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EXECUTIVE SUMMERY


Purpose

This project is done in order to study the performance appraisal system of a company and also to
make a performance management system. This data can provide a framework, a planning tool
for reference to those who are going to apply PMS in their organization.

Study limitations

The Performance management system is made in a way such that it will serve as a reference. It
may be or may not be applied as it is in a particular organization. This study should be regarded
as preliminary. It can provide a jumping off point for future studies once more data becomes
available.

Goal

To understand the performance appraisal system and
To make a detailed PMS. So that any organization can use it for reference.













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INTRODUCTION

PERFORMANCE APPARAISAL

History

The history of performance appraisal is quite brief. Its roots in the early 20th century can be
traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same
may be said about almost everything in the field of modern human resources management.
Performance appraisal is an important part of performance management. In itself it is not
performance management, but it is one of the ranges of tools that can be used to manage
performance. Because it is most usually carried out by line managers rather than HR
professionals, it is important that they understand their role in performance management and how
performance appraisal contributes to the overall aims of performance management - see our fact
sheet on performance management for more information on that topic.

It a basic human tendency to make judgments about those one is working with, as well as about
oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully
structured system of appraisal, people will tend to judge the work performance of others,
including subordinates, naturally, informally and arbitrarily. The human inclination to judge can
create serious motivational, ethical and legal problems in the workplace. Without a structured
appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair,
defensible and accurate.







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Modern Appraisal

Performance appraisal may be defined as a structured formal interaction between a subordinate
and supervisor, that usually takes the form of a periodic interview (annual semi-annual), in which
the work performance of the subordinate is examined and discussed, with a view to identifying
weaknesses and strengths as well as opportunities for improvement and skills development.
In many organizations - but not all - appraisal results are used, either directly or indirectly, 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.
By the same token, appraisal results are used to identify the poorer performers who may require
some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay.
(Organizations need to be aware of laws in their country that might restrict their capacity to
dismiss employees or decrease pay.)
Whether this is an appropriate use of performance appraisal - the assignment and justification of
rewards and penalties - is a very uncertain and contentious matter.
Performance appraisal is an attempt to assess an employees performance. The assessment may
be taken into account in determining wage or salary increases. Claims are made that some
schemes are objective, but most of them are bases on subjective opinion. Some schemes
involve the employee in making an assessment. Employees know they are being evaluated and
they are told the criteria that will be used in the course of the appraisal. Nothing is kept secret.
The appraiser and the appraisee should carry out this task jointly in a cordial atmosphere
stressing on the plus points and finding out ways and means of overcoming drawbacks, if any, of
the appraisee.




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Objectives of Performance appraisal:
To review the performance of the employees over a given period of time.
To judge the gap between the actual and the desired performance.
To help the management in exercising organizational control.
Helps to strengthen the relationship and communication between superior subordinates
and management employees.
To diagnose the strengths and weaknesses of the individuals so as to identify the training
and development needs of the future.
To provide feedback to the employees regarding their past performance.
Provide information to assist in the other personal decisions in the organization.
Provide clarity of the expectations and responsibilities of the functions to be performed
by the employees.
To judge the effectiveness of the other human resource functions of the organization such
as recruitment, selection, training and development.
To reduce the grievances of the employees.

GUIDELINES FOR APPRAISAL

Every individual should receive ongoing feedback during the year and a formal annual
performance assessment/appraisal.
During the assessment sessions the Appraiser should create an open and approachable
environment in which a two-way discussion can be made possible with the Employee.
The Employee on his part should be willing to give and receive proper feedback during the
assessment session.
Performance assessment discussion should cover how the year that went by was for the
Employee, what he has achieved, how was it done and what the way forward is for the
Employee.
Both Appraiser and the Employee should have all the facts and data to support the
Employees KRA performance achievements ready with them during the appraisal
discussions so that any ambiguity in the target achievement can be cleared immediately
and the final score can be calculated to the satisfaction of the Appraiser and Employee.
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REQUISITES OF A GOOD APPRAISAL SYSTEM

The following are the requirements of a good employee performance appraisal system:

The most important condition for the success of any rating system is that the supervisors
fully understand the plan, have faith in its effectiveness and carry out their part
conscientiously. The original rating is made by the employees immediate supervisor. If
this rating is made carelessly, no amount of care and intelligence elsewhere will be able
to save the programme.
It is important that the employee performance appraisal system has to active support of
the top executive who make the final decisions on promotion, training, increment,
transfer, etc.
An appraisal from that has been thoughtfully and skillfully designed should be used. A
well designed from is of great help in securing accuracy and uniformity in doing the
appraisal.
An important part of any employees performance appraisal plan is the statement of
standards of performance standards will enable both the employee and the rather to have
some basis for judgment as to how satisfactory the employees performance has been.
These standards should be stated in writing and in as specific terms as possible.
It must have the support of all the line managers who administer it, otherwise they will
not take interest in its operation.
It must be easily understandable. If the system is too complex or too time-consuming, it
may be non-starter and ultimately be rejected by those who are to use it..
There should be very close collaboration between line managers and the HR manager,
because the line managers are primarily concerned with subordinate and his job, and the
human resource manager focuses on the man and his career.
As much notice as possible should be given to the employee regarding the performance
appraisal interview, so that the employee may be mentally prepared.
Adequate time should be allowed for the performance appraisal interview. This may vary
according to circumstances and the persons taking part in it.
Complete privacy and freedom from telephone and other interruptions should be ensured.
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Process of performance appraisal


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THE EVALUATION PROCESS

The evaluation process of evaluation begins with the establishment of performance standards.
At the time of designing a job and formulating a job description, performance standards are
usually developed for the position. These standards should be clear and vague, and objective
enough to be understood and measured. These standards should be discussed with the
supervisors to find out which different factors are to be incorporated, weights and points to be
given to each factor and these then should be indicated on the Appraisal Form, and later on used
for appraising the performance of the employees.

