International Journal of Human Resource and Labor Laws

Volume 2 Issue 2

Effective Performance Appraisal in Private Banks- “Corrective to

Preventive Tool” With Special Reference to Coimbatore City, India

Dr. Ajitha.H1, Dr. Mohanapriya. B2

Assistant Professor
Department of Business Administration
St. Albert’s College (Autonomous) 1, St. Josephs College for women, Tirupur2
Corresponding Authors’ Email id: ajithah@alberts.edu.in, monasuresh.priya@gmail.com

Abstract
Banking is a fast-growing and competitive sector that plays an important role
in the development of the Indian economy. The study was conducted to find out
the relation of the effectiveness of performance appraisal on the performance
of employees in private sector banks in Coimbatore city. The study focused
mainly on the need for pre-assessment review practices to be followed
regularly before the formal performance appraisal is conducted, which
ultimately enhances the effectiveness of the performance appraisal system.
From the study, it was found that pre assessment reviews significantly affected
the overall performance of the employees in a positive way and helped to
handle grievance related to the performance appraisal system effectively.
Hence the result of the present study adds on to the available empherical
evidence and suggests better practices of performance appraisal to satisfy the
employees and improve their performance.

Keywords: - Performance appraisal, pre assessment review, grievance

handling.

INTRODUCTION very powerful HR tools like performance

Banking is a fast-growing and competitive appraisal is vital. In this highly
sector that plays an important role in the competitive world, the success of any
development of the Indian economy. To organization depends on its human
enhance the performance of these banks, resource and its performance. In the

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 International Journal of Human Resource and Labor Laws
Volume 2 Issue 2

present day's organization, performance employee performance are also

appraisal's effectiveness acts as a catalyst highlighted to the employees and can be
for employees' effective performance motivated to perform better before the
(Smita A Kumbhar,2011). formal appraisal.

Various levels of pre-assessment review Need for the study

sessions conducted before the formal Performance Appraisals can affect
performance appraisal are essential for organizational performance, both
enhancing the performance appraisal positively and negatively. But an effective
system's effectiveness. Pre-assessment performance appraisal system remains a
review sessions are informal evaluations practical challenge in most of the
conducted at regular interval of time for organizations. According to Coens and
the employees to highlight their Jenkins (2000), inaccuracies in appraisal
performance in KPAs once in every can even de-motivate the employees.
month. The final rating is not done, and
actions based on the rating are not imposed HR tools are much effective if it is used to
on the employees in pre assessment improve the performance instead of taking
sessions. The basic criteria of the actions based on evaluation results. Hence
Performance Appraisal System are regular pre-assessment review practices
followed in pre assessment sessions. are vital to overcoming the pitfalls of
formal performance appraisal. Relative
A series of pre-assessment sessions will lack of research about pre-assessment
help the employees know the areas in review sessions in improving the
which they are lacking or need effectiveness of performance appraisal in
improvement. Hence before the final and Private Sector Banks is the primary
formal appraisal, the employees will have impetus for this study.
enough time to improve their performance
and meet the criteria of the appraisal REVIEW OF LITERATURE
system. On the other hand, the appraisers The effectiveness of the performance
will be able to overcome the drawbacks of appraisal system was examined in the
the appraisal system and will be able to Insurance sector in Himachal Pradesh by
handle the employee grievances associated Dr. Kulwant Singh Pathania, Ashish
with the system. Areas of improvement in Kumar Nag and Anuragha D.

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 International Journal of Human Resource and Labor Laws
Volume 2 Issue 2

