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THE IMPACT OF

PERFORMANCE APPRAISAL
SYSTEM
IN WIPRO

Final Report
Submitted in partial fulfillment of the
requirements of
THE MBA PROGRAM
(The Class of 2010)
Submitted to: Submitted by:
Ms. Romil Tyagi Himani Sharma
8nbch046

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TABLE OF CONTENTS

CONTENT PAGE NO.


Acknowledgement 3

Summary 4

Chapter 1

1.1 Objectives

1.2 Limitations

1.3 Methodology 5-8

Chapter 2

2.1 Introduction

2.2 Company Profile 9-30

Chapter 3
30-34
3.1 Review of Literature

Chapter 4 35-47

4.1 Analysis

4.2 Retention Strategy

Findings of the Study 48

Conclusion and Suggestions 49

References 49-51

Appendices 52-55

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ACKNOWLEDGEMENT
Gratitude is seldom expressed in words towards the submission of this project. I
would seize the opportunity to acknowledge my deep sense of gratitude towards all
those who extended their kind help in fulfilling this endeavor.

I take pleasure to record my indebtness to my esteemed guide, Mrs. Romil Tyagi for
her generous guidance, valuable encouragement, and constant inspiration. .

A special word of thanks to Ms. Akansha ( HR consultant Wipro , Delhi)for her time
an knowledge and all the agents and senior group leader of Wipro BPO who gave us
their precious time to fill our questionnaire and give us an clear insight about the
organization performance appraisal system.

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EXECUTIVE SUMMARY
This project is a seminal work to study the Performance Appraisal in BPO sector. The
research topic is “Impact of Performance Appraisal in a BPO “for which Wipro was
focused. The above mentioned company is in a continuous process to mould itself in
order to decrease the high attrition rate of the company and improving the people’s
performance and for the overall organizational development.

Having started the research through the circulation of questionnaire and collecting
secondary data. The filled questionnaire gave us a transparent view of how companies
perform their performance appraisal, criteria’s for performance appraisal.

It was also learnt that the feedback mechanism and self assessment are very essential
and fruitful for the organization but the only constraint is the appraisal cycle which is
annually and is done for few employees.

Having a good performance appraisal is the key to success as it helps in reducing the
attrition rate and motivates employees. This research helped us get a glimpse of the
BPO’s.

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Chapter 1
• Objectives
• Limitations
• Methodology

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OBJECTIVES
a. To undertake a thorough study of Performance Appraisal System of Wipro
BPO Ltd. (Delhi), and also to understand as to what role Performance
Appraisal plays in retention of employees in an organization because as it is,
the attrition rate is sky rocketing in the BPO sector.

b. Apparently would like to know the strategies applicable to retain the


employees and whether performance appraisal is playing a major role in these
organizations to do so.

The project will cover all the employees on the ranks of Technical Associates,
Team leaders, Group leaders and an HR representative. Various questionnaires
will be filled by Employees.HR .

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Research Methodology

Data Collection methods:

1. Primary Data Sources:

Questionnaire: Both Open-ended and close ended

questionnaires will be used. Two questionnaires will be prepared, one for the
agents of the company and the other questionnaire was for the team leaders,
senior group leader and the HR representative.

2. Secondary Data Sources:

 Internet

 Journals.

Sample

A sample size of 135 in which 100 call centre’s ,35 agents, 4 team leaders, a
senior group leader and a HR representative of the company will be taken.

Methods Used

a. Chi-Square Method.

b. SPSS

Chi –square Method

Is a statically test commonly used to compare observed data with data we


would expect to obtain according to a specific hypothesis. It is used to gather
whether the deviations are due result of chance or our were they due to other
factors.

SPSS(Statistical Package for Social Sciences.)


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Is a computer program used for statistical analysis. SPSS datasets have 2-
dimensional table structure where rows represent cases and columns represents
measurements .It defines only 2 datatypes numeric and text. The results are
interpreted on one-to-one ,one-to-many but not many-to-many.

LIMITATION OF THE STUDY


The findings of this study are based on the subjective opinion of the respondents.
Although utmost care was taken to get accurate results, yet because of the risk of
ambiguities and misinterpretations on the part of the respondents, some elements of
inaccuracy might have crept in. Therefore most of the studies based on the opinion
survey suffers from what is recorded and what is truth.

In addition to this, there are other limitations listed below:

Due to the involment of employees in their job responsibilities some employees


could not fill the questionnaire due to lack of time.

Many employees gave a guarded response to the questions

Subjective Opinion cannot be measured in monetary terms.

The findings of the survey are based on the opinion of the respondents.

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Chapter 2
• Introduction.
• Company Profile

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INTRODUCTION
Down the ages in some or the other form Performance Appraisal has always
been in vogue in mundane forms and features. Even today in the era of
globalization Performance Appraisal has become very important and a dire
necessity for the employees, both in the private as well as public sector
organizations. This is basically a process which evaluates the performance of
an employee from time to time. There are various parameters or yardsticks to
measure the efficiency and capabilities of the employee and his dedication
towards the organization.

