SYNOPSIS

India is one of the emerging economy and is growing at an average rate of about 8 to 8.5 %.
Different sectors of economy have contributed in this growth particularly the service sector and
the manufacturing sector .The growth registered in manufacturing sector between 2007 to 2009
was about 25% to 30%.
Punj Llyod established in the year 1982 and employs about 5000 employees under different
grades.
This project is an attempt to understand
procedures/practices of Punj Llyod Ltd.

the

performance

management

system

Organizational efficiency depends upon the performance of the human resource of the
organization. Only appraisal of performance cannot be very much beneficial unless necessary
initiatives are taken for improvement and the management of the existing performance levels of
the employees. This project is an attempt to understand different methods of performance
appraisal and the concept of performance systems.
During the project an attempt was made for Personal Interview of few senior Human Resource
people of the organization who are currently handling this work. However, inorder to understand
the employees perception about the present practices a sample of 50 employees under different
grades have been randomly selected.
Structured questionnaire method was used for the purpose of data collection, data tabulation and
data analysis on the basis of which conclusion has been drawn. On the basis of feed back and
suggestions received certain recommendations have been received which has been included in
the recommendations part of this report.

OBJECTIVE
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This project aims at studying the Performance Management System and its effectiveness in an
organization. Performance appraisal is the most significant and indispensable tool for the
management as it provide useful information for decision making in area of promotion and
compensation reviews.
The objective is to study the existing Performance Management System in PUNJ LLOYD LTD.,
GURGOAN.

To study the strengths and weakness of the prevailing performance management system.

To know the extent of effectiveness of the appraisal system

To give suggestions in further strengthening the Performance Management System

already being practiced by the renowned company, PUNJ LLOYD LTD. with respect to
its well defined vision and core values

To identify and know the area of improvement of the system

RESEARCH METHODLOGY
Research methodology is a way to systematically solve the research problems. It maybe
understood as a science of studying how research is done scientifically. In it we study the various
steps that are generally problem along with the problem behind them. It is necessary for the
researcher to know not only the research methods/ techniques but also the methodology.
Researchers not only need to know how much to develop certain indices or the tests, how to
calculate the means, the mode, the median and the standard deviation or chi-square, how to apply
particular research techniques are relevant and which are not and what would they mean and
indicate and why.
Researchers also need to understand the assumptions underlying various techniques and they
need to know the criteria by which they can decide that certain techniques and procedures will
be applicable to certain problems for the researcher to design his methodology for his problem as
a same may differ from problem to problem.
FOR EXAMPLE:An architect, who designs a building, has to consciously evaluate the basis of his decisions that
is he has to evaluate why and on what basis he selects particulars size, number and location of
doors, windows and ventilators, uses particular materials and not others and the like. Similarly in
research the scientist has to expose the research decisions to evaluation before they are
implemented. He has to specify very clearly and precisely. What decisions he selects and why he
selects them so that they evaluated by others also.
From what has been stated above we can say that research method do constitute a part of the
research methodology.

DATA COLLECTION TOOL

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After the research methodology the data is collected. The task of data collection is to check the
plan, so that the researcher carefully selects the method for his/her own study. There are 2 types
for collecting the data:1. Primary Data
2. Secondary Data
1. Primary Data
Information, which has been gathered for the first time, is called primary data. Here the source
expected to have the desire information are contacted by various methods to collect data. The
reputation and experience of the investigators of collecting the data results in accuracy of
information collected.
2. Secondary Data
Secondary data means data that is already available and it refers to data, which has already been
collected and analyzed by someone else. Secondary data may either published data or
unpublished data. The researcher must be careful in using secondary data. He/she must make a
minute scrutiny because it is possible that secondary data may be inadequate or unsuitable in the
contents of problem, which the researcher wants to study.
There are 4 ways by which the secondary data can be collected:1. Observation Method
2. Interview Method
3. Questionnaire
4. Schedule
But I have used only the questionnaire method for data collection.
QUESTIONNAIRE
In this method a questionnaire is sent to the persons concerned with a request to answer the
questions and return the questionnaire. The questionnaire consists of several questions printed in
a pre decided order and the respondents have to answer the questions on their own.

Characteristics of Good Questionnaire

1. Completeness
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2. Concisenes
3. Clarity
4. Cooperation of respondents
5. Careful construction
SAMPLING
It is the list containing all items from which the sample it is to be drawn and a sample design is a
definite plan for obtaining a sample from the sampling frame.
NEED FOR SAMPLING
1. Sampling can save time and money as a sample study is usually less expensive than other
method and the result can be obtained at faster speed.
2. Sampling is the best method when large populations are to be studied. A complete census
of the populations may be impossible. Even time and money are not the most important
considerations.
3. Sampling enables accurate measurements as the sample studied are conducted by trained
and experiments investigators.
4. Very often an exact description of a characteristics or exact value of a population
parameter may not be required in such cases sample information may serves the
purposes.
5. Information on which marketing decision are based is usually needed immediately
gathering information from the entire population can be a time consuming process and
may be totally impractical when market information is needed quickly.
6. Especially in quality control situation performing functional test on every item produce is
impossible if the item is destroyed.

SAMPLING TECHNIQUE
By doing surveys in these areas 2 types of techniques is adopted. They are: Simple Random Sampling
Convenience Sampling
SIMPLE RANDOM SAMPLING
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This is the most widely used method of sampling in which each and every unit of population has
an equal opportunity of being selected in sample. In simple random sampling the sample items
are selected independently of each other that is selection of any item does not influence the
selection of remaining items and all the items have same probability of being selected.
A simple random sampling can be done in 2ways:1. Lottery Method
2. Table Method
1. Lottery Method
In this method small chits of paper mix together represent all items of population. All blind
selection of the desired no of units of sample is then made.
2. Table Method
The lottery method is impossible if population is large hence a random sample may be selected
with the use of random number table. In this each unit of the population may be selected on the
basis of the random numbers appearing in the table. However these methods cannot be applied in
case of infinite populations.
CONVENIENCE SAMPLING
Convenience sampling is so name because it is convenient for the researcher to select the first
few sample items quickly. Rather that to go through the laborious process of obtaining the
probability sample. Convenience sample are widely used when accurate results are not necessary
and both time and money are seriously limited. Selecting sample units from the population
depends solely on the personal convenience of the researcher. Pre testing of questionnaire is
generally done using convenience sample.
For the purpose of data collection and analysis the research methodology used by me was
as follows:
RESEARCH DESIGN- Descriptive re search design is taken up by me for the project.
SAMPLING METHOD- Simple random sampling.
UNIVERSE: Various departmental employees at PLL, Head Office, Gurgoan
SAMPLING UNIT: Employees of PLL, Head Office, Gurgaon
SAMPLE SIZE: 50
RESPONDENTS: Employees of Head Office, Punj Lloyd Ltd.