The next step is to communicate these standards to the employees, for the employees left to
themselves, would find it difficult to guess what is expected of them To communication
effective, feedback is necessary from the subordinate to the manager

The third step is the measurement of performance. To determine what actual performance is,
it is necessary to acquire information about it .We should be concerned with how we measure
and what we measure. Four sources of information are frequently used to measure actual
performance: personal observation, statical reports, oral and written reports.

The fourth step is the comparison of actual performance with standards. The employee is
apprised and judged of his potential for growth and advancement. Attempts are made to note
Deviation between standard performance and actual performance.

At the next stage ,the results of appraisal are discussed periodically with the employees, where
good points , weak points and difficulties are indicated and discussed so that performance is
improved .The information that the subordinate receives about his assessment has a great impact
on his self esteem and on his subsequent performance. Conveying good news is considerably less
difficult for both the manager and the subordinate than when performance has been below
expectations.

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The final step is the initiation of corrective action when necessary: immediately corrective
action can be of two types. One is immediate and deals predominantly with symptoms. The other
is basic and delves into causes. Immediate corrective action is often described as putting out
fires, whereas basic corrective action gets to the source of deviation and seek to adjust the
differences permanently. Coaching and counseling may be done or special assignments and
projects may be set: persons may be deputed for formal training courses, and decision making
responsibilities and authority may be delegated to the subordinates. Attempts may also be made
to recommend for salary increase or promotions, if these decisions become plausible in the light
of appraisals.

Productivity and Rewards

Appraisal systems are related to institutional productivity requirements. Appraisal systems are
expected to reveal under-productive units and to serve as a response system to focus attention on
problem areas. Appraisal systems should also function to reward productive units and staff.
One of the most crucial response systems is the institution's reward structure. Hypothetically,
performance appraisal is used to reward productive staff through upward salary adjustments.
While salary adjustment may be fixed, especially in state institutions, alternative reward
structures may be initiated by departments to recognize productive staff. Concerns with under-
productive staff may be addressed through targeted staff development activities or through other
means as appropriate.

Appraiser Leadership Attributes

Supervisor or appraiser behavior may be more important than the format used in the performance
appraisal system. Appraisers who act like leaders in their organization are more likely to
experience successful results from the appraisal system than will appraisers who behave as non-
leaders.

Leaders can model desired behavior and prescribe behavior sought from staff. This modeling
carries the advantage of organizational prestige and power associated with the position.
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TYPICAL RATER ERRORS

There are many significant factors which determine the rater errors. Those are as follows:

First impression: Raters may identify some specific qualities or features of the rate and quickly
form an overall impression about him. The identified qualities or features may not provide
adequate base for appraisal.

Stereo Typing: Stereotyping is standard mental picture than an individual holds about a person
because of that person, sex, caste, age, physical characteristics or other features. Stereotyping
results in an oversimplified view of the individual and may blur the raters perception and
assessment of the persons performance on the job.

Halo Effect: Basing the entire appraisal on the basis of one perceived position quality, feature or
trait in an individual. Affiliation with views may result in a higher rating than is warranted. He
too sits late in evening. So he must be working hard.

Horn Effect: Basing the evaluation on the basis of negative quality or feature perceived. This
result I an overall lower rating than may be warranted. He does not shave regularly. He must be
lazy at work too!

Central Tendency: Most appraisal forms require the rater to justify if assessment is an
outstanding or poor. So, that I do not have to justify or clarify.
Strict or Lenient Rating: Depending upon the raters own standards, value system, and or physical
and mental make up at the time of appraisal, ratees may be rated very strictly or very leniently.
Such rating usually does not carry any reference to actual performance of the person or bear any
resemblance to how similar performance is rated elsewhere in the organization.



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Latest Behavior: Rating is influenced by the most recent behavior ignoring the commonly
demonstrated behaviors during the entire appraisal period.

Spillover Effect: Allowing past performance to influence how present performance is evaluated.
The person who has done good work in the distant is assured to be okay at present also.

Sunflower Effect: Rating everyone high to make yourself look good. Perhaps you are not
expecting enough.


SIGNIFICANCE OF PERFORMANCE APPRAISAL

Performance Appraisal has been considered as most significant and indispensable tool for an
organization for the information it provides is highly useful in making discussions regarding
various personal aspects such as promotions and merit increases. Various other important aspect
of performance appraisal is as follow:

A performance appraisal program (PA program) is important to employees professional
development, to meeting the companys or firms goals or objectives and, ultimately, to
contributing to the companys or firms bottom line. No employer, whether a small CPA firm, a
Big Four firm, a nonprofit organization, a government institution or a private or public company,
should be exempt from having a formal PA program.

