CHAPTER-I

1
 PERFORMANCE APPRAISAL
INTRODUCTION

Performance appraisal is one of the traditional and most universal practices of the
management. It is a systematic and objective way of judging the relatives worth or
ability of an employee in performing his task. Modern management refers to an
appraisal system in which the employee‘s merit like initiative, dependability,
personality etc. are compared with others and ranked and rated. The trend now a
day is in the direction of attempting to measure what the man does (performance
appraisal) rather than what he is (merit rating). Employees also wish to know their
position in the organization. Performance appraisal helps to identify those who are
performing their assigned tasks well and those who are not and the reason for such
performance. Appraisals are judgments of characteristics, traits and performance of
others on the basis of which we assess the worth or value of others and identify
what is good and bad.

According to Flippo, ―performance appraisal is the systematic, periodic and an

impartial rating of an employee‘s excellence in matters pertaining to his present job
and his potential for a better job.‖

A performance appraisal is an important tool for measuring managerial efficiency,

organizational effectiveness, monitoring and measuring the performance of
employees.

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 MEANING

―Performance appraisal is the process of evaluating the performance and

qualifications of the employees in terms of the requirements of the job for which he
is employed, for purposes of administration including placement, selection for
promotions, providing financial rewards and other actions which require differential
treatment among the members of a group as distinguished from action affecting all
members equally‖.

It is a systematic evaluation of the individuals with respect to his or her performance

on the job and his or her potential for development.

In a nutshell we can say that performance appraisal is a process by which individual

employees behavior and accomplishments for a fixed time period are evaluated.

3
 OBJECTIVES

Appraisals serve to monitor the effort of individuals to integrate and coordinate

individual‘s effort into a cooperative endeavor and give feedback to the individual to
provide a means of correcting or commanding the efforts of individuals and to provide
an equitable and consistent basis of distributing rewards and penalties. It mainly
concerns itself with the following three purposes: -

a) ADMINISTRATIVE DECISIONS-

It can serve as a basis for job change or promotion.

b) EMPLOYEE DEVELOPMENT-

 By identifying the strengths and weakness of an employee it serves as a

guide for formulating a suitable training and development programme to
improve his quality of performance in his present work. It serves as a
feedback to the employee. By letting the employee know how well he is
doing or where he stands with his supervisors it tells him what he can do
to improve his present performance and go up in the management
hierarchy.

c) PERSONNEL RESEARCH-

This involves generation of manpower information.

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 USES OR IMPORTANCE OF PERFORMANCE APPRAISAL

Performance appraisal is a significant element of the information and control system

in the organization. Some common applications of performance appraisal are given
below-

 Performance appraisal provides valuable information for personnel

decisions such as pay increases, promotions, demotions, transfers and
terminations.

 It helps to judge the effectiveness of recruitment, selection, placement

and orientation systems of the organization.
 It is useful in analyzing training and development needs.

 It can be used to improve performance through appropriate feedback,

working and counseling employees.

 Performance appraisal facilitates human resources planning, career

planning and succession planning.

 It promotes a positive work environment, which contributes to

productivity.

 A competitive spirit is created and employees are motivated to improve

their performance.

 Systematic appraisal of performance helps to develop confidence among

employees.

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 PROCESS OF PERFORMANCE APPRAISAL-

This process of performance appraisal has many stages and involves multiple
activities to be undertaken by an organization. These are usually format
determination, sharing evaluation, designing organizational inputs and reward
administration. The various approaches for appraisal are-

1) Intuitive approach- where the boss judges the employee based on his
perception of the employee behavior.

2) The self-appraisal approach- where the employee himself evaluates his

performance.

3) Group approach- where he is evaluated by a group of persons.

4) The conventional trait approach- where the boss evaluates the

conventional employee on the basis of presence or absence of certain
traits likes integrity, honesty, dependability etc.

5) On achieved results- where the targets are pre set jointly by the rater and
rates in a restricted sense.

Setting performance standards

6 2

Taking corrective actions Communicating standards

5 3

Discussing results Measuring performance

4
Comparing the standards

6
THE PERFORMANCE APPRAISAL PROCESS

There are number of performance criteria which may be used to measure the
proficiency of an employee. It can be classified into two main categories:

OBJECTIVE CRITERIA AND SUBJECTIVE CRITERIA-

Amount and quality of production, work sample tests, length of service, amount of
training necessary, absenteeism, accidents etc. are all objectives criteria.

Rating of employee‘s job proficiency by their superior, peers and subordinates, extent
of upward communication of ideas, degree of knowledge about corporate goal,
contribution to socio cultural values is all examples of subjective criteria.

ESSENTIALS OF AN EFFECTIVE PERFORMANCE APPRAISAL SYSTEM

1. Mutual trust
2. Clear objectives
3. Standardization
4. Training
5. Job relatedness
6. Documentation
7. Feedback and participation
8. Individual differences
9. Post appraisal interview
10. Review and appeal

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MODELS OF PERFORMANCE APPRAISAL

Many form of rating are presently available each naming its strong points as well as
limitations. They may be classified into two broad category

PERFORMANCE APPRAISAL

TRADITIONAL METHODS MODERN METHODS

1. Confidential report 1. Assessment center

2. Free form or essay 2. HR accounting
3. Straight ranking 3. Behaviorally anchored
rating scales
4. Paired distribution 4. MBO appraisal
5. Forced distribution 5. 360-degree appraisal
6. Graphic rating scales
7. Checklist method
8. Critical incidents
9. Group appraisal
10. Field review

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TRADITIONAL METHODS OF PERFORMANCE APPRAISAL

1) Rating method-
The oldest and simplest method of performance appraisal is to compare one man
with all other men and place in a simple rank order. In this way ordering is done
from best to worst of all individuals comprising the group. This method takes into
account rating by more than one another rater. The ranks assigned are then
averaged and relative is determined for each member.