INSTRUMENT USED FOR COLLECTING DATA: Structured questionnaire with multiple

choice questions.
SOURCE OF DATA
PRIMARY: Questionnaire filed by the employees taken from E1-E7 level of various Dept.
SECONDARY: Office presentations, hand outs, form, companys manuals, website etc. Books
written by eminent authors like T.V. Rao and internet.

ABOUT PUNJ LLOYD Ltd.

Punj Lloyd Ltd provides integrated design, engineering, procurement, construction and project
management services in the energy and infrastructure sectors.
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VISION
To be among the top five EPC companies in the segments and markets we serve by 2012.
MISSION
We will deliver reliable, high-quality solutions for global infrastructure, always ensuring that
integrity, safety and sustainability are at the heart of everything we do.
CORE VALUES
To realize our vision and mission, we always turn to the corporate values that we hold dear.
We will live and deliver these values with uncompromising commitment to safety and
sustainability.
Performance
We are here to make a valuable difference to our stakeholders and we will make it happen
against all odds
Passion
We are differentiated by our Can Do attitude and the fire in our belly
Team work
We can gain from the diversity within our Group by sharing knowledge and resources to
achieve individual and collective success
Agility
We understand stakeholder needs and respond with speed and precision
Reliability
We are trustworthy and reliable, in both thought and action. Our stakeholders can count on us
to deliver, always

COMPANY PROFILE

Passionate and committed, the Punj Lloyd Board brings together a dynamic team of engineering,
business, and social visionaries who provide direction to Punj Lloyds executive management in
a vibrant economic and business environment.
The board consists of senior officials including all active founders, along with members who are
global leaders and high achievers in business and society.
ATUL PUNJ
Chairman

LUV CHHABRA
Director,
Corporate Affairs

RAJAN JETLEY
Independent Director

PAWAN K. GUPTA
Whole Time Director

SANJAY GOPAL BHATNAGAR

Independent Director

SCOTT R. BAYMAN
Independent Director

NITEN MALHAN
Non Executive Director

DR. NARESH KUMAR TREHAN

Independent Director

The name Punj Lloyd is synonymous with the construction industry in India. The company Punj
Lloyd started as a joint venture between Punj Sons and the Lloyds, a British company and was
formed in the year 1982. Today, Punj Lloyd is one of the leading engineering and construction
companies with scores of projects executed in India and abroad, in diverse sectors such as Oil &
Gas, Chemicals & Petrochemicals, Fertilizers, Aviation, Telecom, Roads and Bridges. The
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company has recently been awarded the ISO 9002 certification for installation of cross-country
pipelines, tankages, civil construction, in- plant piping, mechanical, electrical and
instrumentation work on turnkey and conventional basis. Punj Lloyd has a workforce of over
5000 people, including 623 engineers, 950 supervisors and support personnel on company rolls.
The companys policy has been to employ the very best in terms of talent and expertise, to bringin the professionals from a wide array of disciplines and form teams that perform and deliver.
The company believes in regular training of its employees.

It has invested over Rs.2000 million in construction equipment that is regularly serviced and
maintained at the central workshop at Banmore, near Gwalior. To keep up with the changing
times the company has also installed a Wide Area Network of 8000 Intelligent Pentium Nodes
with remote connectivity through VSAT. The company has also implemented the ERP package to
facilitate the availability of the information and the optimum utilization of available resources.
The services of Anderson Consulting were taken to develop and place a strategic information
plan using Oracle Financial, Maximo, Primavera and other software to provide information
seamlessly to all levels of the organization.
In its effort to keep up with the reforms in the business scenario and to meet challenges, the
company has restructured its activities into the following Strategic Business Units (SBUs):

Pipeline
Tankages & Terminals
Turnkey & Composite Construction
High Value Engineering Center
Civil Construction
Telecommunication
Plant & Equipment
Plant & Facility Management

These SBUs acts as independent profits centers. To achieve a distinct edge and deliver effective
solutions to its valued customers, the company will continue to seek ways to ensure sustainable
business growth and become a significant player in the burgeoning construction industry in the
21st century.

STRATEGIC BUSINESS UNITS

PIPELINES
Punj-Lloyd has earned its position as a leader in the field of cross-country Pipelines through the
impressive projects that it has successfully completed. In 1983 Punj-Lloyd executed its first
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cross-country pipeline across the Bombay-Pune stretch acknowledged as the most difficult
pipeline installed in India. It traversed the city, tidal marshes, rivers and creeks. This project was
acclaimed by experts as one of the most challenging pipeline ever to be executed in the country.
Since then the Co. has been involved in laying thousands of kilo meters of pipelines in the Indian
Sub-continent, South East Asia and the Middle East.
Since its inception the numbers of projects completed are:
Kandla-Bhatinda Pipeline
Dahej-Vijaipur Gas Pipeline for GAIL
Mumbai-Manmade Pipeline for Bharat Petroleum Corp. Ltd.
Mangalore-Bangalore Pipeline for Petronet
As a part of its pipeline construction activity the company has also done a reasonable number of
river crossings across major rivers by Horizontal Directional Drilling Technique. Apart from the
10 crossings, which were done for the prestigious Kandla-Bhatinda Pipeline project, the
company has also undertaken jobs for lengths varying from 300 Mts. to 900 Mts. The company
has the expertise to handle any type of pipeline through any kind of terrain, anywhere in the
world.
TANKAGES & TERMINALS
Punj Lloyd builds all types of Storage Tanks for the oil and gas industry including Cone Roof,
Floating Roof, Mounded Vessels and Double Walled Cryogenic Tanks. The company designs,
engineer, construct and do project management, right from conceptualization and preparation of
design data to procurement, quality controls, installation and inspection. And for optimum
performance, the company adopts stringent quality control measures and flexible execution
techniques. Today Punj Lloyd has the capability to offer the latest in tankage technology to its
clients.
The clients include countrys well-known names such as Indian Oil Corporation Ltd., Oil &
Natural Gas Corp., Bharat Petroleum, IBP Co Ltd., Reliance and Essar.
TURNKEY & COMPSITE CONSTRUCTION
Punj Lloyd ranks amongst the leading companies in the country for turnkey and specialized
construction. This business unit of Punj Lloyd undertakes lump sum turnkey projects and
provides full range of services needed to plan, design, engineer and construct to meet the specific
requirements of the client. The projects handled by the SBU include Gas Gathering and
Processing Facilities, Captive Power Plants, Compressor Stations, Cooling Water System.

HIGH VALUE ENGINEERING CENTRE

HVEC is a full scope design and detailed engineering services group active in the field of oil &
gas and infrastructure sector for clients worldwide. HVEC provides design and detailed
engineering services including 3-D modeling in multi disciplines.
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Access to latest computer systems and software tools like Caeser II, Intools, ETAP, STAAD,
Primavera, PDMS, Microstation and AutoCAD.
Company owned 150 MBPS connectivity between New Delhi and Europe / USA.