Other benefits that could be derived from having a PA program include enhanced
communications, an opportunity to effectively address performance problems, and improved
employee morale. The primary reason for having a PA program is to monitor employees
performance, motivate staff and improve company morale. Monitoring employee performance
requires routine documentation, which is accomplished through completing a performance
appraisal form.
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When employees are aware that the company is mindful of their performance and that they could
be rewarded with merit increases and promotions, they are motivated to work harder. Morale is
improved when employees receive recognition or reward for their work

An effective PA program will assist the company in achieving its goals and objectives. Not only
will training needs be identified and addressed during a PA review, but hidden talent can be
discovered as well. Through identifying these training needs, staff can perform their jobs at the
highest level and be in a better position to address clients, members and customers concerns
and questions. A well-developed staff is more likely to be proactive, productive and resourceful,
all of which helps give the company a competitive edge, from improved customer relations to
increased profits. Performance appraisal system helps in realizing the overall objective of the
company.

The performance appraisal system helps to provide systematic judgment to backup salary
increases and transfers, to keep a watch and counsel the individual, to let the subordinate know
the needed changes in his behavior, attitude, skills or job knowledge.















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Purpose Performance appraisals

Performance appraisals are essential for the effective management and evaluation of staff.
Appraisals help develop individuals, improve organizational performance, and feed into business
planning. Formal performance appraisals are generally conducted annually for all staff in the
organization. Each staff member is appraised by their line manager. Directors are appraised by
the CEO, who is appraised by the chairman or company owners, depending on the size and
structure of the organization.

Annual performance appraisals enable management and monitoring of standards, agreeing
expectations and objectives, and delegation of responsibilities and tasks. Staff performance
appraisals also establish individual training needs and enable organizational training needs
analysis and planning.

Performance appraisals also typically feed into organizational annual pay and grading reviews,
which commonly also coincide with the business planning for the next trading year. Performance
appraisals generally review each individual's performance against objectives and standards for
the trading year, agreed at the previous appraisal meeting. Performance appraisals are also
essential for career and succession planning - for individuals, crucial jobs, and for the
organization as a whole.

Performance appraisals are important for staff motivation, attitude and behavior development,
communicating and aligning individual and organizational aims, and fostering positive
relationships between management and staff. Performance appraisals provide a formal, recorded,
regular review of an individual's performance, and a plan for future development. Job
performance appraisals - in whatever form they take - are therefore vital for managing the
performance of people and organizations.

Managers and appraises commonly dislike appraisals and try to avoid them. To these people the
appraisal is daunting and time-consuming. The process is seen as a difficult administrative chore
and emotionally challenging. The annual appraisal is maybe the only time since last year that the
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two people have sat down together for a meaningful one-to-one discussion. No wonder then that
appraisal are stressful - which then defeats the whole purpose.

Performance Appraisal is being practiced in 90% of the organizations worldwide. Self-appraisal
and potential appraisal also form a part of the performance appraisal processes.

Typically, Performance Appraisal is aimed at:
To review the performance of the employees over a given period of time.
To judge the gap between the actual and the desired performance.
To help the management in exercising organizational control.
To diagnose the training and development needs of the future.
Provide information to assist in the HR decisions like promotions, transfers etc. Provide
clarity of the expectations and responsibilities of the functions to be performed by the
employees.
To judge the effectiveness of the other human resource functions of the organization such
as recruitment, selection, training and development.
To reduce the grievances of the employees.
Helps to strengthen the relationship and communication between superior subordinates
and management employees.

Approaches to Performance appraisal

Performance appraisal - Traditional approach
Traditionally, performance appraisal has been used as just a method for determining and
justifying the salaries of the employees. Than it began to be used a tool for determining rewards
(a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees.
This approach was a past oriented approach which focused only on the past performance of the
employees i.e. during a past specified period of time. This approach did not consider the
developmental aspects of the employee performance i.e. his training and development needs or
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career developmental possibilities. The primary concern of the traditional approach is to judge
the performance of the organization as a whole by the past performances of its employees.
Therefore, this approach is also called as the overall approach. In 1950s the performance
appraisal was recognized as a complete system in itself and the Modern Approach to
performance appraisal was developed.

Performance appraisal - Modern approach

The modern approach to performance development has made the performance appraisal process
more formal and structured. Now, the performance appraisal is taken as a tool to identify better
performing employees from others, employees training needs, career development paths,
rewards and bonuses and their promotions to the next levels.

Appraisals have become a continuous and periodic activity in the organizations. The results of
performance appraisals are used to take various other HR decisions like promotions, demotions,
transfers, training and development, reward outcomes. The modern approach to performance
appraisals includes a feedback process that helps to strengthen the relationships between
superiors and subordinates and improve communication throughout the organization. The
modern approach to performance appraisal is a future oriented approach and is developmental in
nature. This recognizes employees as individuals and focuses on their development.










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METHODS OF PERFORMANCE APPRAISAL




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PERFORMANCE MANAGEMENT SYSTEM


PURPOSE

To institutionalize the Performance Management System by developing an integrated process of
objective setting, assessment and evaluation that will support individual employee, departmental
& organizational growth and help create a performance driven culture.


OBJECTIVES

o To provide a framework for systematic planning of Performance Objectives at the
beginning of the year.
o To ensure that individual objectives are aligned to the organizations goals.
o To ensure an objective and scientific evaluation of employee performance.
o To identify gaps in performance and take necessary actions to ensure the
achievement of organizational and individual goals.
o To define a proper career planning process.
o To provide inputs for determining the Compensation, Rewards & Recognition.