Wipro BPO Ltd. Is the company on which this project is made on BPO sector
has many trends and policies in the field of Performance Appraisal so Wipro
BPO Ltd. proves to be an important study base for Performance Appraisal. I
particularly chose this company also because happen to know people who
work for the organization and can effectively help us in getting meaningful
information. Wipro BPO has come a long way as a huge organization, a trend-
setter. So my field of interest for research was Wipro BPO.

Performance Appraisal has different measures to judge the capabilities and


efficiency of an individual in an organization- how far the targets have been
achieved, how has his performance been! It plays a very important role in their
analysis as it keeps the employees motivated towards their jobs. This
assessment also helps in the overall growth of the organization. So
Performance Appraisal today plays a very important role in keeping a track of
various employees for different kinds of jobs in the organization.

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PERFORMANCE APRAISAL
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. As a distinct and formal
management procedure used in the evaluation of work performance,appraisal
really dates from the time of the Second World War - not more than 60 years
ago.
Yet in a broader sense, the practice of appraisal is a very ancient art. In the
scale of things historical, it might well lay claim to being the world's second
oldest profession!
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.
Performance appraisal systems began as simple methods of income
justification. That is,appraisal was used to decide whether or not the salary or
wage of an individual employee was justified.

Performance Appraisal is the process of obtaining, analyzing and recording


information about the relative worth of an employee. The focus of the
performance appraisal is measuring and improving the actual performance of

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the employee and also the future potential of the employee. Its aim is to
measure what an employee does.

It is a powerful tool to calibrate, refine and reward the performance of the


employee. It helps to analyze his achievements and evaluate his contribution
towards the achievements of the overall organizational goals.

By focusing the attention on performance, performance appraisal goes to the


heart of personnel management and reflects the management’s interest in the
progress of the employees.

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.
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 To reduce the grievances of the employees

Process of Performance Appraisal

Establishing Performance Standards


The first step in the process of performance appraisal is the setting up of the standards
which will be used to as the base to compare the actual performance of the employees.
This step requires setting the criteria to judge the performance of the employees as
successful or unsuccessful and the degrees of their contribution to the organizational
goals and objectives. The standards set should be clear, easily understandable and in
measurable terms. In case the performance of the employee cannot be measured, great
care should be taken to describe the standards.

Communicating the Standards


Once set, it is the responsibility of the management to communicate the standards to
all the employees of the organization.
The employees should be informed and the standards should be clearly explained to
the. This will help them to understand their roles and to know what exactly is
expected from them. The standards should also be communicated to the appraisers or

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the evaluators and if required, the standards can also be modified at this stage itself
according to the relevant feedback from the employees or the evaluators.

Measuring actual Performance


The most difficult part of the Performance appraisal process is measuring the actual
performance of the employees that is the work done by the employees during the
specified period of time. It is a continuous process which involves monitoring the
performance throughout the year. This stage requires the careful selection of the
appropriate techniques of measurement, taking care that personal bias does not affect
the outcome of the process and providing assistance rather than interfering in an
employees work.

Comparing actual with the Desired Performance


The actual performance is compared with the desired or the standard performance.
The comparison tells the deviations in the performance of the employees from the
standards set. The result can show the actual performance being more than the desired
performance or, the actual performance being less than the desired performance

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depicting a negative deviation in the organizational performance. It includes recalling,
evaluating and analysis of data related to the employees’ performance.

Discussing the Results


The result of the appraisal is communicated and discussed with the employees on one-
to-one basis. The focus of this discussion is on communication and listening. The
results, the problems and the possible solutions are discussed with the aim of problem
solving and reaching consensus. The feedback should be given with a positive attitude
as this can have an effect on the employees’ future performance. The purpose of the
meeting should be to solve the problems faced and motivate the employees to perform
better.

Decision Making
The last step of the process is to take decisions which can be taken either to improve
the performance of the employees, take the required corrective actions, or the related
HR decisions like rewards, promotions, demotions, transfers etc.

Challenges in Performance Appraisal :

In order to make a performance appraisal system effective and successful, an


organization comes across various challenges and problems. The main challenges
involved in the performance appraisal process are:

Determining the evaluation criteria:


Identification of the appraisal criteria is one of the biggest problems faced by the top
management. The performance data to be considered for evaluation should be
carefully selected. For the purpose of evaluation, the criteria selected should be in
quantifiable or measurable terms.

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Create a rating instrument:
The purpose of the performance appraisal process is to judge the performance of the
employees rather than the employee. The focus of the system should be on the
development of the employees of the organization.

Lack of competence:
Top management should choose the raters or the evaluators carefully. They should
have the required expertise and the knowledge to decide the criteria accurately. They
should have the experience and the necessary training to carry out the appraisal
process objectively.

Errors in rating and evaluation:


Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait
influencing the evaluator’s rating for all other traits) etc. may creep in the appraisal
process.
Therefore the rater should exercise objectivity and fairness in evaluating and rating
the performance of the employees.

Resistance:
The appraisal process may face resistance from the employees and the trade unions
for the fear of negative ratings. Therefore, the employees should be communicated
and clearly explained the purpose as well the process of appraisal. The standards
should be clearly communicated and every employee should be made aware that what
exactly is expected from him/her.

