SUMMER TRAINING

PROJECT REPORT

On

“A STUDY ON THE EFFECTIVENESS OF PERFORMANCE

APPRAISAL AT QUANTUM IT INNOVATIONS”

Submitted for the partial fulfilment of the requirement for the

award of
Master of Business Administration
Session- 2018-2019

SUBMITTED BY: UNDER THE GUIDANCE:

MINAL MITTAL Mr. YASHWANT KUMAR
M.B.A. III Sem. Faculty, M.B.A.
P. R. No. – 1828100098

BHARATI VIDYAPEETH DEEMED UNIVERSITY

SCHOOL OF DISTANCE EDUCATION
Academic study center – BVIMR, New Delhi
An ISO 9001:2008 Certified institute
NAAC Accredited Grade “A” University

1
 ACKNOWLEDGEMENT

In pursuing and completion of my MBA and other commitments, I undertook the

task of completing my project on “A Study on the Effectiveness of Performance
Appraisal at Quantum IT Innovations”. To this I would like to thank and convey
my gratitude to the Management of Quantum IT Innovations. who allowed me to
conduct my project and gave me their whole-hearted support.

I also record my thanks Mr. Nitin Sharma (Inter Guide at Quantum IT

Innovation)and all the employees and fellow employees of Quantum IT
Innovations. Some of whom were frank and forthright and a few who were slightly
apprehensive but nevertheless gave me their full co-operation. To all those I owe a
debt of gratitude.
I am fortunate in having sought and secured valuable guidance, continuous
encouragement and strong support at every stage of my guide and supervisor
Mr. Yashwant Kumar, Faculty Management of Bharati Vidyapeeth Deemed
University School Of Distance Education, New Delhi and am deeply grateful to him.

I want to acknowledge the help provided by guide and friends. The precious inputs
provided by them have helped in compiling this report. As well as I want to thank
my friends and colleagues who helped me in this working.

I express my deep-hearted thanks and gratitude to all of those who helped me in this
Project.

2
 STUDENT UNDERTAKING
Certificate of Originality
I Minal Mittal, MBA III Sem would like to declare that the project report entitled “A
Study On The Effectiveness Of Performance Appraisal At Quantum It Innovations”
Submitted to Bharati Vidyapeeth University Pune, School of Distance Education
Pune, Academic Study Centre BVIMR New Delhi in partial fulfillment of the
requirement for the award of the degree.
It is an original work carried out by me under the guidance of Mr. Yashwant Kumar.
All respected guides, faculty member and other sources have been properly
acknowledged and the report contains no plagiarism.
To the best of my knowledge and belief the matter embodied in this project is a
genuine work done by me and it has been neither submitted for assessment to the
University nor to any other University for the fulfillment of the requirement of the
course of study.

MINAL MITTAL
M.B.A. III Sem.
P. R. No. – 1828100098

3
 PREFACE

Company Name: Quantum IT Innovations

Company Profile: Quantum operations began in India in the mid-1950s, Quantum

is one of the leading IT and ITES player in the industry. Quantum offer smartest
and proven IT services. Quantum offers the best Software solutions to both small
and large Business entities. Quantum provides a tremendous opportunity to market
product and services for all business. Quantum help out clients to achieve a
maximum ROI. Quantum expertise in developing dynamic, robust and high end
CMS websites utilizing latest technologies like VB.net, asp.net, PHP, Java, Python
etc.

4
TABLE OF CONTENTS

1. Company Profile
2. Introduction Review
3. Research Methodology
 Research Design
 Research Sample
4. Data Analysis
5. Data Collection
6. Findings
7. Summary and Conclusions
8. Bibliography
9. Annexure – Survey Questionnaire

5
 CHAPTER 1

COMPANY PROFILE
1.1 Profile
Quantum IT Innovation began in India in 2014, Quantum has grown to become one
of the most highly regarded companies in this country. Quantum offer a smartest
and proven IT Services. Quantum possess Maximum expertise and experience in
wide ranging domains i.e Web Development, Mobile App Development, Digital
Marketing, Software Development. Quantum is turning up rapidly as the industry’s
leader in offering premium software solutions.

Quantum is one of the leading company offices in India, USA and UK that started
making Mobile App:- Android, Windows, Swift and iOS Apps. It expertise in
developing dynamic robust and high end CMS website utilizing latest technologies
like VB.net, asp.net, PHP, Java, Python etc.