CIVIL CONSTRUCTION
This SBU mainly focuses on three independent business units: Heavy foundation, Industrial
Construction and Highways / Bridges. In Industrial Civil and Building construction the company
has executed a number of projects like Underground Tanks for treated water, Water Treatment
Plant and Pumping Facilities for Oil India Ltd. near Jaisalmer, Rajasthan as well as Intake Well
for Chambal Fertilizer Ltd. and large number of tank Pad Works.
In Industrial construction, the company is executing a job of Soda Ash Plant at Kala Talav near
Bhavnagar (Gujarat) for Nirma Ltd. In Heavy foundation the company has completed piling and
pile cap works at Raja Garden Fly over, Delhi for UP State Bridge Corp. Ltd. For this, the
company has imported the latest state-of-the-art BAURES Pile Driving Rig BG-15 and has set
up concrete batch Plants and other modern construction equipment for doing the work. The
company is also taking up the work of driven piles for Soda Ash Plant at Kala. In roads and
Bridge works, ICC SBU has recently bagged a prestigious road project on BOOT basis worth Rs.
2355.05 million in Gujrat.
TELECOMMUNICATION
With over three decades of expertise in construction and a formidable technical infrastructure,
Punj Lloyds total capability is illustrated through its execution of multi-disciplinary projects.
The telecommunication division is the youngest in the fold and is a natural extension of the fiber
optic works that the company has been carrying out in the oil / gas sectors alongwith the pipeline
construction activities. This division is targeting the immense opportunities that exist in the
Indian Telecommunication sector.
The company was involved in the laying of around 1200 km of Optical Fibre Cable alongside
cross-country pipelines. A number of other projects involving several hundred kms of OFC
laying are in hand / under execution. A Hybrid Fibre Coaxial pilot project for Multimedia
transmission to around 30,000 houses in Mohali has been executed in record time for Motorola /
Essar Com. Vision. Currently the company has executed a project for M/s Bharati Telenet Ltd. in
M.P. for basic services. It involves backbone of around 1500 km and access network in several
cities.
Being a quality conscious and resourceful Construction Company with excellent equipment base
and trained manpower, the company proposes to undertake large construction contracts for
implementation of telecom projects, both for basic and cellular circles. The Co. will undertake
the laying of OFC and Copper cable for backbone and access network, outside plants, supply and
erection of towers and masts of Digital Microwave Communication System and GSM Cellular
network along with other related civil works.

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PLANT & EQUIPMENT

Productive equipment asset management is a critical element in delivering projects and quality in
time to the clients. Punj Lloyds vast equipment base is managed, maintained and operated by a
specialist Plant & equipment division.
PLANT & FACILITY MANAGEMENT

Maintenance & preservation of 740 MW gas based power plant (Phase 1) and LNG storage
and regasification terminal (Phase 2) at Dabhol. Asset maintenance and preservation of the
Daewoo Automobile Plant, near Delhi.
Maintenance & toll management for Vadodara-Halol Expressway in Gujarat.
Operation & Maintenance of Gas Processing and Gathering Facilities in Rajasthan.

CORPORATE FUNCTIONS AT PLL

FINANCE AND ACCOUNTS

F&A is committed to be responsive, knowledge driven, providing innovative solutions to
shareholders, internal and external customers. The main objective is to provide decision
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support, financial planning and internal controls in order to preserve and maximize the
companys net worth.

HUMAN RESOURCE DEPARTMENT

HR is committed to serve the organization by providing timely, competent & affordable
human resource and develop & motivate them to achieve the organizations Vision &
Mission.

LEGAL AND ADMINISTRATION

Legal & Administration Dept. is committed to provide cost effective quality services to make
the organization effective and productive while safe-guarding the interest of the company as
well as that of the customer.

MARKETING
Marketing acts as the driving force to position the company in the chosen global market
place. This is achieved by servicing the customers through a highly proactive approach.

MATERIAL
Materials Dept. is committed to providing various SBUs and departments, the desired quality
and quantity of materials and services at optimum cost and within the desired timeframe.
This is achieved through the effective utilization of available skills/ resources, systematic
inventory control and harmonious relationship with vendors and customers.

QUALITY ASSURANCE / QUALITY CONTROL,SAFETY & ISO

Its aim is to provide services to achieve deliver and maintain the highest international
standard of quality and Health, Safety & Environment (HSE) rating through highly skilled
manpower, latest technology, quality and HSE systems. The prime focus is to achieve this
through high level interaction and deployment with line functions.

ESTIMATION
As a focal point for the key function of the bidding process, this department delivers in time
high quality proposals for multifarious projects by conceptualization, effective co-ordination,
efficient collection / analysis of data and accurate costing.
The above departments work in careful co-ordination & synchronization in order to achieve
the long term & short term goals of the individual department as well as the company as a
whole. These goals are derived from the vision & mission statement. The quality
commitment serves as a means to achieve these goals in the best possible manner, which is
acceptable to the customer.

HR FUNCTION AT PLL
The HRD department of Punj Lloyd is a relatively young department. It was set up in the
year 1993.Since then it has grown by leaps and bounds. The essence of HRD department
is to make the individuals a part of its vision and objectives. The different functions
performed by the HRD Department in this company are as follow:
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MAN POWER PLANNING:

The procedure for manpower planning at PLL is a simple one. Each department is
required to make a request to the HRD through a Manpower Requisition from (MRF)
about the present and anticipated vacancies arising out of resignation / superannuation /
forthcoming projects etc. The form requires certain information to be filled such as
position for which manpower is required indicating major responsibilities, qualification
and experience required for the job. Based on the MRF, HRD acknowledges the man
power needs of various SBUs and subsequently draws up a recruitment plan to fill up the
vacancies.

RECRUITMENT AND SELECTION:

The Company avoids goings for the external recruitment for the vacancies in the top
management, it tries to fill the vacancy as far as possible internally. The companys
existing manpower resources are assessed through the manpower inventory.
Whenever there is any vacancy in any SBU, the skill inventory chart is referred to and
efforts are made to fill up the vacancies through internal transfers.

The company also goes for Campus placements. For the vacancies at the lower level
candidates are selected on the basis of written test, group discussion and interviews.

DESIGNING COMPENSATION PACKAGE

The compensation package is devised carefully by the HRD department. Remuneration is
fixed depending upon the knowledge, experience and nature of the job. Efforts are made
to take care of all the needs of an employee. Employee posted at the site are paid special
site allowance, food subsidy, and transport facility apart from other benefits.

INDUCTION
Every new joinee is formally placed and oriented by the HRD department in the
organizational environment. This is achieved by conducting induction programs, which
are organized in batches. The participants are given introduction of the company, its
history, the people associated, functioning of various SBUs, ISO awareness and
companys rules & regulations and policies, along with an induction booklet.

