INTRODUCTION TO PROJECT

In this project analysis of existing performance appraisal practices of LPS has been done.
This project tells how much this practice is rational to their employees & how much it
gives motivation to their employees. Try to find out up to what extent this appraisal
practices helpful in identifying employee's future goals. How much it helps in
communication between superior & subordinate & also try to find out existing appraisal
programme up to what extent help employees in SWOT analysis. Also try to find the
need of improvement in existing system.

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 SIGNIFICANCE OF STUDY

Significance of study is given below:-

 To get liable information.

 Find out most responsive factor which results in satisfaction on dissatisfaction
towards existing appraisal system.
 To analyze loop holes & put forward certain recommendation & suggestions.

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 OBJECTIVE OF STUDY

Main objective of study is to analysis the performance appraisal practices of LPS.

To achieve this objective various sub-objectives have established which are:

1. To determine the rationality of existing performance appraisal system.

2. To assess the level of satisfaction among appraisers through performance
appraisal system.
3. To see the individuals are aware of their targets through existing appraisal
system.
4. To estimate the motivation level among the appraisers after last appraisal.
5. To analyses the improvement in performance.

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RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. Research is

an art of scientific investigation & careful investigation or inquiry especially through
search for new facts in any branch of knowledge. The methodology may differ from
problem to problem, yet the basic approach remains same. Research is an original
contribution to the existing stock of knowledge making for its advancement.

RESEARCH DESIGN

Research is an arrangement of condition & analysis of data in a manner that aims to

combine relevance to the research purpose with economy in procedure. The research is
descriptive in nature.

DATA SOURCES

For collecting the data concerning the research study is primary & secondary.

Tools of data collection:

Questionnaire: Primary

Magazines, Books: Secondary.

SAMPLE SIZE

A Sample of 100 employees was chosen.

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 RESEARCGH METHODOLOGY AT A GLANCE

Research Problem : Analysis of performance appraisal

practices in LPS.

Research Design : Descriptive

Data collection:

Data type : Primary & Secondary

Data Collection tool : Primary-: Questionnaire

Secondary-: Magazines, Books

Sampling:

Sampling Technique : Convenient Technique

Sample size : 100 employees

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 PERFORMANCE APPRAISAL SYSTEM

Performance appraisal means systematic evaluations of personality & performance of

each employee by his supervisor or some other person trained in techniques of merit
rating. It employs various rating techniques for comparing individual employees in a
work group in terms of personal qualities of deficiencies & the requirements of their
respective jobs.

According to Dale Yoder, "Performance appraisal includes all formal procedures used
to evaluate personalities, contributions & potentials of group members in a working
organization. It is continuous process to secure information necessary for making
correct & objective decisions on employees."

Performance assessment is process that measures employee's performance. It involves

deciding (1) what to assess, (2) who should make the assessments (3) which assessment
procedure to use (4) how to communicate assessment results.

Performance appraisal is the step where the management finds out how effective it has
been at hiring & placing employees. If any problems are identified, steps are taken to
communicate with the employee & to remedy them.

OBJECTIVE OF PERFORMANCE APPRAISAL

Performance appraisal has been considered as a most significant & indispensable tool for
an organization, for the information it provides is highly useful in making decisions
regarding various personal aspects such as promotions & merit increase. Performance
measures also link information gathering & decision making processes which profice a
basis if judging the effectiveness of personnel sub-divisions such as recruiting, selection,
training & compensation. Accurate information plays a vital role in the organization as a
whole. If valid performance data are available, timely, accurate, objective standardized &
relevant, management can maintain consistent promotion & compensation policies
throughout the total system.

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It falls in two categories:

1. Administrative objective
2. Self improvement objective

Administrative objectives are as follows:

a) Promotions
b) Transfers
c) Wages & Salary Administration
d) Training & Development
e) Personal Research

Performance appraisal has wide range of utility:

1. It unifies the appraisal procedure so that all employees are rated in the same
manner.
2. It provides information which is useful in making & enforcing important
decisions.
3. It provides information in the form of records about rating.
4. It serves to stimulate & guide employee development.
5. A periodic & accurate appraisal contains a supervisor to be alert & competent
in his work.
6. It gives supervisors a more effective tool for rating their personnel.
7. It makes for better employer-employees relations.

METHODS OF PERFORMANCE APPRAISAL

There are methods of merit rating which may be classified into:

1. Traditional Methods
2. Modern Methods

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A) Traditional Methods:

Traditional methods are very old techniques of the performance appraisal. They are based
on trait-oriented appraisal. Evaluation of employees is done on the basis of the standards
of the personal traits or qualities such as attitudes, judgments, versatility, initiative,
dependability, leadership, loyalty, punctuality, knowledge of job.