Quantum offers the best software solutions to both small and large business entities.
Quantum’s Social Media Marketing provides a tremendous opportunity to market
product and services for all business.

Quantum offer innovative Digital Marketing Service. Quantum help out clients to
achieve the maximum ROI through their Digital Out Of Home (DOOH) solutions
that combine Designing and Development with Online Marketing and Social Media
Embedding.

6
1.2 PERFORMANCE APPRAISAL AT QUANTUM IT
INNOVATION.

Directed towards constructive business and performance improvement strategies,

the dialogue should cover these main time slices:-

1. Reviewing the past

2. Considering the present

3. Looking into future

The dialogue is intended to benefit both partners in many ways:-

 By clarifying specific responsibilities, key contributions expected
and relating these to the organizations objectives.

 By helping to understand what is expected of each partner and

where their efforts should be concentrated.

 By reviewing past successes and failures from the preceding period

and the lessons to be learnt from them.

 By discussing how the day-to-day relationship is felt to be

supportive, constructive or restrictive.

 By checking whether the working environment is effectively

deployed, organized and resources economically and effectively
deployed.

 By sharing mutual aspirations ideas, hopes, challenges to improve

and inspire higher performance standards.

 By providing a realistic, data based framework for fair

performance evaluation.

 By crystallizing role enlargement, role enrichment and training and

development.

 The objectives of the performance dialogue don’t require anything new

of each partner, it simply ensures of basic communication responsibilities
in a formal way and on a regular basis, an enlightened comprehensive
stocktaking and planning of performance and related issues for

7
 improvement.

1.3 SETTING GOALS / KEY RESULT AREAS (KRAS) /

TARGETS

 Job profile helps to identify responsibilities and enlist them in

accordance of their importance. The most important
responsibilities should come first and routine responsibilities
should come at the end.

 Set 3 goals for each quarter. Some of the goals will continue
throughout the year. e.g. Sales, recovery and some of goals will be
for a specific period. Out of these 3 goals, 2 goals should be of
very important nature and one goal could be that of routine
responsibility or improvement.

 As far as possible the KRA / Targets should be:-

o To increase sales volume

o To reduce costs and waste

o To collect from debtors

o To improve the innovative methods and processes

Unless the goals are on these lines, they would not be goals but would be routine
assignments. Goals should be quantifiable and their performance measurable. Unless
goal is quantified in terms of numbers or time, it would not be measurable.

At the end of the year, managers have the opportunity to have a performance
dialogue with superior. During the discussions managers have to convince their
superior about their performance or superior will have to convince managers for his
expectations. The kind of dialogue is important that gives opportunity to both - the
superior as well as sub-ordinate – to remove the misconceptions and realize each
other’s difficulties and also helps to understand each other in a better manner.

8
1.4CRITICAL ATTRIBUTES

CONCEPTUAL SKILLS

1. Proactive skills

 Ability to anticipate problems and undertake steps to resolve them.

 Effectiveness in influencing events.

2. Analytical & Planning skills

 Competence in analyzing a problem in its various aspects

 Generation and evaluation of various alternative in problem solving

 Vision, foresight and power of anticipation

 Allotment of correct priorities and setting realistic objectives.

3. Total perspective

 Ability to look at the total picture and take an overall view.

 Ability to work through stated philosophy / values / policies

 Ability to take optimal decisions to the advantage of the overall

organization (and not only the best for own department / unit)

4. Integrated Skills

 Ability to harmonic and integrate divergent views

9
Human Skills

1. Leadership

 Ability to direct, co-ordinate work and plan activities of the team.

 Judicious delegation of authority to other while ensuring effective

control.

 Ability to get the work done through subordinates – though corrective

action / follow up.

2. Training & Development of subordinates

 Degree of guidance and encouragement provided to subordinates to

develop their full potential.

 Efforts made for imparting on-the-job training.

 Utilization of training facilities / resources for growth and

development of subordinates.

3. Ability to inspire and motivate

 Personnel bearing, example and enthusiasm in inspiring and motivating

others.

 Degree of impact on the team members

 Level of moral amongst subordinates

 Ability to command respect from subordinates

 Concern for welfare of subordinates

10
4. Interpersonal Relationship

 Skills in establishing and maintaining rapport with people

 Internal – seniors, peers, juniors

 External – Personnel in other companies

5. Tact & Cooperation

Ability to maintain cordial and harmonious relations in work situations

 Receptivity to different view points

 Degree of cooperation and co-ordination with colleagues and seniors

 Degree of active participation in group efforts in work situations

6. Communication

 Clarity, precision and effectiveness in expression both – verbal and

written.