TRAINING AND DEVELOPMENT

Training and development at PLL is an ongoing activity. Training is also given to the
people employed on the contract basis. Training needs are identified through appraisal
and training programs are organized accordingly. The HR department prepares the annual
training plan and maintains the necessary records of the training and of the employees
with respect to their training history. Training programs are designed not only to help the
employee aspire for greater responsibilities, but also provide means to self-improvement
in their respective positions.

PERFORMANCE APPRAISAL
The Company has a well-laid down performance review system for the regular
employees. Trainees and probationers are not covered under this system as they are
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evaluated separately. The period of review is 1st January to 31st December of the calendar
year. Employees are granted increments and promotions based on their performance
effective from 1st July of the following year. The company has two types of appraisals,
self-appraisal and normal. Where the former is for only top management the latter is for
the lower cadre people.

EXIT INTERVIEWS
Whenever an employee desires to leave the company he is required to fill up an Exit
Interview from. The HRD department analyses the information-collected from the Exit
Interview from and takes steps to plug the loopholes, if any.

INNOVATIVE FORUM
To encourage individuals to share their ideas and responsibilities in a positive, creative
and innovative manner, the concept of Innovative Forum was introduced in the company.
The objectives of this forum are:
Transformation of Human Resources into Human Capital1. To make the participants realize that they are not merely employees but an
integral part of the organization and that the organization firmly believes in their
active involvement.
2. To recognize and reward individuals creative and innovative contributions.

PMS as applied in PUNJ LLOYD Ltd.

OBJECTIVE
Develop a transparent system of setting goals and assessing performance
Create a culture of development and coaching

KEY DESIGN PRINCIPLES ON WHICH PERFORMANCE MANAGEMENT SYSTEM AT

PUNJ LLOYD IS BASED
Objective
Performance metrics is largely quantitative
Evaluation is based on a combination of performance on KPIs/ Goals and underlying
behavioral competencies
Transparent
KPIs/ Goals against which a person is evaluated is agreed by both reviewee and reviewer
at the start of the review period
Rewards are linked to performance on set goals and potential
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Disciplined
Process is simple and follow a pre laid calendar

PERFORMANCE MANAGEMENT SYSTEM A FOUR STEP PROCESS

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STEPS
GOAL SETTING: It is done in March every year for the coming financial year. 3-5 goals are
formed up by the superior.
PERFORMANCE OBJECTIVE: For each goal, performance objective is set up.
WEIGHTAGE (in %): Weightage is assigned to each goal by review manager in whole numbers
from 1-100. The cumulative weightage of all the goals should be 100%,
ANNUAL TARGET- BASE: 1-3 lines describing the basic expectation from individual.
ANNUAL TARGET STRETCH: 1-3 lines describing the stretch target expectation from
individual.
MID YEAR ASSESSMENT (Individual Comments): Progress report update, by individual
during mid- year is taken with regards to said performance objective.
MID YEAR ASSESSMENT (Manager Comments): Progress report update, by manager during
mid- year is taken with regards to said performance objective.
YEAR END ASSESSMENT (Individual Comments): Progress report update, by individual
during year- end is taken with regards to said performance objective.
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YEAR END ASSESSMENT (Manager Comments): Progress report update, by manager during
year-end is taken with regards to said performance objective.
PERFORMANCE RATING: Manager has to assign rating to the individual on the scale of 1-4
basis, the rating guidelines for performance assessment for the said objective.
OVERALL PERFORMANCE RATING: Manager calculates the weighted average of all goals
with the help of following formula
Weighted Average= Weightage Goal 1* Performance Rating Goal 1 + Weightage Goal 2*
Performance Rating Goal 2+ and so on for all the goals.
RATING DECRIPTION FOR PERFORMANCE ASSESSMENT
SCORE
4
3
2
1

DESCRIPTION
Consistently exceeds expectation in all areas of work.
Meets expectations of the role in areas of work.
Meets some expectations, needs improvement in some key areas.
Does not meet expectations of the role. Needs immediate improvement in
job performance/ needs a role change.

Bell curve is used for performance management. This theory was conceived by Herrnstein &
Murray in 1994.
The logic is, as per the bell-curve rule, is to classify certain number of employees forcefully
under some defined rules.
After collecting the ratings of every employee a graph is prepared, where ratings or scores are on
one hand and the number of employees on other.
4 point scale taken up by the company forms a bell curve in which 10% of total strength of
employees fall in Below Average group, 50% falls in Average, 30% falls in Above Average group
and 10% falls in Outstanding group.
Promotion is given from the outstanding group of 10% employees up to Senior Manager Post.
Promotions are due after 2 years. In Punj Lloyd Ltd minimum of 5% increment in salary is given
yearly.

ROLES
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ROLE OF REVIEWEE
Revisits his/her goals objectively
Assesses his/her achievement against each goal
Writes his/her achievement against all goals in the space provided
Shares his/her achievement with his/her reviewer
ROLE OF REVIEWER
Rates his/her Reviewer against each goal on a 4 point scale
Provides feedback to his/her reviewee in person about
o Achievements
o Areas of concern/ under achievement
o Developmental needs
Submits his/her rating in Oracle.

ROLE OF FUNCTIONAL HEAD/SBU HEAD

Objectively analyses final rating of all employees under his Function/SBU
Corrects for any rating errors
Normalizes the entire ratings along with HR and sends it back to HR for final roll out of
recommendations and rewards.

ROLE OF HR
Ensures the sanity of the entire process
Collates all ratings of reviewers and submits the consolidated report to SBU
Heads/Functional Heads for normalization across organization.
Issues the increment letter
Salary, promotion, location change and other recommendations collated and informed to
all via letter.

PMS at Punj Lloyd is now done online using oracle database management system.
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TRAINING
Training recommendations are provided at the beginning of the assessment year basing the
perceived expectations from the individual for performing his/her role effectively and efficiently.
Time frame of the training is also mentioned along with training
Training at Punj Lloyd Ltd is of two type
-

Behavioral
Technical

Few training provided under behavioral training are leadership development skills,
communication skills, managerial skills, team building etc whereas training like financial
planning, project financial planning etc fall under technical training.