This method has two advantages of simplicity and naturalistic or naturalness. But
it has disadvantages of being subjective and the ranking becomes difficult when
there are even twenty or thirty cases. Also the magnitude of the difference in
ability between ranks is not equal at different positions.
As an answer to the last problem the paired comparison technique of ranking has
been evolved. In this method the rater compares each man in his group with every
other man with the final ranking of each worker determined by the number of time
he was judged better than others.

1) Rating scale method-

This method provides a kind of scale for measuring absolute differences between
individuals. This is method is of two types-

I) Discrete- the characteristic ‗job knowledge‘ may be divided into five

categories on a discrete scale ―exceptionally good‖, ―above
average‖, ―average‖, ―below average‖ and ―poor‖. The rater can tick
mark category, which describes best he person being rated.
II) Continuous or graphic- where just above the category notation an
interrupted line is provided. The rater can tick at any point along its
length.

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There are four kinds of standards used in rating scales, namely
numerical or alphabetical, descriptive adjective, man-to-man and
behavior sample. In man-to-man rating scale the standards are very
concrete because these are neither numbers nor alphabets (which
do not convey same meaning to all) nor descriptive adjective but are
persons, of varying ability whom the rater has selected and ranked
in the ability under consideration.

Thus a scale of men is created for each trait. The objective to this
scale is that its construction involves difficult and laborious
procedure. Persons used as standards by different raters are
different.

In behavior sample standards, a series of actual description of

behavior are employed which is supposed to indicate varying
amounts of the characteristic being rated. The use of actual
descriptions of behavior reduces some of the differences in
interpretation usually found among different raters.

Frequently there is a tendency for the rater to pile up the ratings

either at he middle or at the highest end of the scale. To meet this
the ―forced distribution system‖ is used where the rater is instructed
about the percentage of cases, which should fall in each category.
For example, job knowledge the following percentage must be used:
poor-10%, below average-20%, average-40%, above average-20%
and exceptionally good-10%.

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2) Checklist method-

This consists of a list consisting of a number of statements about the worker and
his behavior. Each statement on this list is assigned a value, which are derived
from preliminary research in which the pooled judgments of person familiar with
the job are used. The rater is asked to place a plus sign or a question mark in
front of each statement depending on whether he feels the description applies,
does not apply or there is doubt. The method has the advantages of requiring only
a report of facts from the rater. Final rating is average of the scale value of the
statement, which the superior had checked.

Since the value assigned to different statements do not appear on the list the rater
does not know how highly he has rated a given individual. He also does not have
to distinguish among various categories for each of the several traits considered
for each the several employees working under him. The rater is more precise and
less ambiguous in his expression of the worthiness of the individual. The extent of
constant and halo error are also minimized.

3) Forced choice method-

The forced choice rating form contains a series of groups or statements. The rater
checks how effectively the statements describe each individual being evaluated.
Each statement carries weight, which is not indicated to the rater. There are a
number of variations. Sometimes all the statements may be either favorable or
unfavorable. In another, from four statements two positive and two negative the
rater picks the most appropriate and the most inappropriate respectively. It makes
the performance evaluation more objective.

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4) Critical incident technique-

It involves three steps. A list of noteworthy (good or bad) on the job behavior,
usually of specific instances is first prepared which are vital for success or failure
on job. A group of experts then assigns scale values to them, depending upon the
degree of desirability for the job.

The third step is constructing a checklist that includes incidents, which define
‗good‘ and ‗bad‘ workers. This method helps to identify key areas in which
employees are weak or strong. It emphasizes rating on the subjective evaluation
of traits. Finally, the supervisor finds counseling easier since he knows his
subordinates weakness.

5) Confidential report-

This is a traditional form of appraisal used in most government organizations. A

confidential report is a report prepared by the employee‘s immediate superior. It
covers the strengths and weaknesses, main achievements and failure, personality
and behavior of the employees. But it involves a lot of subjectivity because
appraisal is based on impressions rather than on data.

6) Free form or essay method-

Under this method, the evaluator writes a short essay on the employee‘s
performance on the basis of overall impression. The description is expected to be
as factual and concrete as possible. An essay can provide a good deal of
information about the employee especially if the evaluator is asked to give
examples of each one of his judgments.

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 7) Straight ranking method-

In this technique, the evaluator assigns relative ranks to all the employees in the
same work unit doing the same job. Employees are ranked from the best to the
poorest on the basis of overall performance. The ‗whole man is compared with the
whole man‘ without analyzing performance. The relative position of an employee
is reflected in his numerical rank.

8) Paired comparison method-

This is a modified form of man to man ranking. Herein, each employee is

compared with all the others in pairs one at a time. The number of times an
employee is judged better than the other determines his rank. Comparison is
made on the basis of overall performance. The number of comparisons to be
decided on the basis of the following formula-

N (N-1)\2

9) Group appraisal method-

Under this method, a group of evaluators assesses employees. This group

consists of the immediate superior of the employee, other supervisors having
close contact with the employee‘s work, head of the department and a personnel
expert. The group determines the standards of performance for the job, measures
actual performance of an employee, analyses the cause of poor performance and
other suggestions for improvement in future.