Pathak(2011). It was found from the study includes a) What leads to effectiveness of
that for an effective appraisal system, Performance Appraisal System and how it
mutual trust, clear objective, can be defined and b) how can the
standardization, training, job-relatedness, organizations identify if the Performance
documentation, feedback and participation, Appraisal System used in the organization
individual difference, post appraisal produces the desired result. Further, the
review and appeal are the factors that need author has attempted to create a model that
to be considered. identified some of the cognitive
characteristics of supervisors and
Zachary Dechev and Dr. J.J.A.Kamphorst employees that explain certain variance in
(2010), in their study “ Effective the effectiveness of Performance Appraisal
Performance Appraisal- A study into the in the organization. According to the
relationship between satisfaction and author, the overall perception of justice of
optimizing business results”, has found Performance Appraisal System, accuracy
that the effective appraisal process in completing the Performance Appraisal
correlated with a high level of satisfaction process and employee’s level of
of employees and employee engagement. organizational commitment relates to
Performance Appraisal effectiveness. In
Smita A Kumbhar (2011), the challenge the popular work of Irmgard Schweiger
faced by a present-day organization and Glenn Sumners (1994) “Optimizing
depends on PAS's effectiveness, which the Value of Performance Appraisals",
ultimately acts as a catalyst for employees' they explain that in a well planned and
effective performance. Kithuku and organized Performance Appraisal system
Victoria Mutile(2012) identified that PA which aims at training and development
used in the organization could have both part of the evaluation will help in
positive and negative impact on employee improving the performance of the
performance. employees than any other type. The
developmental approach (modern
Jonathan Anderson (2002), in their study approach) of Performance Appraisal is
“Measuring Human Capital: Performance referred to as the usage of rating for
Appraisal Effectiveness”, has attempted to training and development and provision of
identify the answers to certain questions feedback to employees (Boswell and
related to Performance Appraisal which Boudreau (2000)).

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 International Journal of Human Resource and Labor Laws
OBJECTIVES AND METHODOLOGY
Research is a search for new and useful
information on a particular topic in a
systematic and logical way. The research
methodology is a systematic investigation
and is the more formal, systematic,
intensive process of carrying on the
scientific method of analysis (Best, 1977).
The purpose of the research was to gain
insight into the effectiveness
performance appraisal affected by the
regular pre-assessment sessions
performance appraisal in new private
sector banks.
Objectives of the study
The major objectives of the study are
 To find the relevance of frequent pre-
assessment review sessions of PA on
the job performance of employees.
 To find the relation of pre-assessment
review practices of PA on effective
grievance handling.
Hypotheses
A research hypothesis is a statement
created by researchers to speculate upon a
research or experiment's outcome.
 H0- there is no significant relevance of
the pre-assessment review session of
PA on the job performance
employees.
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Volume 2 Issue 2
 H0- there is no significant relation of
pre-assessment practices of PA on
effective grievance handling.
Research methodology
Research design is the structure that has
been formed to seek answers to research
questions. The study was a descriptive
study aimed at gaining an in depth
of understanding and measuring the impact
that regular pre assessment session of
of performance appraisal has on the
effectiveness of performance appraisal in
new private sector banks.
The researcher identified the respondents
using Stratified Random sampling. The
data required for the study was collected
from 300 employees of new private sector
banks. Both primary and secondary data
were collected for the study.
The primary data was gathered at the field
level through a structured questionnaire
from employees of new private sector
banks in Coimbatore city. The secondary
data required for the study was collected
from journals, review articles, websites
etc. The statistical tool Carl Pearson’s
correlation coefficient was used to analyze
the data collected.
of
 International Journal of Human Resource and Labor Laws
Volume 2 Issue 2

ANALYSIS AND DISCUSSIONS

Correlation between frequent pre assessment sessions of PA and employee performance

Table 1
Correlations

Total employee Total pre-assessment

S.No.
performance sessions

Pearson Correlation 1 .898**

Total
1. employee Sig. (2-tailed) .000
performance
N 300 300

Total Pearson Correlation .898** 1

Pre assessment Sig. (2-tailed) .000

2.
session
N 300 300

**. Correlation is significant at the 0.01 level (2-tailed)

To determine the strength of the association between the variables is high

relationship between variables Pearson (r=0. 898), and that the correlation
Correlation Co-efficient is used. The coefficient is significantly different from
proposed null hypothesis was as follows: zero (P<0.001).