LITERATURE REVIEW
The concept of performance management has been one of the most important and positive
developments in the sphere of human resource management in recent years. The phrase
PERFORMANCE MANAGEMENT was first coined by Beer and Ruh in 1976. But it became
recognized as a distinctive approach in mid 1980s, because of the growing realization that a
more continuous and integrated approach was needed to manage reward performance.
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Performance management is, of course, about performance. It is important to clarify what

performance means, because is performance cannot be defined; it cant be measured or managed.
There are different views on what performance is. It can be regarded as simply the record of
outcomes achieved. On the individual basis, it would then be the record of persons
accomplishments.
On the other hand, it has also been suggested that performance is behavior and should be
distinguished from the outcomes because the outcomes can be contaminated by systems
prevalent in the organization.
A more comprehensive view of performance, however, is achieved if it is defined as embracing
both behavior and outcomes.
Therefore, performance management in it fullest sense, is concerned with what people do (their
work), how do they do it (their behavior) and what they achieve (their results). It embraces all
formal and informal measures adopted by organization to increase organizational, team and
individual effectiveness and continuously to develop knowledge, skills and competence.
The fundamental purpose of performance management is to establish a culture in which
individuals and groups take responsibility for continuous improvement based on COMMON
UNDERSTANDING of organizations goals and priorities. CLEAR EXPECTATIONS for
individuals and teams, CAPABILITY built through investments in performance management
tools and COMMITMENT based on meaningful work and rewards linked to business and
personal achievements.
PERFORMANCE MANAGEMENT: is the process of assessing progress toward achieving
predetermined goals. It involves building on that process, adding the relevant communication
and action on the progress achieved against these predetermined goals.
PMSPerformance Management System is the process of performance planning
(goal setting), performance monitoring and coaching, measuring(evaluating) Individual
performance linked to organizational goals, giving him/ her feedback, rewarding the individuals
based on his/her achievements against set performance goals and required competencies , and
working out a plan for his/her development.

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PMS PROCESS CYCLE

The main purpose of performance management is to link individual objectives and organizational
objectives and bring about that individuals obey important worth for enterprise. Additionally,
performance management tries to develop skills of people to achieve their capability to satisfy
their ambitiousness and also increase profit of a firm.
Performance management system (PMS) is the heart of any people management " process in
organization. Organizations exist to perform. If people do not perform organizations don't
survive. If people perform at their peak level organization can compete and create waves.
Performance management systems if properly designed and implemented can change the course
of growth and pace of impact of organizations. In the past organizations as well as the HR
function have wasted a lot of time by wrongly focusing on performance appraisals rather than
performance management. Difference between both of them is summarized below.

Performance Appraisal
Top down assessment
Annual appraisal meeting
Use of ratings
Monolithic system
Focus on quantified objects
Often linked to pay
Bureaucratic complex paperwork
Owned by the HR department

Performance Management System

Joint process through dialogue
Continuous reviews with one or more formal reviews
Rating less common
Flexible process
Focus on values, behaviors as well as objectives
Less likely to be directly linked to pay
Documentation likely to be minimum
Owned by line managers

SETTING UP A PERFORMANCE MANAGEMENT SYSTEM

23

Setting up a good performance management system doesn't happen overnight or by accident. You
need to consider its design and carefully plan how it will work before managers begin using it to
evaluate employees.
A performance management system should provide employees with these four basic benefits:
1.
2.

A clear understanding of job expectations

Regular feedback about performance

3.

Advice and steps for improving performance

4.

Rewards for good performance

The goal of a performance management system is to help boost employee performance and,
ultimately, the productivity of the business. For it to be effective, a performance management
system should incorporate the following critical elements:
Updated Job Descriptions
Job descriptions should clearly describe the employee's current duties and performance
expectations. Position descriptions should be specific, clearly defining the job function, required
skills, deadlines and goals, and should delineate expectations for the employee's relations with
peers and customers.
Keep job descriptions current, especially during times of organizational change. Rapid growth
and downsizing inevitably add new responsibilities and shift employees' workloads.
Performance Measures and Standards
Once you have job descriptions in place; you need to establish performance standards that
describe what constitutes below-average, average, and above-average performance. Start by
thinking about the best- and worst-case scenarios until you reach realistic standards for
measuring performance
Next, determine how you're going to measure the expectations outlined in the job description.
This requires both objective and subjective methods of assessment. In some situations it's easy to
gauge performance by looking at the numbers: for example, how many new accounts an
employee brought in or how many products an employee assembled.
Quantifying an employee's coping skills, customer service skills or attitude is much more
difficult. Some managers also have biases or poor evaluation skills. Establish clear guidelines
and measures that eliminate potential bias and prevent evaluators from subjectively determining
what constitutes excellent and unacceptable behavior.
Evaluator Training
Research shows that managers with poor communication or interpersonal skills are often the
downfall of a company's otherwise sound performance management program. All managers need
training on how to communicate and how to conduct fair, nonjudgmental and consistent
24

appraisals. An effective performance management system will administer training to managers

before they conduct their first reviews.
Guidelines for Improvement
Institute basic policies to cope with employee weaknesses and poor performance. Decide if you'll
provide training or mentoring for employees exhibiting subpar performance. Set guidelines that
outline how long it should it take an employee to improve and what steps will be taken if the
employee fails to show improvement.
Employee Input
Solicit and evaluate staff suggestions for your performance management program. Incorporate
employee input into your program or system as needed.
Compensation and Rewards
When your employees perform well they should be compensated. Rewards keep morale high,
generate loyalty and foster additional improvement. But closely linking pay hikes and
promotions to performance appraisals is a contested issue. Critics say that too close a tie between
performance evaluation and compensation may be punishing or unfair to employees who don't
overachieve.
Regardless of how and when you choose to compensate your employees, an above-average
appraisal deserves acknowledgment. Make sure you consistently reward employees for their hard
work.
Performance Management System should be:
Job-related
Practical
Have Measurable Standards
Perhaps the most important design consideration is to develop a process that is practical and easy
to understand and use. The focus should be on the results of the performance management
process - effective and motivated staff - not the steps of the process.

THE PMS PROCESS HAS TWO CLEAR OBJECTIVES

THE EVALUATION OBJECTIVE

Performance evaluation and assessment of the readiness of an

individual to take on
higher responsibilities.
THE DEVELOPMENT
OBJECTIVE
To provide feedback to individuals on their performance levels and
onTo
counsel
and coach levels
sub ordinates so that they improve their
current
competency
To generate data required for decisions on salary , bonus and
performance and develop competencies.

promotions
To motivate
. subordinates through recognition and support.
To strengthen supervisor subordinate relations.
To diagnose individual and organizational competencies, so that

actions can be taken on problem areas.

To define the training requirements based on individual competency.

25

PMS also helps organization do the following

-

Define performance requirement at individual level.

Align the organizations efforts to meet the organizational goals by setting targets at
individual levels.
Reviewing the performance during the course of year and take corrective actions to
ensure performance.
Evaluate individual performance and developmental requirements.
Provide feedback to individuals on performance and developmental requirements.
To take decision on salaries, promotions, job transfers and training and development of
individuals.

STEPS IN THE PERFORMANCE APPRAISAL PROCESS

Established performance standard.

Communicate performance expectations to employee.
Measure actual performance.
Compare actual performance with standards.
Discuss the appraisal with the employees.
If necessary, initiate the corrective action.

The appraisal process begins with the establishment of performance

standards. These should have evolved out of job analysis and the job
description discussed under human resource planning. These performance standards should also
be clear and objective enough to be understood and measured. Too often, these standards are
articulated in some such phrase as "a full day's work" or "a good job".