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10) Field review method-

In this method, a training officer from the HR department interviews line

supervisors to evaluate their respective subordinates. The interviewer prepares in
advance the questions to be asked. By answering these questions a supervisor
gives his opinion about the level of performance of his subordinate, the
subordinate‘s work progress, his strengths and weakness, promotion potential,
etc. The evaluator takes detailed notes of the answer, which are then approved by
the concerned supervisor. These are then placed in the employee‘s personal
service file.

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 MODERN METHODS OF PERFORMANCE APPRAISAL:

1) Assessment centers-

An assessment center is a group of employees drawn from the different work units.
These employees work together on an assignment similar to the one they would be
handling when promoted. Evaluators observe and rank the performance of all the
participants. Experienced managers with proven ability serve as evaluators. This
group evaluates all employees both individually and collectively by using simulation
techniques like role playing, business games and in basket exercises. Employees are
evaluated on job related characteristics considered important for job success.

2) Human resources accounting method-

HR is a valuable asset of the organization. This asset can be valued in terms of

money. When component and well-trained employees leave an organization the
human asset is decreased and vice versa. Under this method, performance is judged
in terms of cost and contribution of employees. Costs of HR consist of expenditure on
HR planning, recruitment, selection, induction, training, compensation, etc.
contribution of HR is the money value of labor productivity or value added by HR.
difference between cost and contribution will reflect the performance of employees.

3) Behaviorally anchored rating scales (BARS)-

This method combines graphic rating scales with critical incidents method. BARS are
description of various degrees of behavior relating to specific performance
dimensions. Critical areas of job performance and the most effective behavior for
getting results are determined in advance. The rater records the observable job

15
behavior of an employee and compares these observations with BARS. In this way,
an employee‘s actual job behavior is judged against the desired behavior. The steps
involved in constructing BARS are as follows-

a) Identify critical incidents

b) Select performance dimensions
c) Retranslate the incidents
d) Assign scales to incidents
e) Develop final instrument

4) Appraisal by results or MBO-

The concept of management by objective (MBO) was developed by Peter Drucker in

1954. He called it ‗management by objective and self-control‘. Since then MBO has
become an effective and operational technique of performance appraisal and a
powerful philosophy of managing. It is also known as work planning and review or
goal setting approach to appraisal.

MBO has been defined as ― a process whereby the superior and subordinate
managers of an organization jointly identify its common goals, define each
individual‘s major areas of responsibility in terms of results expected of him and use
these measures as guides for operating the unit and assessing the contributions of
each of its members‖

The main steps involve din performance appraisal through MBO are as follows-

a) Set organizational goals

b) Defining performance targets
c) Performance reviews
d) Feedback

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MBO is superior to other methods of performance appraisal. It offers the following
benefits:

 Ends-means chain
 Role clarity
 Objective appraisal
 Motivation and commitment
 Management development
 Coordination

MBO suffers from the following drawbacks:

 Difficulty in goal setting

 Problem of participation
 Lack of understanding
 Time consuming and expensive
 Inflexibility

5) The 360-degree appraisal technique -

Performance appraisal has come to occupy a pivotal place in human resource

function. The traditional merit rating which focused on personality traits was replaced
by performance appraisal with focus on work results. The concept of M30
transformed it into a participative process. This led ultimately to the introduction of
360-degree feedback system in the United States.

360-degree system involves evaluation of a manager by everyone above, alongside

and below him. Structured questionnaires are used to collect responses about a
manager from his bosses, peers and subordinates. Several parameters relating to
performance and behavior are used in questionnaires. Each manager is judged by a
minimum of fifteen colleagues, at least two of them being his bosses, four of them
peer, and six of them subordinates. The responses are presented collectively to the
assesees in the form of charts and graphs. Comments and interpretations are

17
presented later. Counseling sessions are arranged to solve the weaknesses identified
in the 360-degree assessment. The 360-degree assessment program is effective
when used from the top down. The fact that the manager at the top has also been
administered the test convinces and they willing to go through it as well.

SUPERIOR

PEER EMPLOYEE
PEER

SUBORDINATE

FOUR INTEGRAL COMPONENTS OF 360-DEGREE APPRAISAL

LIMITATIONS OF PERFORMANCE APPRAISAL

The main problems involved in performance appraisal are as follows:

1) Errors in rating-
Performance appraisal may not be valid indicator of performance and potential of
employees due to the following types of errors:
a) Halo effect- it is the tendency to rate an employee consistently high or low
on the basis of overall impression. One trait of the employee influences the
rater‘s appraisal on all other traits.

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 b) Stereotyping- this implies forming a mental picture of a person on the basis
of his sex, age, caste or religion.

c) Central tendency- it means assigning average rating to all the employees

in order to avoid commitment or involvement. This is adopted because the
rater has not to justify or clarify the average ratings.

d) Constant error- some evaluators tend to be lenient while others are strict in
assessing performance. In first case, performance is overrated while in
second case it is underrated.

e) Personal bias- performance appraisal may become invalid because the

rater dislikes the employee. Such bias may arise on the basis of regional or
religious beliefs and habits or interpersonal conflicts.

f) Spill over effect- this arises when past performance affects assessment of
present performance.

2) Lack of reliability-
Reliability implies stability and consistency in the measurement. Lack of consistency
over time and among different raters may reduce the reliability of performance
appraisal.

3) Incompetence-
Raters may fail to evaluate performance accurately due to lack of knowledge and
experience. Post appraisal interview is often handled ineffectively.
4) Negative approach-
Performance appraisal loses most of its value when the focus of management is on
punishment rather than on development of employees.

