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Submitted in partial fulfillment of Bachalor Degree in Business Administration
Ms. Neha Walia
Amity Global Business School, Chandigarh
I would like to convey my heartiest gratitude to several people, for their support and guidance which helped me complete my Summer Internship. First and foremost I would like to thank HDFC Branch for giving me an opportunity to do my internship in their esteemed organization. My special appreciation extends to Mr.-------------------for their constant encouragement through out this period. I would also like to thank our Programme Co-ordinator, Ms. Neha Walia for her guidance and unflinching support through out the phases of my internship. My special thanks to my classmates and dear friends, for their support through out my internship. With their help I could complete my work efficiently and effectively. Last but not the least, my endless appreciation goes to my family who has stood by my side and given me moral support whenever I was low and boosted my will power. Tejinderpal Singh
SL.No 1 EXECUTIVE SUMMARY 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 INTRODUCTION HDFC PROFILE STUDY DESIGN SAMPLE DESIGN LIMITATION INTRODUCTION TO PERFORMANCE APPRAISAL NEED FOR PERFORMANCE APPRAISAL ACHIEVING ORGANIZATIONAL GOAL CHARACTERISTIC OF GOOD PERFORMANCE APPRAISAL EVALUATION TECHNIQUE METHOD OF PERFORMANCE APPRAISAL FACTOR INFLUENCING PERFORMANCE OF AN EMPLOYEE ADVANTAGES SAMPLING DATA ANALYSIS AND INTERPRETATION FINDING SUGGESTION QUESTIONNAIRE BIBILOGRAPHY Page. No
Ltd. This experience helped me understand the basic functioning of the organization where I was inducted. This helped me get useful insight and understanding of online marketing. Training sessions were held to give me insights about How to create markets and write comments on other member’s markets and to encourage and appreciate them for their nice efforts and creative markets. I also learnt how to work online for such a nice which enhanced my knowledge. The best learning experience was that I started from the very basics of getting to that position and not from the position itself. the benefits to the members as well as the HDFC.EXECUTIVE SUMMARY This internship report consists of the overall experience of online working as a part of HDFC Standard Life Insurance Co.Project Title: Performance Appraisal System of HDFC. writing skills and communication. 4 . My Internship program .
Performance Appraisal is the basis of HRD. The process of Performance Appraisal helps the employees and management to know the level of employees Performance compared to the standard or predetermined level. In every organization.INTRODUCTION: The process of Human Resource Development (HRD) helps the employee’s to acquire and develop technical. In contrast. They also use it in determining wages and transfers as they do it in the American companies. In American business. the process of HRD helps the employee’s to acquire and development technical. The assessment of the degree of success of an individual employee is an important part of HRM that leads to the Performance Appraisal. 5 . In fact. belief and attitudes necessary exists to achieve goals. transfer. skill. But the recent developments in HRD indicate that Performance Appraisal is the basis for employee development. the degree of success obtained by the individual employee in achieving individuals goals directly determines the organizational effectiveness. Performance Appraisal is important to understand and improve the employee’s performance through HRD. counseling and motivation etc. providing feedback to the employee’s and personal research. The aim of the project is to focus on the Performance Appraisal system undergone in HDFC Standard Life Insurance Co Ltd (HDFC SLIC). Performance Appraisal indicates the level of desired performance level and actual performance and the gape between these two. The purpose of Performance Appraisal to make a distinction between performer and non performer on the job. managerial and behavioral knowledge. regarding the emphasis for the feedback to the employee’s and assessing the need for their training is very less or we can say it’s little. This gap should be bridged through training. and abilities. beliefs &attitudes necessary to perform present and future roles. salary determination. skills & abilities and the values . managerial and behavioral knowledge. promotion. the Performance Appraisal is done to determine wage increase. Indian companies use Performance Appraisal for training and development. It was viewed that Performance Appraisal was useful decide employee’s promotion or transfer.
The overriding purpose of Performance Appraisal is to help HDFC Standard Life Insurance Company Limited employees to improve and thus to improve organizational effectiveness. 6 . abilities.This project aim to study the need for Performance Appraisal. how it helps the employees of the Organization to improve their abilities so as to meet both the personal and organizational present and future requirements. motivation and expectancies. Whether the organization is reaching its standards by Performance Appraisal resulting in increase in quality and productivity of the employees observed. Performance Appraisal therefore institutional needs as well as staff member needs.
the total asset size has crossed more than Rs. India’s premier housing finance institution has assisted more than 3.3 million families own a home.800 cores. 00. 83. The corporation has a deposit base of Rs.551 cores. London and Singapore service associates in Saudi Arabia.000 cores including mortgage loan assets of more than Rs. Presented ‘Dream Home’ award for the biggest housing finance provider in 2004.2. Kuwait and Oman to assist NRI’s and PIO’s to own a home back in India.000 depositors. HDFC Bank was incorporated in August 1994. and currently has a nationwide network of 1412 Branches and 325’s ATM’s in 528 Indian towns and cities. 95. The bank was incorporated in August 1994 in the name of ‘HDFC’s Bank Limited’. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt. It has international offices in Dubai. as part of the RBI’s liberalization of the Indian Banking industry in 1994. since in inception in 1977 across 2400 cities and town through its network over 250 offices. (HDFC). earning the trust of more than 9. HDFC Bank commenced operation as a Scheduled Commercial Bank in January 1995. and Bangladesh in the setting up of housing g finance companies. Recognition for the servi9ce to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. India. 7 . HDFC PROFILE: Housing Development Finance Corporation Ltd. Maldives. Customer Service and satisfaction has been the mainstay of the organization. with its registered office in Mumbai. Qatar. 17. As of December 2008. The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI)to set up a bank in the private sector. AWARDS AND ACCOLADES: Awarded the Economic Times Corporate Citizen award in 2004. HDFC has set benchmarks for the Indian housing finance industry.