1. Unstructured Appraisal

Under this, the appraiser is required to write down his impression about the person being
appraised in an unstructured way. However, in some organizations, comments are
required to be grouped under specific headings such as quality of the job performance,
reasons for specific job behaviors, personality traits, and development needs. This system
is highly subjective and has got its merit in its simplicity and is still in use especially in
the small firms.

2. Ranking Method

Ranking is a simple process of the placing employees in a rank according to their job
performance. It permits comparison of all employees in any single rating group
regardless of the type of work. All workers are judged on the same factors and they are
rated on the overall basis with the reference to their job performance instead of individual
assessment of traits. In this way, the best is placed first in the rank and the poorest
occupies the last rank.

3. Forced Distribution Method

The forced distribution system is devised to force the appraiser to fit the employees being
appraised into the predetermined ranges of scale. It has an advantage over the paired
comparison system in that two or more employees can be given equal ratings. This
system is based on the presumption that employees can be divided into five point's scale
of outstanding, above average, below average and poor. In this system, the appraiser
asked to the distribute the employees into these categories in such a way that about 10%
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of the men are in group 'outstanding', 20% 'above average' 40% 'average'; 20% 'below
average', and 10% 'poor'.

4. Graphic Rating Scale

Under this method scale is established for a number of the specific factors ad qualities.
Five degree is established for each factor and general definitions appear at points along
the scale. Generally, the rater is supplied with a printed form, one for each person to be
rated. The selection of factors to be measured on the graphic rating scale is an important
point under this system. These are of two types: (1) characteristics, such as initiative and
dependability, and (ii) contributions, such as quantity and quality of work. Since certain
areas of job performance cannot be objectively measured, it is likely that graphic scale
will continue of use a mixture of the both characterisitics and contributions.

5. Check List

Under this method, various statements are prepared in such a manner that they describe
various types and levels of the behaviors for a particular job. Each statement is attached
with a scale value. At the time of rating the employees, the supervisor just collects and
check all the statements. After the weight or values are attached to the individual traits,
the rating up to this level is gathered on the rating sheet. Then the weights are averaged
and employee is evaluated. The weighted check-list should be prepared by the persons
thoroughly acquainted with job and perfect at preparing and weighing statement. When
this process is over, rating is placed on separate cards. Then these cards are sorted by the
rates who actually observed the accomplishment of the work. They rank the employees
from poor to excellent. Weight ate then assigned to the statements in the accordance with
the way ranked y te raters.
* Forced Choice

This method is used particularly with the objective of the avoiding scope for personal
prejudices. Under this method, the rater is forced to choose between descriptive
statements of seemingly equal worth describing the person in question. Statements are
chosen of both the sides ( favorable as well as unfavorable ). For example, the following

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two pairs of statement may be given to rater and the may be asked to select one statement
from each pair that is represented by supervisor.

1. Gives clear instructions to his subordinate.

2. Can be depended upon to complete any job assigned.
3. Makes promises that he knows he cannot keep.
4. Show favoritism to some employees.

6. Critical Incident Method

A critical incident means a significant act by an employee exceeding or failing any of the
requirements of his job. It represents an exceptional behavior of an employee at work, as
for instance, Resisted the implementation of change; Became upset over work; Refused
to help a fellow worker; Suggested an improvement in the work method; Tried to get a
fellow worker to accept the management decision; Welcome new ideas.

The method requires every supervisor to record all such significant incidents in each
employee's behavior which indicate effective successful action and those which indicate
ineffective or poor behavior. These are recorded in a specially designed notebook which
contains categories or characteristic under which various behaviors can be recorded.

7. Field Review Method

Under this method, the supervisors are interviewed by an expert from the personnel
department. The expert questions the supervisor to obtain all the pertinent information on
each employee ad takes notes in his notebook. Thus, there is no rating form which
factors or degrees, but overall ratings are abstained. The workers are usually classified
into three categories as outstanding, satisfactory and unsatisfactory.