5) Multiple objective-

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Raters may get confused due to two many objectives or unclear objectives of
performance appraisal.

6) Resistance-
Trade unions may resist performance appraisal on the ground that it involves
discrimination among its members.

7) Lack of knowledge-
The staff appraising performance of employees might not be trained and experienced
enough to make correct appraisal.

8) Hypercritical or „Horns‟ effect-

It is the tendency of the superior to rate people lower than their performance justify.

Other problems of Performance Appraisal reported by various studies are:-

1) Relationship between appraisal rates and performance after promotions was not
significant.
2) Absence of inter-rater reliability.
3) The situation was unpleasant in feedback interview.
4) Most part of the appraisal is based on subjectivity.

PERFORMANCE APPRAISAL OF MANAGERS

Appraisal of managers is very important. But it is more difficult because it cannot be

measured in quantitative terms. Managerial appraisal should measure therefore, both
performance in accomplishing goals and performance as a manager.

1) Performance in accomplishing goals-

A manager is responsible for achieving the targets of his work unit. The extent to
which these targets are achieved is a good criterion for evaluation.

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2) Performance as managers-
Although an impressive record of setting and accomplishing goals is an indicator of a
manager‘s performance, this standard cannot be used in all cases. Managers
achieve organizational goals by performing the basic managerial functions.
Therefore, a manager can be appraised on the basis of how well he understands and
undertakes these functions of planning, organizing, staffing, directing and controlling.
Each of these functions involves a series of activities. These activities can be taken
as standards of performance. A five-degree rating scale can be used to rate the
performance of managers. Weights to the scale can be assigned for those activities,
which are clear and adequately known.

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CHAPTER-II

22
COMPANY‟S PROFILE

Bharti Airtel Limited, commonly known as Airtel, is an Indian multinational steel

communications services company headquartered at New Delhi, India. It operates in
20 countries across South Asia, Africa and the Channel Islands. Airtel has GSM
network in all countries in which it operates, providing 2G, 3G and 4G services
depending upon the country of operation. Airtel is the world's third largest mobile
telecommunications company with over 261 million subscribers across 20 countries
as of August 2012. It is the largest cellular service provider in India, with 183.61
million subscribers as of November 2012. Airtel is the third largest in-country mobile
operator by subscriber base, behind China Mobile and China Unicom.

Airtel is the largest provider of mobile telephony and second largest provider of fixed
telephony in India, and is also a provider of broadband and subscription television
services. It offers its telecom services under the airtel brand, and is headed by Sunil
Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve Cisco
Gold Certification. It also acts as a carrier for national and international long distance
communication services. The company has a submarine cable landing station at
Chennai, which connects the submarine cable connecting Chennai and Singapore.

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Airtel is credited with pioneering the business strategy of outsourcing all of its
business operations except marketing, sales and finance and building the 'minutes
factory' model of low cost and high volumes. The strategy has since been copied by
several operators. Its network—base stations, microwave links, etc.—is maintained
by Ericsson and Nokia Siemens Network whereas business support is provided by
IBM, and transmission towers are maintained by another company (Bharti Infratel Ltd.
in India). Ericsson agreed for the first time to be paid by the minute for installation and
maintenance of their equipment rather than being paid up front, which allowed Airtel
to provide low call rates of 1/minute (US$0.02/minute). During the last financial year
(2009–10), Bharti negotiated for its strategic partner Alcatel-Lucent to manage the
network infrastructure for the tele-media business. On 31 May 2012, Bharti Airtel
awarded the three-year contract to Alcatel-Lucent for setting up an Internet Protocol
access network (mobile backhaul) across the country. This would help consumer‘s
access internet at faster speed and high quality internet browsing on mobile
handsets.

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 HISTORY

Sunil Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with
Germany's Siemens to manufacture push-button telephone models for the Indian
market. In 1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company
became the first in India to offer push-button telephones, establishing the basis of
Bharti Enterprises. By the early 1990s, Sunil Mittal had also launched the country's
first fax machines and its first cordless telephones. In 1992, Mittal won a bid to build a
cellular phone network in Delhi. In 1995, Mittal incorporated the cellular operations as
Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular service was
extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT
Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In
2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the
company acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in
2002, and the company was listed on Bombay Stock Exchange and National Stock
Exchange of India. In 2003, the cellular phone operations were rebranded under the
single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered
Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar.

25
This expansion allowed it to offer voice services all across India. In 2009, Airtel
launched its first international mobile network in Sri Lanka. In 2010, Airtel acquired
the African operations of the Kuwait based Zain Telecom. In March 2012,Airtel
launched a mobile operation in Rwanda.

Today, Airtel is the largest cellular service provider in India and the third largest in the
world

Airtelcomes to you from Bharti Cellular Limited - a part of the biggest private
integrated telecom conglomerate, Bharti Enterprises.

Bharti provides a range of telecom services, which include Cellular, Basic, Internet
and recently introduced National Long Distance. Bharti also manufactures and
exports telephone terminals and cordless phones. Apart from being the largest
manufacturer of telephone instruments in India, it is also the first company to export
its products to the USA. Bharti is the leading cellular service provider, with a footprint
in 15 states covering all four metros and more than 7 million satisfied customers.

VISION:

To make mobile communications a way of life and be the customers' first choice.

MISSION:

We will meet the mobile communication needs of our customers through:

•Error-free service delivery

•Innovative products and services

• Cost efficiency

• Unified Messaging Solutions

CORE VALUE:

We will delight our customer with our simplicity, speed & innovation.

We will honors our commitment.