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Purpose of Performance Appraisal
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:

1.To review the performance of the employees over a given period of time.

2.To judge the gap between the actual and the desired performance.

3.To help the management in exercising organizational control.

4.To diagnose the training and development needs of the future.

5.Provide information to assist in the HR decisions like promotions, transfers


etc.

6.Provide clarity of the expectations and responsibilities of the functions to be


performed by the employees.

7.To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development.

8.To reduce the grievances of the employees.

9.Helps to strengthen the relationship and communication between superior –


subordinates and management – employees.

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According to a recent survey, the percentage of organisations (out of the total
organisations 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)

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Current Global Trends in Performance Appraisal System

The heart of the human resource management system in the organisations.


Performance appraisal defines and measures the performance of the employees and
the organisation as a whole. It is a tool for accessing the performance of the
organisation.

The important issues and points concerning performance appraisal in the present
world are:

1. The focus of the performance appraisals is turning towards career development


relying on the dialogues and discussions with the superiors.

2.Performance measuring, rating and review systems have become more detailed,
structured and person specific than before.

3.Performance related pay is being incorporated in the strategies used by the


organizations

4.Trend towards a 360-degree feedback system

5.The problems in the implementation of the performance appraisal processes are


being anticipated and efforts are being made to overcome them.

In India, the performance appraisal processes are faced with a lot of obstacles, the
most prominent being the lack of quantifiable indicators of the performance.

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GLOBAL TRENDS
The emergence of following concepts and the following trends related to Performance
appraisal can be seen in the global scenario:

360 Degree Appraisal

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive
appraisal where the feedback about the employees’ performance comes from all the
sources that come in contact with the employee on his job. Organisations are
increasingly using feedback from various sources such as peer input, customer
feedback, and input from superiors. Different forms with different formats are being
used to obtain the information regarding the employee performance.

Team Performance Appraisal

According to a wall street journal headline, "Teams have become commonplace in


U.S. Companies". Most of the performance appraisal techniques are formulated with
individuals in mind i.e. to measure and rate the performance of the individual
employee. Therefore, with the number of teams increasing in the organisations, it
becomes difficult to measure and appraise the performance of the team. The question
is how to separate the performance of the team from the performance of the
employees. A solution to this problem that is being adopted by the companies is to
measure both the individual and the team performance. Sometimes, team based
objectives are also included in the individual performance plans.

Rank and Yank Strategy

Also known as the "Up or out policy", the rank and yank strategy refers to the
performance appraisal model in which best-to-worst ranking methods are used to
identify and separate the poor performers from the good performers. Then the action
plans and the improvement opportunities of the poor performers are discussed and
they are given to improve their performance in a given time period, after which the
appropriate HR decisions are taken. Some of the organisations following this strategy
are Ford, Microsoft and Sun Microsystems.

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Measuring Employee Performance
The most difficult part of the performance appraisal process is to accurately and
objectively measure the employee performance. Measuring the performance covers
the evaluation of the main tasks completed and the accomplishments of the employee
in a given time period in comparison with the goals set at the beginning of the period.
Measuring also encompasses the quality of the accomplishments, the compliance with
the desired standards, the costs involved and the time taken in achieving the results.

Measuring employee performance is the basis of the Performance appraisal processes


and performance management. Accurate and efficient performance measurement not
only forms the basis of an accurate performance review but also gives way to judging
and measuring employee potential.

For the purpose of measuring employee performance, different input forms can be
used for taking the feedback from the various sources like the superior, peers,
customers, vendors and the employee himself. All the perspectives thus received
should be combined in the appropriate manner and to get an overall, complete view of
the employees’ performance. Observation can also be exercised by the superior to
obtain information. Some suggestions and tips for measuring employee performance
are:

1. Clearly define and develop the employee plans of action (performance) with
their role, duties and responsibilities.

2.Organizational outcomes or the achievement of organizational goals should also


be kept in mind.

3.Focus on accomplishments and results rather than on activities.

4.Also take note of the skills, knowledge and competencies and behaviors of the
employees that help the organisation to achieve its goals.

5.Financial measures like the return on investment, the market share, the profit
generated by the performance of the team should also be considered.

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Methods of Performance Appraisal
The various methods and techniques used for Performance appraisal can be
categorized as the following traditional and modern methods:

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Traditional Methods

1. ESSAY APPRAISAL METHOD

This traditional form of appraisal, also known as "Free Form method" involves a
description of the performance of an employee by his superior. The description is an
evaluation of the performance of any individual based on the facts and often includes
examples and evidences to support the information. A major drawback of the method
is the inseparability of the bias of the evaluator.

2. STRAIGHT RANKING METHOD

This is one of the oldest and simplest techniques of performance appraisal. In this
method, the appraiser ranks the employees from the best to the poorest on the basis of
their overall performance. It is quite useful for a comparative evaluation.

3. PAIRED COMPARISON

A better technique of comparison than the straight ranking method, this method
compares each employee with all others in the group, one at a time. After all the
comparisons on the basis of the overall comparisons, the employees are given the
final rankings.