2008. 2008. Unit Linked Savings Plan Tops Mint Best TV Ads Survey March. “Best Home Loan Provider” title at the ZEE Pinnacle Awards 2006. Dun & Bradstreet –American Express Corporate Award 2006. 2008. Sar Utha Ke Jiyo Among India’s 60 Glorious Advertising Moments January. HDFC Ranked as India’s Third Best Managed Company by Finance Asia 2005. HDFC Group Companies: 8 . Received PCQuest Best IT Implementation Award May. Marketing &Advertising Power Awards 2006. “Best Strategy”. at the 4Ps Business. HDEC won the Best award for “Investment Management in India” at the Euro money 2006 Real Estate Awards. Received 2008 CIO Bold 100 and CIO Security Awards.
and retaining the best people in the industry. We believe that the ultimate identity and success of our bank will reside in the exceptional quality of our people and their extraordinary efforts. For this reason. motivating.Other Companies: • HDFC Property Ventures Ltd • HDFC Developers Ltd. • HDFC Ventures Trustee Company Ltd. • HDFC Trustee Company Ltd • HDFC Investments Ltd • HDFC Holdings Ltd • Credit Information Bureau (India) Ltd • HDFC Securities BANC ASSURANCE: Career: HDFC Bank is a dynamic bank. developing. Operational Excellence. we are committed to hiring. 9 . with a youthful and enthusiastic team determine to accomplish the vision of becoming a world-class Indian bank. • GRUH Finance Ltd. Our business philosophy is based on four core values – Customer Focus. Product Leadership and People.
Maintain our current standards for asset quality through disciplined credit risk management. Develop innovative product and services that attract our targeted customers and address inefficiencies in the Indian financial sector. E Corporate Governance: HDFC Bank recognizes the importance of good corporate governance. Leverage our technology platform and open scaleable systems to deliver more products to more customers and to control operating costs. We are committed to do this while ensuring the highest levels of ethical standards. Our business strategy emphasizes the following: Focus on high earnings growth with low volatility. risk management and audit and compliance.Mission and Business Strategy: Our mission is to be a “World-Class Indian Bank. therefore. service level. Continue to develop products and service that reduces our cost of founds. 10 .” benchmarking ourselves against international standards and be practices in terms of product offerings. corporate governance and regulatory compliance. The objective is to build sound customer franchises across distinct business so as to be a preferred provide of banking service for target retail and wholesale customer segment. is established to provide a direction and framework for managing and monitoring the bank in accordance with the principle of goods corporate governance. and to achieve a healthy growth in probability. technology. which is generally accepted as a key factor in attaining fairness for all stake holders and achieving organizational efficiency. professional integrity. consistent with the Bank’s risk appetite. This corporate Governance Policy.
69 billion or 81. Spain. 469. 791. Standard Life Healthcare is one of the largest private medical insurance providers in the UK. Standard Life Bank offers a range of mortgages and savings products. Germany. Canada.6 billion as at 31st December 2005. 969 cores. and protection and investment products. Scotland (UK). Standard Life Insurance Co. 11 . INR 819.000. Hong Kong. operation in all the important markets of the world like Austria.Stan dard Life –UK. the biggest float on the London Stock Exchange in the last five years. 10. 979 or INR 10. Currently over 7 million Customers worldwide.) Standard Life Group Companies: Standard Life Investment manages assets for the group as well as third parties. China. and had mortgage book of £ 10. 46. Providing range of saving.000 cores. Standard Life Financial Strength has total Assets under management UK £ 125 billion (more than Rs. As at December 2006. Standard Life Insurance Company is one of the most trusted Insurance Companies worldwide based at Edinburgh. is the largest mutual insurance company in Europe. pension. Standard Life listed on 10th July 2006. and has a record of strong investment performance. Ireland and India through its network. Founded in 1825.
Ltd: HDFC Standard Life Insurance Company Limited is a joint venture between HDFC Ltd.HDFC Standard Life Insurance Co. combined with the Insurance expertise of Standard Life is committed to offer better financial solution to the customers. 12 . a Leading Finance Company in India & Standard Life Assurance. Our study of Performance Appraisal in the HDFC Standard Life Insurance Company Limited is the major stack in the HDFC LTD. The financial expertise of HDFC Group. the largest mutual Insurance Company in Europe.
the easiest to deal wit. while the rest in held by others. As all these areas from the basic infrastructure for establishing the highest possible customer service standards. To ensure this we have concentrated our focus on expansion of branch network. India’s leading housing finance institution and a Group Company of the Standard Life Plc. HDFC Standard Life believes that stabling a strong and ethical foundation is an essential prerequisite for long term sustainable growth.00% HDFC Standard Life Insurance Company Limited is one of India’s leading insurance companies. “The most obvious choice for all” 13 .43% and Standard Life (Mauritius Holding) 26.00% of equity in the joint venture.00% 74. In short. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited). Vision of HDFC Standard Life Insurance Co. which offers a range of individual and group insurance solutions. organizing an efficient well trained sales force. 2009 HDFC Ltd. Ltd… The most successful and admired life insurance company which mean that we are the trusted company. offer the best value for money. As on February 28. and set the standard in the industry. holds 72. and setting up appropriate system and process with optimum use of technology.Joint venture: Stake Holding Pattern 26. UK.
as we wish to be perceived as an institution with high moral standing. We continue to promote high integrity in business practices and shun short cuts and unethical practices. Our core values are drilled down to all levels of employees.564. 00. 2009. as these are inviolable. we have consistently focused on setting benchmarks in all aspect on insurance business. Our group solutions have been desired to offer you complete flexibility combined with a low charging structure. 2000. The company has covered over 10. Track record so far Our gross premium income for the year ending March 31.Key strengths: Finical Expertise As a joint venture of leading financial services groups. when Indian insurance space was opened for private participation. HDFC Standard Life has the financial expertise required to manage your long term investments safety and efficiently. 2009 stood at Rs. Range of Solutions We have s range of individual and group solutions. 5. which can be easily customized to specific needs. our differentiators are: 14 . Since our inception in 2000.000 lives as on March 31. Being the first private player to be registered with the IRDA and the first to issue a policy on December 12.69 cores.
