A Study of Performance Appraisal System: A Project Report ON

A
PROJECT REPORT
ON
A STUDY OF
PERFORMANCE APPRAISAL SYSTEM
OF
HINDUSTAN AERONAUTICS LIMITED

AIRCRAFT DIVISION, NASIK
SUBMITTED TO
UNIVERSITY OF PUNE
BY
S.R.MOUSIMI NAIDU
MBA – II
(2012-2013)
MET’s BHUJBAL KNOWLWDGE CITY INSTITUTE OF MANAGEMENT,
NASHIK, MAHARASHTRA, INDIA - 422003

ACKNOWLEDGEMENT
No project of this kind can be possible without the help and significant dialogue with a large
number of managers and faculty members.
I am grateful to my research guide, Prof. ZAFAR KHAN for his guidance throughout the
project.
I am grateful to Mr.Dilip Sarote, (Chief manager-HR) for his valuable guidance throughout
the project.
I am grateful thank Mr. Shankar Narayan, (Dy.General Manager-Training & Development

Institute) for his valuable guidance throughout the project.
Several thoughtful managers gave me their perspective and generous support. I would like to
place on record my sincere gratitude to Smt.Manisha Vaidya, (Sr. Manager-HR), I got
benefited from interaction with all the managers and I would like to thank them all from my
bottom of my heart for their help and support.
Finally, a note of appreciation to every person who has played a part in the successful
completion of the project.
MOUSIMI NAIDU
DECLARATION
I hereby declare that the information, Photographs, Data etc. gathered during the training
period (project period) shall be strictly utilized only for the purpose of Project Report work.
This Project report is a part of the partial fulfillment of Degree in Master of Business
Administration (MBA–II) at MET INSTITUTE OF MANAGEMENT for the Session: 2012-
13 under University of Pune.
I honestly state that the intention of collection of the information in my project

report is solely for the purpose of academic study, not for commercial purpose or any means.
My sole and sincere motive is to learn the procedure practically and express my views by
preparing Project Report.
Thus the sole and honest objective for collecting the information is only for
the academic purpose and I assure that collected information will be restricted only for
Project Report.
MOUSIMI NAIDU
PREFACE
Managing human resources in today’s dynamic environment is becoming more and more
complex as well as important. Recognition of people as a valuable resource in the
organization has led to increased trends in employee maintenance, job security, etc.
This research project deals with “A Study Of Performance Appraisal System carried out
At Hindustan Aeronautics Ltd., Ojhar, Nasik”. In this report, the effectiveness of
performance appraisal system as it is carried out in the company has been studied &
evaluated.
The first section of the report deals with a detailed company profile. It includes the
company’s history: its activities and operations, organizational structure, etc. This section
attempts to give detailed information about the company and the nature of its functioning.
The second section deals with the concept of performance appraisal. This section provides a
brief conceptual explanation to performance appraisal. It contains the definition, process and
significance of performance appraisal.
In the third section, the research study conducted to evaluate the process of performance
appraisal at Hindustan Aeronautics Ltd., Ojhar, Nasik has been included. This section also
contains the researcher’s findings, conclusions, suggestions and feedback.
The fourth and final section of this report consists of extra information that is related to the
main contents of the report. These annexure include some graphs and diagrams relating to the
company, graphs relating to the research study and important documents upon which the
project is based.
INDEX
Sr.No. Particular
Title Page
Certificate of the Institute
Certificate of The Organization
Acknowledgement
Index
List of Table
List of Graphs
Preface
1 Chapter 1 : Introduction of the Subject

2 Chapter 2 : Profile of the Organization
3 Chapter 3: Research Methodology
Objective of Project,
Research Methodology,
Scope & Limitation of Project
4 Chapter 4 :Data Presentation & Data Collection

5 Chapter 5: Data Analysis and Interpretation
6 Chapter 6: Findings & Conclusion
Appendices :
a. Questionnaire
b. Glossary of Terms
c. Bibliography/References
1.1 PERFORMANCE APPRAISAL
Introduction:
“Differentiation” has taken new dimensions in the realm of business. The very
term spells the extent of success of the organization. It is what the organization possesses as
different from the competition and how these recourses are utilized that determines how fast
and far the organization moves. This “differences factor” is the Human capital of the
company. The human capital is, arguably, the differentiating factor of any organization
because all other resource can be replicated by other organization. But human resource is an
organization’s greatest asset because ‘talent’ through replicable, takes time to master. And it
is this first mover’s advantage that companies take advantage of. “People are our most
valuable asset” is a cliché, which no member of any senior management team would disagree
with. Yet, the reality for many organizations is that their people remain undervalued, under
trained and underutilized.
Of all the factors of production, the Human resource forms the crux of the
organization-conceiving ideas and giving them shape and life. This factor is of paramount
importance because of its innate ability to produce further resources of infinite value, by its
abilities. Unlike other resources the human resources, blessed with emotions of satisfaction,
gratitude, resentment etc., is unpredictable in behavior. It therefore becomes necessary to
provide a congenial work environment and other resources, which facilitate performance, the
core of these being the compensation and benefits accorded to him, which provides him a
sense of security and satisfaction.
Performance Appraisal is the process of assessing the performance and progress of an
employee or a group of employees on a given job and his/ their potential for future
development. It consists of a formal procedure to evaluate personalities, contributions and
potentials of employees. It helps the organization in deciding an employee’s promotion,
transfer, incentives, and pay increase.
Literature Survey
The value of effective performance appraisal systems, and in particular
360 Degree Feedback, to the overall well-being of all organizations is
being realized more and more by business leaders.
Multinationals like IBM, HP, L&T, Caterpillar, ABB etc. and Indian companies like
Infosys, Wipro, TCS are also following the same trend and they are aligning themselves with
the latest as well as effective method of performance appraisal which promises to whip out
the biases in the appraisal system if implemented properly and also promises to build a
knowledge based work culture that will work unperturbed even if the crucial member/key
players of the company resigns. This method approaches to build up a work environment that
shifts its focus from individual development to team development. Employees are encouraged
to become good team members not to become charismatic leaders.
A classic example of this lies in the fact when the CEO of hp Ms. Flourentina
resigned the work culture or the business of the company was not hampered in the slightest
fashion. The work flow was smooth and in the ground level officers were not bothered. Back
in India when Infosys Mentor Mr. Murthy decided to resign there was no uproar in the IT
giant of India and now the company currently runs smoothly under the able leadership of Mr.
Nilkeni.
Thus this system provides a unique platform for building up of the employees from the very
day they walk in the premises of the company.
Currently our very own HAL is undertaking efforts to implement Lean Initiative across all
the divisions. So the same system would eventually also prevail in our company too and thus
making the path to take India a step ahead in the business of aviation.
Certainly the hopes are high one day the HAL employees also held up their head high and
proudly announce that “I am from HAL”; like the way the Japanese does by declaring they
are from Toyota or Mitsubishi. A culture, where not the state, to which the person belongs, is
not the thing to take pride in but the company for which he/she is working.
So in order to understand this culture we started to look at various websites offering insights
about the 360 degree performance appraisal system and found a lot and
started to realize that a new culture is emerging that may eventually
replace the existing system of performance appraisal. In order to get the
feel of the same we started researching and Google helped in a big way.
The list of the websites, which we surfed and which gave us a lot of
inputs are given in the annexure.
Definition:
According to Prof. E.B.Flippo Performance Appraisal defined by,” It is a

systematic, periodic and so far as humanity possible, an impartial rating of an employee’s
excellence in matters pertaining to his present job and to his potentials for a better job.”
Performance Appraisal is the periodic and systematic assessment of the