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THE PERFORMANCE MANAGEMENT SYSTEM PROCESS FLOW







































Vision, Mission
Values & Goals
Organizational
Annual
Business Plan
Specific
Organizational
Objectives
Definite
Individual
Objectives
Review or
Measurement of
KRA
achievement
Assignation of
Final Rating
Career
Development &
Rewards
Functional
Objectives
Key Result
Areas (KRAs)
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COMPONENTS OF PERFORMANCE MANAGEMENT SYSTEM


1. Performance Planning & Objective Setting

2. Performance Assessment

3. Career Development

4. Rewards



PERFORMANCE PLANNING & OBJECTIVE SETTING


Performance Planning is an important part of the Performance Management System as it
makes the objectives of business and individual performance clear and simple.

It also aligns individual goals to organizational objectives at every level in the
Organizational Hierarchy.


Performance Planning starts with the finalization of business and functional objectives,
which flow from the vision and mission of the organization.

Individual objectives and KRAs are then finalized for the financial year through
consultation and mutual agreement between the appraisee and the appraiser by 1
st
of
April of the new financial year.







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PERFORMANCE ASSESSMENT

Performance Assessment is done in an objective and scientific manner as explained below at the
end of the financial year before 31
st
March.

COMPONENTS OF PERFORMANCE ASSESSMENT FORM

Key Result Areas: They are the important strategic areas in an employees job
profile that needs to be quantified and measured so that the organization can ascertain
that the individual performance is directed towards the achievement of the business
objectives. The KRAs should be simple, specific, measurable & time bound and the
number of KRAs should not exceed five.
Target: In this column the target to be attained for each KRA needs to be captured.
For example, if one of the KRAs of a Junior Engineer RF Design is generating a
Drawing design; his target is to generate the design as per the work requirement each
time he develops a new design.
Measure: The yardstick/index that would enable the performance to be measured
needs to be captured. Taking the same example above the measure for assessing
whether the Junior Engineer RF Design has generated the design as per the work
requirement is the Work Specification Document.
Weightage: Each KRA needs to be given a weightage depending on its importance in
the individual employees job profile. The total weightage of all KRAs should
amount to 100%.
Time Line: The column for Time Line should depict the accurate time duration
available for achieving the particular KRA. That is, is it to be completed in 3 months,
6 months or by the end of the financial year.
Target Achieved: The actual target achieved need to be captured in the column.
Final Score: The Appraiser would calculate the score for every KRA (Score =
Target Achieved/Target * Weightage). The score for each individual KRA is totaled
to obtain the Total Score

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CAREER DEVELOPMENT


Inputs from the Performance Review exercise can be used for planning the career
development of the individual.
To ensure the growth of an individual, development strategies like training, coaching,
mentoring, job rotation & job enlargement may be deployed.
To achieve career enhancement, areas for development needs to be identified with focus
on the current as well as future job responsibilities of the employee.
Promotions will be based on the performance rating and the potential for moving into the
next level.

REWARDS

Rewards can be monetary & non monetary.
Non Monetary rewards are the awards, recognition that the employee receives for his
performance.
Monetary rewards are the salary increments the employee receives.
The quantum of increment an employee gets every year depends on the rating that
he/she has received for his/her performance in the last financial year.
For each rating a particular % of increase in the salary is fixed after the Performance
Assessments are completed.
This % of increase is decided based on the market trends that currently exist.
The higher the rating the higher percentage of increment the employee receives.










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OBJECTIVES AND SCOPE OF STUDY


Objectives

To study the process of performance appraisal of a IT company.
To design a performance management system.


Scope

PMS can be used for the training, incentives, promotions, demotions, motivation of
the employees etc. We can find out the areas where the employee is lacking and
hence we can design a training programme for him. Also if the employee is
performing very well then we can provide him with the incentives this will help in
motivating the employee. Also we can decide on the issues like promotions ,
demotions with the help of comments and reviewers approval.




















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RESEARCH METHODOLOGY

SOURCES OF DATA COLLECTI ON:-

Once the researcher has decided the research Design the next job is of data collection. This data
will useful for observation to organized, so that we can get some patterns and come to logical
conclusion. Depending upon the sources utilized, whether the data has come from actual
observations or from records that are kept for normal purposes, these statistical data can be
classified into two categories i.e. Primary data and Secondary data.

1. Primary Data:
Primary data can be obtained by communication or by observation. Primary data is one which is
collected by the investigation himself for the purpose of a specific inquiry or study. Such data is
original in character and it generated by surveys conducted by individuals or research
institutions.

This data Collected by following methods:-
The primary data is collected through discussion with the managers and questionnaire.

2. Secondary Data:-
When an investigator uses the data which has already been collected by others, such data is
called as secondary data. This data is primary data for the agency that collects it and becomes
secondary for someone else who uses this data for his own purposes. The secondary data can be
obtained from journals, reports, publication of professionals, Internet and research organizations.

This data Collected by following methods:-

The secondary data is collected through the reports.





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DESIGNED PMS


Level wise list of Competencies which can be better developed through means other than
training programmes.

Supervisor - Level Competencies

1) Positive Attitude
Is positive in his outlook towards work and the environment in general. Enthusiastic in accepting
new initiatives / challenges and demonstrates a feeling of optimism and energy.

2) Functional Knowledge
Has a good grasp of his job and related processes. Can evaluate job related information for its
practical application.