Modern Method:

"Management by objectives" (MBO) is the come as behavior approach to subordinate

appraisal, actually called "works planning an review" in case of General Electric Co.
U.S.A. under this approach, an employee is not appraised by these recognizable traits, but

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by his performance with respect to the agreed goals or objectives. Thus, the essential
feature of this approach is mutual establishment of job goals. Thus application of goal
setting approach to performance appraisal involves the following steps:

 The subordinate discusses his job description wit his superior and they agree
on the contents of his job and the key results area.
 The subordinate prepares a list of reasonable objectives for the coming period
of the six to twelve months.
 He sits with the superior to discuss these targets and plans and a final set is
worked out.
 Check-points are established for the evaluation of progress, and the ways of
measuring progress are selected.
 The superior and the subordinate meet at the end of the period to discuss the
result of the subordinate's efforts to meet the targets mutually established.

Behaviorally Anchored Rating Scale

Behaviorally anchored rating (BARS) are designed to identify the critical areas of
performance for a job, and to describe the more effective and less effective job behavior
for getting results. Performance is evaluated by asking the rater to record specific
observable job behaviors of an employee and then to compare these observations with a
"behaviorally anchored rating scale". As a result, the supervisor is in position to compare
the employee's actual behavior with the behavior that has been previously determined to
be more or less effective.

Behaviorally Anchored Rating Scale ( BARS) approach combines elements of the

traditional rating scale and the critical incident method. Using BARS, job behaviors from
critical incident—effective and ineffective behaviors-are descried more objectively. This
method employs individuals who are familiar with a particular job to identify its major
components. They are asked to rank and validate specific behaviors for each of the
components. BARS approach gets away from measuring subjective traits and instead
measures observable, critical behaviors that are related to specific job dimensions.

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CAUSES OF FAILURE OF APPRAISAL TECHNIQUE

Performance appraisal techniques have often failed due to following reasons:

1. The supervisors play dual & conflicting role of both the judge & the helper.
2. Too many objectives often cause confusion.
3. The supervisor feels that subordinate appraisal is rewarding.
4. Different qualities to be rated may not be given proper weight age certain in
cases.
5. If the factors included in assessment are irrelevant, the result of merit rating
will not be accurate.
6. Poor communications keep employees in the dark about what is expected of
them.
7. Unwillingness on the part supervisors to tell employees plainly how to
improve their performance.

SUCCESS OF AN APPRAISAL SYSTEM

 Existence of an atmosphere of confidence & trust so that both supervisor &

employee may discuss matters frankly.
 The supervisor must vary thorously evaluate the employee's performance.
 The result of performance rather than personality traits should be given due
weight.
 Rating should be used to evaluate the effectiveness of training programmes.
 Performance appraisal should provide an incentive to the employees to better
performance in a bid to improve their over other.
 Systematic appraisals will prevent grievances & develop confidence amongst
the employees if they are convinced of the impartial basis of evaluation.

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 EXISTING APPRAISAL PRACTICES IN LPS

Ranking method & man to man comparison method is used in LPS.

In ranking method comparison of employees in any single rating group regardless of type
of work. All employees are judge on the same factors & they are rated on the overall
basis with reference to their job performance instead of individual assessment of traits. In
this way best is placed first in rank & poorest occupies the last rank.

In paired comparison method every employee in a job family is compared with every
other to determine which is the better employee. This is provided with little booklet
containing two names on each page.

Instruments used of appraisal:-

 Knowledge of work
 Ability to do work
 Quality & Quantity of output
 Personal qualities like dependability, adaptability, initiative, etc.

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 Method followed by the organization for performance
evaluation

No. of employees = 100

Data analysis:-

Methods Respondents
Unstructured appraisal 
Employee ranking 
Forced distribution 
Graphic rating scales 
Check-list 
Critical incidents 
Field review 
Management by objectives 
Behaviorally anchored 

Interpretation:- Employee ranking method is used by organization for performance

evaluation of employees.

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 Appraisal which is followed in your organization is

No. of employees = 100

Data analysis:-

Time Respondents
Yearly 
Half yearly 
8 months 

Interpretation:- In LPS yearly appraisal is given to their employees.

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 Parity between periodic performance reviews & annual
appraisal Rating

No. of employees = 100

Data analysis:-

Options % of respondents
Outstanding  47.00
Satisfactory 48.64
Unsatisfactory 13.46

Interpretation:- 47% appraisers viewed that periodic performance reviews by their

boss was in outstanding parity, 48.64% appraisers viewed that periodic performance
reviews by their boss was in satisfactory parity, 13.46% appraisers viewed that periodic
performance reviews by their boss was in unsatisfactory parity.

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Satisfaction of employees with the existing criteria followed for
appraisal

No. of employees = 100

Data analysis:-

Options % of respondents
Outstanding  47.00
Satisfactory 48.64
Unsatisfactory 13.46

Interpretation:- 47% people said that existing criteria for appraisal is outstanding,
48.64% people said that existing criteria for appraisal is satisfactory, 13.46% people said
that existing criteria for appraisal is unsatisfactory.