Employees in terms of the performance,aptitude,capabilities and other qualities which
are necessary.It is a systematic effort on the part of management and has a linkage with
induction,selection,training and provides data to determine promotions,transfers,e.t.c.
CHARACTERISTICS
 Performance Appraisal is a process.
 It is the systematic examination of the strengths and weakness of an employee
in terms of his job.
 It is scientific and objective study. Formal procedures are used in the study.
 It is an ongoing and continuous process wherein the evaluations are arranged
periodically according to a definite plan.
 The main purpose of Performance Appraisal is to secure information
necessary for making objective and correct decision an employee
PROCESS
The process of performance appraisal involves:
 Establishing performance standards
 Communicating the Standards
 Measuring Performance
 Comparing the actual with the standards
 Discussing the appraisal
 Decision making
1. ESTABLISHING PERFORMANCE STANDARDS
The first step in the process of performance appraisal is the setting

up of the standards, which will be used to as the base to compare the actual
performance of the employees. This step requires setting the criteria to
judge the performance of the employees as successful or unsuccessful and
the degrees of their contribution to the organizational goal and objectives. The standards set
should be clear, easily understandable and in measurable terms. In case the performance of
the employee cannot be measured, great care should be taken to describe the standards.
2. COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards to

all the employees of the organization. The employees should be informed and the standards
should be clearly explained to them. This will help them to understand their roles and to
know what exactly is expected from them. The standards should also be communicated to the
appraisers or the evaluators and if required, the standards can also be modified at this stage
itself according to the relevant feedback from the employees or the evaluators.
3. MEASURING THE ACTUAL PERFORMANCE
The most difficult part of the Performance appraisal process is measuring the actual
performance of the employees, that is, the work done by the employees during the specified
period of time. It is a continuous process, which involves monitoring the performance
throughout the year. This stage requires the careful selection of the appropriate techniques of
measurement, taking care that personal bias does not affect the outcome of the process and
providing assistance rather than interfering in an employees work.
4. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE
The actual performance is compared with the desired or the standard performance.
The comparison tells the deviations in the performance of the employees from the standards
set. The result can show the actual performance being more than the desired performance or,
the actual performance being less than the desired performance depicting a negative deviation
in the organizational performance. This process is very important.
5. DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on one-
to-one basis. The focus of this discussion is on communication and listening. The results, the
problems and the possible solutions are discussed with the aim of problem solving and
reaching consensus. The feedback should be given with a positive attitude as this can have an
effect on the employees’ future performance. The purpose of the meeting should be to solve
the problems faced and motivate the employees to perform better.
6. DECISION MAKING
The last step of the process is to take decisions, which can be taken either to improve
the performance of the employees, take the required corrective actions, or the related HR
decisions like rewards, promotions, demotions, transfers etc.
GOAL OF THE PERFORMANCE APPRAISAL SYSTEM:
 Job relatedness
 Highlighting the critical areas instrumental for job success
 Clear understanding by Appraiser & Appraisee
 Confronting to per-decided standards
 Identifying and Utilizing Dependable Measures
LIMITATIONS
 Errors in Rating
 Lack of reliability
 Negative approach
 Multiple objectives
 Lack of knowledge
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.
FEATURES OF PERFORMANCE APPRAISAL:-
 Performance Appraisal is not only a technique or method but also is a

systematic and continuous Process.
 In Performance Appraisal, periodic and systematic assessment of employee’s

performance is done.
 This technique is used by the management to make fair and impartial analysis
of the value of employees.
 In the process of performance appraisal, efforts are made to bring an

uniformity while appraising the job performance of the employees working in
an organization.
With out assessing the performance of employees the organization can not identify its most
potential human resources. The employees can be rewarded for the achievement of goals
only by using this function of performance appraisal. The employees in the organization
who are under performing can also be improved by using performance appraisal. That is
why the study on performance appraisal is selected for conducting research.
PURPOSE OF PERFORMANCE APPRAISAL:
 To evaluate an employee according to some standards.
 Find out the strength and weakness inside the employee.
 To provide training or reward according the appraisal.
 For continuous improvement, mentoring so that increased total output of an
employee.
FIG.: METHODS OF PERFORMANCE APPRAISAL
METHODS OF PERFORMANCE APPRAISAL
Traditional Methods Modern Methods
Essay Appraisal
Field Review Management

By Objectives
Forced-Choice Rating
Assessment
Graphic Rating Scale centre
Ranking Methods 360◦appraisal

system
Traditional Methods:
(i) Essay Methods:
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.
(ii) 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.
(iii) 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
.
(iv) 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.
(v) 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 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, 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.
Modern Methods:
(i) 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.
Define
Organizational
goals
Performance Define
Departmental
appraisal
goals
Define
Provide
Employee
Feedback
Objective goals
Continuous Definr Expected

Monitoring Result
(ii) Assessment centers

In any placement decision and even in promotion decisions, some prediction of future
performance is necessary. Assessment Center involves a battery of tests facilitating the
wholesome evaluation of an individual. It is a multi-rater system in which multiple assessors
evaluate an individual based on various tests. At the end of the tests, the assessors discuss
amongst themselves the performance of the individual and arrive at a consensus as his
potential.
(iii) 360o Feedback

Many firms have expanded the idea of upward feedback into what is called the 360-
degree feedback. The feedback is generally used for training and development, rather than for
pay increases. Most 360 Degree Feedback systems contain several common features.
Appropriate parties i.e. 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 immediate manager up in the
organizational hierarchy, but also by peers and subordinates. Appropriates customer ratings 6
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
Fig.1. Concept of 360-degree performance appraisal
Superior
Internal
External customer
customer
Self
Subordinate
Peer
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."
Benefits of Performance Appraisals
1. Measures an employee’s performance.

2. Helps in clarifying, defining, redefining priorities and objectives.
3. Motivates the employee through achievement and feedback.
4. Facilitates assessment and agreement of training needs.
5. Helps in identification of personal strengths and weaknesses.
6. Plays an important role in Personal career and succession planning.
7. Clarifies team roles and facilitates team building.
8. Plays major role in organizational training needs assessment and analysis.
9. Improves understanding and relationship between the employee and the reporting
manager and also helps in resolving confusions and misunderstandings.
10. Plays an important tool for communicating the organization’s philosophies, values,
aims, strategies, priorities, etc among its employees.
11. Helps in counseling and feedback.
Rating Errors in Performance Appraisals:
Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as
'rating errors'. These errors can seriously affect assessment results. Some of the most common
rating errors are: -
 Leniency or severity:
Leniency or severity on the part of the rater makes the assessment subjective. Subjective
assessment defeats the very purpose of performance appraisal. Ratings are lenient for
the following reasons:
a) The rater may feel that anyone under his or her jurisdiction who is rated
unfavorably will reflect poorly on his or her own worthiness.
b) He/ She may feel that a derogatory rating will be revealed to the rate to detriment
the relations between the rater and the rate.
c) He/ She may rate leniently in order to win promotions for the subordinates and
therefore, indirectly increase his/her hold over him.
 Central tendency:
This occurs when employees are incorrectly rated near the average or middle of the
scale. The attitude of the rater is to play safe. This safe playing attitude stems from
certain doubts and anxieties, which the raters have been assessing the rates.
 Halo error:
A halo error takes place when one aspect of an individual's performance influences the
evaluation of the entire performance of the individual. The halo error occurs when an
employee who works late constantly might be rated high on productivity and quality of
output as well as on motivation. Similarly, an attractive or popular personality might be
given a high overall rating. Rating employees separately on each
of the performance measures and encouraging raters to guard
against the halo effect are the two ways to reduce the halo effect.
 Rater effect:
This includes favoritism, stereotyping, and hostility. Extensively high or low score are
given only to certain individuals or groups based on the rater's attitude towards them
and not on actual outcomes or behaviors; sex, age, race and friendship biases are
examples of this type of error.
 Primacy and Regency effects:
The rater's rating is heavily influenced either by behavior exhibited by the ratee during
his early stage of the review period (primacy) or by the outcomes, or behavior exhibited
by the ratee near the end of the review period (regency). For example, if a salesperson
captures an important contract/sale just before the completion of the appraisal, the
timing of the incident may inflate his or her standing, even though the overall
performance of the sales person may not have been encouraging. One way of guarding
against such an error is to ask the rater to consider the composite performance of the
rate and not to be influenced by one incident or an achievement.
 Performance dimension order:
Two or more dimensions on a performance instrument follow each other and both
describe or rotate to a similar quality. The rater rates the first dimensions accurately and
then rates the second dimension to the first because of the proximity. If the dimensions
had been arranged in a significantly different order, the ratings might have been
different.
 Spillover effect: -
This refers to allow past performance appraisal rating to unjustifiably influence current
ratings. Past ratings, good or bad, result in similar rating for current period although the
demonstrated behavior does not deserve the rating, good or bad.
Sukoi-30 MK1
HAL GLIMPSES:
FOUNDER:
Late seth Walchand Hirachand
CHAIRMAN:
Shri R.K Tyagi
MANAGING DIRECTOR:
Shri P V Deshmukh
HR EXECUTIVE DIRECTOR:
Shri. T Sudhakar Rao
OUR MISSION
“To become a globally competitive aerospace industry while working