3) Interpersonal Skills
Involves others, interacts effectively and is a committed team member. Understands others and is
able to deal with them effectively. Shares information and ideas and seeks to resolve conflicts.

4) Self Empowerment
Is confident, decisive and action-oriented. Assumes ownership and responsibility for the job. Is
committed, resilient and energetic and has a clear sense of what needs to be done.

5) Analytical Ability
Is able to identify and diagnose key issues, seek relevant information, draw accurate conclusions/
inferences in order to find the appropriate solution.

6) Adaptability
Is open and adapts to different situations quickly. Accepts change willingly.

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7) Improvement Orientatio
Seeks, suggests and implements new ideas for continuous improvements. Can think, think, think
of innovative (think out of box), multiple options.

Executive Level Competencies

1) Planning & Organising/ Self Management
Identifies and prioritises resources, anticipates constraints, work scheduling and mobilises
resources so as to achieve the targets/goals. Is personally organised and systematic.

2) Problem Solving/Analytical Skills
Overcomes problems and obstacles through systematic analysis and balanced decision-making.
Seeks all relevant information and finds the optimal solution.


3) Interpersonal Skills/Team Working/Conflict Resolution (Interpersonal Skills)
Is an effective and committed team member? Understands other people and relates effectively to
them. Shares information and ideas and seeks to resolve conflicts.

4) Self Empowerment (Action Orientation)
Confident, decisive and action-oriented. Assumes ownership and responsibility for his job. Is
committed and energetic and has a clear sense of what needs to be done.

5) Creativity/Flexibility
Is open and adaptable. Looks at situations creatively and finds new solutions.






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Middle Management Level Competencies


1) Listening/ Summarising (Networking)
Collects, interprets and shares information effectively. Interacts, liases and builds relationships
with a diverse range of parties both internal and external to the organisation.

2) Motivation/Caring
Creates an urge in an employee to achieve specific objectives. Shows genuine concern and
respect and are sensitive to employees' needs. Is committed to supporting and protecting staff.

3) Empowering/ Development of Subordinates
Creates an environment where people have the confidence to assume responsibility and
ownership of the job. Supports ongoing feedback and development and helps staff to realise their
full potential through appropriate interventions.

4) Improvement Orientation
Keeps own skill set up to date and is proactive in ensuring the implementation of new and better
ways of achieving desired objectives. Ensures that learning is shared and that quality is
maintained and improved upon.

5) Integrity/Drive
Fully internalises the organizations philosophy of doing business and acts as a role model and
example. Is committed to the job and works hard for the long term good of the organisation.
Takes on responsibility and accepts challenges.

6) Specialist Knowledge
Has a good grasp of a wide range of operational issues and demonstrates good technical project
skills. Keeps updated on new developments, theories and methods and continuously expands his
knowledge base. Capable of conducting research in a specialist area.

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7) Influencing & Persuading
Makes an impact and puts his/her ideas and views across clearly. Establishes credibility, gains
acceptance and converts resistance to acceptance.


Senior Management Level Competencies

1) Influencing
Is able to impact upon, gain the acceptance of, and effect behaviour changes in individuals,
groups and large audiences either through directly presentational skills or liasing, networking
and indirect influence.

2) Resource Optimisation/Work Process Orientation
Plans effectively to make the best possible use of the existing resources. Optimises the workflow
and ensures effective integration and alignment with other related processes. Sets goals and
objectives, monitors progress and responds rapidly when required.

3) Stress Management (People Management)
Shows genuine concern for staff and takes responsibility for their welfare and development.
Seeks to improve and optimise man-management processes and the working environment.

4) Multi-functionality
Has a complete overview of the operation and business area. Understands the specific
operational components and diverse functional responsibilities and ensures their smooth
integration

5) Leadership in adversity (Leadership by Example)
Motivates, inspires, influences and pushes people to attain organisational and project goals.
Leads by example and delegates effectively


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6) Learning Facilitation/ People Process Orientation (Organisation Development Orientation)
Initiates and supports a continuous process of increasing the skill base and systems and process
improvement. Makes optimal utilization of various people management techniques for effective
recruitment, reward and development.

7) Integrity
Fully internalizes the organizations philosophy of doing business and acts as a role model and
example. Does whatever he/she believes to be right in spite of pressures to the contrary

























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Description of designed PMS:-
Appraisee: An employee undergoing appraisal.
Appraiser: Immediate supervisor of appraisee.
Reviewer: Supervisor of appraiser.

Step1-The immediate boss of the appraisee sets the goals for him which is with accordance with
the role of the appraisee in the organization.This helps in appropriate goal settting. The
immediate boss knows more accurately about the job of the appraisee hence he is the best person
to set goals for him.

Step2- The goals which are set by the appraiser is checked and overviewed by the reviewer.

Step3- After setting the goals it should be shared with the employee for whom the goals are
being designed. It is necessary to discuss it with the employee because no one else can know
better than him. He is more aware about his capabilities than him. So it is very necessary that the
appraisee should agree to the designed goals for him.

Step4- If the goals are not accepted by the appraisee then repeat the step 1, 2, 3.Because until
and unless the appraisee does not agree to the goals he will not be able to accomplish them hence
it is necessary that the goals should be in accordance.