H0- there is no significant relevance of
pre assessment review session of PA on
job performance of employees.
The above table shows the Correlation
between pre-assessment review sessions of
performance appraisal
performance of employees. The strength of
Hence the null hypothesis is rejected. This
shows that if relevant pre-assessment
review sessions of PA are conducted, it
helps to improve the performance of
employees in a drastic way.
and job

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 International Journal of Human Resource and Labor Laws
Volume 2 Issue 2

Correlation between pre assessment review session in PA and effective employee

grievance handling

Table 2
Correlations

S. Total employee Total pre assessment

No. grievance handling sessions

Pearson Correlation 1 .698**

Total employee
1. grievance Sig. (2-tailed) .000
handling
N 300 300

Pearson Correlation .698** 1

Total pre-
2. assessment Sig. (2-tailed) .000
sessions
N 300 300

**. Correlation is significant at the 0.01 level (2-tailed).

To determine the strength of the of association between the variables is

relationship between the factors Pearson
Correlation Co-efficient is used. The
proposed null hypothesis was as follows:
H0- there is no significant relation of pre
assessment practices of PA on effective
grievance handling of employees.
The above table shows the Correlation
between pre-assessment review sessions of
performance appraisal and effective
employee grievance handling. The strength
high (r=0. 698), and that the correlation
coefficient is significantly different from
zero (P<0.001).
Hence the null hypothesis is rejected. This
shows that if relevant pre-assessment
review sessions of PA are conducted, it
helps to improve the effectiveness of
grievance handling of employees.

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 International Journal of Human Resource and Labor Laws
Volume 2 Issue 2

FINDINGS, SUGGESTIONS AND a. Employee Awareness

CONCLUSIONS The employees will understand the
Findings processes involved in the appraisal system
The analysis results showed that the when pre-assessment sessions are
frequent pre-assessment sessions conducted regularly before the formal
conducted before the formal appraisal appraisal is conducted.
would help to improve the performance of
the employees in a drastic way. It was also b. Employees’ Suggestions Accepted
found from the analysis results that and Grievances Handled
conducting frequent per assessment The scope of employee’s involvement in
sessions will help to effectively handle the framing policies and appraisal system
grievance of the employees with the processes will be high compared to the
performance appraisal system when conventional appraisal system. The
compared to conventional steps followed employees' grievances with the appraisal
in the appraisal process. system and the appraisal results can be
handled effectively in the subsequent pre-
Suggestions assessment sessions.
Private Banks invest a lot of resources in
their performance appraisal system. PAS's c. Drawbacks of the system rectified
effectiveness is attained if it is used to The management and the appraisers can
improve the performance of employees, review the appraisal process and the steps
then taking actions for their low involved in it, and have the chance of
performance. rectifying that before the final appraisal is
conducted.
Hence for a developmental approach of
performance appraisal system, regular pre- d. Employee Acceptability
assessment review sessions are the best Employees have the chance to get
solution. The various benefits of the involved in the decision-making process
regular pre-assessment session include the related to the appraisal process and the
following. grievances are also handled in a timely
manner. Hence the resistance of the
employees with the system will reduce,
thereby enhancing their acceptability level.

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 International Journal of Human Resource and Labor Laws
Volume 2 Issue 2

e. Effective System of Performance Effectiveness”, Midwest Academy

Appraisal of Management Conference
The drawbacks and the limitations of the III. Burke, R.J., Wertzel, W. and Weir,
appraisal systems can be overcome in the T. (1978),” Characteristics of
successive pre-assessment sessions. Hence Effective Employee Performance
the formal performance appraisal system Review and Development
can be made effective. Interviews: Replication and
Extension”, Personnel Psychology,
CONCLUSION 31, 1978, pp. 903-909.
Banking in the private sector is evolving IV. Longenecker, C.O. and Goff, S.J.
with time and in order to sustain its (1992), “Performance Appraisal
position and grow in the competitive Effectiveness: A Matter of
market, the management should take steps Perspective”, Advanced
to make PAS effective, which leads to the Management Journal, 57, 2, 1992,
high performance of employees. Frequent pp.18- 23.
pre-assessment review techniques can help V. Pallavee Shrivastava and Usha
to reap the benefits of PAS to the fullest. Kiran Rai (2012),” performance
Hence the result of the present study adds appraisal practices in indian
on to the available empherical evidence banks”, A Journal of Management,
and suggests better practices of Vol.5 No.2, Dec 2012.
performance appraisal to satisfy the VI. Todd Grubb (2007),” Performance
employees and improve their performance. Appraisal Reappraised: It’s Not All
Positive”, Journal of Human
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