Standard Life is a strong. HDFC Ltd’s excellent brand strength emerges from its unrelenting focus on corporate governance.Values of HDFC Standard Life Insurance Co. We were the first private life insurer to break the ice using the idea of “Sar Utha Ke Jiyo”. financially secure business and a market leader in the UK Life & Pensions sector. Preferred and trusted brand: Our brand has managed to set a new standard in the Indian life insurance communication space. 15 . is the most recalled campaign in its category. high standards of ethics and clarity of vision. Today. we are one the few brands that customer recognize. Moreover. Our values Integrity Innovation Customer Centric People care Team work Joy and simplicity Strong promoter: HDFC standard life is a strong financially secure business supported by two strong and secure promoters – HDFC Ltd and Standard Life. like and prefer to do business. Ltd…. “Sar Utha Ke Jiyo”. our brand thought.
irrespective of the market condition. Thus. our investment focus is based on the primary objective of protecting and generating good. consistent. Customers see a plan not piecemeal product selling. looks at the whole financial picture. and stable investment returns to match the investor’s long term objective and return expectations.Investment philosophy: We follow a conservative investment management philosophy to ensure that our customer’s money is looked after well. Need based selling approach: Despite the criticality of the life insurance sales in the industry have been characterized by over by reliance on tax benefits and limited advice-based selling. These are regularly reported to the board and this ensures that the company management and board members are fully aware of any risks and the actions taken to ensure they are mitigated. Need.based selling process. helps customers understand their latent needs at the first instance itself without focusing on product features or tax benefits. Risk control frame work: HDFC Standard Life has fully implemented a risk control framework to ensure that all types of risks (not just financial) are identified and measured. “Disha” the first of its kinds in the industry. Our eight-step structured sales process “Disha” however.executive directors and the Principal Offers & Executive Director. As a life insurance company we understand that customer have invested their savings with us for the long term with specific objectives in mind. 16 . The investment policies and actions are regularity monitored by a formal investment committee comprising non.
Today. we are extremely satisfied with the base that we that we have created for long term success of this company. 17 . Besides the mandatory training that financial consultants have to undergo period to being licensed. The agent who successfully completed this training only. professional and so on. Focus long term value: HDFC Standard Life does not focus in the business of ramping up the top line only. Almost all employees have undergone training to enhance their technical skill or the softer behavioral skill to be able to delver the service standards that our company has for itself. some of which were found useful by the IRDA and later made mandatory for the entire industry. we have developed and implemented various training modules covering various including product knowledge. This has been made compulsory by IRDA for all insurance companies under the new Unit Linked Guidelines. pricing.Focus on training: Training is an integral part of our business strategy. Transparent dealing: We are one the few companies whose product details. and objective handling skills. but to create maximization of stake holder’s value. was authorized by the company to sell ULIPs. clauses are clearly communicated to help customer take the right decision. selling skills. Strict compliance with regulations: We have initiated and implemented many new processes.
be it: Protection: Need for a sound income protection in case of your unfortunate demise Investment: Need to ensure long term real growth of your money Savings: Save for the milestones and protect your savings too Pension: Need to save for a Self Respectable and comfortable life at Retirement Stage Health: Cover for health related exigencies Awards and Accolades: “Best New Insurer” Award from Outlook money – 2003. 18 .Diversified product portfolio: HDFC Standard Life’s wide and diversified product portfolio help individuals meet their various need. “Most Respected Private Insurance Company” Award from Business World – 2004.
Parekh is a Fellow of the Institute of Charted Accountants (England & Wales). Mr. Deepak S. Mr.He is the Chief Executive Officer of HDFC Limited. He was inducted as a whole –time director of HDFC Limited in 1985 and was appointed as its Extenuative Chairman in 1993. 2000. He was appointed as the Group Chief Executive of the Standard Life Group in March 2004. He joined HDFC Limited in a senior management position in 1978.Parekh is the Chairman of the Company. Keki M. “Best New Insurer” Award from Outlook Money – 2006. He is the Executive Chairman of Housing Development Finance Corporation Limited (HDFC Limited). 19 . He is currently the Managing Director of HDFC Limited. He has been with Standard Life Group for 34 years holding various senior management positions.Crombie joined the Board of Directors of the Company in April 2002. HDFC Standard Life Selected as ‘4Ps Power Brand 2006’. Mistry joined the Board of Directors of the Company in December. for being of the India’s Top 25 Most Innovative Companies’. + : Brief Profile of the Board of Directors: Mr. Sir Alexander M.
Ranjan Pant is a global Management Consultant advising CEO/Boards on Strategy and Change Management. Corporate Responsibility and Shared Services Centre. Divan has wide experience in auditing and taxation planning of individuals and limited companies and also has substantial experience in structuring overseas investment to and from India. Mr.up the Securities & Exchange Board of India (SEBI) and is also associated with various committees of SEBI and the Reserve Bank of India (RBI). He is also Chairman of 20 .. She has been employed with HDFC Limited since 1978 and was appointed as the Executive Director in 2000. Mr. Mr. Campbell is currently the Group Operations Director in the Standard Life Group and is responsible for group operations. 2000. having been Deputy Chairman since March 2006. Gerald E. Ms. He was appointed as its Management Director in November. Divan is a practicing charted Accountant and is a Fellow the Institute of Charted Accountants of India. Strategy & Planning. Pant has an MBA from the Wharton School and BE (Honors) from Birla Institute of Technology and Sciences. Divan was the Former Chairman and managing committee member of medsnell group international association of independent accounting firms and has authored several papers of professional interest. Campbell joined the Board of Director in November 2005. Pant. Karnad is Executive director of HDFC Limited. Grimstone was appointed Chairman in May 2007. Ms. Corporate Business Development at General Electric head quarters in Fairfield.He joined HDFC Limited in 1981 and became an Executive Director in 1993. Mr. Mr. Ms. She is responsible for overseeing all aspects of lending operations of HDFC Limited. Mr. He became a director of the standard life assurance company in July 2003. Boston. Renu S. is a graduate in law and holds a Master’s degree in economics from Delhi University. Ravi Narain was a member of the core team to set. Inc. Marcia D. Mr. He was also Director. Asia Pacific Development. Gautam R. USA. Mr. where he led the worldwide Utility Practice. Mr. Ravi Narain is the Managing Director & CEO of National Stock Exchange of India Limited. until 2002 was a Partner & Vice – President at Bain & Company.