Step5- The periodic i.e. time to time discussion between appraisee and appraiser should be there.
It will also help for the training need analysis. If the training is provided at the right time then it
will help in maintaining the performance of the employee. And also the optimum utilization of
the skills and abilities can be achieved.

Step6- The self evaluation should be done by the appraisee in order to know the result of the
appraisal and also if at all he can improve on some areas before the actual performance appraisal
is going to be done. It also helps in diluting the dissatisfaction of the employees towards their
appraisal i.e. they will have the idea of their appraisal in advance so there will be less chances of
disagreement.
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Step7- The evaluation will be done by one to one interaction between appraisee and appraiser
and it will be reviewed by the reviewer and then the performance appraisal will be approved. It is
very necessary to maintain the transparency in this because it will help in effective achievement
of the designed goals.

Step8- If at all there is any disagreement in step7 then the reviewer is involved and then the
performance appraisal is done. In order to avoid any further problems it is better to involve
higher authorities because they possess the required qualities n abilities to provide solution.



























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Datta Meghe Institute OF Management Studies
Atrey Lay Out Nagpur 440022


Proposed Performance Appraisal System For IT Comapany.

The performance appraisal system proposed for ADCC Infocad Ltd is designed with the intent of
measuring performance of the employees ensuring transparency & consistency while measuring
performance for overall effectiveness in the organization. ADCC may consider output of the
performace as a basis for remuneration updation (Performance based compensaion).

The score of the performance along with the tenure spend in the organization may be the basis for
promotion. The mechanism given below is proposed considering that roles & responsibilities are
clearly defined in the organization for each of the (designation) roles.
Terminologies Used are Appraisee, Appraiser, and Reviewer. Where,

Appraisee:An employee undergoing appraisal.
Appraiser: Immediate supervisor of appraisee.
Reviewer: Supervisor of appraiser.

Step 1: Appraiser to set goals for appraisee based on the role of the appraise on the specified
format.

Step 2: Goals set by appraiser to be approved by reviewer.

Step 3: Goal sharing with appraisee.

Step 4: Goals may not be accepted by an appraise then revise the step 1, 2 & 3.

Step 5: Periodic discussion between appraise & appraiser during appraisal cycle.

31


Step 6: Self evaluation by appraisee at least before 15 days of the last date of appraisal cycle.

Step 7: Evaluation will be done by appraiser having face to face interaction with appraise. This
evaluation to be reviewed by reviewer & approved.

Step 8: If any disagreement in Step:7 an evaluation is to be closed involving reviewer & or HR in
the discussion.
An outcome of the above evaluation can form the basis of the change in the performance pay of the
salary. Also, score of the performance system can be one of the criteria coupled with time frame to
make an employee eligible for promotion.





























32


Performance Appraisal Form For IT Company


Name Of Appraisee:
Employee ID:
Designation:
Appraiser Name:
Reviewers Name:
Period Of Appraisal:
__________________________________________________
____________
____________
__________________________________________________
__________________________________________________
From_____ To__________



A. Task Based:

S.
N
.
Goal
Descripti
on
Self Appraisal Appraiser Evaluation Review
er
Approv
al
Rating Commen
ts
Rating Commen
ts Timeliness Qualit
y
Timeliness Qualit
y
1
2
3
4


B. Behavioral & Managerial:

S.
N.

Attributes Self Appraisal Appraiser Evaluation Reviewe
r
Approva
l
Ratin
g
Comments Rating Comments
Communication
Interpersonal &
Team Work

Project Management
Resource
Management

Process Compliance



33

C. Organizational Activities:

Organizational Activities Appraiser Comments Rating








Goals Set By Mr./Mrs. Signature & Date:
Goals Reviewed By Mr./Mrs. Signature & Date:
Goals Accepted By Mr./Mrs. Signature & Date:
Evaluation done by Appraiser Mr/Mrs.
(Having face to face interaction with appraisee)
Signature & Date:
Evaluation Acceptance By Appraisee Signature & Date:
Reviewers Approval. Signature & Date:


D. Additional Feedback from Appraisee(If any) :

Feedback On Appraisee Comments
Significant Achievements
Career Aspirations / Strategy for
Achievement

Training Requirements
Suggestions for Organizational Development
Other






Appraisee Signature:
__________________
Appraiser Signature:
___________________
Date: _____________________ Date:____________________

Reviewer Signature:
___________________
Date:
_____________________



34


Appraisers Comments for Development of Appraisee


(i) List the appraisees strengths

________________________________________________________________________
______________________________________________________________________________
____________________________________________________________________

(ii) List the areas for improvement

________________________________________________________________________
______________________________________________________________________________
____________________________________________________________________


(iii) What specific plans of action, including training, will be taken to help the
appraisee in their current job or for possible advancement in the company?

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________


Achievement


(i) Describe the appraisees areas of additional responsibilities and/or other work-
related achievements

________________________________________________________________________
______________________________________________________________________________
___________________________________________________

35

Review with Staff

My immediate superior and I have discussed my performance review.