4. CRITICAL INCIDENTS METHODS

In this method of Performance appraisal, the evaluator rates the employee on the basis
of critical events and how the employee behaved during those incidents. It includes
both negative and positive points. The drawback of this method is that the supervisor
has to note down the critical incidents and the employee behaviour as and when they
occur.

5. FIELD REVIEW

In this method, a senior member of the HR department or a training officer discusses


and interviews the supervisors to evaluate and rate their respective subordinates. A
major drawback of this method is that it is a very time consuming method. But this
method helps to reduce the superiors’ personal bias.

6. CHECKLIST METHOD

The rater is given a checklist of the descriptions of the behaviour of the employees on
job. The checklist contains a list of statements on the basis of which the rater
describes the on the job performance of the employees.

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7. GRAPHIC RATING SCALE

In this method, an employee’s quality and quantity of work is assessed in a graphic


scale indicating different degrees of a particular trait. The factors taken into
consideration include both the personal characteristics and characteristics related to
the on the job performance of the employees. For example a trait like Job Knowledge
may be judged on the range of average, above average, outstanding or unsatisfactory.

8. FORCED DISTRIBUTION

To eliminate the element of bias from the rater’s ratings, the evaluator is asked to
distribute the employees in some fixed categories of ratings like on a normal
distribution curve. The rater chooses the appropriate fit for the categories on his own
discretion.

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Modern Methods

Management by Objectives

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker
in 1954. It can be defined as a process whereby the employees and the superiors come
together to identify common goals, the employees set their goals to be achieved, the
standards to be taken as the criteria for measurement of their performance and
contribution and deciding the course of action to be followed.

The essence of MBO is participative goal setting, choosing course of actions and
decision making. An important part of the MBO is the measurement and the
comparison of the employee’s actual performance with the standards set. Ideally,
when employees themselves have been involved with the goal setting and the
choosing the course of action to be followed by them, they are more likely to fulfill
their responsibilities.

MBO process

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\

360 Degree Performance Appraisal

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive
appraisal where the feedback about the employees’ performance comes from all the
sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior),
subordinates, team members, customers, suppliers/ vendors - anyone who comes into
contact with the employee and can provide valuable insights and information or
feedback regarding the "on-the-job" performance of the employee.

360 degree appraisal has four integral components:

1. Self appraisal

2. Superior’s appraisal

3. Subordinate’s appraisal

4. Peer appraisal.
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Assessment Centers –

An assessment centre typically involves the use of methods like social/informal


events, tests and exercises, assignments being given to a group of employees to assess
their competencies to take higher responsibilities in the future. Generally, employees
are given an assignment similar to the job they would be expected to perform if
promoted. The trained evaluators observe and evaluate employees as they perform the
assigned jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centres are interpersonal skills,
intellectual capability, planning and organizing capabilities, motivation, career
orientation etc. assessment centres are also an effective way to determine the training
and development needs of the targeted employees.

Behaviorally Anchored rating Scales

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Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which
combines the graphic rating scale and critical incidents method. It consists of
predetermined critical areas of job performance or sets of behavioral statements
describing important job performance qualities as good or bad (for eg. the qualities
like inter personal relationships, adaptability and reliability, job knowledge etc).
These statements are developed from critical incidents.

In this method, an employee’s actual job behavior is judged against the desired
behaviour by recording and comparing the behavior with BARS. Developing and
practicing BARS requires expert knowledge.

Human Resource Accounting

Human resources are valuable assets for every organization. Human resource
accounting method tries to find the relative worth of these assets in the terms of
money. In this method the Performance appraisal of the employees is judged in terms
of cost and contribution of the employees. The cost of employees include all the
expenses incurred on them like their compensation, recruitment and selection costs,
induction and training costs etc whereas their contribution includes the total value
added (in monetary terms). The difference between the cost and the contribution will
be the performance of the employees. Ideally, the contribution of the employees
should be greater than the cost incurred on them.

Company Profile

Wipro Limited is a $5 billion Indian conglomerate. According to the 2008-09


revenue, Wipro is the second largest IT company in India. Wipro Ltd has interests
varying from information technology, consumer care, lighting, engineering and
healthcare businesses. Azim Premji is the Chairman of the board.

Wipro(Western India Palm Refind Oils) started as a vegetable oil trading company in
1947 from an old mill at Amalner, Maharashtra, India founded by Azim Premji's
father. He repositioned it and transformed Wipro (Western India Vegetable Products
Ltd) into a consumer goods company that produced hydrogenated cooking oils/fat
company, laundry soap, wax and tin containers and later set up Wipro Fluid Power to
manufacture hydraulic and pneumatic cylinders in 1975. Wipro entered the
information technology sector. In 1979, Wipro began developing its own computers
and in 1981, started selling the finished product. This was the first in a string of
products that would make Wipro one of India's first computer makers. The company
licensed technology from Sentinel Computers in the United States and began building
India's first mini-computers. Wipro hired managers who were computer savvy, and
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strong on business experience.In 1980 Wipro moved into software development and
started developing customized software packages for their hardware customers. This
expanded their IT business and subsequently developed the first Indian 8086 chip.