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 Rationality of existing system

No. of employees = 100

Data analysis:-

Options % of respondents
Outstanding  10.81
Satisfactory 76.31
Unsatisfactory 12.88

Interpretation:- 10.81% of total appraisers said that system was outstanding in

terms of rationality, 76.31 of total appraisers said that system was satisfactory in term of
rationality, 12.88% of total appraisers said that system was unsatisfactory in terms of
rationality.

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 Compatibility ratio between self appraisal & appraisal rating
by Deptt.

No. of employees = 100

Data analysis:-

Compatibility % age of respondents

Around 25%  2.77
Around 50% 19.44
Around 75% 47.22
Around 100% --

Interpretation:- 2.77% of total appraisers said, the compatibility ratio is 25%, while
19.44% of appraisers said that the compatibility ratio is 50%, 47.22% of appraisers
viewed that the compatibility ratio is 75%, 30.55% of appraisers did not respond.

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 Appraisal exercise helps in identifying & setting future goals

No. of employees = 100

Data analysis:-

Options % of respondents
Outstanding  37.83
Satisfactory 51.35
Unsatisfactory 8.10

Interpretation:- 37.83% revealed that existing appraisal system is helpful in setting

future goal up to outstanding level, 51.35% of appraisers viewed that extent of assistance
was satisfactory, 8.10% of appraisers viewed that this system is unsatisfactory, 2.70% of
appraisers did not respond.

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 Method of goal setting used by departmental heads

No. of employees = 100

Data analysis:-

Rationality % of respondents
Quantitative  2.63
Qualitative 18.50
Both 80.84

Interpretation:- 80.84% of the appraisers recommended that method of goal setting

quantitatively as well as qualitative, 2.63% of the appraisers recommended quantitatively
for goal setting, 18.5% of the appraisers recommended qualitative method for goal
setting.

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 Clarity about goals/objectives/targets

No. of employees = 100

Data analysis:-

Clarity % of respondents
High  56.76
Average Clarity 32.43
Low Clarity 8.10
No Clarity 2.70

Interpretation:- 56.76% of the appraisers said that they are very much clear about
their targets/objective, 32.43% of the appraisers said that clarity about their
targets/objective up to average lever, 8.1% of the appraisers said that clarity about their
targets/objective up to low level, 2.7% of the appraisers were not clear about their
targets/objective.

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 Helpful in SWOT-Analysis

No. of employees = 100

Data analysis:-

Options % of respondents
Outstanding  ---
Satisfactory 65.68
Unsatisfactory 21.62

Interpretation:- 65.68% of the appraisers said that the existing system assists in
swot analysis, 21.62% of the appraisers said that the existing system assists in swot
analysis poorly, 12.70 of the appraisers said that the existing system does not help in swor
analysis.

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 Help in improving communication between superior
& Subordinate

No. of employees = 100

Data analysis:-

Rationality % of respondents
Outstanding  38.38
Satisfactory 61.11
Unsatisfactory --

Interpretation:- The data obtained shows that the communication between superior
subordinate was improved outstandingly in view 38.38% of the appraisers, 61.11% of the
appraisers said that the improvement in communication was satisfactory.

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 Provide positive reinforcement for good work & training for
Poor work

No. of employees = 100

Data analysis:-

Options % of respondents
Outstanding  38.64
Satisfactory 48.64
Unsatisfactory 12.70

Interpretation:- 38.64% of the appraisers said that positive reinforcement for good
work & training for poor work is outstanding, 48.64% of the appraisers said that positive
reinforcement for good work & training for poor work is satisfactory, 12.7% of the
appraisers said that positive reinforcement for good work & training for poor work is
unsatisfactory.

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 Motivated for further improving performance through
discussions/performance counseling

No. of employees = 100

Data analysis:-

Options % of respondents
Outstanding  38.64
Satisfactory 48.64
Unsatisfactory 12.70

Interpretation:- 38.64% of the appraisers assured that they felt highly motivated
through discussions/performance counseling, 38.64% of the appraisers viewed that the
extent of motivation is satisfactory & 12.7% of the appraisers viewed that the extent of
motivation is unsatisfactory.

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 Improvement in performance after last appraisal

No. of employees = 100

Data analysis:-

Options % of respondents
Outstanding  54.44
Satisfactory 45.54
Unsatisfactory --

Interpretation:- 54.44% of the total appraisers assured that after last appraisal they
have improved outstandingly, 45.55% of the appraisers assured that after last appraisal
they have improved satisfactory.