 Extent, manner and periodicity of communication

7. Resolution of conflict

 Courage to confront issues constructively / tactfully

11
FUNCTIONAL SKILLS

1. Job Knowledge

 Level of professional knowledge in terms of depth, breadth and

currency in relation to the requirement of the job.

 Degree of proficiency in the application of knowledge to the assigned

tasks

 Clarity of objectives relating to own functions

2. Planning & Organizing

 Foresight and vision in anticipating work needs

 Ability in analyzing problem in it’s various aspects

 Ability to accord correct priorities

 Degree of competence in making effective use of resource in terms of

men, material and time.

3. Decision Making

 Ability to take optimal and prompt decisions after due evaluation of

available alternatives.
Willingness to take risk, after careful exploration of opinions

PERSONALITY ATTRIBUTES

1. Dependability

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  Ability to accomplish task on time without sacrificing quality.

 Ability to accomplish task consistently with little or no supervision.

2. Openness

 Quality of being frank and candid in accepting and giving suggestions,

ideas, opinions etc.

3. Creativity / Innovativeness

 Capacity for original thinking

 Ability to produce fresh / new ideas deviating from the traditional

pattern of thinking.

Perseverance

 Ability to persist and continue actively in the face of difficulty,

opposition and counter influence.

Empathy / Sensitivity

 Capacity to understand and appreciate others feelings.

Integrity (Intellectual & Moral)

 Courage of own convictions

 Degree of honesty and uprightness in stating facts and giving correct

information even at the risk of personal disadvantage.

Loyalty / Commitment

 Readiness with which additional responsibility is willingly accepted

 Subordination of personal interest to the overall interest of the company

13
  Degree of trustworthiness

Self – confidence

 Personality (strong or weak)

14
 CHAPTER 2
INTRODUCTION REVIEW

2.1 Overview
‘PERFORMANCE APPRAISAL IS A FORMAL, STRUCTURED SYSTEM
OF MEASURING AND EVALUATING AN EMPLOYEES JOB, RELATED
BEHAVIORS AND OUTCOMES TO DISCOVER HOW AND WHY THE
EMPLOYEE IS PRESENTLY PERFORMING ON THE JOB AND HOW
THE EMPLOYEE CAN PERFORM MORE EFFECTIVELY IN THE
FUTURE SO THAT THE EMPLOYEE, ORGANIZATION, AND SOCIETY
ALL BENEFIT’.

Performance appraisal is a process of summarizing, assessing and developing the

work performance of an employee.

In order to be effective and constructive, the performance manager should make

every effort to obtain as much objective information about the employee's
performance as possible.

Performance Appraisal is a review and discussion of an employee's performance of

assigned duties and responsibilities based on results obtained by the employee in
their job, not on the employee's personality characteristics.

Personality should be considered only when it relates to performance of assigned

duties and responsibilities.

It is a structured formal interaction between a subordinate and supervisor, that

usually takes the form of a periodic interview (annual or semi-annual), in which the
work performance of the subordinate is examined and discussed, with a view to
identifying weaknesses and strengths as well as opportunities for improvement and
skills development.

In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are used
to identify the better performing employees who should get the majority of
available merit pay increases, bonuses, and promotions.

15
By the same token, appraisal results are used to identify poorer performers, who
may require some form of counseling, or in extreme cases, demotion, dismissal or
decreases in pay.

2.1 Modern Performance Appraisal

Performance appraisal may be defined as a structured formal interaction between a

subordinate and supervisor, that usually takes the form of a periodic interview
(annual or semi-annual), in which the work performance of the subordinate is
examined and discussed, with a view to identifying weaknesses and strengths as
well as opportunities for improvement and skills development.

In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are used
to identify the better performing employees who should get the majority of
available merit pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers who
may require some form of counseling, or in extreme cases, demotion, dismissal or
decreases in pay. (Organizations need to be aware of laws in their country that
might restrict their capacity to dismiss employees or decrease pay.)

Whether this is an appropriate use of performance appraisal - the assignment and

justification of rewards and penalties - is a very uncertain and contentious matter.

Hence the purpose of my study is to assess and analyze with reference to Quantum
IT Innovations. the impact of HR practices in the organizational performance. To
analyze the prevailing Performance Appraisal Practices at Quantum IT Innovations.
These strategic HR practices need to be integrated with the organizational goal for
successful working of the organization.