26
We will follow the highest standard of professional integrity & behaviour.

We will respect individual, build winning teams and lead by example.

We will create a fun filled and friendly workplace.

AIRTELMOBILE COMMUNICATIONS LIMITED

Bharti Tele-Ventures Limited was incorporated on July 7, 1995 for promoting

investments in telecommunications services. Its subsidiaries operate telecom

services across India. Bharti Tele-Ventures is India's leading private sector provider

of telecommunications services based on a strong customer base consisting of 7.42

million total customers, which constitute, 6.76 million mobile and 657,000 fixed line

customers, as of April 30, 2004.

Bharti Tele-Ventures vision for its mobile business is “To make mobile

communications a way of life and be the customers first choice‖.

The mission is to meet the mobile communication needs of the customer through 1)

error free service 2) Innovative products and services and 3) cost efficiency. The

Company‘s strategic objective is to consolidate its leadership position amongst the

mobile service providers in India.

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The Indian mobile market, according to the COAI, has increased from approximately

1.2 million subscribers as of March 31, 1999 to approximately 29.21 million

subscribers as of June 30, 2004.

Despite this rapid growth, the mobile penetration rate in India, at approximately 2.8%

as of June 30, 2004, is significantly lower than the average mobile penetration rate in

other Asian and international markets.

The number of mobile subscribers in India is expected to show rapid growth over the

next four years. By 2006 it is projected at 50 million by COAI and 44 million by

Gartner.

Bharti Tele-Ventures believes that the demand for mobile services in India will

continue to grow rapidly as a result of the following factors:

⇏ Lower tariffs and handset prices over time;

⇏ Growth in pre-paid customer category;

⇏ Greater economic growth and continued development of India's economy;

⇏ Higher quality mobile networks and services; and

⇏ Greater variety and usage of value added services.

Bharti Tele-Ventures, through its subsidiary has the licenses to provide GSM services

in all the twenty-two telecom circles in India. It proposes to consolidate all its

subsidiaries providing mobile services under Bharti Cellular Limited.

As of June 30, 2004, approximately 92% of India's total mobile subscriber market

resided in the Company's sixteen mobile circles, which collectively covered only 56%

of India's land mass.

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 AIRTEL DISTRIBUTION SYSTEM

DISTRIBUTION SYSTEM
A proper distribution system is very important for every company because nowadays
the customer wants full service without any pain. Airtel has a deep penetration in the
market of prepaid cards, coupons, easy recharge and postpaid cards. I also seen in
the market the happy faces of customers and retailers of Airtel because of the easy
availability of Airtel cards and coupons.

BENEFITS OF GOOD DISTRIBUTION SYSTEM

1. Easy availability
2. Satisfied customers
3. Competitive advantage
4. Better market reputation
5. Saves time

DISTRIBUTION SYSTEM OF AIRTEL

1. Organization (C&FA's)
2. Distributor
3. Retailer
4. Customer

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HRM DEPARTMENT:

HR Mission Statement

“To lead the organization in enhancing its human capital and creating a
winning environment where everyone enjoys contributing to the best of one‟s
ability.”

Airtel will achieve this by:

 Inspiring and motivating its people.

 Developing its people to strive for higher standards.
 Driving an open minded and enterprising corporate culture where people
through leadership at all levels dare to dream, dare to try, dare to fail and
dare to succeed.
 Attracting and recruiting the best talent

Airtel has a very defined and well structured department and its various policies of
keeping each employee productive part of the organization are intoned with the
corporate world‘s requirement.

Employees in the company are largely committed to their organization and have
shown progress in the company. Employees are satisfied with the HR department of
Airtel GSM Company.

Humans are the basic tool for having competitive edge in the market for most of the
organizations and Airtel is one of these. Airtel has one of the best HR systems in
India that gives it an edge over its competitors.

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HR DEPARTMENT SECTIONS:

HR department of Airtel has three sections.

 Employee services

o Payroll information
o Leave and medical record
o Final settlements and provident fund
o Policies and procedures
o Employees record and recreation

 OD and Effectiveness

o Training plan
o Talent management
o Performance management
o Employees retentation
o Orientation employee communication

 Staffing and compensation

o Staffing plan and HR budgeting

o Management trainee and internship program
o Interviewing and selection
o Compensation, benefits and incentive

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Performance Review:
At AIRTEL a review is intended to be an open and frank discussion between an
employee and their Team Leader/Manager. Generally there are two elements: first is
the element in which discussion takes place over the strengths and areas which need
to be developed as displayed by the job holder over the past 12 months. The
performance is of course judged comparing the performance against the core
indicators of Job. The second element is concerned with discussing the training
needs/inputs activities that are considered to be appropriate to help the jobholder
overcome some of development areas discussed in the review and also those
activities that are deemed appropriate to build upon their current strengths.

Appraisal categories
% Of total numbers of
Appraisal category Definition of category employees which can
be rated in this
category
1.expert Indicates exceptional 15%
performance
2.very Good Indicate performance 10%
that consistently meets
the requirements of the
position,‖ very good‖
indicates the individual
is on track for
advancements
3. Good Indicated performance 8%
that requires
improvement (i.e. meet
requirements without
initiative or
advancement)
4. Basic Performance to be 5%
improved (hardly
meets requirements)

Sources of Performance Appraisal:

At AIRTEL the primary sources of performance appraisal are the managers and
secondary sources are employees themselves. Though the peers also give their
opinion but it usually does not have any weightage unless a conflict arises between
the manager and the employee.