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 FINDINGS

 Employee ranking method & man to man comparison method is being used at
LPS, Rohtak.
 In LPS yearly appraisal is given to their employees.
 Mostly all of the appraisers assured that their performance is outstanding with in
department.
 47% appraisers viewed that periodic performance reviews by their boss was in
outstanding parity, 48.64% appraisers viewed that periodic performance reviews
by their boss was in satisfactory parity.
 Mostly all of the appraisers are satisfied with these criteria.
 Mostly all of the appraisers said that system is satisfactory in terms of rationality.
 Compatibility ratio between self appraisal & appraisal rating by Deptt. Is 75%.
 Mostly all of the appraisers said that appraisal exercise helps in identifying &
setting future goals.
 All most all of the appraisers recommended that method of goal setting
quantitatively as well as qualitative.
 Mostly appraisers said that they are very much clear about their targets/objectives.
 Mostly all the appraisers said that the existing system assists in swot analysis.
 The improvement in communication between superior & subordinate is up to
satisfactory level.
 All most all of the appraisers said that positive reinforcement for good work &
training for poor work is satisfactory.
 All the appraisers assured that they felt highly motivated through discussions/
performance counseling at the time of appraisal.
 All the appraisers assured that after last appraisal they have improved
outstandingly.

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 SUGGESTIONS

1. The unit under study is suggested to pay more attention on feed back &
performance review so that employees may become aware of their weaker
area.
2. The emphasis on identification of training needs & promotion should also be
paid in addition to increments.
3. An atmosphere of confidence & trust should be created to both superior &
subordinate may discuss matters frankly.
4. All appraisers should be told about SWOT analysis.
5. Too many objectives should not served before subordinate because it often
cause confusion & cannot get his goal.
6. Performance appraisal system should be clear to both boss & employee.
7. Scientific methods should be adopted for performance appraisal.
8. Proper human relation should be developed.
9. There should not be difference of opinion between superior & subordinate in
regard to letter of performance.
10. Implementation of appraisal system should also be audited by personnel
people.

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 LIMITATIONS OF STUDY

1. The size of sample used in this study is small which may influence the findings of
study.
2. Though every caution in flowing questionnaire was taken due to human nature,
the possibility of business in the questionnaire cannot rule out.
3. Since the study was conducted under various departments so most of respondents
were feeling reluctant in giving what they personally feel. They were giving their
view from industry's angle rather than personal point of view.

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 BIBLIOGRAPHY

 Rao T.V. 'reading In Human Resource Development'

 Mamoria C.B., 'Personnel Management'.
 Chhabra T.N., 'Human Resource Management'
 Flippo, E.B., 'Principle of Management'
 Das Gupta, 'Business & Management in India'

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 QUESTIONNAIRE

QUES:- 1) What Kind Of appraisal is followed in your organization?

(A) Yearly [ ] (B) half yearly [ ]

(C) 8 months [ ]

QUES:- 2)Is the annual appraisal rating is better than periodic performance

review?

(A) Outstanding [ ] (B) Satisfactory [ ]

(c) Unsatisfactory [ ]

QUES:- 3) How do you find the existing criteria followed for appraisal?

(A) Outstanding [ ] (B Satisfactory [ ]

(C) Unsatisfactory [ ]

QUES:-4) Do you find the existing system rational?

(A) Outstanding [ ] (B Satisfactory [ ]

(C) Unsatisfactory [ ]

QUES:-5) What is the compatibility ratio between self appraisal and appraisal

rating by organization?

(A) Around 25% [ ]

(B) Around 50% [ ]

(C) Around 75% [ ]

(D) Around 100%[ ]

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QUES:-6How do you find performance appraisal in identifying and setting future

goals?

(A) Outstanding [ ] (B Satisfactory [ ]

(C) Unsatisfactory [ ]

QUES:- 7) What are the methods used by the deptt. Head for performance

appraisal?

(A) quantitative [ ] (B) qualitative [ ]

(C) Both [ ]

QUES:- 8) How much clarity is there about goals?

(A) High [ ] (B) Average[ ]

(c ) No [ ] (d )Low [ ]

QUES:- 9) How do you find P A in SWOT analysis?

(A) Outstanding [ ] (B Satisfactory [ ]

(C) Unsatisfactory [ ]

QUES:-10) How do you find the PA in further improving performance through

discussion/ performance counseling?

(A) Outstanding [ ] (B Satisfactory [ ]

(C) Unsatisfactory [ ]

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