as an instrument for achieving self-reliance in design, manufacture and maintenance of
aerospace defence equipment and diversifying to related areas, managing the business on
commercial lines in a climate of growing professional competence ".
OUR VALUES
 CUSTOMER SATISFACTION
We are dedicated to building a relationship with our customers where we

become partners in fulfilling their mission. We strive to understand our
customers ' needs and to deliver products and services that fulfill and exceed all
their requirements.
 COMMITMENT TO TOTAL QUALITY
We are committed to continuous improvement of all our activities. We will

supply products and services that conform to highest standards of design,
manufacture, reliability, maintainability and fitness for use as desired by our
customers.
 COST AND TIME CONSCIOUSNESS
We believe that our success depends on our ability to continually reduce the
cost and shorten the delivery period of our products and services. We will
achieve this by eliminating waste in all activities and continuously improving
all processes in every area of our work.
 INNOVATION AND CREATIVITY
We believe in striving for improvement in every activity involved in our

business by pursuing and encouraging risk-taking, experimentation and learning
at all levels within the company with a view to achieving excellence and
competitiveness
 TRUST AND TEAM SPIRIT
We believe in achieving harmony in work life through

mutual trust, transparency, co-operation, and a sense of
belonging. We will strive for building empowered teams to work towards
achieving organisational goals
 RESPECT FOR THE INDIVIDUAL
We value our people. We will treat each other with dignity and respect and
strive for individual growth and realisation of everyone's full potential.
 INTEGRITY:
We believe in a commitment to be honest, trustworthy and fair in all our

dealings. We commit to be loyal and devoted to our organisation. We will
practise self discipline and own responsibility for our actions. We will comply
with all requirements so as to ensure that our organisation is always worthy of
trust.
HISTORY OF THE COMPANY
Hindustan Aeronautics Limited (HAL) came into existence on 1st October 1964. The
Company was formed by the merger of Hindustan Aircraft Limited with Aeronautics India
Limited and Aircraft Manufacturing Depot, Kanpur.
The Company traces its roots to the pioneering efforts of an industrialist with
extraordinary vision, the late Seth Walchand Hirachand, who set up Hindustan Aircraft
Limited at Bangalore in association with the erstwhile princely State of Mysore in December
1940. The Government of India became a shareholder in March 1941 and took over the
Management in 1942.
Today, HAL has 19 Production Units and 9 Research and
Design Centres in 7 locations in India. The Company has an
impressive product track record - 12 types of aircraft manufactured
with in Hindustan Aeronautics Limited (HAL) came into existence on
1st October 1964. The Company was formed by the merger of Hindustan Aircraft Limited
with Aeronautics India Limited and Aircraft Manufacturing Depot, Kanpur.
The Company traces its roots to the pioneering efforts of an industrialist with
extraordinary vision, the late Seth Walchand Hirachand, who set up Hindustan Aircraft
Limited at Bangalore in association with the erstwhile princely State of Mysore in December
1940-house R & D and 14 types produced under license. HAL has manufactured over 3550
aircraft , 3600 engines and overhauled over 8150 aircraft and 27300 engines.
HAL has been successful in numerous R & D programs developed for both Defence
and Civil Aviation sectors. HAL has made substantial progress in its current projects:
 Dhruv, which is Advanced Light Helicopter (ALH)

 Tejas - Light Combat Aircraft (LCA)
 Intermediate Jet Trainer (IJT)
 Various military and civil upgrades.
Dhruv was delivered to the Indian Army, Navy, Air Force and the Coast Guard in March
2002, in the very first year of its production, a unique achievement.
Space Programs
HAL has played a significant role for India's space programs by participating in the
Manufacture of structures for Satellite Launch Vehicles like:
 PSLV (Polar Satellite Launch Vehicle)

 GSLV (Geo-synchronous Satellite Launch Vehicle)
 IRS (Indian Remote Satellite)
 INSAT (Indian National Satellite)
Joint Ventures
HAL has formed the following Joint Ventures (JVs):

 BAeHAL Software Limited
 Indo-Russian Aviation Limited (IRAL)
 Snecma HAL Aerospace Pvt Ltd
 SAMTEL HAL Display System Limited
 HALBIT Avionics Pvt Ltd
 HAL-Edgewood Technologies Pvt Ltd
 INFOTECH HAL Ltd
Apart from these seven, other major diversification projects are Industrial Marine Gas
Turbine and Airport Services. Several Co-production and Joint Ventures with international
participation are under consideration.
HAL's supplies / services are mainly to Indian Defence Services, Coast Guards and
Border Security Forces. Transport Aircraft and Helicopters have also been supplied to
Airlines as well as State Governments of India. The Company has also achieved a foothold in
export in more than 30 countries, having demonstrated its quality and price competitiveness.\
HAL has won several International & National Awards for achievements in R&D,
Technology, Managerial Performance, Exports, Energy Conservation, Quality and
Fulfillment of Social Responsibilities.
HAL was awarded the “INTERNATIONAL GOLD MEDAL AWARD” for Corporate
Achievement in Quality and Efficiency at the International Summit (Global Rating Leaders
2003), London, UK by M/s Global Rating, UK in conjunction with the International.
HAL was presented the International - “ARCH OF EUROPE” Award in Gold Category in
recognition for its commitment to Quality, Leadership, Technology and Innovation
.
At the National level, HAL won the "GOLD TROPHY" for excellence in Public Sector
Management, instituted by the Standing Conference of Public Enterprises (SCOPE).
The Company scaled new heights in the financial year 2006-07 with a turnover
of Rs.7, 783.61 Crores.
COMPANY OVERVIEW:
 HAL is a NAVRATNA public sector undertaking fully owned by the