32
Feedback:

Workers at AIRTEL are informed of their performance and given the opportunity to
express their opinion over their own level of performance against each competence.
This serves the following two main purposes:
 It enables the reviewer to redefine whether the initial assessment was correct, as
circumstances may exist that the reviewer is unaware of.
 By asking the worker what he sees to be his own strengths and development
areas often help to reduce negative responses and makes planning training
needs/inputs activities easier if the person is able to express for himself the areas
in which he feels he can improve.

33
ANALYSIS

SWOT ANALYSIS

Following is the SWOT Analysis for AIRTEL

STRENGTH WEAKNESS
 Very focused on telecom.  Price Competition from
 Leadership in fast growing BSNL and MTNL
cellular segment.  Untapped Rural market
 Pan-India footprint.
 The only Indian operator,
other than VSNL, that has
an international submarine
cable.

 The fast-expanding IPLC  Competition from other

market. cellular and mobile
 Latest technology and low operaters.
cost advantage.  Saturation point in Basic
 Huge market. telephony service

OPPORTUNITIES THREATS

34
 STRENGTH

 VERY FOCUSED ON TELECOM Bharti Airtel is largely focused on the

telecom, around 93% of the total revenue comes from telecom(Total telecom
revenue Rs 3,326).

 LEADERSHIP IN FAST GROWING CELLULAR SEGMENT Airtel is holding

leadership position in cellular market.. Bharti Airtel is one of India's leading
private sector providers of telecommunications services based on an
aggregate of 27,239,757 customers as on August 31, 2006, consisting
of 25,648,686 GSM mobile and 1,591,071 broadband & telephone customers.

 PAN INDIA FOOTPRINT Airtel offers the most expansive roaming network.
Letting you roam anywhere in India with its Pan-India presence, and trot
across the globe with International Roaming spread in over 240 networks. The
mobile services group provides GSM mobile services across India in 23
telecom circles, while the B&T business group provides broadband &
telephone services in 92 cities.

 THE ONLY OPERATOR IN INDIA OTHER THAN VSNL HAVING

INTERNATIONAL SUBMARINE CABLES. Airtel, the monopoly breaker
shattered the Telecom monopoly in the International Long Distance space with
the launch of International Submarine cable Network i2i jointly with Singapore
Telecommunications Ltd. in the year 2002. This has brought a huge value to
the IPLC customers, delivering them an option besides the incumbent carrier,
to connect to the outside world.

35
 WEAKNESS
 Price Competition from BSNL and MTNL. Airtel is tough competition from
the operators like BSNL nd MTNL as these two operators are offering services
at a low rate.

 Untapped Rural market. Although Airtel have strong Presence throughout

the country but still they are far away from the Indian rural part and generally
this part is covered by BSNL so indirectly Airtel is loosing revenue from the
rural sector.

OPPORTUNITIES
 THE FAST EXTENDING IPLC MARKET An IPLC (international private
leased circuit) is a point-to-point private line used by an organization to
communicate between offices that are geographically dispersedthroughout the
world. An IPLC can be used for Internet access, business data exchange,
video conferencing, and any other form of telecommunication. Airtel Enterprise
Services and SingTel jointly provide IPLCs on the Network i2i. The Landing
Station in Singapore is managed by SingTel and by Airtel in Chennai (India).
Each Landing Station has Power Feeding Equipment, Submarine Line
Terminating Equipment and SDH system to power the cable, add wavelengths
and convert the STM-64 output to STM-1 data streams respectively.

 LATEST TECHNOLOGY AND LOW COST ADVANTAGEThe costs of

introducing cellular services for Airtel are marginal in nature, as it needs only
to augment its cellular switch/equipment capacity and increase the number of
base stations. The number of cities, towns and villages it has covered already
works to its advantage as putting more base stations for cellular coverage in
these areas comes with negligible marginal cost. Besides such cost
advantages, it has also other cost advantages for the latest cellular
technology. As a late entrant into the cellular market, it has dual advantage of
latest technology with modern features, unlike other private cellular operators
who started their service more than 4-5 years back and low capital cost due to
advantages of large scale buying of cellular switch/equipment.

 HUGE MARKETThe cellular telephony market is presently expanding at a

phenomenal / whopping __ rate every year and there is still vast scope for
Airtel to enter /expand in this market. Besides there is a vast rural segment
where the cellular services have not made much headway and many
customers are looking towards Airtel for providing the service to them. With
its wide and extensive presence even in the remotest areas, Airtel poised to

36
 gain a big market share in this segment when it expands cellular services into
the rural areas.

THREATS
 COMPETITION FROM OTHER CELLULAR It is time for BSNL to
improve/expand its cellular services. Fierce and cut-throat competition is
already in place with the markets ever abuzz with several tariff reductions and
announcement of attractive packages, trying to grab most of the ‗mind share‘
of the ‗king‘ - ‗the consumer‘, whose benefits are increasing with passing of
everyday. If BSNL is not innovative and agile, its cellular service will be a flop.
It needs to be proactive with attractive packaging, pricing and marketing
policies lest its presence in the market be treated with disdain by the private
cellular companies. The launch of WLL services by Reliance Infocomm has
aggravated the situation.