He then spent 13 years with Schroders in London. Other Companies HDFC Trustee Company Ltd. HDFC Property Ventures Ltd. customer interactions ect. As one of the founding members of HDFC Standard life. HDFC Developers Ltd. 2008. HDFC Holding Ltd. Gerry held senior positions within the Department of the Health and Social Security and HM Treasury until 1986. Parasnis has been responsible for setting up branches. He is the Director to Sir Alexander Crombie. performance management system. HDFC Investments Ltd. Mr. GRUH Finance Ltd.Candover Investment plc and was appointed as one of the UK’s Business Ambassadors by the Prime Minister in January 2009. Paresh Parasnis is the principal officer and executive director of the company November 14. Mr. During his 16 – year’s tenure at HDFC Limited. 21 . Hong Kong and New York. overseeing new business new business claims settlement. and was Vice Chairman of Schroders’ worldwide investment banking activities from 1998 to 1999. A fellow of the institute of Charted Accountant of India. he has been associated with the HDFC Group since 1984. he was responsible for driving and spearheading several key initiatives.
To asses whether the appraisal is done without any bias the employees. STUDY DESIGN Objective of the study 1. 5. To know the satisfactory level and the comfortable level between the Employees and superiors. To know and identify merits and demerits of performance appraisal in HDFC Standard Life Insurance Co Ltd. Methodology of the study 22 . To study the performance appraisal system in HDFC Standard Life insurance Co Ltd. 4. 3. 2. Credit Information Bureau (India) Ltd. To asses the degree of awareness among employers and employees on performance appraisal in HDFC Standard Life Insurance Co Ltd.
Questionnaire: It is formalized set of question. the methodology adopted is data collection and sample plan. It can be collected through questionnaires. Primary data: Primary data is collected of facts on the subject of the study by the researcher. The Questionnaire is mainly desired to measure the effectiveness of performance appraisal system for executive in SCR. Secondary data: Secondary data reface to the use of information already collected and published or unpublished. with are logically and systematically arranged to collect the information useful for the proposed study. SAMPLE DESIGN: 23 . reports etc. The questionnaire in this study is structured containing a limited number of questions which are easy and to understand. Source of data: The data for the study has been collected from various primary and secondary sources.Methodology is said to be the procedure or way in which the project work has been done. journals. The sources are books. The layout of their questionnaire is farmed in such a way that confusing and rerecording error are minimized. In the project work.
Somajiguda Branch-V. The size is confined due to time and availability. marketing department of HDFC Standard Life Insurance Co Ltd. 2. 24 . Population: The population for the present study consists of all the employees of HDFC Standard Life Co Ltd working at Somajiguda Branch-V. Administration. 3. Sample size is limited to 50 respondents. Somajiguda Branch-V Study is limited to selected group from the main stream of the organization. Sample Technique: The sample for the present study is selected using simple random technique.1. LIMITATIONS: The study is limited to HDFC Standard Life Insurance Co Ltd. Problems with confidential information. Sample size: The size of the sample for the present study is confined to 50 employees belonging to personnel.
recognize productivity through reward. for the purpose of administration including 25 . INTRODUCTION TO PERFORMANCE APPRAISAL SYSTEM Performance Appraisal has been around of hundreds of years. There is a high chance of sampling error. “Performance Appraisal is the process of evaluating the performance & qualification of the employees in terms of the requirements of the job for which he is employed. openness. The responses would have also been affected by the amount of work and working conditions. as it is only human nature to evaluate fellow colleagues. Effective appraisal system should address clarity. & be cognizant to appraisal leadership qualities. Study includes both collections of data from primary as well as secondary sources. fairness.
identifies those who should be transferred more over.” BY HEYEL “Performance Appraisal determines who shall receive merit increase.” BY RONALD BENJAMIN Key to assessing an employee’s performance is the setting of objectives. counsel’s employees their improvement. facilitates selection. A key element of the performance appraisal process should be reviewing how well the employee has performed in relation to objective that has been previously set for them.placement. encourage employees to express their views or to seek clarification on duties. it improves employee job performance. Measurable. 26 . For objectives to be useful. broadens thei9r capacity & potential. determines training needs. determines promo ability. it’s often said they should be SMART. reward & increase the analytical abilities of supervisors. providing financial rewards & other action which required differential treatment among the group as distinguished from actions affecting all member equally. promotes a more effective utilization of manpower and improves placement . Specific. selections for promotions.
NEED FOR PERFORMANCE APPRAISAL: To effect promotion based on competence and performance. Time framed (with asset date for competition). To assess the training &development needs of the employees. Achievable (Occasionally agreed between the line manager & employee). To bridge the gap between the existing performance & desired performance. They can be mechanism of increasing communication between the employee &his. Result oriented. 27 . To help each employee to understand his own strengths &weakness.
28 . Supervising officer so that each employee gets to know the difficulties of his subordinates and attempt to solve them. To help in salary increment. They can be instruments to provide an opportunity for employees for self reflection And goal setting so that individually planned and monitored development takes place. ACHIEVING ORGANIZATION GOALS The achievement of an organization’s goals rests with its people. transfer. Develop inter personal relationship. They can assist in a variety of personnel decisions by generating data about each employee periodically. and reward and discharge decisions. Provide information about the performance ranks. Performance appraisal is all about providing a way to do this. It provides legally defensible reasons for making promotion. To prevent grievance & in-disciplinary activities. The more talented the people and the better they are managed and coordinated toward those goals the greater the chance of success.