government of India.
 19 production units, 10 R&D centres, 33000 employees, ISO-9001, AS-9100, NADCAP
certifications.
 Company Turnover is RS.14,001cr 2011-12.
 PBT: 3200cr.
 36th rank among Global Aerospace Companies.
 The company is managed by Board of Directors which has a full time chairman and
Board is autonomous.
 Appointments of chairman and directors are made by government of India through PESB
(public enterprise selection board).
 There are three division of HAL Nasik :
 AMD(Aircraft Manufacturing Division).
 AOD(Aircraft Overhaul Division).
 AURDC(Aircraft Upgradation Research and DevelopmentCenter
So far the Division has manufactured more than 700 aircraft and overhaul more than 1300
aircraft. With the expertise gained over the last 3 decades, the division has already made its
presence felt in the global market and is fully geared up for meeting any challenging task in
the domestic and the international market.
CORE BUSINESS OF HAL:
 Design and development of fixed and rotary wing aircraft, avionics and
accessories.
 Manufacture,maintainence,repair amd overhaul of:-
 Fighters,transport and trainer aircraft helicopters.
 Aeroengines.
 Avionics.
 Accessories.
 Ground support equipment.
 Aircraft mid life upgrade programmes.
CURRENT ACTIVITIES IN HAL:
MIG 21(Interceptor).
MIG 27(Bomber).
Su -30 Aircraft product in Nashik:
COMPLETED
 MIG 21E7FI-264.
 MIG 21E7FI-196
 MIG 21BIS-290.
 MIG trainer 21.
 MIG 27-M-105.
 Su-30MKI-140(UNDER PROGRESS).
DEPARTMENTS AT HAL NASHIK DIVISION:
 Personnel and Administration.

 Security, Viglance and fire services.
 Purchase and stores.
 Integrated Material Management.
 Finance, PF and Payroll.
 Transport.
 Township administration
CORPORATE ORGANISATION
CHAIRMAN
BUSINESS DIRECTORS (5)
Banglore MIG Helicoptor Accessorie Design

Complex Complex Complex s Complex
(MD) (MD) (MD) Complex
(MD) (Director
)
FUNCTIONAL DIRECTORS(3)
CORPORATE FINANCE HR
PLG & MKTG (DIRECTOR) (DIRECTOR)
(DIRECTOR)
Planning Finance. HR
Projects. IMM. HMA
Marketing. Company sec. Lean.
Quality.
Customer Services.
Mgt Services & IT.
PROMOTERS:
The HAL promoters are Government Of India.
PRODUCTS AND SERVICES:-
The following are the products manufactured by HAL:

DIVISIONS:
FINANCIAL HIGHLIGHTS 2011-12:
Hindustan Aeronautics Limited (HAL) a Navratna Defence Public Sector

Unit has declared an impressive financial performance for the year 2011-12. The
provisional financial results are - Sales for the year 2011-12 is Rs.14,001 Crores
registering a growth of 6.74 % over the previous year, Profit Before Tax (PBT) for the
year is at Rs.3,200 Crores.
An Interim Dividend of Rs.747.70 Crores has been paid for the year 2011-12, which is
620 % of the paid-up capital. The Company for the 11th year running has met all the
targets set in “Excellent” category in respect of the MOU concluded with the Government
of India, for the year 2011-12.
The highlights of major achievements during the year are:
 All flight trials for Turrent Gun and Rocket have been completed for the ALH-WSI, which
marks a significant milestone towards certification.
 Light Combat Aircraft (Tejas) LSP-7, flew its maiden flight and LSP-7 will be offered to
IAF for user evaluation trials.
 First flight of Light Combat Helicopter (TD-2) was carried out. It is built with weight
reduced parts, optimized transmission system and incorporates several improvements
based on flight evaluation of TD-1.
 Detailed design and analysis of structural parts of Light Utility Helicopter (LUH) has been
completed.
 HAL has bagged Raksha Mantri’s Excellence in Performance Award for the year 2009-10.
Three quality circle teams from HAL have won two gold and one distinguished awards in
International Convention on Quality Control Circles (ICQCC 2011), held in Japan.
ORGANISATION FLOW CHART
AIRCRAFT DIVISION, NASIK
Managing Director (MiG Complex)

(For Nasik)
General Manager (Gd. IX)
GM GM GM
(AURDC) (AOD) (AMD)
Additional General Manager (Gd. VIII)
Deputy General Manager (Gd. VII)
Chief Manager (Gd. VI)
Senior Manager (Gd. V)
Manager (Gd. IV)
Deputy Manager (Gd. III)
Officer/Engineer (Gd. II)
Asst Officer/Engineer (Gd. I )

DEPARTMENTAL ORGANIZATION CHART
Head of HR Deptt. (O)

Chief Manager –HR(O)
Performance Employee Facility Facility

Management / Relation Management Management
Employee Management (Public Relations (Transport)
Relation & Printing press)
Management
Officer-HR Manager-
Sr.Manager- Sr.Manager- (FM)PRO HR(FM)
HR(PM/ERM) HR(ERM)
Officer
(Printing press) Dy.Manager-
HR(FM)
REPORTING PATTERN OF AIRCRAFT OVERHAUL DIVISION, NASIK
Daljeet Singh
GM(AOD)
B S Sarkar S Rajendran
AGM (PO) AGM (O)
P B Joshi H L Suryaprakash P G Sastry

V S Srinivas
DGM (O) DGM (Q) DGM(Rtbl)
DGM (PO)
C Mandal Gp. Capt.(Retd.)

DGM(Prdn) R M Sitharam
V. G Deodhar
DGM (OS)
DGM (CS)
Gp.Capt.(Retd.) D Maiti
R S Apte DGM (Prj) Gp.Capt. KD
DGM (ATC) Bhat
CTP
AIRCRAFT OVERHAUL DIVISION ,NASHIK
QUALITY POLICY:-
HAL,AOD-Nashik is committed to establish and maintain a quality

management system for
repair, overhaul ,design upgradation of fighter aircraft and aircraft component that implied
needs of customer to delight customer by ensuring timely delivery ,cost effectiveness and
quality of product through continual improvements in its business processes.
QUALITY OBJECTIVES:
 Understanding and satisfying the stated and implied needs of the customers.
 Adopt appropriate solutions for continual product and process improvement to meet the
everchanging needs of customers.
 To improve outsourcing by developing ve3ndors to meet the customer requirenments.
 To progressively decrease the quantum of import by indigenizing more and more critical and
standard parts.
DESIGNATION TYPES:
There are two types:-
 Employees
 Officers.
Designation for employees:
SCALE DESIGNATION NAMES

S11 Senior chief supervisor
S10 Chief supervisor
S9 Senior master
S8 Assistant supervisor
S7 Highly skilled technician or Senior
assistant
S6 Assistant or Senior technician
S5 Assistant B or technician
S4 Junior Assistant
S2 Junior Attendant
S1 Helper
Designation for officers:
GRADE DESIGNATION NAMES

G9 General Manager
G8 Additional General Manager
G7 Deputy General Manager
G6 Chief Manager
G5 Senior Manager
G4 Manager
G3 Deputy Manager
G2 Engineer or Officer
G1 Assistant Engineer
FUNCTION OF THE HUMAN RESOURCE DEPARTMENT IN NASHIK
DIVISION:
HR Depatment implements the directives regarding policies and procedures contained in
various Personnel Circulars/Personnel Bulletins issues by HAL Corporate Office. The
Personnel Manual consists of eight volumes and is used as reference Manual and is
identified by the issue number and date of amendment.
Human Resource Department in Hindustan Aeronautics Limited,Nashik Division

is divided into five categories. They are as given below:
Employee Relation Management
Performance Management
Facility Mnagement
Talent Management
Talent Acquistion
HUMAN RESOURCE MANAGEMNT FUNCTIONS