 MARKET MATURITY IN BASIC TELEPHONY SEGMENT Although Airtel

entered in the basic telephony market it‘s a biggest there for the company as
the basic telephony market has reached

37
CHAPTER-III

38
39
CHAPTER-IV

40
 PERFORMANCE APPRAISAL SYSTEM IN AIRTEL

Appraisal form of AIRTEL is highly comprehensive. There is only one form used in
AIRTEL and the same form is used for all the categories of employees. The
performance appraisal form in AIRTEL applies to promotions, annual increments
and disciplinary actions. On the basis of this form 5% people are promoted and 10%
are given additional benefits.
‗Checklist Method‘ does performance appraisal here. This method is less time
consuming and the appraiser can get him acquainted with performance at a glance.
Under it, there is a printed form one for each person to be rated. This form consists
of a number of traits like initiative, job knowledge, ability to learn, personality etc.
Also the employee contribution like quantity and quality of work, attitude towards
work and fellow employees is also considered. In front of each factor, a number of
boxes are given and the appropriate box is ticked off. Sometimes for promotion
purposes, paired comparison technique is also used.
In the Annual Confidential Report brief bio-data of the employee is incorporated
such as name, position, department, category, pay scale, basic consolidated salary,
date of increment falling due date of expiry of probationary period/apprentice
period/temp. engagement, additional benefits given during last one year and the
attendance record.

Assessment is made mainly on the following points-

1. Quality of work- on the basis of frequency of mistakes and general
accuracy of work produced disregarding amount of work output given.

2. Quantity of work- on the basis of volume of work, output disregarding

mistakes in their factor.

3. Judgment- on basis of employee‘s ability to think clearly and make

logical decisions.

41
 4. Initiative- on the basis of his resourcefulness in handling assignment
without detailed instructions and ability to think on original lines.

5. Ability to learn- this is seen by the speed with which instructions are
grasped and new routines mastered.

6. Job knowledge- this assessment here is made on basis of knowledge for

job requirement gained through education and experience that is to see
whether he is familiar with the job or not.

7. Attitude- on basis of his attitude towards work and fellow employees that
is whether he is cooperative willingly and tries to do a through job.

8. Personality- on the basis of the effect of employee‘s personality upon

people contacted that is whether he makes a favorable impression by his
tact or whether he is courteous and friendly in his daily associations.
9. Safety- on the basis of whether the employee is safety conscious or not.
10. Supervision ability- this is applicable for supervisors only. Assessment
is made on the basis of the employee‘s ability to organize a group for
maximum efficiency and whether he has an ability to coordinate activities
of the group with other related groups within the organization.

For the unskilled and semi-skilled workers judgment, initiative, personality and
supervision ability are not applicable.

The Annual Confidential Report is filled by the immediate supervisors and is then
reviewed by the departmental head.

Promotion of executives is done on the basis of seniority as well as on performance

and merit. The Vice President (operations) does the final appraisal of executives.

42
43
CHAPTER-V

44
 OBJECTIVES OF STUDY

1) To study the performance appraisal system in AIRTEL.

2) To study the method used for performance appraisal in the organization.

3) To study the satisfaction level of the employees‘ after performance appraisal.

4) To provide suggestions if necessary.

(A) PURPOSE OF THE STUDY

The entire study has been based on the accomplishment of the following objectives.

 To measure the effectiveness of the performance appraisal.

 To know the most effective method of the performance appraisal.

(B) METHODOLOGY OF THE STUDY :

Specific and proper methodology was needed to make the research report

successful and the methodology adopted has been concerned with techniques for

collecting primary and secondary data. This research report work of mine was

centered in and around sales department where we gathered responses from around

35 employee. Primary data have been gathered on the basis of the structural

questionnaire which are designed under the guidance of the company concerned

people. The secondary information has been gathered from the company‘s internal

files and records.

45
 RESEARCH METHODOLOGY

No work can be completed without the research methodology. Research

methodology is an important tool which provides a technique to conduct the study
efficiently and effectively. Research methodology is a way to systematically solve the
research problem. It may be understood as a science of studying how research is
done scientifically.

RESEARCH METHODOLOGY is a way to systemically solve the research problem. It

may be understood as a science of studying how research is done. and it to study the

various steps that are generally adopted by a researcher in studying his research

problem it is necessary for the researcher to design the methodology form the

problem as a method differ from problem- problem.

Type of Research-Descriptive Research

Sampling Design-random sampling

Universe-The universe chooses for the research study is the employee of

Airtel,Lucknow

SAMPLE SIZE

I have chosen a sample size of the 100 employees.

DATA COLLECTION

46
Secondary data- Are collected through the various magazines and journal and

web sites of AIRTEL, Press releases of the company. Newsletters and Brochures and

detailed descriptive leaflets Magazines like Business World, Outlook, etc

Sample area-Employees of Airtel

47
CHAPTER-VI

48
AWARENESS OF PERFORMANCE APPRAISAL:

Existence of performance appraisal system

100%

yes

INTERPRETATION-

The whole population under study is aware of the existence of performance appraisal
system within the organization.

49
 NUMBER OF EMPLOYEES APPRAISED IN THE ORGANIZATION:

Appraisal of employees

100%

yes

INTERPRETATION-

100% of the employees within the organization are appraised.

50
NUMBER OF TIMES APPRAISAL TAKES PLACE:

Quarterly - 20%
Half yearly - 20%
Annually - 60%

INTERPRETATION-

For most of the employees‘ performance appraisal takes place annually.

METHODS OF PERFORMANCE APPRAISAL:

13% 13%

17% Self Appraisal

Observation
Check list
Others
57%

INTERPRETATION-

Checklist method is used for performance appraisal is 57%,observation method is

used by 17% ,self appraisal method and others are used in equal proportion i.e 13%

51
AWARENESS OF FEEDBACK BY SUPERIOR AFTER PERFORMANCE
APPRAISAL:

feedback after performance appraisal

20%

yes
no

80%

INTERPRETATION-

Majority of the employees are aware of the feedback provided by the superior after
performance appraisal.80% are aware of performance appraisal and 20% are not.