16
2.3 Review of Literature
Performance appraisal is necessary to measure the performance of the employees
and the organization to check the progress towards the desired goals and aims.
The latest mantra being followed by organizations across the world being – "get
paid according to what you contribute" – the focus of the organizations is turning to
performance management and specifically to individual performance.

Performance appraisal helps to rate the performance of the employees and evaluate
their contribution towards the organizational goals. If the process of performance
appraisals is formal and properly structured, it helps the employees to clearly
understand their roles and responsibilities and give direction to the individual’s
performance. It helps to align the individual performances with the organizational
goals and also review their performance.

Performance appraisal takes into account the past performance of the employees
and focuses on the improvement of the future performance of the employees.

People differ in their abilities and their aptitudes. There is always some difference
between the quality and quantity of the same work on the same job being done by
two different people. Performance appraisals of Employees are necessary to
understand each employee’s abilities, competencies and relative merit and worth for
the organization. Performance appraisal rates the employees in terms of their
performance.

Performance appraisals are widely used in the society. The history of performance
appraisal can be dated back to the 20th century and then to the second world war
when the merit rating was used for the first time. An employer evaluating their
employees is a very old concept. Performance appraisals are an indispensable part
of performance measurement.

17
Among these performance Appraisal are the measure of the effectiveness of hiring
the employees Appraisal are like Balance- sheets- a snapshots of past performance,
but they need to be given the shape of a profit and loss statement a moving picture.

2.4 Aim
There are basically many purposes to which performance appraisal-

 First, it can be used as a basis for reward allocations. Decisions as who will
get salary increases, promotions, and other rewards are determined by their
performance evaluation.

 Second, these appraisals can be used for identifying areas where

development efforts are needed. Management needs to spot those
individuals who have specific skill or knowledge deficiencies. The
performance appraisal is a major tool for identifying these deficiencies.

 Finally the performance appraisal can be used as a criterion against which

selection devices and development programs are validated. It is one thing to
say, for example, that our selection process is successful in differentiating
satisfactory performers from unsatisfactory performers.

18
THE APPRAISAL PROCESS

Established Performance Standards



Communicate Performance expectations to employee



Measure actual performance



Compare actual performance with standards



Discuss the appraisal with the employees



If necessary, initiate the corrective action

The appraisal process begins with the establishment of performance standards.

These should have evolved out of job analysis and the job description discussed
under human resources planning. These performance standards should also be clear
and objective enough to be understood and measured.

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Communication only takes place when the transference of information has taken
place and has been received and understood by the subordinate. Therefore feedback
is necessary from the subordinate to the manager. Satisfactory feedback insures that
the information communicated by the manger has been received and understood in
the way it was intended.

The third step is to determine what actual performance is, it is necessary to acquire
information about it. We should be concerned with how we measure and what we
measure.

What we measure is probably more critical to the evaluation process than how we
measure, since the selection of the wrong criteria can result in serious dysfunctional
consequences. And that we measure determines, to a great extent, what people in
the organization will attempt to excel at.

One of the most challenging tasks faced by mangers is to present an accurate

appraisal to the subordinate and then have the subordinate accept the appraisal in a
constructive manner

Appraising performance touches on one of the most emotionally charged activities

the assessment of another individual’s contribution and ability. The impression that
subordinates receive about their assessment has a strong impact on their self esteem
and very important, on their subsequent performance.

The final step in the appraisal is the initiation of corrective action when necessary.
Corrective action can be of two types. One is immediate and deals predominantly
with symptoms. The other is basic and that look out for causes. Immediate action
corrects something right now and gets things back on track.

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Supervisors have conducted performance appraisals for years. Employees have
attended training sessions for years. Organization members have worked long, hard
hours for centuries. Processes, such as planning, budgeting, sales and billings have
been carried out for years in organizations. But all too often, these activities are
done mostly for the sake of doing them, not for contributing directly to the preferred
results of the organization.

Performance management reminds us that being busy is not the same as producing
results. It reminds us that training, strong commitment and lots of hard work alone
are not results.

The major contribution of performance management is its focus on achieving results

-- useful products and services for customers inside and outside the organization.
Performance management redirects our efforts away from busyness toward
effectiveness.