PERFORMANCE APPRAISAL CYCLE OF HAL
HRD CELLS OF DIVISION
i) Make available sufficient copies of

quarterly task setting & assessment sheet
To all department.
Ii) Handover the performance appraisal
report format to the appraise by 20th mar
of performance year.
iii) Receive the filled up performance
appraisal report of the previous year by
25th April.
iv) Forward report of officers in grades V
& above to the complex/corporate office
by 30th April/5th may.
v) Convene meeting of performance
review board and complete part of the
report of 20th may.
VI) Communicate feedback if any to the
appraise by 31st may.
vii) Complete part I of the report.
Task setting for

Assessment by the first Quarter
Reviewing Authority Performance by 15th april
by 20th april Appraisal
Cycle
Task setting for the

Assessment of Fourth Second Quarter and
Quarter by 7th April & assessment of First
Completion of report Quarter by 7th july.
by initiating Authority
by 10th april.
Task setting for Task setting for the

the Fourth Quarter Third Quarter and
and assessment of assessment of Second
Third Quarter by Quarter by 7th oct.
7th jan
LIGHT COMBAT AIRCRAFT (LCA) (Tejas)
OBJECTIVES OF THE STUDY
The following are the objectives of the study:

1. To understand the procedure of performance appraisal followed in HAL.
2. To understand Employees’ attitude towards the present appraisal system.
3. To ascertain how effective the current appraisal system is in
a) Enhancing productivity
b) Attaining corporate standards
4.To suggest measures to positively develop the process of performance appraisal.
RESEARCH METHODOLOGY:
Research methodology is the process of systematic & in depth study of search for any
particular topic. Subject of the investigation based by collection, completion, presentation
& interpretation of relevant details. It helps to presentation of data in correct manner & in
right quality & quantity. Without using research methodology the project report can not be
done.
Definition:-
Research is defined as, “a careful investigation or enquiry especially through

search for new facts in any branch of knowledge.”
Data collection method is very useful in conducting research. It is depending on the

stheirces. Statistical data are classified under two categories.
Methods of Data
Collection
Primary Data Secondary Data

Collection Collection
1.Primary Data
Primary data are obtained by study specifically designed to fulfill the data needs of the
problems at hand.Such data are original in character & are generated in large number of
surveys.
Primary data are those which are collected for specified objectives directly from the field of
enquiry & are original in nature. The collection of primary data is laborious & involves
huge time & is generally beyond the scope of an individual.
Example:-
 Interview
 Observation
 Questionnaire
This project report carries the following actual techniques of collecting primary data.
 Interview
 Observation
 Questionnaire
 Sample size : 100
2.Secondary Data
Secondary data means data that is already available in various reports, letters, books,
periodicals, etc. secondary data is that, which has been used previously for any research & is
now in use for the second time.
In short, the data presented in research reports when used again for further research is
called “Secondary Data”.
Examples:-
1. Articles
2. Magazines
3. Internet Source
4. Reference Books & Text Books
This project report carries the following actual theories of collecting secondary data.
 Booklets, pamphlets, magazines of organization.
 Website of organization.
 Reference book
SELECTION OF TOPIC:
Performance Appraisal is considered as an indispensable tool for an organization, for

the information it provides is highly useful in making decisions regarding various personal
aspects such as promotions and merit increases. Performance measures also link information
gathering and decision making processes which provide a basis for judging the effectiveness
of personnel. If valid performance data is available, timely, accurate, objective, standardize
and relevant, management can maintain consistent promotion and compensation policies
throughout the organization.
Formal performance appraisal plans are designed to meet three needs, one of the
organization and other two of the individual.
1. They provide systematic judgments to back up salary increases, transfers, demotions or
terminations.
2. They are means of telling an individual how he is doing and suggesting needed changes
in his behavior attitudes, skills, or job knowledge. They let him know “where he stands”
with the boss.
3. The superior uses them as a base for training and developing the individual.
The growing importance given to the topic of Performance Appraisal, the use of
various metrics in performance management and the strategic role the concept of
performance appraisal plays in decision making regarding the succession of an
organisation have encouraged me o choose this topic for research study.
SCOPE OF THE STUDY
The performance appraisal is emerging as one of the strong tools in the development
of human resources. Performance Appraisal system has dual approach namely, Evaluation
approach and Development approach. One without the other makes the appraisal ineffective.
Since the objectives of the Performance Appraisal system are to enhance effectiveness,
potential, development and career stretch of an individual for the management to formulate
HRD programs and to meet the organizational needs, there is a wide scope for study of
Performance Appraisal System.
 In the present competitive scenario it is necessary for any organization to assess the
performance of the employees for its future growth and development. The study throws light
in understanding the various methods for accessing the performance appraisal of the
employees.
 The company can compete effectively in the market only when it utilizes the available human
resources.
 The human resources can be termed as a ‘human capital’. It is a essential for any organization
to evaluate the performance of the employees as it is a criteria for promotion and their growth
and survivor.
 This study also focuses to highlight the various strength and weaknesses in the methods of
performance appraisal which is currently implementing.
 The success of any organization clearly signifies by using the statement “the right member of
employee, right type of employee, employee at right place and employee at right time.
It can be revealed only through the performance appraisal.
The skills and knowledge possessed by the employees can be determined through this
performance appraisal.
The company can designed policies and procedures in terms of job description, job
specification and job analysis and also called the functions of performance appraisal
LIMITATIONS OF THE STUDY

1.Time frame is too short i.e. only 2 months. It is very difficult to study any process in a large
organization in this time frame.
2. Sample size (100) may not be the true representation of the population.
INTERMEDIATE JET TRAINER (IJT)
(i) Primary Data:
 Questionnaire
 Observation
(ii) Secondary Data:

 Company Records
 Internet
SAMPLING PLAN:
Sampling Technique: Simple Random Sampling
Sample Size: 100 Employees
Sample Area: Hindustan Aeronautics Ltd., Ojhar, Nasik
Duration: Two Months.
PROCESS OF PERFROMANCE APPRAISAL SYSTEM FOLLOWED IN HAL
HAL follows a two-tier Performance Appraisal system. Initiating Authority and
Reviewing Authority are the two parties which appraise the performance of an
individual. In HAL, tasks are set on quarterly basis and employee’s performance is
evaluated for the same. Some traits are decided by the company on the basis of which
employee’s are evaluated. At all levels, officers do their self appraisal. Below is the
format of Appraisal form.
Table: 2.1 Format of Appraisal form
Part Content To be filled by
Cover Page Bio Data of the Appraisee Appraisee
Quarterly Task Setting &
Part A Appraisee & IA
Assessment
Self Appraisal Appraisee
Part B
Comments On Self Appraisal IA & RA
Part C Assessment of Traits IA & RA
Part D Qualitative Assessment – Appraisee IA & RA
Part E General Assessment & MRC IA & RA
Part F Training & Development Needs IA & RA
Evaluation By PRB PRB.
Part G
Remarks Of Higher Authorities GM/MD/FD/CH
Part H Illustrative Areas – Training -
Part I Check List HRD Cell
QUARTERLY TASKS AND ACHIEVEMENTS

The most important feature of PAR System is the setting up of Quarterly Tasks
jointly by the IA and the Appraisee. These are called Mutually Agreed Tasks. The set
tasks are recorded on an Assessment Sheet. Maximum 100 marks are distributed
amongst all the tasks on the relative importance. The IA evaluates the performance of
the Appraisee by 07th of the first month of the subsequent Quarter. The Quarters for
the purpose of PARs are shown in the following table:
QUARTERS PERIOD
I 1 APRIL TO 30TH JUNE
ST
II 1ST JULY TO 30TH SEPTEMBER