POSITIVE CHANGE FELT BY EMPLOYEES AFTER APPRAISAL

Positive change felt by employees in their performance after appraisal

12%

yes
no

88%

INTERPRETATION-

Most of the employee‘s belief that after performance appraisal there has been a
positive change in their performance level.88% feel the change and 12% did not.

52
SATISFACTION LEVEL OF EMPLOYEES TOWARDS PERFORMANCE
APPRAISAL

Satisfaction level of employees towards performance appraisal system

40%
satisfied
unsatisfied

60%

INTERPRETATION-

Majority of the population under study is satisfied with the performance appraisal
system carried out in the organization 60% are satisfied and 40% are not.
NEED OF IMPROVEMENT IN PERFORMANCE APPRAISAL SYSTEM
Need of change or improvement in performance appraisal system

44% yes
no

56%

INTERPRETATION-

56% of the employee‘s belief that performance appraisal system can still be improved
and 44% employee belief that there is no need of improvement.

53
CHAPTER-VII

54
 FINDINGS

Mostly the whole population under study is aware of the performance appraisal
system done in the organization. All the employees are appraised by the head of the
human resource department.

The whole population under study is appraised annually by the head of the human
resource department. That is once in a year the performance appraisal system is
practiced in the organization.

All the employees in the organization are appraised by the checklist method. The
head of the personnel department prepares the checklist form containing questions
which is filled by all the employees.

Majority of the employees under study say that after performance appraisal they are
provided with proper feedback so that they can improve their performance and are
also guided for further betterments.

Most of the employees have found a positive change in their performance after
appraisal and proper feedback. After appraisal if the employees are not found up to
the mark then they are properly guided and trained for improvement.

Most of the employees are fully satisfied with the performance appraisal system done
in the organization but some of them also want some changes as they say that
nothing is perfect and everything can be improved.
Changes which the employees want in the appraisal system are-
The performance appraisal system should take place twice in a year that is
half yearly instead of yearly.
The appraisal system should not be biased.
The immediate head or supervisor of the employee should do the appraisal
and also provide proper feedback.

55
 RECOMMENDATIONS

1) The system can be redesigned in the sense that there should be three different
formats, one each for managers, officers and supervisors, and non-supervisors
personnel instead of the same format for each category.

2) The reliability of a rating system can be obtained by comparing the rating of two
individual for the same person.

3) The rating must be made by the immediate superior. However, a staff department
can assume the responsibility of monitoring the system. Though the staff
department cannot change any rating, it can point out inconsistencies to the rater
such as harshness, leniency, and central tendency and so on.

4) The system should be used as a mechanics to under trained difficulties of

subordinates and providing ways to remove them. The superior should
understand the strength and weaknesses of their subordinates and help them to
realize these. They should help the subordinates to become aware of their
positive contribution. They should also encourage them to accept more
responsibilities and challenges and acquire new capabilities. Finally the superior
should plan for effective utilization of the talents of subordinates.

5) Provision should be made to identify the training needs of the employees.

6) There should be a system of ‗self appraisal‘ of the employee. Along with the
appraisal form appraised by immediate superior, the employee should also
appraise himself and two forms should together go the personnel department. If
there is a wide disparity in any factor, then it should be analyzed and efforts
should be made to know the possible causes of the occurrence.

56
CHAPTER-VIII

57
 LIMITATIONS OF THE STUDY

1) The time during which the study was done was not sufficient.

2) The information provided by the employees was biased.

3) The employees were not fully aware of the performance appraisal system
being practiced in the organization.

4) Organization Structure was complex to study.

58
CHAPTER-IX

59
 CONCLUSION

Management in the modern times primarily means handling of men because it is

through them that the world moves. Of men, machine, money and material, men are
the most important assets possessed by the organization. They rely on the appraisal
system as a tool for deployment of manpower. But many people get upset the
moment they learn about the time for their performance to be appraised.

Performance appraisal is therefore a very vital tool for personal development and
because of the complex factors involved it has to be handled very delicately. It is a
process of assessing systematically the performance of a person on the job and his
potential for higher levels job in future. It provides an objective basis for taking
personnel decisions. If performance appraisal is not done properly then superiors will
not able to take proper personnel decisions. They will not be able to judge the
effectiveness of recruitment, selection, and placement and orientation system of the
organization.

If performance system is biased then the superior will not able to judge the real
performance of the employees and will not be able to give the proper feedback and
analyze their training and development needs. Systematic appraisal of employees
helps to develop confidence among them.

The performance appraisal system in a reputed organization like Airtel has been
studied with a view to analyze the practical implications of the system and to give
findings regarding the various aspects of the performance appraisal system and their
some of the applications. The various suggestions given have been based on the
survey conducted of different appraisers and appraises in the organization.

60
 BIBLIOGRAPHY

Tripathi, P.C: Personnel Management, Sultan Chand and Sons, New Delhi, 1995.

Monappa, Arun and M.S. Saiyidain: Personnel Management, Tata McGraw Hill, New
Delhi, 2004.

Boler, Malti: Performance Appraisal, Vikas Publishing House, New Delhi, 2005.

Flippo, Edwin B.: Personnel Management, McGraw Hill, Kogakusha, Tokyo, 2005.

Gupta, C.B.: Human Resource Management, Sultan Chand and Sons, New Delhi,
2007.

Webilography:

www.airtel.com

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