection are personal discussion & questionnaire etc.After collecting the data the next step is to analyze the information.
. Make the decision: The last step is to take a decision on the basis of finding that what action should be regarding the findings INSTRUMENTS TO BE USED: • • • • INTERNET MAGAZINES JOURNALS NEWS PAPERS
SCOPE OF THE STUDY The scope of the study has been concised to the exposure of derivatives.
• SECONDARY DATA: Secondary data consists of information that already exists somewhere and was collected for another purpose.
The secondary data provide a starting point for research and offer advantage of low cost and ready availability. the answers given by the respondents were used to fill up the questionnaire. This method was preferred as it is economical. In this I asked a set of predetermined questions in a predefined order. Secondary data used here was the Performa of performance appraisal used in IFFCO . It was prepared taking into account the factors. which were to be analyzed to know the process of Performance Appraisal.The method used in collecting primary data in my research was questionnaire. which may not be the same as the purpose of research. The questionnaire used was structured type of questionnaire. Questionnaire: A questionnaire was prepared which consisted of open-ended questions with multiple choices. given more information and the response is very good.
CHAPTER: 5 DATA ANALYSIS
1 Quarterly Half-yearly Monthly Annually Graph No. Type of performance appraisal preferred Table No.
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 85%
85% 15% 0 0
15% 0 Quarterly Half-yearly Monthly 0 Annually
After analyzing the data. the results shows that 85% of the senior production officers prefer quarterly performance appraisal and 15% prefer halfyearly performance appraisal. the data was collected which is analyzed as follows:
1.By filling of the questionnaire.
This analysis shows there is lack of appraisal by the immediate seniors. Senior’s satisfied by subordinate’s performance Table No.2. 2 75% 25%
25% Yes Can’t say 75%
After analyzing the data.
. the results shows that 75% of the senior production officers feel that their seniors are satisfied with their performance and 25% can’t say. 2 Yes Can’t say Graph No.
3. Satisfied with their own Performance Table No. 3 Yes No 85% 15%
Graph No. 3
15% Yes No 85%
After analyzing the data, the results shows that 85% of the senior production officers are satisfied with their own performance and 15% are not satisfied with their own performance. This implies that satisfaction level has to be increased among senior production Officers.
4. Performance appraisal improves performance
Table No. 4 Yes No Graph No. 4 100% 0%
0% Yes No 100%
After analyzing the data, the results shows that 100% of the senior production officers feel that performance appraisal do helps in performing better.
Through this we come to know that process of performance appraisal is coming out to be positive and it should be continued.
5. Information is submitted timely by the senior production officers to their seniors Table No. 5 Yes No Graph No. 5 100% 0%
0% Yes No 100%
After analyzing the data, the result shows that 100% of the senior production officers submit all the information timely to their seniors. This shows that all the senior production officers submit all the information timely to the seniors.
. the result shows that 57% of the senior production officers feel that they are provided with a chance to defend them against adverse entries in their appraisal whereas 43% denies it. 6
After analyzing the data. 6
Yes No Graph No. Adequate and fair chance provided to defend against adverse entries in your appraisal
Table No.6. This shows that there is lack of chances provided to defend against adverse entries in appraisal.
7 Personal Official Others No Bad Performance Graphs No. This shows that there are some reasons.
. 7 16% 16% 16% 52%
60% 50% 40% 30% 20% 10% 0% Personal Official Others 16% 16% 16%
No Bad Performance
After analyzing the data. 16% of senior production officer’s due to other reasons and no bad performance from the rest of the 52% of senior production officers.7. which are required to be rectified to improve performance. Reason for bad performance Table No. 16% of senior production officers due to official reasons. the results shows that 16% of senior production officers performed bad due to personal reasons.
the results shows that 60% of the senior production officers are fully aware of the appraisal system and rest 40% are unaware of this system.8.
. Table No. This shows that awareness about the performance appraisal system is to be increased. 8 Yes No Graph No. Awareness of appraisal system. 8 60% 40%
40% Yes 60% No
After analyzing the data.
CHAPTER: 6 FINDINGS & Limitations
a SELF-APPRAISAL form is given to the staff members and they fill it up. 3.
. DELHI. 4.) 2.) In IFFCO.) Performance appraisal in IFFCO. Delhi.FINDINGS
1. DELHI. at the majority senior staff members submit all the information timely to their superiors.) All senior production officers agree that performance appraisal system helps them to perform better. And then after according to their self-observation and through the appraisal form filled by the staff members rating is given to the members. is done annually. For appraisal in IFFCO. Accordingly then incentives and promotions are granted.
DELHI. There is lack of fair chances provided to defend yourself against adverse entries in your appraisal.LIMITATIONS
In IFFCO. there is lack of proper knowledge among senior production officers about the procedure followed in Performance Appraisal.
. There is lack of satisfaction level among the senior production level officers regarding to their own work as they have monotony at their work.
CHAPTER: 7 RECOMMENDATIONS & CONCLUSION
• For the lower group the company can increase their wages.
• The criteria decided upon which the performance has to be rated should not
be fixed it should be changed from time to time. this will help to raise their moral and they can work better. • There should be the feeling of teamwork in the organization.
. give them
• The standards of the rating should be very specific. which motivate them to work to their fullest capacity and to motivate them to work more and show good and better results.RECOMMENDATIONS
• The company should appraise the performance of the workers by giving
them some incentives. They don’t want financial help as they earn enough to maintain their status.
• They should keep changing the raters for the performance appraisal system
from time to time so that they don’t become bias at anytime for any employee. appraise performance by recognizing there work in meetings etc. • The system should be cost effective and it should suit the budget of the
• The method of the company should be changed periodically so that the
employees have no chance to complain for the method. clear and concise. They want their work recognition. and provide them the medical facilities etc because they want financial help from the company to insure their proper living.
• For the top management of the company it should offer them holiday
j) Customer relations. f) Ability to learn. d) Dependability. The immediate boss who has been observing the immediate subordinate throughout the year rates him according to the self appraisal form filled and personal observation under following factorsa) Quality of work. Accordingly. k) Subordinate development. Rating given to the senior production officers is done confidentially and whatever information is been filled in the self-appraisal form is not crossquestioned. The sole objective for taking part in performance appraisal of senior production officers in IFFCO is to be awarded with promotions and incentives
. i) Discipline. g) Attendance. The rating given is confidential and out of the knowledge of their subordinates. h) Reactions to criticism. promotions and incentives are granted to the deserving ones. b) Quantity of work.CONCLUSION
In IFFCO performance appraisal is conducted annually. c) Job knowledge. e) Innovation and creativity.
Senior production officers of IFFCO follow the procedure of performance appraisal given by the senior managers because they have monotony in their work and they have no time for any innovation or creativity.but the basic reason why performance appraisal is conducted is to develop the performance and attitude.
Does performance Appraisal help you in performing better? Yes No
5. Are you satisfied with your performance? Yes No
4. Do you submit information timely to your superiors? Yes No
STUDY OF PERFORMANCE APPRAISAL SYSTEM 1. Are your seniors satisfied with your performance? Yes No
3. What type of performance appraisal you prefer? Annually Monthly Quarterly Half yearly
What actually comes as the reason for your bad performance? (If any) Personal Official Other
8. Are you fully aware of the appraisal system followed in your company? Yes No
9.6. Any suggestion to alter existing Performance Appraisal system of your company?
_________________________________________________________________ _________________________________________________________________ _________________________________________________________________
. Do you get adequate and fair to defend your self against adverse entries in your appraisal? Yes No
Human resources development
1.S.iffco. Human resources development . RAO
Human resources development . CHABBRA Human resources development .V.