Increase staff self-esteem. Better clarity &define job function &responsibility. The most effective goals are measurable and have easy to understand performance standards.The appraisal process starts with a manager and employee setting goals for the year together. Gain new insights into staff and supervisor. CHARACTERISTICS OF GOOD APPRAISAL SYSTEM: Increase motivation to perform effectively. Develop valuable communication among appraisal participants. 29 .
Encourage increase self –understanding among staff as well as insight into the kind of development activities that are of value. How often rate: 30 .& development of training programs. test validation. OFTEN TO RATE & WHO SHOULD RATE. Distribute rewards on a fair & credible basis. EVALUATION TECHNIQUE: The six steps in performing evaluations 1. the following Principles are to be met (SMART objectives). When to rate: Usually. Result orientate in a company. Achievable (occasionally agreed between the line manager &employee. EASTABLISH PERFORMANCE EVALUATION POLICIES ON WHEN TO RATE. Clarify organizational goals so they can be more readily accepted. Measurable. Establish performance standards for each position and criteria for evaluation In setting objectives to be followed by the employee to be evaluated. Times framed (with a set date for competition). Specific. Improve institutional/departmental manpower planning. all employee are rated on/ near the sane date in a Company.
because a more frequent of the objectives is possible.evaluation. 2. such as Rating by a committee of several superiors. analysis of data & records & discussion with the employee. The data that they gather are influenced by the criteria for evaluation & by the technique used for evaluation. However. Who should rate: These are several possibilities. TRADITIONAL METHODS: Individual evaluation methods: 31 . Self. Rating by the employees peers (co-workers). METHODS OF PERFORMANCE APPRAISAL: There are two types’ traditional methods and modern methods. Have raters gather data o employee performance: The raters collect information by observation. more &more organization shifts to evaluation: this is convenient especially in fast moving organization. Sometimes a combination of the above mentioned possibilities is also used.In many companies there is one evaluation in a year. Rating by the employees subordinates. but the most evaluation is the appraisal by the superior.
3 it’s the most common evaluation tools in use today. Disadvantage: 1. The method was developed to 32 . The scores indicate the worth of every individual. There are certain advantages in using methods Advantages: 1. without references to other person(s). GRAPHIC RATING SCALE: Is the oldest & still most used method of evaluation? In case the case the rater is presented with A set of traits & is asked to rate the employee on each them. use & permits a statistical tabulation of scores 2. It’s arbitrary & rating is generally subjective. Forced choice: Is technique when rater must choose from a set of descriptive statement about an employee. 2. It assumes that each characteristic is equally important for all jobs 3. The person whom is making the judgment can makes as fine discrimination of merit as he chooses. The person who is making the judgments is freed from direct “quantitative “terms in marketing his decision of merit on any quality 4.Individual evaluation methods are those techniques when the standards of performance are defined individually. It is easy to understand.
substitute graphic rating scales. 2. Usually. Feedback is provided about the incidence during performance review session. Advantages: Explanation will give specific information about the employee and can revel more about the supervisor. Disadvantages: 1. as graphic rating scales permits to evaluate all the employees high. Rater’s bias is easily introduced. Essay evaluation: In which the rater is asked to describe the strong & week aspects of the employee’s behavior by a supervisor. Critical incident method: Technique is a method according to which the rater maintains a log of behavioral incidents that represent either effective for each employee being rated the basis of this method is the principle that there are certain significant set in each employees behavior &performance which makes all the difference between success &failure on all jobs. Negative incidents are generally more noticeable than positive ones. Checklists &weighted checklists: 33 . the recording of the incident is the chore of the supervisors &may be put off &easily forgotten the feedback may be too much at one time &appear as a punishment etc. Contains subjective evaluation. but this method needs more time to use than the other techniques. The advantage of this method is that the results are less subjective. This method has significant limitations too. this method is used in combination with other methods.
Each employee is paired with every person to be compared with. if not. Paired Comparison Method: It’s used in case where there are several subordinates to be ranked. number of judgments becomes excessively large. the rater leaves it blank. the rater checks the item.A check list is a set of objectives of descriptive statements. If the rather believers that the employee possesses a trait listed. ● The relative position of each man is tested in terms of his numerical ranks. & results are indexed based on this number. Disadvantages: ● When number of group is large. Forced distribution method: 34 . The number of times that a person is chooses as the better employee is tallied. Advantages: ● Easy to use. The rater chooses as the better performing subordinate. A rating score from the checklist equals the number of checks. The method was further developed by giving weights (from excellent to poor) to several objectives. Advantages: ● It results are tabulated and a rank is assigned to each individual to he/she show stands in relation to others. Ranking methods: The case when the superior is asked to rank the subordinates based on some overall criterion.
Since assessment center are basically meant for evaluating the potential of candidates to be considered for promotion. Behavioral Observation Scales. less tense & more satisfied than in case using other methods. This rater is asked to rate the employees in some fixed distribution of categories.10%in high. 40% in average. developed by Latham &Associates. training or development. MODERN METHODS: Behaviorally anchored rating scales (BARS): This method was developed by smith & Kendall. 20% in low average. as it seems that they become more committed. Advantages: ● Attempts to correct raters tendency to give consistency high or low ratings. ● Overall objectively of the increases.It’s the method similar to grading on a curve. ● Rater cannot introduce bias or halo effect. Like BARS. Assessment center: In this individual from departments are brought to spend two or three days working on an individual or group observers rank the performance of each and every participant in order of merit. A BARS rating form usually contains 6 to 10 specifically defined performance dimensions. each with 5 to 6 critical incident anchors (both positive & negative). The BARS approach relies on the use of critical incidents to serve as anchor statements on a scale. The major difference is that the rater should give under BOS how often the rate has been observed engaged in the specific behaviors identified in BOS. such as 10% in low. Employee prefer the using of this method instead of others. the BOS use the critical incident technique to identify a series of behaviors that cover he domain of the job. 20%in above average. they offer an excellent means for 35 .