III 1ST OCTOBER TO 31ST DECEMBER
IV 1ST JANUARY TO 31ST MARCH
Table: 2.2 DETAILS OF QUARTERS FOR PA
SELF APPRAISAL
All officers are required to assess themselves in part B of the Appraisal form. In this,
they get the opportunity to assess their performance against mutually agreed tasks.
The IA and RA have to comment on the self-appraisal done by officers.
LEVELS OF INITIATING / REVIEWING AUTHORITY(IA/RA)

To appraise the appraisee, different levels of Initiating and Reviewing authority have
been appointed.
Table: 2.3. LEVELS OF INITIATING / REVIEWING AUTHORITY

Grade of Appraisee Initiating Authority Reviewing Authority
I / II Min. Grade III or Above Min. Grade V or Above.
III / IV Min. Grade V or Above Min. Gr. VI or Above.
V / VI Min. Grade VII or Above Min. Grade VIII or Above.
VII / VIII Min. Grade IX or Above Min. Grade IX or Above.
IX / X MD / FD CH
ASSESSMENT OF TRAITS
Separate sets of traits are provided to different levels of officers and different
weightage is assigned to these traits based on the level of the officer to be evaluated.
The traits are graded on a scale of five. The details of traits for various levels of
officers are shown in the following table:
Table: 2.4. TRAITS FOR VARIOUS LEVELS OF OFFICERS
LEVEL TRAITS
Level I Job Knowledge: Extent of theoretical knowledge and practical know-how as
(Grade I/
related t assigned tasks; related/ allied jobs and knowledge of current
II)
development in his own field.
Quality of work: General excellence of output, methods and systems.
Man management: Ability to ensure optimum utilization of manpower
29towards target fulfillment.
Punctuality and Attendance: General discipline in adhering to work timings
and attendance.
Level II Job knowledge: Extent of theoretical knowledge and practical know-how as
(Grade III /
related to assigned tasks related / allied jobs and knowledge of current
IV)
development in his own field.
Planning and coordination: Ability to meticulously plan his job and
effectively coordinate with his team members in achievement of common
organizational goals.
Quality of work: General excellence of output, methods and systems.
Developing subordinates: Ability to interact, guide, counsel and nurture
subordinates with a view not only to help them to perform their present job
effectively but also to groom them for meeting greater responsibility/
challenge.
Potential to shoulder higher responsibilities: Ability to take up higher level
responsibility and set pace for the team member towards goal achievement.
Level III Professional competence: Functional, managerial ability in application of job
(Grade V/
knowledge to set perspective plan and fulfillment of the same with optimum
VI)
use of resources.
Quality consciousness: General excellence of the work/ job executed. Efforts
to achieve quality improvement plan and strive for higher standards.
Cost and Time consciousness: Utilization of resources effectively, ensuring
required tolerance/ quality within optimum time and minimum cost.
challenge.
Team building: Ability to interact, command and influence people with a
view t have cohesiveness amongst them to ensure thrust in the direction of
achievement of targets.
Level IV Professional competence: Functional, managerial ability in application of job
(Grade VII/
VIII)
use of resources.
Customer satisfaction: Ability to fulfill the needs of both internal and
external customers of his position.
Time management: Productive and effective use of available time.
challenge.
Level V Professional competence: Functional, managerial ability in application of job
(Grade IX/
X)
use of resources.
Customer satisfaction: Ability to fulfill the needs of both internal and
external customers of his position.
Time management: Productive and effective use of available time.
challenge.
Man management: Ability to ensure optimum utilization of manpower
towards target fulfillment.
Management of external environment: Ability to deal with external
agencies towards building image of the company.
Table: 2.4. TRAITS FOR EMPLOYEES
Achievement of Task Assigned: Level of accomplishment of assigned

tasks: IA to monitor Tasks assigned during the Appraisal Year so as to
ascertain achievements.
Average Individual Incentive Efficiency: IA must award Marks based
on the average individual efficiency of the workman.
Attendance & Punctuality: General discipline in adhering to work
timings and attendance. IA/RA should also take into consideration the
number of days on which the workman has been on LWP total working
days of the Division/Office during the Appraisal year.
Quality & Reliability: General excellence of output, methods and
systems tems.Efforts to achieve quality improvement plan to strive for
higher standards.
Conduct & Discipline: General behavior, conduct and Discipline of the
workplace, IA/RA while awarding marks should consider issuance of
charge sheet/initiation of disciplinary action, punishments imposed e.t.c.
House Keeping: Level of standards of housekeeping at work place.
Job Knowledge: Extent of theoretical knowledge and practical know
how as related to assigned tasks.
Any outstanding work done during the Period
(Suggestions,Innovation,Initiative e.t.c): Marks awarded based on the
number of suggestions made e.t.c.
Table: 2.5. DISTRIBUTION OF MARKS FOR EACH TRAIT.
GRADE GRADE GRADE GRADE

TRAITS I & II III & IV V & VI VII &
VIII
Performance 80 75 70 60
Job Knowledge 5 5 _ _
Quality of Work 5 5 _ _
Man Management 5 _ _ _
Punctuality & Attendance 5 _ _ _
Planning & Coordination 5
Developing Subordinate _ 5 5 5
Potential to shoulder higher
_ 5 5 5
responsibilities
Professional Competence _ _ 5 5
Quality Consciousness _ _ 5 5
Cost & time consciousness _ _ 5 5
Team building _ _ 5 5
Customer Satisfaction _ _ _ 5
Time Management _ _ _ 5
Total 100 100 100 100
Scale of Gradation
Total Marks 100-90 89-80 79-50 Below 50
Performance Exceptional Above Average Average Below Average
Rating
LIGHT UTILITY HELICOPTER (LUH)
1. The Performance Appraisal System followed in the company is known to me?
NO OPINION RESPONDENTS PERCENTAGE

1 Strongly Agree 55 55
2 Agree 36 36
3 Neutral 3 3
4 Disagree 0 0
5 Strongly disagree 6 6
55
36
6
3
0
Strongly Agree No opinion Disagree Strongly

Agree Disagree
INFERENCE:
 From the graph, we can see that 55% people are strongly agree with the statement
 36% are agreeing means they are aware about the PA system followed in HAL.
 3% have no opinion about the statement.
 6 % people strongly disagree with the statement i.e. they are not aware about the
PA system.
2. I am aware of the objectives of Performance Appraisal system practiced in the company

2 Agree 43 43
3 Neutral 5 5
4 Disagree 0 0
44 43
8
5
0

Agree Disagree
INFERENCE:
 44% people know the objective of PA, they are strongly agree with the statement.
 43% people are agreeing with the statement.
 5% have no opinion about the statement.
 8% are strongly disagreeing with the statement, i.e. they don’t the objective of the PA.
3. I am aware of what is expected out of my job

2 Agree 38 38
3 Neutral 6 6
4 Disagree 0 0
5 Strongly Disagree 3 3
Strongly
Strongly
Disagree Agree
Disagree
0% 53%
3%
Neutral Agree
6% 38%
INFERENCE:
 91% people are well aware about their job responsibility.

 3% people are strongly disagreeing with the statement.
 6% have no opinion about the statement
4. The performance appraisal systems help in improving employee’s efficiency.

2 Agree 43 43
3 Neutral 16 16
4 Disagree 9 9
Strongly Strongly
Disagree Agree
Disagree 2% 30%
9%
Agree
Neutral 43%
16%
INFERENCE:
 73% people think that PA is beneficial in improving employee’s efficiency.
 16% people have no opinion about the statement.
 11% think that PA is not beneficial in improving the efficiency of employees.
5. Performance appraisal is a motivational tool used by the organization.

2 Agree 46 46
3 Neutral 9 9
4 Disagree 11 11
Strongly
Disagree Disagree
Strongly
11% 4%
Agree
30%
Neutral
9%
Agree
46%
INFERENCE:
 76% people think PA as an important motivational tool.