Since 1992 Wipro began to grow its roots off shore in United States and by
2000 Wipro Ltd ADRs were listed on the New York Stock Exchange. History:

1945: Incorporation of Western India Vegetable Products Limited

1975: Wipro Fluid Power established

1980: Wipro Info tech Launched

1986: Santoor Soap launched

1988: Wipro BioMed established

1990: Wipro GE Medical Systems Ltd. Incorporated

1991: Wipro Lighting established

1998: Wipro launched its repositioned Identity (Rainbow Flower and


Applying Thought) and articulates its externally oriented values.

2000: Wipro Listed on New York Stock Exchange 1999- Wipro becomes#1 in
market capitalization in the country.

2003: Three major acquisitions during the year 2003 are – Spectra mind,
Global Energy Practice of AMS Inc. and R&D labs of Ericsson.

2004 :

o Crossed the $1 Billion mark in annualized revenues.


o Wipro launches India’s first RFID enabled apparel store.
o Wipro Technologies named Asian Most Admired Knowledge
Enterprise second year in a row.
o IDC rates Wipro as the leader among worldwide offshore service
providers.

2005 - Wipro acquires mPower to enter payments space also acquires


European System on Chip design firm NewLogic

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2008 - Wipro acquires Gallagher Financial Systems enter mortgage loan
origination space.

2009 - Wipro stops Connectivity IP and closes NewLogic Sophia-Antipolis


R&D centre.

Wipro has over 18,500 professionals and 4000 professionals’ onsite.

Wipro BPO India is committed to offering quality and long term services to
its customers. There are mainly three areas where Wipro focuses – knowledge
processing, equipping BPO technology, and reengineering the business
process.

Wipro is more than just a BPO as it places the customer first, thus making
every effort to ensure that all client requirements are duly fulfilled.

The headquarters of Wipro BPO India is in Bangalore. Professionals at Wipro


BPO India work towards making new innovations, offering new talents, a
framework for self- sustainability, and domain knowledge. The services
offered are customized and cost- effective. The services that are offered are
meant for various industries as mentioned below:

• Travel and Hospitality


• Banking and Capital Markets
• Telecom
• Healthcare sector
• Insurance
• Hi-Tech Manufacturing

The solutions offered by Wipro BPO India are in the following areas:

• Finance and Accounting


• Loyalty Services
• HR Services
• Knowledge Services
• Procurement

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Wipro had acquired Spectramind in 2002 but has now changed its name to Wipro
BPO and is doing well in the offshoring venture. Wipro, before it changed its name to
Wipro BPO, had worked well through the Spectramind e-services and had 31 clients
in 2004-05. Wipro's acquisition of Spectramind had jointly offered quality non-voice
services and effective solutions to clients.
Wipro BPO is working towards setting up 2 BPO centers at Shanghai and Chengdu in
China. The total number of employees will be 300. Apart from working on
establishing the BPOs within this year, Wipro BPO is also planning to set up BPOs in
the US and Brazil as well.

Wipro BPO India registered a revenue of Rs. 263.6 crore in March and Rs. 251.5
crore in June, making Wipro one of India's top 10 BPO firms.

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CHAPTER 3
• Review of Literature

Review of Literature

1. The objective of this literature review is to establish the problems associated


with the EPAS and the at the Larkspur Fire Department .The Larkspur
Fire Department utilized an EPAS that was internally developed without the
use of human resources, legal expertise , without trained experts who carried
out the appraisal function and without identifying the desired outcomes which
were conducted on annual basis. To overcome this problem Training &
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support process for supervisors was initiated, a choice rating system was
started regular feedbacks and orientation programmes for the employees and
the supervisors were also started.

2. The purpose of this study was to identify and analyze sales people’s
perception of performance appraisal criteria in a Telecommunications
Corporation and to provide information that will help in the continued
development of effective performance appraisal criteria; aid managers when
assessing the performance of sales people and serve as guidelines for the
professional development training of managers on performance evaluation.

3. The article titled “Testing the effectiveness of Performance Appraisal at


Nokia”.Nokia has incorporated performance appraisals in its compensation
plan. The company adopted pay-for - performance and therefore measuring
and gauging different performance indicators of each employee is essential .
Nokia has an global matrix structure and has an performance appraisal system
called “Investing in People”. has been designed as 360degrees feedback and
electronic briefing sessions

4. “Understanding Performance Appraisal Methods” by Muazzam


Mehmood. In this article he focuses on the various methods that are being
used Once the employees have been selected, trained and motivated then they
are appraised . It is the step where the effectiveness of hiring and placing of
employees is evaluated. Several methods and techniques of appraisal are
available for measurement . The Performance Appraisal method is divided
into four categories :
a. Trait Based Method.
b. Behavioural Method.
c. Comparative Method
d. Result oriented Method.