36 . By setting objective through participation or by assignment from a superior.conducting evaluation processes in an objective way all assesses get equal opportunity to show their talents and capabilities and secure promotion based on merit. which can be measured by labor productivity or value added by human resources. placement. Benefits of MBO: An MBO system provides the following benefits to the organizations 1) It establishes linkage between the performance of the individual & the organizations hence both more in the achievements of the same objective. selection induction. communicate and debate. ages and benefits etc. 2) It becomes easy to implement because those who carry out the plans also participate in setting up these plans 3) The communication chain between & among employees & or units are clearly established facilitating information sharing. control. while performing the job. the subordinate is provided with a course to follow & a target to shoot for. organize. recruitment. The major problem is not with the techniques but how they are used & by whom? The responsibility of the rater & the seriousness of the rater are much more critical than which method to choose. training development. Have Raters Evaluated Employees Performance Management by Objectives (MBO): MBO is more than just an evaluation program & process it is viewed as a philosophy of managerial practices a method by which managers and subordinates plan. Human Resource Accounting: Human resource accounting deals with the cost of and contribution of human resources to the organization cost of the employees includes costs of manpower planning. 4) It identifies performance deficiencies. employee contribution is the money value of employee service. Which evaluation technique to be used? An exact answer cannot be given.
Make decisions & file the evaluation: Currently being a decision maker. 37 . Action planning & goal setting for future. & listen & problem solving the using of which depends mainly of the experience level of the employee. Identification of key performance areas (KPA) & target setting through periodic discussions between each employee & their bosses. Identification of training needs. Self appraisals by appraise. There are three generally used approaches to these interview situations. Experts advise that the employee development & salary action discussions shouldn’t occur in the same interview. Discussions of problems encountered Agreement about potential performance improvement possibilities.Discuss the evaluation with the employee: The supervisor should hold an elevation interview with each subordinate in order to discuss his or her appraisal & to set objectives for the upcoming evaluation period. tell & sell. Key Components of Performance Appraisals: The components of performance appraisal are. the evaluator needs to be a really qualified person. Discussion on how current performance is in line with long term career goals e) Specific action plans for the coming year. Identification of qualities required for the present & future jobs. The performance evaluation discussions should include a) b) c) d) Review of overall progress. Performance analysis to identify factors that have facilitated & factors that have hindered performance. tell.
Self appraisal should start at end of the performance period just before performance review decision take place. Hence it’s desirable to have Periodic exercise in identifying performance areas for each person in relation to his role. experiencing growth through action. These categories of functions should be so defined that the performance of any employee can be assessed meaningfully. Identifying KPA’s and setting quantifiable targets where ever possible is only one way of planning once performance.appraisal should start with the appraise taking up his KPA’s & objective for the period that was over & reflecting about his achievements. Self – Appraisal: Self –appraisal has an important role to play in employee development. Key performance areas: KPA may be defined as the important or critical categories of function to be performed by a role incumbent. for any given period of time. they may not be able to get a complete picture. Final assessment by the supervising officer for administrative purposes. Key performance areas. over a given period of time. Such effort would include identifying possible direction of growth. performance analysis. performance rating & counseling are the most important components of a development oriented performance appraisal system. 38 . Even if they are supply to new incumbents of any job. The individual is not likely to learn & develop himself he is interested in his own learning & development and makes conscious efforts to develop. Normally. performance analysis. Self –appraisal is not meant to be ritualistic form filling exercise. It is a significant initial step for performance development. self appraisal. KPA’s can be obtain from job descriptions maintained by most organizations are very broad & sketchy. Self. review & reflection to consciously monitor the growth. KPA’s are broad categories of function to be performed by any employee in relation to his job.
Objective of counseling: Counseling aims at development of the counselee. his strengths & weaknesses. Helping him to realize his potential as a manager. To assess truly the performance of the subordinates in his present job providing guidance & counseling to him to improve his performance. The system of CR has two principal objectives & the reporting officer has a very clear perspective of these objectives. It focuses on the entire performance during a particular period rather than on specific problem. 39 . To assess his potential & to prepare him through appropriate feedback guidance for higher responsibilities Success of the reporting system depends on the following principles: Absolute objectivity of the assessor (s). It’s based on the relation between two persons. Counseling is a dyadic process. Helping him understand himself. It involves the following: Encouraging him to set goals for the future improvement. Helping him understand himself. his strengths & weakness. in order to help him in his problem. in achieving various objectives. a manager who is providing help or who is counseling & an employee to whom such help is given or who is a counselee. Helping him to develop various action plans for further improvement. It focuses on the analysis of the performance on the job and identification of training needs for further improvement. Helping him to review in a non threatening way.Performance counseling: Performance counseling can be defined as the help provided by a manager to his subordinates in analyzing their performance and other job behaviors in order to increase their job effectiveness.
Two way communication between the reporter & the reporting officer. Also. 40 . A true and objective assessment of the related performance & fitness to take up higher responsibilities. which can be achieved only through joint effort by both of them. The superior officer has to give subordinate a clear understanding of the task to be performed & the subordinates required to the best of his capacity to the quantitative & qualitative achievements of the given tasks making optimum use of the resources available. Subsequent follow –up action. Should be aimed at improving the performance of the employees. both the superior & his subordinate are aware of the ultimate goal of their organization.
Knowledge of job. Development of subordinates. Creativity and accuracy. Delegating. Public relation. Acceptance of responsibility.Factors influencing performance of an employee: Intelligence. Attitude. Data management. Contribution to team work. Risk-Taking. Quality of work and quality of output. Integrity and dependability. 41 . Initiative and original thinking. Clarity of objectives.
Rater problem. and reward.If the criteria of evaluation are poor. Systematic efforts to tone up performance results. Opposition to evaluation. 2.AVANTAGES OF PERFORMANCE APPRAISAL: Performance appraisal system can be put to several uses converting the entire spectrum of human resource function in the organization. the technique used cumbersome.Which arises due to the perceptual difference in the meaning of the words use to evaluate employees? 42 . Diagnosing individual and organizational problem. promotion. Input for an array of professional decision such as placement. transfer. corrective actions and appropriate feedback. Potential problems while conducting performance appraisal: 1.The rater problem such as: Problem with standard of evaluation. The most common fear is that of rater subjectivity. the design is blamed & the evaluation is worth nothing. or the system is more from than substance. System design & operating problem. To identify individuals with high potential. The uses which performance appraisal serves are: To take decision on termination.most employees are wary of performance evaluation.