 14% are in opposition to the statement.
 9% don’t have any opinion.
6. Training needs of employees are identified during performance appraisal.

2 Agree 45 45
3 Neutral 11 11
4 Disagree 16 16
Strongly
Disagree Strongly
Disagree 8% Agree
16% 20%
Neutral Agree
11% 45%
INFERENCE:
 65% people consider PA as a tool to identify training needs.

 24% people don’t consider PA as a tool to identify training needs.
 11% don’t have any opinion about the statement.
7. After performance appraisal, company provides necessary training.

2 Agree 27 27
3 Neutral 23 23
4 Disagree 29 29
INFERENCE:
 36% people are agreeing that after PA appropriate training has been given to the employees.
 41% people are disagreeing with the statement; they think no training has been given to the
employees.
8. The Performance Appraisal improving relationship between the Superior & Subordinate.

2 Agree 40 40
3 Neutral 31 31
4 Disagree 13 13
Strongly
Disagree
3%
Strongly
Disagree Agree
13% 13%
No opinion
31% Agree
40%
INFERENCE:
 53% people think that PA improves Superior- Subordinate relationship.
 16% people think that PA doesn’t improve Superior- Subordinate relationship.
 31% people have no opinion about the statement
9.My immediate Superior conduct periodical performance appraisal.

2 Agree 51 51
3 Neutral 12 12
4 Disagree 10 10
51
23
12 10
4

Agree Disagree
INFERENCE:
 74% people think that immediate superior conducts PA.

 14% people think somebody else does the PA.
9. My superior gives me proper job related guidance from time to time.

2 Agree 46 46
3 Neutral 9 9
4 Disagree 11 11
Strongly Agree
1% Agree
11%
No opinion
9% 33%
Disagree
46% Strongly
Disagree
INFERENCE:
 33% people strongly agree that they get proper guidance from their superior for their job.
 46% people agree that they get proper guidance from their superior for their job.
 12% people don’t get proper guidance from their superior.
11. Performance appraisal is a lengthy and time consuming activity.

2 Agree 24 24
3 Neutral 30 30
4 Disagree 25 25
Strongly Agree
7% Agree
14%
No opinion
25%
24% Disagree
Strongly
30% Disagree
INFERENCE:
 38% people think PA as a time consuming process.

 32% people think that PA is not time consuming process.
12. HAL should implement computerized automated performance appraisal system.

2 Agree 32 32
3 Neutral 12 12
4 Disagree 1 1
Disagree Strongly
No opinion 1% Disagree
12% 4%
Strongly
Agree
Agree
51%
32%
INFERENCE:
 83% people are agreeing that HAL should implement computerized or automated PA
form system.
 5% people are happy with current form.
13. The traits included in the performance appraisal form are insufficient for evaluating
employee’s performance.

2 Agree 34 34
3 Neutral 19 19
4 Disagree 19 19
Strongly Strongly
Disagree Agree
4% 24%
Disagree
19%
Neutral
19% Agree
34%
INFERENCE:
 58% people are in favor that traits included in the PA form are insufficient.
 Only 23% think that traits included in the PA form are sufficient in evaluating employee’s
performance.
14. Feedback system is practiced in our organisation after completion of given task.

2 Agree 44 44
3 Neutral 15 15
4 Disagree 23 23
44
23
15
12
6

Agree Disagree
INTERPRETATION:
 12% people strongly agree that they get feedback after completion of given task.
 44% people agree that they get feedback but not always.
 23% people disagree with the statement but sometime they get the feedback.
 6% people strongly disagree with the statement i.e. they never get the feedback for their
job.
15. Career growth plan is a part of the performance appraisal system.

2 Agree 48 48
3 Neutral 9 9
4 Disagree 10 10
Strongly Agree
6% Agree
10%
27% No opinion
9%
Disagree
Strongly
48% Disagree
INFERENCE:
 75% people think that career growth plan is the part of the PA system.
 16% people don’t agree that career growth plan is a part of the PA system.
16. The company should include common training program in the performance appraisal
form.

2 Agree 43 43
3 Neutral 10 10
4 Disagree 9 9
2% Strongly Agree
9% Agree
10% 36% No opinion
Disagree
43% Strongly
Disagree
INFERENCE:
 79% people think that training programs included in the PA form are insufficient.
 11% people think that training programs in PA form are sufficient.
17. Performance appraisal evaluates employees purely on the basis of job performance.

2 Agree 34 34
3 Neutral 25 25
4 Disagree 17 17
5 Can’t Say 8 8
34
25
16 17

Agree Disagree
INFERENCE:
 50% people are agreeing that PA evaluates employees purely on their job performance.
 25% people disagree with the statement.
18. Performance appraisal is a true reflection of an employee’s efficiency, performance and
Effectiveness.

2 Agree 40 40
3 Neutral 22 22
4 Disagree 15 15
5 Can’t Say 9 9
INFERENCE:
 54% people think that by PA we get true picture of employee’s efficiency, performance
and effectiveness.
 24% people do not agree with the statement.
EMPLOYEE VIEWS
 50% people attended the 2-3 training programs.
 60% people rated with the overall performance in last one year.
 50% people want to get motivated in outstanding work.
 60% people are not satisfied with the current appraisal system.
 55% people want changes in appraisal system that they want face to face discussion with
Initiating Authority and Reviewing Authority. Proper work should be provided to
workmen to utilize their own skill.
 65% people want to share their job experience after their retirement .
 65% people want that to implement MBO method in HAL.
 Suggestions from the employees they said most of them want to be motivated from the
side of company.
FIFTH GENERATION FIGHTER AIRCRAFT (FGFA)
CHAPTER 6
FINDINGS &
CONCLUSIONS
1. From the100 employees surveyed, most of them (approximately
91%) are aware about the Performance Appraisal System followed in the company and an
equal percentage of them aware about their job responsibilities.
2. 76% people think PA motivates employees for doing the job better and 65% people think
through PA, Company can identify training needs.
3. A large majority (76%) feel that performance appraisal is an important motivational tool.
4. 53% people think that PA is effective in improving Superior- subordinate relationship.
5. Three-fourths of the respondents had responded that career-growth plan is part of the
performance appraisal system.
6. More than one third of the respondents (41%) opine that appropriate training is not given
after performance appraisal..
7. More than one-third (38%) have replied that performance appraisal is a lengthy and time-
consuming process.
MULTI-ROLE TRANSPORT AIRCRAFT (MTA)
SUGGESTIONS &
RECOMMENDATION
1. The very concept of Performance Appraisal should be marketed
throughout the organization; unless this is done, people would not
accept it, however important it may be to the organization.
2. HR department can organize a workshop on Performance Appraisal System for all the
employees to educate people about the system followed in the company.
3. The content of Appraisal form and marking scheme should be explained in detail to all the
employees in order to ensure that performance appraisal is conducted in its true spirit.
4. 360o & MBO Appraisal system should be introduced for all Officers in the company so that
performance appraisal reflects a fair picture.
5. Training is an important tool to develop employees. Training has to be imparted to equip

employees with the required skills to ensure job performance. Appropriate training schedule
has to be prepared and the same is to be conveyed to the employee. The Training Department
has to ensure that the training programme mentioned in Performance Appraisal report is
provided without fail.
6. The other criticism that the PA system is lengthy and time consuming can be overcome by
implementing an online PA system. Only relevant fields have to be kept dynamic. Other
permanent details of the employees like Date of Joining, Training undergone etc have to be
stored in a database which will be reflected each time the PA form is filled without having to
type the same details every time.
7. While rating the employees in PA there should be face to face discussion with Initiating
Authority and Reviewing Authority.
LIGHT COMBAT HELICOPTER (LCH)
CONCLUSION
1. The performance appraisal system and the procedure followed at HAL
have been well received by the employees.
2. The study reflects a fairly positive image of the PA system. Majority of