5. The objective of this study is “Productivity Implications of Employee


Performance and Appraisal System”. The productivity of any organisation
is directly correlated to the Effectiveness of the Employee Performance
Appraisal System ,which is subject to Effectiveness of the support systems
,depending on the type of organizational business. Technology, systems and
Manpower are linked in an inter-related circle focussing towards productivity.

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6.” Key Performance Indicators: Objectively Evaluate Call Centre
Performance” by Sam Miller Call centres are customer service centres that
receive and transmit multiple requests by telephone (and also usually by email and
other online channels). call centres handle fairly high volumes of both inbound
and outbound calls .Dealing with customers directly is of course a very sensitive
matter, and every company strives to put its best foot forward with its call centres.
Careful management is required, and this is usually performed using KPI's and
benchmarking. common key performance indicators for call centres include the
average amount of time that a call takes to resolve, or AHT (average handling
time). This combines the average time that a caller waits on hold and the average
time that a caller spends talking with the agent (ATT, average talk time).

7. “TheAppraisalNeeds in the Call Centre Industry “ by Hani Masgidi.


Call centres have over the years developed a performance appraisal system
that's including all the components of good communication. Nowhere else
does appraisals matter so much as much in call centre business, as its all about
customer experience which sells and is at CSR discretion. Technology has
turned the way in the favour of call centres and has reduced the hassle of
managers and supervisors who had to listen to live calls to evaluate the
performance of CSR, now with advanced software recording option; the calls
can be replayed for evaluation of the quality and customer satisfaction. One of
the best possible made evaluations models includes all the ingredients of good
communication. The appraisals is made on the basis of one of the basic
elements of good communication and it is expected from CSR to demonstrate
these good practices to get good results towards the end for themselves and for
the company.

8. “Perceptions of federal performance appraisal systems” The purpose of


this study was to propose a new performance appraisal system and to
evaluate the perceptions of officers and supervisors in comparison with the
current appraisal system of the Federal Probation's Central District of
California (FPCDC). It also determined the areas in which the performance
appraisal system can be improved. This study introduced the use of goal

34
setting and specific feedback into the performance appraisal system. It
determines if officers and supervisors feel that the introduction of such
factors will increase their motivation to perform better and help them to
focus more on meeting organizational objectives and further lead to better
appraisals.

35
CHAPTER 4
• ANALYSIS
• RETENTION STRATEGY

36
37
ANALYSIS

This part of thesis deals with the results of the questionnaire .It shows how
much importance employees attach towards certain job and the evaluation of
the job. Moreover the results of the interviews are presented in order to
provide a better understanding. They are explained below:

EDUCATIONAL QUALIFICATION

60%
50%
40%
30% Graduation
20% MBA
10% M.TECH
0%
EDUCATIONAL
QUALIFICATION

Figure 1
Educational Frequency Percentage%
Qualification
Graduates 60 60%
MBA 15 15%
M.TECH 25 25%

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EXPERIENCE IN BPO

60%
0-2 years
40%
2-4 years
4-6years
20% 4-6years
0-2 years
0%
EXPERIENCE

Figure 2
Experience Frequency Percentage%

0-2 years 60 60%

2-4 years 13 13%

4-6 years 37 37%

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PERFORMANCE APPRAISAL

60%
50%
Evalaution of
40%
Em ployees
30%
Part of Career
20% Devlopment
10% Both
0%
Perform ance
Appraisal

Figure 3
Perception Frequency Percentage

Evaluation of Employees 60 60%

Part of Career 18 18%


Development

Both 22 22%

Interpretation: A trend has been noticed that the majority of the people (60%) think of
Performance Appraisal as a tool for evaluating employees and very few believe it to be
acareer development program or both. The employees think that performance appraisal
gives a clear view of how they are performing, where they can improve . They think that
performance appraisal helps in their personal development. A performance appraisal
system is a means for both setting and recognizing the achievement of goals or
standards and also helps them in planning their career and overall development.

40
NEED OF PERFORMANCE APPRAISAL

Reward or
Promotions
Utilization of Skills

Retention of
Need Employees

0% 10% 20% 30% 40% 50%

Figure 4
Need Frequency Percentage
Retention of Employees 15 15%
Utilization of Skills 35 35%
Rewards or Promotions 50 50%

Interpretation: The view of the employees is quite distributed but 50% of the employees
consider Performance Appraisal as a system of reward, promotion and salary
increments. Employees feel that by giving rewards and salary increments, companies
motivate them to give their best and by giving promotions companies try to reduce the
attrition rate. Employees feel good about themselves when they get promotions and
salary-increments for their achievements. This does not mean that performance
appraisal is the only way of getting the best from the employees.

41
LEVEL OF SATSFACTION ACHIEVED

70%
60%
50%
40% Yes
30%
No
20%
10%
0%
Satisafaction
Level

Satisfaction Level Frequency Percentage

Yes 70 70%

No 30 30%

Interpretation: As 70% of the employees believe that the company’s Performance


Appraisal system is quite satisfactory, we can assume Wipro BPO’s Performance
Appraisal system to be good enough and the employees are happy with the Performance
appraisal procedure followed by the company.