In order to avoid this perception.It occurs when the rater assigns on several dimensions of performed based on an overall. Central tendency error.The most common problem is that employees may feel that the evaluations are unfair.The tendency of the raters to assign average ratings for all the dimensions. general impression of the rate. Time or event error.Raters forget more about past behavior than behavior. Employee’s problem with performance evaluation. The Halo Effect. The self evaluation can be good method in achieving this aim.The tendency to rate the preferred employees higher & those not preferred lower. it should be presented how difficult is the evaluation of employees. Personal Bias Error. 43 .
Sampling used in current survey: This method is called as chunk sampling.SAMPLING: Sampling: Sampling may be defined as the selection of some part of an aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made. In other words. These are some times called accidental samples because those entering in to the sample enter by accident. A sample from obtained from readily available list. A chunk is a fraction of one population taken for investigation because of its convenient availability. such as telephone directories or automobile registrations or credit card members is a convenience sample. they just happen to be a right place and at the right time of data collection. it is the process of obtaining information about an entire population only a part of it. 44 .
90 80 70 60 50 40 30 20 10 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr DATA ANALYSIS AND 45 .
2. Are you aware about the organization performance appraisal system? a) YES OPINION YES NO TOTAL b) NO NO. OF RESPONDENTS 50 0 50 PERCENTAGE 100 0 100 YES NO From the above it is evident that 100% of the employees feel that performance appraisal is quit essential for any organization. Do you think that performance appraisal is essential? 46 .INTERPRETATION 1.
a) YES b) NO OPINION YES NO TOTAL NO.OF RESPONDENTS 48 2 50 PERCENTAGE 96 4 100 YES NO 47 .
where as 16% of 48 .From the above data it is evident that 96% of the respondents feel that performance appraisal is very essential in the organization. where as 45 employees feel it is not essential in organization.OF RESPONDENT 42 8 50 PERCENTAGE 84 16 100 YES NO From the above data it shows that 84% of employees feel that organization facilitate growth & learning due to performance appraisal. 3. Does appraisal system of your organization facilities career growth & learning? a) YES OPINION YES NO TOTAL b) NO NO.
employees feel that organization does not provides growth & learning of employees. Performance appraisal system really assesses the quality of an employee. Do you agree? a) YES b) NO 49 . OPINION YES NO TOTAL NO.OF RESPONDENTS 46 4 50 PERCENTAGE 92 8 100 4.
where as 85 feel that it does not assesses the quality of an employee. 5.YES NO From the above data it is evident that 92% of the employees feel that the performance appraisal system really assesses the quality of an employee. Periodicity of performance appraisal should be on a) Quarterly basis c) Annual basis b) Half-yearly basis 50 .
6.OF RESPONNDENTS 8 12 30 50 PERCENTAGE 16 24 60 100 A B C From the above data it is evident that 60%of the employees feel that performance appraisal should be done on annual basis & 24% of the employees feel should be in done on half yearly basis 165 of the employees feel should be done in quarterly basis.OPINION A B C TOTAL NO.OF RESPONDENTS PERCENTAGE 51 . The present performance appraisal of your organization distinguishes the performers & non performers? a) Strongly agree c) Disagree OPINION b) Agree d) Strongly disagree NO.
OF RESPONDENTS 48 PERCENTAGE 96 52 . 7. where as 105 strongly agree and 16% disagree doesn’t distinguishes performers & non-performers.A B C D TOTAL 5 37 8 0 50 10 74 16 0 100 A B C D From the above data it is evident that 74% of the employees ‘agree’ that performance appraisal system of the organization distinguishes performs & non performers. The periodical performance appraisal of employee is required for maintaining efficiencu of individual 7 organization? a) YES OPINION YES b) NO NO.
NO TOTAL 2 50 4 100 YES NO From the above it shows that 96% of the employees feel that periodic performance appraisal of the employee is required for maintaining efficiency of individual and organization and above 4% of the employees feel that it is not required to maintained. 8. Are you aware of the basis or attributes on which your performance is appraised? a) YES b) NO 53 .
OF RESPONDENTS 41 9 50 PERCENTAGE 82 16 100 YES NO From them above data it shows that 82% of the employees are aware on which their performance is appraised but 16% of the respondents feel that they are not aware of the basis on which their performance is appraised. Performance appraisal is based upon a) Seniority influence b) Performance d) Both a & b c) Recommendations & Trade Union 54 .OPINION YES NO TOTAL NO. 9.
Performance appraisal is useful to the contributor to encourage people to perform better on their jobs? a) YES b) NO 55 .OF RESPONDENTS 2 27 3 18 50 PERCENTAGE 4 54 6 36 100 A B C D From the above data it shows that 54% of the employees feel that performance appraisal in railways is based upon performance 36% feel that it based on both performance and recommendation 7 trade union. 10.OPINION A B C D TOTAL NO.
The appraisal system is helping each employee to discover his/her potential & make their short comings? a) Agree b) Disagree c) Strongly Agree c) Strongly Disagree 56 . but 8% of the employees feel that it is not a contributor for job.OPINION YES NO TOTAL NO. 11.OF RESPONDENTS 46 4 50 PERCENTAGE 92 8 100 YES NO From the above data it shows that 92%of the employees feel that performance appraisal is contributor to encourage better job.
leadership qualities & growth? a) Agree b) Disagree c) Strongly Agree d) Strongly Disagree 57 . communication skill. 12.OPINION A B C D TOTAL NO.OF RESPONDENTS 38 6 5 1 50 PERCENTAGE 76 12 10 2 100 A B C D From the above data it shows that 76% of the employees feel that appraisal system discovers potential and make their short comings and 125 employees feel that it does not discover potential. discipline. The present performance appraisal of your organization assesses individual behavior. integration.