the questions have received positive feedback from the majority of the respondents.
3. A majority of the respondents agree that career growth plan is a part of the PA system, which
speaks well of the performance appraisal system being followed.
4. The system captures the training needs of individuals.
5. The respondents also opine that appropriate training is not provided after PA and that more
training programs need to be added.
6. In a world of technology, it is imperative that the PA system should be set up online to

eliminate unwarranted delays. It also improves employees’ efficiency. After surveying 100
employees, it can be concluded that PA is effective in motivating people in achieving the set
targets and provides opportunity to improve oneself.
APPENDICES:
 BIBLIOGRAPHY
 QUESTIONNAIRE
 GLOSSARY OF TERMS
BIBLIOGRAPHY
1. Human Resource Management by Ashwatthapa.
2. Circulars of HR department.
3. Web- sites: www.naukrihub.com
www.ichr.com
www.hal-india.com
GLOSSARY OF TERMS
1. Performance appraisal (PA): also known as employee appraisal, is a method by which

the job performance of an employee is evaluated (generally in terms of quality, quantity, cost
and time). Performance appraisal is a part of career development.
2. Paired Comparison Method: Ranking employees by making a chart of all possible pairs
of the employees for each trait and indicating which is the better Employee of the pair.
3. Forced Distribution Method: Similar to grading on a curve; predetermined percentages

of ratees are placed in various categories.
4. Graphic Rating Scale: A scale that lists a number of traits and a range of performance for
each. The employee is then rated by identifying the score that best describes his or her
performance for each trait.
5. Alternation Ranking Method: Ranking employees from best to worst on a particular trait.
6. Critical Incident Method: Keeping a record of uncommonly good or undesirable

examples of an employee’s work-related behavior and reviewing it with the employee at
predetermined times.
7. Behaviorally Anchored Rating Scale (BARS): An appraisal method that aims at

combining the benefits of narrative and quantified ratings by anchoring a quantified scale
with specific narrative examples of good and poor performance.
8. Management By Objectives (MBO): Involves setting specific measurable goals with each
employee and then periodically reviewing the progress made.
9. Unclear Performance Standards: An appraisal scale that is too open to interpretation;
instead, include descriptive phrases that define each trait and what is meant by standards like
“good” or “unsatisfactory.”
10. Halo Effect: In performance appraisal, the problem that occurs when a supervisor’s
rating of a subordinate on one trait biases the rating of that person on other traits.
11. Central Tendency: A tendency to rate all employees the same way, avoiding the high
and the low ratings.
12. Strictness / Leniency: The problem that occurs when a supervisor has a tendency to rate
all subordinates either high or low.
13. Appraisal Interviews: An interview in which the supervisor and subordinate review the
appraisal and make plans to remedy deficiencies and reinforce strength.
QUESTIONNAIRE
HAL
HR SURVEY
QUESTIONNAIRE ON PERFORMANCE APPRAISAL FOR EMPLOYEES
(Please be free to share your views. your answers are a valuable for us)
Statements
Please tick your response
S.No Statements
1 2 3 4 5
The Performance Appraisal System followed in the
1.
company is known to me
I am aware of the objectives of Performance Appraisal
2.
system practiced in the company.
3. I am aware of what is expected out of my job.
The performance appraisal systems help in improving
4.
employee’s efficiency.
Performance appraisal is a motivational tool used by the
5.
organization.
Training needs of employees are identified during
6.
performance appraisal.
After performance appraisal, company provides
7.
necessary training.
8. The Performance Appraisal improving relationship
between the Superior & Subordinate.
My immediate Superior conduct periodical performance
9.
appraisal.
My superior gives me proper job related guidance from
10.
time to time.
Performance appraisal is a lengthy and time consuming
11.
activity.
HAL should implement computerized automated
12.
performance appraisal system.
The traits included in the performance appraisal form
13.
are insufficient for evaluating employee’s performance.
Feedback system is practiced in our organisation after
14.
completion of given task.
Career growth plan is a part of the performance
15.
appraisal system.
The company should include common training program
16.
in the performance appraisal form.
Performance appraisal evaluates employees purely on
17.
the basis of job performance.
Performance appraisal a true reflection of an
18.
employee’s efficiency, performance and effectiveness.
Any suggestions is required to improve in feedback system?
Note: 1) Strongly Agree (2) Agree (3) Neutral (4) Disagree (5)Strongly Disagree
ABBRIVATIONS:
 IA: Initiating Authority.
 RA: Reviewing Authority.
 PAR: Performance Appraisal Report.
 PRB: Performance Review Board.

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A

PERFORMANCE APPRAISAL SYSTEM

HINDUSTAN AERONAUTICS LIMITED

MET’s BHUJBAL KNOWLWDGE CITY INSTITUTE OF MANAGEMENT,

NASHIK, MAHARASHTRA, INDIA - 422003

I am grateful thank Mr. Shankar Narayan, (Dy.General Manager-Training & Development

I honestly state that the intention of collection of the information in my project

1 Chapter 1 : Introduction of the Subject

Scope & Limitation of Project

4 Chapter 4 :Data Presentation & Data Collection

According to Prof. E.B.Flippo Performance Appraisal defined by,” It is a

Performance Appraisal is the periodic and systematic assessment of the

1. ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting

2. COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the standards to

3. MEASURING THE ACTUAL PERFORMANCE

4. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

GOAL OF THE PERFORMANCE APPRAISAL SYSTEM:

METHODS OF PERFORMANCE APPRAISAL

FEATURES OF PERFORMANCE APPRAISAL:-

 Performance Appraisal is not only a technique or method but also is a

 In Performance Appraisal, periodic and systematic assessment of employee’s

 In the process of performance appraisal, efforts are made to bring an

FIG.: METHODS OF PERFORMANCE APPRAISAL

METHODS OF PERFORMANCE APPRAISAL

Traditional Methods Modern Methods

Field Review Management

Ranking Methods 360◦appraisal

(ii) Field Review:

(iii) Forced - Choice rating

(v) Ranking methods

(i) Management by objectives

Continuous Definr Expected

(ii) Assessment centers

(iii) 360o Feedback

Benefits of Performance Appraisals

1. Measures an employee’s performance.

Rating Errors in Performance Appraisals:

 Primacy and Regency effects:

 Performance dimension order:

“To become a globally competitive aerospace industry while working

We are dedicated to building a relationship with our customers where we

 COMMITMENT TO TOTAL QUALITY

We are committed to continuous improvement of all our activities. We will

 COST AND TIME CONSCIOUSNESS

 INNOVATION AND CREATIVITY

We believe in striving for improvement in every activity involved in our

We believe in achieving harmony in work life through

 RESPECT FOR THE INDIVIDUAL

We believe in a commitment to be honest, trustworthy and fair in all our

HISTORY OF THE COMPANY

 Dhruv, which is Advanced Light Helicopter (ALH)

 PSLV (Polar Satellite Launch Vehicle)

HAL has formed the following Joint Ventures (JVs):

 HAL is a NAVRATNA public sector undertaking fully owned by the

CURRENT ACTIVITIES IN HAL:

DEPARTMENTS AT HAL NASHIK DIVISION:

 Personnel and Administration.

BUSINESS DIRECTORS (5)

Banglore MIG Helicoptor Accessorie Design

Projects. IMM. HMA

Marketing. Company sec. Lean.