42
IMPORTANCE OF SELF APPRAISAL

60

40 Yes

20 May be NO
May be
Yes
0
Importance
of Self -
Appraisal

Figure 5
Importance Of Self Frequency Percentage
-Appraisal

Yes 50 50%

NO 20 20%

May be 30 30%

Interpretations: It is noticed that self-appraisal does play an important role in


Performance Appraisal as 50% of the employees say so as self- appraisal helps the
employees to evaluate themselves. Self-Appraisal gives an opportunity to the employees
to document not only the achievements, but also the difficulties encountered while
working. It also helps the appraiser understand the gap between the self assessment of
the appraised and the assessment by the appraiser.

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PERFORMANCE APPRAISAL CYCLE

100%
Anually

50% Half-Yearly
Quarterly
Quarterly
0% Anually
Cycle

Figure 6
CYCLE FREQUENCY PERCENTAGE

Annually 90 90%

Half-Yearly 00 0%

Quarterly 10 10%

Interpretations: Employees unanimously gave their assent that Performance Appraisal


cycle is yearly.

RETENTION STRATEGY

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Attrition is the biggest problem faced by BPOs these days. Attrition rate in BPOs is
more than the attrition rate in any other sector. It is very important to control this
attrition rate. Many retention schemes are applied .The various strategies are:

a.)Communications - Getting Your People to Care

b.)Set Clear Expectations


a. How often do you appraise your employees/team-members?
B. What are your expectations from your employees/team-members? What are
the parameters to measure their performance? Have you communicated to them?

C,What will be the consequences, if they fail?

d.What will be the rewards, if they exceed the expected level?

c.) Rewards

The aim of employee reward policies and practices, if any in your organization
is to help attract, retain and motivate high-quality people. Getting it wrong can have a
significant negative effect on the motivation, commitment and morale of employees.
Personnel and development professionals will be involved frequently in reward
issues, whether they are generalists or specialize in people resourcing, learning and
development or employee relations

The rewards may also may be given in the form of :

Group Medi-claim Insurance Scheme: This insurance scheme is to provide adequate


insurance coverage of employees for expenses related to hospitalization due to illness,
disease or injury or pregnancy in case of female employees or spouse of male
employees. All employees and their dependent family members are eligible.
Dependent family members include spouse, non-earning parents and children above
three months

45
Personal Accident Insurance Scheme: This scheme is to provide adequate insurance
coverage for Hospitalization expenses arising out of injuries sustained in an accident.
This covers total / partial disablement / death due to accident and due to accidents.

Subsidized Food and Transportation: The organizations provide transportation facility


to all the employees from home till office at subsidized rates. The lunch provided is
also subsidized.

Company Leased Accommodation: Some of the companies provides shared


accommodation for all the out station employees, in fact some of the BPO companies
also undertakes to pay electricity/water bills as well as the Society charges for the
shared accommodation. The purpose is to provide to the employees to lead a more
comfortable work life balance.

Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include
pool tables, chess tables and coffee bars. Companies also have well equipped gyms,
personal trainers and showers at facilities.

Corporate Credit Card: The main purpose of the corporate credit card is enable the
timely and efficient payment of official expenses which the employees undertake for
purposes such as travel related expenses like Hotel bills, Air tickets etc

Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to the
employees on the basis of business need. The employee is responsible for the
maintenance and safeguarding of the asset.

Personal Health Care (Regular medical check-ups): The company provides the
facility for extensive health check-up. For employees with above 40 years of age, the
medical check-up can be done once a year.

Loans: The company provide loan facility on three different occasions: Employees
are provided with financial assistance in case of a medical emergency. Employees are
also provided with financial assistance at the time of their wedding. And, The new
recruits are provided with interest free loans to assist them in their initial settlement at
the work location.
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Educational Benefits: This policy helps to develop the personality and knowledge
level of their employees and hence reimburses the expenses incurred towards tuition
fees, examination fees, and purchase of books subject, for pursuing MBA, and/or
other management qualification at India's top most Business Schools.

Flexi-time: The main objective of the flextime policy is to provide opportunity to


employees to work with flexible work schedules and set out conditions for availing
this provision. Flexible work schedules are initiated by employees and approved by
management to meet business commitments while supporting employee personal life
needs .The factors on which Flexi time is allowed to an employee include: Child or
Parent care, Health situation, Maternity, Formal education program

Regular Get together and other cultural programs: The company organizes cultural
program as and when possible but most of the times, once in a quarter, in which all
the employees are given an opportunity to display their talents in dramatics, singing,
acting, dancing etc. Apart from that the organizations also conduct various sports
programs such as Cricket, football, etc and regularly play matches with the teams of
other organizations and colleges.

Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/-
based on their level in the organization.

Employee Referral Scheme: In several companies employee referral scheme is


implemented to encourage employees to refer friends and relatives for employment in
the organization.

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FINDINGS OF THE STUDY

Performance Appraisal has become the most important part of today’s HR system .It
is used in retention of employees and a great deal to evaluate their performance .It is
believed that it is a system of rewards ,promotion and salary. Most employees who
were interviewed said that they were satisfied with performance appraisal system of
their company.