26

Communication only takes place when the transference has taken place and has been received
and understood by the subordinate. Therefore feedback is necessary from the subordinate to the
manager. Satisfactory feedback censures that the information communicated by the manager has
been received and understood in the way it was intended.
The third step in the appraisal 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.
What we measure is probably more critical to the evaluation process than how we measure, since
the selection of the wrong criteria can result in serious dysfunctional consequences. And what we
measure determines, to a great extent, what people in the organization will attempt to excel at.
One of the most challenging tasks facing managers is to present an accurate appraisal to the
subordinate and then have the subordinate accept the appraisal in a constructive manner.
Appraising performance touches on one of the most emotionally charged activities the
assessment of another individual's contribution and ability. The impression that subordinates
receive about their assessment has a strong impact on their self-esteem and, very important, on
their subsequent performance.
The final step in the appraisal is the initiation of corrective action when necessary.
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 often described as "putting out fires," whereas basic corrective
action gets to the source of deviation and seeks to adjust the difference permanently.
Immediate action corrects something right now and gets things back on track.

27

METHODS OF PERFORMANCE APPRAISAL

The foregoing list of major program pitfalls represents a formidable challenge, even considering
the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing
away with appraisals themselves is like trying to solve the problems of life by committing
suicide. The more logical task is to identify those appraisal practices that are (a) most likely to
achieve a particular objective and (b) least vulnerable to the obstacles already discussed.
I shall briefly review each method taking them more or less in an order of increasing
complexity.
ESSAY METHOD
In its simplest form, this technique asks the rater to write a paragraph or more covering an
individual's strengths, weaknesses, potential, and so on. In most selection situations, particularly
those involving professional, sales, or managerial positions, essay appraisals from former
employers, teachers, or associates carry significant weight.
GRAPHIC RATING SCALE
This technique may not yield the depth of an essay appraisal, but it is more consistent and
reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work (is he
outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that
vary with the job but usually include personal traits like reliability and cooperation. It may also
include specific performance items like oral and written communication.
FIELD REVIEW
The field review is one of several techniques for doing this. A member of the personnel or central
administrative staff meets with small groups of raters from each supervisory unit and goes over
each employee's rating with them to (a) identify areas of inter-rater disagreement, (b) help the
group arrive at a consensus, and (c) determine that each rater conceives the standards similarly. .
FORCED-CHOICE RATING
Like the field review, this technique was developed to reduce bias and establish objective
standards of comparison between individuals, but it does not involve the intervention of a third
party.
MANAGEMENT BY OBJECTIVES
To avoid, or to deal with, the feeling that they are being judged by unfairly high standards,
employees in some organizations are being asked to set - or help set - their own performance
goals. Within the past five or six years, MBO has become something of a fad and is so familiar to
most managers.
RANKING METHODS
For comparative purposes, particularly when it is necessary to compare people who work for
different supervisors, individual statements, ratings, or appraisal forms are not particularly
useful. Instead, it is necessary to recognize that comparisons involve an overall subjective
28

judgment to which a host of additional facts and impressions must somehow be added. There is
no single form or way to do this.
The best approach appears to be a ranking technique involving pooled judgment.
The two most effective methods are alternation ranking and paired comparison ranking.
1.

Alternation ranking:

Ranking of employees from best to worst on a trait or traits is another method for evaluating
employees. Since it is usually easier to distinguish between the worst and the best employees
than to rank them, an alternation ranking method is most popular. Here subordinates to be rated
are listed and the names of those not well enough to rank are crossed. Then on a form as shown
below, the employee who is highest on the characteristic being measured and the one who is the
lowest are indicated. Then chose the next highest and the next lowest, alternating between
highest and lowest until all the employees to be rated have been ranked.
2.

Paired-comparison ranking:

This technique is probably just as accurate as alternation ranking and might be more so. But
with large numbers of employees it becomes extremely time consuming and cumbersome.
Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or
more people are asked to make independent rankings of the same work group and their lists are
averaged), are among the best available for generating valid order-of-merit rankings for salary
administration purposes.
ASSESSMENT CENTERS
So far, we have been talking about assessing past performance. What about the assessment of
future performance or potential? In any placement decision and even more so in promotion
decisions, some prediction of future performance is necessary. How can this kind of prediction
be made most validly and most fairly?
360 DEGREE FEEDBACK
Many firms have expanded the idea of upward feedback into what the call 360-degree feedback.
The feedback is generally used for training and development, rather than for pay increases.
Most 360 Degree Feedback system contains several common features. Appropriate parties
peers, supervisors, subordinates and customers, for instance complete survey, questionnaires on
an individual. 360 degree feedback is also known as the multi-rater feedback, whereby ratings
are not given just by the next manager up in the organizational hierarchy, but also by peers and
subordinates. Appropriates customer ratings are also included, along with the element of self
appraisal. Once gathered in, the assessment from the various quarters are compared with one
another and the results communicated to the manager concerned.
Another technique that is useful for coaching purposes is, of course, MBO. Like the critical
incident method, it focuses on actual behavior and actual results, which can be discussed
objectively and constructively, with little or no need for a supervisor to "play God."

29

Advantages
Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee
meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job
performance. Employees are judged according to real outcomes, and not on their potential for
success, or on someone's subjective opinion of their abilities.
The guiding principle of the MBO approach is that direct results can be observed easily. The
MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied
elements that go to make up employee performance.
MBO advocates claim that the performance of employees cannot be broken up into so many
constituent parts, but to put all the parts together and the performance may be directly observed
and measured.
Disadvantages
This approach can lead to unrealistic expectations about what can and cannot be reasonably
accomplished. Supervisors and subordinates must have very good "reality checking" skills to use
MBO appraisal methods. They will need these skills during the initial stage of objective setting,
and for the purposes of self-auditing and self-monitoring.
Variable objectives may cause employee confusion. It is also possible that fluid objectives may
be distorted to disguise or justify failures in performance.

BENEFITS
Managing employees performance facilitates the effective delivery of sales plans. There is a
clear and immediate correlation between using performance management programs and
improved sales result.
Direct financial gains
-

Sales growth
Eliminates over payments
Saves time and automates processes
Accommodates plan changes

Motivated sales force

-

Optimizes incentives plans

On time reporting and payments
Controlled data distribution
Visible calculations
Improves employee engagement
Boosted confidence

30

Improved management control

-

Flexible, responsive to management needs

Displays data relationships
Easy to trace data calculations
Helps audit/ comply with legislative requirements
Simple scenario planning

31

DATA PRESENTATION AND DATA ANALYSIS

1) How long have you been working with the company?
TABLE
SERIAL NO.
1
2
3
Total

RANGE
Less than 2 years
2-5 years
More than 5 years

NO.OF
RESPONDENTS
8
32
10
50

IN
PERCENTAGE
16%
64%
20%
100%

From the table and pie chart shown above it can be interpreted that

16% of the respondents have been working in the company for less than 2 years.
64% of the respondents have been into the company for 2 to 5 years.
20% of the respondents have been working with the company for more than 5 years.

So, it can be interpreted that majority of the respondents have an experience with the company
which ranges between 2 to 5 years.