Recently, organizations have been faced with challenges like never before.
Increasing competition from businesses across the world has meant that all
businesses must be much more careful about the choice of strategies to remain
competitive. Everyone (and everything) in the organization must be doing what
they're supposed to be doing to ensure strategies are implemented effectively.

21
This situation has put more focus on effectiveness, that systems and processes in the
organization be applied in the right way to the right things: to achieve results. All of
the results across the organization must continue to be aligned to achieve the overall
results desired by the organization for it to survive and thrive. Only then it be said
that the organization and its various parts are really performing.

THE HISTORY OF PERFORMANCE APPRAISAL

Its roots in the early 20th century can be traced to Taylor’s pioneering Time and
Motion studies. But this is not very helpful, for the same may be said about almost
everything in the field of modern human resources management.

As a distinct and formal management procedure used in the evaluation of work

performance, appraisal really dates form the time of the second World War- not
more than 60 years ago. Yet is a broader sense, the practice of appraisal is very
ancient art. In the scale of things historical, it might well lay claim to being the
world’s second oldest profession.

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Appraisal is both inevitable and universal. In the absence of a carefully structured
system of appraisal, people will tend to judge the work performance of others,
including subordinates, naturally, informally and randomly.

The human inclination to judge can create serious motivational, ethical and legal
problems in the workplace. Without a structured appraisal system, there is little
chance of ensuring that the judgment made will be lawful, fair, defensible and
accurate.

Performance appraisal systems began as simple methods of income justification, i.e.

appraisal was used to decide whether the salary or wage of an individual employee
was justified or not.

The process was firmly linked to material outcomes. If an employee’s performance

was found to be less than ideal, a cut in pay would follow. On the other hand, if
their performance was better than the supervisor expected, a pay rise was in order.

Sometimes this basic system succeeded in getting the results that were intended; but
more often than not, it failed.

For example, early motivational researchers were aware that different people with
roughly work abilities could be paid the same amount of money and yet have quite
different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important,
yes, but they were not the only element that had an impact on employee
performance.

23
It was found that other issues, such as morale and self-esteem, could also have a
major influence.

As a result, the traditional emphasis on reward outcomes was progressively rejected.

In the 1950s in the United States, the potential usefulness of appraisal as tool for
motivation and development was gradually recognized. The general model of
performance appraisal, as it is known today, began form that time.

Modern Appraisal

Performance appraisal may be defined as a structured formal interaction between a

subordinate and supervisor, that usually takes the form of a periodic interview
(annual or semi-annual), in which the work performance of the subordinate is
examined and discussed, with a view to identifying weaknesses and strengths as
well as opportunities for improvement and skills developments.

In many organizations- but not all- appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are used
to identify the better performing employees who should get the majority of
available merit pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers who
may require some form of counseling, or in extreme cases, demotion, dismissal or
decreases in pay. (Organization needs to be aware of laws in their country that
might restrict their capacity to dismiss employees or decrease pay.)

Whether this is an appropriate use of performance appraisal – the assignment and

justification of rewards and penalties- is a very uncertain and contentious matter.

The performance appraisal process has become the heart of the human resource

24
management system in the organizations. Performance appraisal defines and
measures the performance of the employees and the organization as a whole. It is a
tool for accessing the performance of the organization. The important issues and
points concerning performance appraisal in the present world are:

 The focus of the performance appraisals is turning towards

career development relying on the dialogues and discussions with the
superiors.

 Performance measuring, rating and review systems have become more

detailed, structured and person specific than before.

2.4OBJECTIVES OF PERFORMANCE APPRAISAL

Performance Appraisal process show that organization undertake performance

appraisal to meet certain objectives which are in the form of salary increase,
promotion, identifying training and development needs and putting pressure on the
employees for better performance.

The objectives are explained in the following points:

SALARY INCREASE: - Performance appraisal plays a major role in making

decision about salary increase. The increment in the salary depends on how the
employee performs the job, and there is a continuous evaluation of his performance
formally or informally. In small organizations as there is direct contract between the
superiors and the subordinate, performance appraisal can be an informal process,
but in large organizations where direct contract hardly exists the performance
appraisal process is formal.

PROMOTION: - Performance appraisal discloses how an employee is working in

his present job and what his strong and weak points are. In the light of these, it can

25
be decided whether he can be promoted to the next higher position and what
additional training will be necessary for him. Similarly, performance appraisal can
be used for transfer, demotion, and discharge of an employee.