OPINION A C C D TOTAL
NO.OF RESPONDENTS 39 5 4 2 50
PERCENTAGE 78 19 8 4 100
A B C D
From the above data it shows that 78% of the employees agrees with the above statement and 10% disagree.
13. How do you want tour performance to be communicated to you? a) d) Written Form No Need NO.OF RESPONDENTS PERCENTAGE b) Oral Form c) Open Communication
A B C D TOTAL
30 10 4 6 50
60 20 8 12 100
A B C D
From the above data it is evident that most of the employees feel that their performance should be communicated to them in a written form.
14. What kind of counseling should occur in an organization? a) Formal OIPINION YES NO b) Informal NO.OF RESPONDENTS 29 21 PERCENTAGE 58 42
From the above data it’s evident that 58% feel of the employees feel that counseling in an organization should be of formal kind and 42% of employees feel counseling should of informal kind.
15. According to you, Counseling is a a) c) Formality b) Identifies Strength & Weakness of the employee
To know the areas of need for development NO.OF RESPONDENTS 12 PERCENTAGE 24
OF RESPONDENTS PERCENTAGE b) Sometimes c) Rarely OPINION 61 .B C TOTAL 10 28 50 20 56 100 A B C From the above data it’s evident that 56% of the employees feel that counseling is used to know the areas of development and 245 feel that it is just a formality and 20% feel that it identifies the strength & weakness of the employees. How often did you speak. 16. or discuss about your performance with your superiors? a) d) Frequently Never NO.
A B C D TOTAL 16 19 9 6 50 32 38 18 12 100 a b c d From the above data it’s evident that 38% of the employees said that they sometimes and 32% frequently speak with their superiors about performance. Training & development programs improve the quality of the employees? a) d) Agree b) Disagree c) Strongly agree Strongly disagree NO. 17.OF RESPONDENTS 25 PERCENTAGE 50 OPINION A 62 .
Has your performance increased as a result of performance ap[praisal system.B C D TOTAL 0 25 0 50 0 50 0 100 Agree Disagree Strongly Agree Strongly Disagree From the above data it’s evident that 50% of the employees are strongly agree and 50% agree that training & development the quality of the employees in the organization.OF RESPONDENTS 16 32 PERCENTAGE 32 64 63 .? a) d) To a large extent Not at all b) Moderate extent c) Less extent OPINION A B NO. 18.
and transfer. The appraisal system facilitates growth & learning of employees and it is used to distinguish performers.C D TOTAL 1 1 50 2 2 100 Large extent Moderate extent Less extent Not at all From the above data it’s evident that 64% of the employees are feel that to moderate extent and 32% to large extent think that performance increased as a result of performance appraisal system. to determine organization needs. promotions. 64 . and to basis for pay increase. FINDINGS AND SUGGESTION: Findings: It has been found that most of the employees think that the performance appraisal is essential and they think it is used as a tool to improve performance.
The employees that their promotions match their contributions and new performance appraisal technique should be adopted in the organization and the short comings are informed to them. The performance appraisal should not be assessed by biased mind and 65 . Organization provides training & development programs to overcome the short comings identified in performance appraisal. New performance appraisal techniques such as 360 degree performance appraisal system should be used. The performance appraisal supports to experiment with new ideas as basis for promotion. Some employees that they do not know which basis their performance is appraised and most of the employees feel that it help them discover their potential and enables to know their short coming. Promotion should be based on performance rather than seniority or any other factors. The existing appraisal system helps the management to identify potentiality of employees as well as useful for maintaining efficiency of the individual & organization. The short coming of employees should be informed to them after performance appraisal. Performance appraisal should be appraised by granting awards/ merit certificate. Suggestion: The performance appraisal system should facilitate career growth & learning of employees.
personal grudge. Gauge the potential for performance of each employee. On what basis performance appraisal should be informed to the employees. The feedback to performance appraisal shouldn’t only be given to those employees who are rated ‘below average’ but also to all the employees as is would motivate the employees to perform even better. The extent of communication with the top & middle level management. Feedback should not be given to the employees more frequently. QUESTIONNAIRE FOR A STUDY PERFORMANCE APPRAISAL SYSTEM. Do you think that Performance Appraisal is essential? a) Yes b) No 66 . 1. Are you aware about the organization Performance Appraisal? a) Yes b) No ON 2.
Periodicity of Performance Appraisal should be on a) Quarterly c) Annual basis b) Half-yearly basis 6. Leadership 67 .3. The present Performance Appraisal of your organization distinguishes the performer & non performers? a) Strongly agree c) Disagree b) Agree d) Strongly disagree 7. Performance Appraisal System really assesses the quality of an employee. Does Appraisal System of your organization facilities career Growth & Learning of employees? 4. Do you agree? a) Yes b) No 5. Discipline. The Periodical Performance Appraisal of employee is required for maintaining efficiency of individual & organization? a) Yes b) No 8. The Performance Appraisal of your organization assesses Individual Behavior. integration. Performance Appraisal in Railways is based upon a) c) Seniority b) Performance d) Both a & b Recommendation & Trade Union influence 9. Communication Skill.
Himalaya Publishing House. Does the organization provide training & development programs? a) Yes b) No 12.Qualities & Growth? a) d) Agree Strongly Disagree b) Disagree c) Strongly Agree 10.V Gankar. “CH. Mamoria and S. Article on Performance Management. Keith. Paramananda”. “Human Behavior at Work”. 68 . Subba Rao. Hope do you want your performance to be communicated to you? a) c) Written Form b) Oral From No Need Open Communication d) 11.P. Hill International Book co. 1989.C. Essential of HRM and Industrial Relations.B. Singapore. HRM. Training & Development programs improve the quality of the employees? a) Yes b) No BIBILOGRAPHY: Davis.
Robert Bascal “Performance Management” to help Companies. by “Gary Cokins”. “ABC Manager’s Primer”. Improve their Performance Management Systems. Activity Based Cost Management”. “An Executive Guide”. 69 .
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