2) How often is the performance appraisal being conducted in the company?

32

TABLE
SERIAL NO.

DURATION

NO.OF
RESPONDENTS

IN PERCENTAGE

Quarterly

NIL

Six monthly

NIL

Annually

50

100%

50

100%

Total

INTERPRETATION:
From the table and pie chart shown above it can be inferred that

100% of the respondents say that performance appraisal is conducted annually.

None of the respondents agree to any other option such as six monthly, half yearly.

So, it can be inferred that the respondents of the organization are aware of the fact that
performance appraisal is done on yearly basis in the organization, which is general trend
followed in most of the companies.

3). Does your superior consider your achievements in relation to the performance
standards?
TABLE
33

SERIAL NO.

RESPONSE

1
2
3
Total

Yes, every time

Sometimes
Never

NO.OF
RESPONDENTS
38
9
3
50

IN PERCENTAGE
76%
18%
6%
100%

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.)76% of the respondents say that their superior every time reviews their achievement by
comparing their current performance with performance standards.
ii.)18% of the respondents are of the view that their superior sometimes reviews their
achievement by comparing their current performance with performance standards.
iii)6% of the respondents think that their superior never reviews their achievement by comparing
their current performance with performance standards.

4). Do you expect any clarification in current Performance Management System?

TABLE
SERIAL NO.

RESPONSE

NO.OF
RESPONDENTS

IN PERCENTAGE
34

1
2
3
Total

Yes
No
Cant say

13
21
16
50

26%
42%
32%
100

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.)26% of the respondents would like to review current performance management system if given
a chance.
ii.)42 % of the respondents would not like to review current performance management system if
given a chance.
iii.)32% of the respondents cant say whether they would like to review the current
performance management system if given a chance or not.
5) Do you think a clear definition of goals enables you to improve your performance?
TABLE
SERIAL NO.

RESPONSE

Substantially

NO.OF
RESPONDENTS
39

IN PERCENTAGE
78%
35

2
3
4
5
Total

To certain extent
Marginally
To less extent
Not at all

9
2
Nil
Nil
50

18%
4%
0
0
100

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.78% of the respondents think that clear definition of goals enables the employees to
substantially improve their performance.
ii.18% of the respondents think that clear definition of goals enables the employees to improve
their performance but up to a certain extent.
iii.4% of the respondents think that clear definition of goals marginally enables the employees to
improve their performance.
iv.None of the respondents think that clear definition of goals enables affect their performance to
a less extent or not at all.
Thus it can be inferred that maximum of the respondents think that goals should be clearly
defined as it enhances the performance.
6) Do you get a chance to rate your own performance?
TABLE
SERIAL NO.

RESPONSE

Always

NO.OF
RESPONDANTS
41

IN PERCENTAGE
82%
36

2
3
4
5
Total

Often
Sometimes
Rarely
Never

9
NIL
NIL
NIL
50

18%
0
0
0
100

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.82% of the respondents are of view that they are always given a chance to rate their
performance.
ii.18% of the respondents say that they are often given a chance to rate their performance.
iii.None of the respondents say that they are given a chance to rate their performance only
sometimes, rarely or never.
Thus it can be concluded that company follows a system in which employees rate their own
performance, generally known as SELF APPRAISAL.
7) How much degree of consideration is given to the following?
TABLE
SERIAL NO.

RESPONSE

1
2

Merit cum seniority

Seniority cum merit

NO.OF
RESPONDENTS
38
2

IN PERCENTAGE
76%
4%
37

3
4
5
Total

Merit only
Seniority only
Any other, specify

10
Nil
Nil
50

20%
0
0
100

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.76% of the respondents say that merit cum seniority is given significant degree of
consideration.
ii.4% of the respondents say that seniority cum merit is given significant degree of consideration.
iii.20% of the respondents say that only merit is given significant degree of consideration.
iv.None of the respondents say that only seniority is given significant degree of consideration.
v.Nobody specified any other response.
Thus it can be inferred that merit plays a vital role in the company as compared to seniority.

8) Is the promotional policy linked with the performance appraisal system?

TABLE
SERIAL NO.

RESPONSE

1
2
3

Substantially
To certain extent
Marginally

NO.OF
RESPONDANTS
2
7
26

IN PERCENTAGE
4%
14%
52%
38

4
5
Total

To less extent
Not at all

13
2
50

26%
4%
100

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.4% of the respondents think that the promotional policy is substantially linked with the
performance appraisal system.
ii.14% of the respondents think that the promotional policy is linked with the performance
appraisal system up to a certain extent.
iii.52% of the respondents think that the promotional policy is marginally linked with the
performance appraisal system.
iv.26% of the respondents think that the promotional policy is linked with the performance
appraisal system to a less extent.
v.4% of the respondents say that promotional policy is not at all linked to the performance
appraisal system of the company.
Thus it can be concluded that respondents believe that promotional policy is not well linked to
the performance appraisal system.
9) In your opinion does the performance management system of the company identifies the
training needs?
TABLE
SERIAL NO.

RESPONSE

1
2
3
4

Substantially
To certain extent
Marginally
To less extent

NO.OF
RESPONDENTS
10
31
7
2

IN PERCENTAGE
20%
62%
14%
4%
39

5
Total

Not at all

NIL
50

0%
100

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.20% of the respondents are of the view that the performance management system of the
company substantially identifies the training needs.
ii.62% of the respondents say that the performance management system of the company
identifies the training needs up to a certain extent.
iii.14% of the respondents believe that the performance management system of the company
identifies the training needs marginally.
iv.4% of the respondents say that the performance management system of the company identifies
the training needs up to a less extent.
v.None of the respondents thinks that the performance management system of the company not
at all identifies the training needs.
Thus it can be inferred that performance management system of the company identifies the
training needs appreciably aptly.
10) Does the company adopt systematic training after identification of the same?
TABLE
SERIAL NO.

RESPONSE

1
2
3
4
5

Substantially
To certain extent
Marginally
To less extent
Not at all

NO.OF
RESPONDENTS
NIL
3
26
16
5

IN PERCENTAGE
0
6%
52%
32%
10%
40

Total

50

100

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.None of the respondents are of view that systematic training is followed at the company
substantially.
ii. 6% of the respondents believe that the company adopts the systematic training up to a certain
extent.
iii.52% of the respondents say that the company adopts the systematic training marginally.
iv.32% of the respondents say that the company adopts the systematic training to a less extent.
v.10% of the respondents answered that the company not at all adopts the systematic training.
Thus, it can be interpreted that Performance Management System of the company identifies the
training needs aptly but does not adopt systematic training after identification of the same.
11) Does performance management leads to identification of hidden potential of the
employees?
TABLE
SERIAL NO.