It was noticed that self appraisal has become the most important part in performance
appraisal. It can be used motivate employees to a great height and can increase
productivity. It also helps tap full potential of their employees as they keep track on
individual performances.

In Wipro BPO the main parameters of Performance Appraisal is CALL TARGETS


and SATISFIED CUSTOMERS. The employees of wipro are happy as they are
allowed to view last years performance reports are accessible to them which allows
them to improve on their weaknesses. HIGH LEVEL of satisfaction in respect to job
is found in employees .

The leaders and group leaders are of the opinion that performance appraisal is used
mainly for the retention of employees. The HRD department is responsible along ith
the AVP and supervisors .They evaluate a person on the overall proficiency,
efficiency and satisfied customer. They shape performance appraisal criterion for
salary, increments and promotions. The most widely used method for appraisal in
Wipro is 360 degrees appraisal. They focus on individual employees and help them
work in group together.

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CONCLUSIONS
After analyzing the data provided by the employees , team leaders, and HR
representative of the company it is clear that majority of them are satisfied with the
present performance appraisal.

But I still feel more bonuses should be given to the employees to motivate them. The
frequency of Salary hike should be increased in proportion to the employees’
performance as the attrition rate is still high in the company. The employees of Wipro
have started focusing in self appraisal i.e. individual performance appraisal system so
the company should now focus on the individual levels also . Self assessment is an
indispensable part of 360 degree appraisals and therefore 360 degree performance
appraisals have high employee involvement and also have the strongest impact on
behavior and performance. It provides a "360-degree review" of the employees’
performance and is considered to be one of the most credible performance appraisal
methods.

360 degree appraisal is also a powerful developmental tool because when conducted
at regular intervals (say yearly) it helps to keep a track of the changes others’
perceptions about the employees. A 360 degree appraisal is generally found more
suitable for the managers as it helps to assess their leadership and managing styles.
This technique is being effectively used across the globe for performance appraisals.

49
References
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b http://www.bpo.knowledgehills.com/hills/default.aspx accessed on 28.07.09

c. http://www.performance-appraisal.com/info.htm accessed on 28.07.09

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e .http://www2.lv.psu.edu/jxm57/irp/chisquar.html accessed on 28.07.09

f. http://www.ci.larkspur.ca.us/3061-StudyingEmployeePerformanceAppraisal.pdf
accessed on 3.08.09

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on 12.08.09

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m .http://www.articlesbase.com/human-resources-articles/testing-the-
effectiveness-of-performance-appraisals-40438.html accessed on 4.09.09

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50
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u. http://www.businessballs.com/performanceappraisals.htmaccessed on 2.11.09

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7.11.09

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51
APPENDICES

Questionnaire

Age:

Education Qualification:

Overall experience in BPO sector:

Years of experience in Wipro BPO:

1. What according to you is Performance Appraisal?

o Evaluation of employees.

o Part of career development.

2.· Why do you think companies have Performance Appraisal system?

a. Retention of employees

b. Increase in utilization of skills

c.Increase knowledge and ability to perform

d.Rewards, promotions and salary increments

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3. How Performance Appraisal helps in retention of employees?

4. What are the parameters that determine the Performance Appraisal of an


individual?

5.What are the purposes of Performance Appraisal in a company ?

o Feedback on employee Performance.

o Recognize Training needs of employee

o Criteria utilized to assign awards

o Chance for organizational Analysis and Improvement.

6.What type of Performance Appraisal system do you use for evaluating your
employees?

o 360 Degrees Performance Appraisal.

o General Performance Appraisal

o Technical Performnace Appraisal.

o Employee self assessment.

o Project Evaluation Review.

o Sales Performance Appraisal.

7. What do you consider as vital for performance appraisal of an individual?

o Experience

o Individual Performances

o Individual Potential

o Current Performances.

53
8.Are employees given an opportunity to make an input to their own performance
appraisal?

o Yes.

o No

9.How important Performance Appraisal is in utilizing the optimal skills ,knowledge


and abilities of the employees?

o Very important.

o Least important.

o Not at all important.

10. Who all are involved in performance appraisal system of your company?

54
55
Questionnaire

1. Educational Qualification
o Graduate
o M.B.A
o M.tech

2. Overall Experience in BPO sector ?


o 0-2 yrs
o 2-4 yrs.
o 4-6 yrs.

3. What according to you is Performance Appraisal?


o Evaluation of Employees
o Part of career Development.
o Or both.

4. Why do you think companies have Performance Appraisal System ?


o Retention of Employees.
o Utilization of Skills.
o Rewards, Increments or Promotions.

5. Are you satisfied with the company’s Performance Appraisal?


o Yes.
o No.
o Can’t Say.

6. Do you think self-appraisal plays an important role in your performance style?


o Yes.
o No
o May be.

7. What is your Performance Appraisal Cycle ?


o Quarterly.
o Half- yearly.
o Annually.

8. Is the content of performance appraisal reports freely accessible and


Communicated to employees?
o Yes.
o No.

9. What do you like or dislike about the Performance Appraisal policy of your
Company?

56