( ) I agree with the appraisal
( ) I disagree with the appraisal

Comments:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
____________________________________________________
______________________________________________________________________________
_____________



__________________________
Signature of Employee Date



Recommendations


Termination Ready for promotion
(w.e.f. _______________)
Extension of probation Has potential for promotion, but
not ready now

Consider for merit increment

Normal increment of
Rs.________

Transfer to other types of work

No salary increment
Suitable for confirmation


Others:
___________________________




36

Other Remarks:

______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________




Signature of Appraiser Date






For Human Resource Department Only



Present Salary: ____________________ Date of Last Increment:
____________________

New Salary: ____________________ Effective Date:
____________________

Comments:

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
__________________________________________





________________________________
Signature of Managing Director
Date





37

Competency Matrix Evaluation Base




Specified Rating


Appraisal
parameter
Job Title
S
o
f
t
w
a
r
e

E
n
g
i
n
e
e
r


S
e
n
i
o
r

S
/
W

E
n
g
i
n
e
e
r


T
e
a
m

L
e
a
d


T
e
c
h
n
i
c
a
l

S
p
e
c
i
a
l
i
s
t


A
r
c
h
i
t
e
c
t


D
e
v
e
l
o
p
m
e
n
t

M
a
n
a
g
e
r


S
e
n
i
o
r

M
a
n
a
g
e
r


Q
E

D
i
r
e
c
t
o
r


D
e
v
e
l
o
p
m
e
n
t

P
r
o
j
e
c
t

M
a
n
a
g
e
r


Q
u
a
l
i
t
y

E
n
g
i
n
e
e
r


S
e
n
i
o
r

Q
u
a
l
i
t
y

E
n
g
i
n
e
e
r


Q
u
a
l
i
y

T
e
a
m

L
e
a
d


Task based (A)

Timeliness

Quality

Weightage for this group in overall rating (A1) 0.7 0.7 0.6 0.7 0.7 0.5 0.5 0.5 0.5 0.7 0.7 0.6




Behavioral and managerial Skills (B
)
Communication

Interpersonal and team work

Project management

Resource management

Process Compliance

Weightage for this group in overall rating (B1) 0.2 0.2 0.3 0.2 0.2 0.4 0.4 0.4 0.4 0.2 0.2 0.3




Organizational activities (C)

Organizational activities

Weightage for this group in overall rating (C1) 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1




Sum of individual normal weightages 1 1 1 1 1 1 1 1 1 1 1 1









38


For Software Engineer:-




Ratings of reviewer


Appraisal
Parameters
P
e
r
s
o
n

1

P
e
r
s
o
n

2

P
e
r
s
o
n

3

P
e
r
s
o
n

4

P
e
r
s
o
n

5


Task based (A)

Timeliness

Quality

Total rating for this group

Behavioral and managerial
Skills (B )

Communication

Interpersonal and team work

Project management

Resource management

Process Compliance

Total rating for this group

Organizational activities
(C)

Organizational activities

Total rating for this group


Overall rating (%)













39


For senior software engineer



Ratings of reviewer


Appraisal
Parameters
P
e
r
s
o
n

1

P
e
r
s
o
n

2

P
e
r
s
o
n

3

P
e
r
s
o
n

4

P
e
r
s
o
n

5


Task based (A)

Timeliness

Quality

Total rating for this
group

Behavioral and
managerial Skills (B )

Communication

Interpersonal and team
work

Project management

Resource management

Process Compliance

Total rating for this
group

Organizational activities
(C)

Organizational activities

Total rating for this
group


Overall rating (%)











40


For Team leader-



Ratings of reviewer

Appraisal
Parameters
P
e
r
s
o
n

1

P
e
r
s
o
n

2

P
e
r
s
o
n

3

P
e
r
s
o
n

4

P
e
r
s
o
n

5



Task based (A)

Timeliness

Quality

Total rating for this group

Behavioral and managerial
Skills (B )

Communication

Interpersonal and team work

Project management

Resource management

Process Compliance

Total rating for this group

Organizational activities (C)

Organizational activities

Total rating for this group


Overall rating (%)














41


For Technical Specialist-


Ratings of reviewer

Appraisal
Parameters
P
e
r
s
o
n

1

P
e
r
s
o
n

2

P
e
r
s
o
n

3

P
e
r
s
o
n

4

P
e
r
s
o
n

5



Task based (A)

Timeliness

Quality

Total rating for this group

Behavioral and managerial
Skills (B )

Communication

Interpersonal and team work

Project management

Resource management

Process Compliance

Total rating for this group

Organizational activities (C)

Organizational activities

Total rating for this group


Overall rating (%)















42


For Example:-

For Software Engineer:-



Ratings of reviewer

Appraisal
Parameters
P
e
r
s
o
n

1

P
e
r
s
o
n

2

P
e
r
s
o
n

3

P
e
r
s
o
n

4

P
e
r
s
o
n

5


Task based (A)

Timeliness 4 2 4 2 1
Quality 4 2 4 1 1
Total rating for this group 8 4 8 3 2
Behavioral and managerial
Skills (B )

Communication 1 2 2 4 1
Interpersonal and team work 2 2 3 4 1
Project management 1
Resource management
Process Compliance 2 2 4 2 1
Total rating for this group 5 7 9 10 3
Organizational activities
(C)

Organizational activities 2 2 3 0 1
Total rating for this group 2 2 3 0 1

Overall rating (%) 3.333 2 3.7 1.7167 1












43



For senior software engineer



Ratings of reviewer


Appraisal
Parameters
P
e
r
s
o
n

1

P
e
r
s
o
n

2

P
e
r
s
o
n

3

P
e
r
s
o
n

4

P
e
r
s
o
n

5


Task based (A)

Timeliness 4 2 3 2 1
Quality 3 2 3 1 1
Total rating for this
group 7 4 6 3 2
Behavioral and
managerial Skills (B )