RESPONSE

1
2
3
4
5

Substantially
To certain extent
Marginally
To less extent
Not at all

NO.OF
RESPONDENTS
13
15
12
7
3

IN PERCENTAGE
26%
30%
24%
14%
6%
41

Total

50

100

INTERPRETATION:
From the table and pie chart shown above it can be concluded that
i.26% of the respondents think that performance management system substantially leads to
identification of hidden potential of the employees.
ii.30% of the respondents think that performance management system leads to identification of
hidden potential of the employees up to a certain extent.
iii.24% of the respondents think that performance management system marginally leads to
identification of hidden potential of the employees.
iv.14% of the respondents think that performance management system identifies potential to a
less extent.
v.6% of respondents believe that it does not lead to the identification of hidden potential.
Thus it can be deduced that Performance Management System identifies the hidden potential of
the employees well.
12) What is your expectation from performance management system?
Rank them on 7 point scale, 7 being most appropriate and 1 being least.
TABLE
RANK
1
ATTRIBUTES
Salary
0
administration &
benefits
Determination of 0
promotion

14

34

19

25
42

Tool
for
identification of
training needs.
An insight into
your strengths &
weaknesses
Career
and
succession
planning
Goal setting

10

20

15

11

17

19

16

30

20

22

INTERPRETATION:
From the table shown above it can be concluded that
i.60% respondents expect that PMS for Career and succession planning as their first priority.
ii.68% respondents expect that PMS shall be used for Salary administration & benefits.

CONCLUSION
The response of the question about existing grievance settlement is not satisfactory about 88%
of the respondants feels that thegreviance settlement system is not effective. 42% of the
respondants are of the opinon that while establishing the work objective their wiilingness and
consent is not taken into consideration by their superiors . The goals of the indiviual employees
are little bit)maginally clear as per the views expressed by 46% of the respondants. About
fairness and reasonability of the current salary offered to employee 54% of the respondantants
slightly agree that it is reasonable.A large percentage about 52% of the respondants are of the
opinion that the training programmes adopted after the identification of the training needs is less
effective.There is no personal cunselling after the appraisal is over. Not even a single respondent
is of the opinion that the pms existing in the organization is outstanding.
43

LIMITATIONS
1. Although all attempts were made to make this an objective study, biases on the part of

respondents might have resulted in some subjectivity as many employees gave guarded
answers to some crucial questions.
2. Though, no effort was spared to make the study most accurate and useful, the sample
Size selected for the same may not be the true representative of the Company, resulting
in biased results.
3. Some of them did not fill the questionnaire due to lack of time.
4. Some of the questionnaire could not be completed due to reasons other than time factor.
5. The possibility of better results, using deeper statistical techniques in analyzing and
interpreting data may not be ruled out.
44

6. The confidentiality of the system created some problem in getting information.

RECOMMENDATONS
1. Ojectives of performance management system should be made clearer to the employees

this will enable them to accept the system more openly.

2. It is quite evident that company lacks in goal clarity as 46% of respondents agree that
goals are marginally specified to them. Also 78% of respondents believe that goal clarity
will lead to better performance. In such a case company should lay more emphasis in
making goals clear-cut to the employees.
3. As it is evident that not much of the employees are satisfied with the salary structure I
would suggest PLL to conduct a benchmarking with other companies of the same level
and implement changes in the pay structure.
45

4. It is apparent from the analysis that training needs are aptly identified by Performance
Management System but the company does not adopt systematic training after
identification of the same. Thus the whole identification process becomes unproductive.
Therefore company should pay attention to such issue as training plays an important part
in nurturing the future of employees.
5. Feedback and counselling are the vital elements of any Performance Management
System. The appraisal should also be followed up with a session of counseling which is
often neglected in many organizations. Counseling involves helping an employee to
identify his strengths and weaknesses to contribute to his growth and development.
Purpose is to help an employee improve his performance level, maintain his morale,
guide him to identify and develop his strong points, overcome his weak points, develop
new capabilities to handle more responsibilities, identify his training needs. Providing
feedback plays constructive role. Feedback provides for the area of improvement. But
mechanism of counselling and feedback is not followed in strict term in the organisation,
as clear from the analysis. It should be made more frequent and a continuous process. If
the performance counselling and feedback sessions are of good quality then it will result
in increased employee motivation to improve performance.
6. The existence of a proper grievance channel is also of utmost importance as employees
should be given a chance to convey their complaints to the top management.
7. Majority of employees are satisfied with the current Performance Management System
but continous efforts should be put in to make it more effective.

BIBLIOGRAPHY
Sahu, R K Performance Management System, first edition, Excel books
Pascal Robert, e book, Performance Management.
Armstrong Micheal, e book, Managing Performance.

WEBSITE
46

http://www.pdf-search-engine.com/performance-management-pdf.html
http://en.wikipedia.org/wiki/Performance_management
http://derekstockley.com.au/h-performance-management.html

About the Work

Dear Sir/Madam,
I, the student of MBA final semester of Sikkim Manipal University, is doing a
Project Report on Performance Management System with specific reference to manufacturing
sector. For this purpose given below are few questions which will help me to complete the
present assignment and your answers will help me to complete this work.
QUESTIONNAIRE
1. How long have you been working with the company?
a. Less than 2 years
b. 2-5 years
47

c. More than 5 years

2. How often is the performance appraisal being conducted in the company?
a. Quarterly
b. Six Monthly
c. Annually
3. Does your superior consider your achievements in relation to the performance standards?
a. Yes, every time
b. Sometimes
c. Never
4. Do you expect any clarification in current Performance Management System?
a. Yes
b. No
c. Cant say
5. Do you think a clear definition of goals enables you to improve your performance?
a.
b.
c.
d.
e.

Substantially
To certain extent
Marginally
To less extent
Not at all

6. Do you get a chance to rate your own performance?

a.
b.
c.
d.
e.

Always
Often
Sometimes
Rarely
Never

7. How much degree of consideration is given to the following?

a.
b.
c.
d.
e.

Merit cum seniority

Seniority cum merit
Merit only
Seniority only
Any other, kindly specify

8. Is the promotional policy linked with the performance appraisal system?

a.
b.
c.
d.

Substantially
To certain extent
Marginally
To less extent
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e. Not at all
9. In your opinion does the Performance Management System of the company identifies the
training needs?
a.
b.
c.
d.
e.

Substantially
To certain extent
Marginally
To less extent
Not at all

10. Does the company adopt systematic training after identification of the same?
a.
b.
c.
d.
e.

Substantially
To certain extent
Marginally
To less extent
Not at all

11. Does Performance Management leads to identification of hidden potential of the employees?
a.
b.
c.
d.
e.

Substantially
To certain extent
Marginally
To less extent
Not at all

12. What is your expectation from Performance Management System?

Rank them on 6 point scale, 6 being most appropriate and 1being least.

DETAIL
a.

Salary Administration and Benefits

b.

Determination of promotion

c.

Decision on layoff

RANK

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d.

Goal setting

e.

Tool for identification of trainees

f.

An insight into your strengths and weakness

24. Give some suggestions for the improvement in the existing system.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________

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