Communication 2 3 5 4 1
Interpersonal and team
work 2 2 3 4 1
Project management 2 0
Resource management 4 0
Process Compliance 2 2 4 2 1
Total rating for this
group 10 9 12 10 3
Organizational activities
(C)

Organizational activities 3 1 3 0 1
Total rating for this
group 3 1 3 0 1

Overall rating (%) 3.15 1.9667 3.2 1.7167 1










44



For Team leader-



Ratings of reviewer

Appraisal
Parameters
P
e
r
s
o
n

1

P
e
r
s
o
n

2

P
e
r
s
o
n

3

P
e
r
s
o
n

4

P
e
r
s
o
n

5


Task based (A)

Timeliness 4 2 4 2 1
Quality 4 2 4 1 1
Total rating for this group 8 4 8 3 2
Behavioral and managerial
Skills (B )

Communication 1 2 2 4 1
Interpersonal and team work 2 2 3 4 1
Project management 1 0
Resource management 5 0
Process Compliance 2 2 4 2 1
Total rating for this group 10 7 9 10 3
Organizational activities (C)

Organizational activities 2 2 3 0 1
Total rating for this group 2 2 3 0 1

Overall rating (%) 3.1 2 3.6 1.9 1













45




For Technical Specialist-


Ratings of reviewer

Appraisal
Parameters
P
e
r
s
o
n

1

P
e
r
s
o
n

2

P
e
r
s
o
n

3

P
e
r
s
o
n

4

P
e
r
s
o
n

5


Task based (A)

Timeliness 4 2 4 2 1
Quality 4 2 4 1 1
Total rating for this group 8 4 8 3 2
Behavioral and managerial
Skills (B )

Communication 1 2 2 4 1
Interpersonal and team work 2 2 3 4 1
Project management 1 0
Resource management 5 0
Process Compliance 2 2 4 2 1
Total rating for this group 10 7 9 10 3
Organizational activities (C)

Organizational activities 2 2 3 0 1
Total rating for this group 2 2 3 0 1

Overall rating (%) 3.1 2 3.6 1.9 1











46


FINDINGS

According to the survey, the percentage of organizations (out of the total organizations surveyed
i.e. 50) using performance appraisal for the various purposes are as shown in the diagram below:




The most significant reasons of using Performance Appraisal are:

Making payroll and compensation decisions 80%
Training and development needs 71%
Identifying the gaps in desired and actual performance and its cause 76%
Deciding future goals and course of action 42%
Promotions, demotions and transfers 49%
Other purposes 6% (including job analysis and providing superior support, assistance
and counseling)

0%
10%
20%
30%
40%
50%
60%
70%
80%
80%
71%
76%
42%
49%
6%
47

S St tr re en ng gt th hs s o of f p pe er rf fo or rm ma an nc ce e a ap pp pr ra ai is sa al l

The performance appraisal of the organization has some advantages. These advantages can be
considered to be the strong points of the organization.

A. The rewards method in the organization encouraged the employees to perform better.
They were also motivated by informal meetings with the supervisor where the supervisor
would use this opportunity to convey some important techniques for improving the
performance of the employee.-67%.

B. The essay type ensures that both the operational and non-operational type of criteria is
covered in the appraisal.-7%.

C. This system regularly keeps checks on the extra workshops/training the employee has
got.-12%.

D. It also encourages people to regulate update their knowledge by going for various
courses. It has a special weight age in the appraisal system.-14%.


0%
10%
20%
30%
40%
50%
60%
70%
A B C D
67%
7%
12%
14%
48

Weakness of the performance appraisal
Obstacles to the success of formal performance appraisal programs should be familiar to most
managers. If these drawbacks are looked into then there is all chance that his organization and
his employees will improve their performances. There were some of the drawbacks, which were
noticed during the analysis.

A. Performance appraisal ratings can boomerang when improperly communicated to
employees-51%.

B. Negative feedback not only fails to motivate the typical employees, but also can cause
him to perform worse -22%.

C. Only those employees who have a high degree of self-esteem appear to be simulated by
criticisms to improve their performance-11%.

D. Even though employee is evaluated from all angles personal bias plays a spoil spot-5%.

E. Transparency in the PA should be maintained- 11%.

0%
10%
20%
30%
40%
50%
60%
A B C D E
51%
22%
11%
5%
11%
49

CONCLUSION

The Performance Management system:-
Every company should go in for a PMS because:-

It provides a regularly scheduled uniform system of reviewing the employees
performance and an opportunity for exchanging views about each other, i.e. the
department and the employee.

It gives evidence of managements interest in the individual employee.

It induces supervisors and department heads to think more seriously.

It gives an opportunity to an employee to know his plus and minus points and to improve
his performance.

It provides and objective basis for many types of personnel decisions including pay
increase, training, promotion etc.

Employee performance appraisal indicates whether the present job makes full use of an
employees abilities and if any change is desirable in his duties, what kind of training is
required to improve his performance.










50

ANNEXURE

QUESTIONNAIRE



1. According to you for what purpose the performance appraisal is essential?

a. Making payroll and compensation decisions
b. Training and development needs
c. Identifying the gaps in desired and actual performance and its cause
d. Deciding future goals and course of action
e. Promotions, demotions and transfers
f. Other purposes

2. What are the strengths of the performance appraisal?







3. What are the weaknesses of performance appraisal?