TRAINING AND DEVELOPMENT: - Performance appraisal tries to identify the

perfection of an employee on his present job. This information can be used for
devising Training & Development programme appropriate for overcoming
weakness of the employee.

PRESSURE ON EMPLOYEES: - Performance appraisal puts some sort of

pressure on employees for the better performance. If the employees are conscious
that they are being appraised in respect of certain factors and their future largely
depends on such appraisal, they tend to have positive and acceptable behavior in
this respect. Thus appraisal can work automatically as a control device.

26
SATISFACTION THROUGH FEEDBACK: - Performance appraisal provides
feedback to employees about their performance. A person works better when he
knows how he is working. The knowledge of how his efforts are contributing to the
attainment of organizational objectives provides him satisfaction, that his work is
meaningful. Through Feedback he comes to known his shortcomings and then he
tries to overcome them and contribute more to the achievement of goals set by the
organizations.

27
 Actions
Taking Corrective

Standards
Setting Performance
uni
Comm
g
catin rds
a
Stand

FLOWCHART OF PROCESS OF PERFORMANCE APPRAISAL

Discussing Results Measuring

Performance

Comparing With
Standards

28
PROCESS OF PERFORMANCE

ESTABLISHING PERFORMANCE STANDARDS: -

The first step in the process of performance appraisal is the establishment of certain
standards, which will serve as the basis of the evaluation. These standards should be
clear and in writing. It should be discussed with the supervisors to ensure that all the
relevant factors have been included. If work performance cannot be measured then
the personal characteristics, which contributed to employee’s performance must be
determined. These characteristics include work quality, honesty & reliability,
cooperation & teamwork, job knowledge, initiative, leadership, attendance, sense of
responsibility, health and physical conditions etc.

The standards should be mentioned in the appraisal form & the appraisal form
should be carefully designed and printed. In addition who is to do appraisal and how
frequently appraisal is to be done should also be decided.

29
COMMUNICATING THE STANDARDS: -

The performance standards specified are communicated and explained to the

employees so that they come to know what is expected of them. The standard
should be conveyed to the evaluators also. The reactions of the employees to the
standard should be obtained and if necessary the standard should be revised in the
light of the feedback received form the employees and the evaluators.

MEASURING PERFORMANCE: -

a.) The performance standards are specified and accepted.

b.) Measurement of the actual performance. This requires choosing the right
technique of management, identifying the internal and external factors influencing
performance and collecting information on results achieved. Personal observations,
written reports and face-to-face contacts are the means of collecting data on
performance.

COMPARING THE ACTUAL WITH THE RESULTS: -

Actual performance is compared with the predetermined performance standards.

Such comparisons reveal the deviations, which may be positive or negative. Positive
deviations occur when the actual performance exceeds the standards if actual
performance is less than the standards and if actual performance is less than the
standards then it is negative.

DISCUSSING THE APPRAISAL: -

The results of the appraisal are communicated to and discussed with the employees.
Along with the deviations the reasons behind them are also expressed and
discussed. Such discussion will enable the employees to know their weakness and
strengths and thus the employees will be motivated to improve him/her.

30
TAKING CORRECTIVE ACTIONS: - Through mutual discussions with
employees, the steps required to improve performance are identified and initiated.
Training, counseling etc. are examples of corrective actions that help to improve
performance.

PREREQUISITE OF SUCCESSFUL PERFORMANCE APPRAISAL

The essentials of an effective performance system are as follows:

Documentation: It means continuous noting and documenting the performance. It

also helps the evaluators to give a proof and the basis of their ratings.

Standards / Goals: The standards set should be clear, easy to understand,

achievable, motivating, time bound and measurable.

Practical and simple format: The appraisal format should be simple, clear, fair
and objective. Long and complicated formats are time consuming, difficult to
understand, and do not elicit much useful information.

Evaluation technique: An appropriate evaluation technique should be selected; the

appraisal system should be performance based and uniform. The criteria for
evaluation should be based on observable and measurable characteristics of the
behavior of the employee.

Communication: Communication is an indispensable part of the Performance

appraisal process. The desired behavior or the expected results should be
communicated to the employees as well as the evaluators. Communication also
plays an important role in the review or feedback meeting. Open communication
system motivates the employees to actively participate in the appraisal process.

Feedback: The purpose of the feedback should be developmental rather than

judgmental. To maintain its utility, timely feedback should be provided to the
employees and the manner of giving feedback should be such that it should have a
motivating effect on the employees’ future performance.

Personal Bias: Interpersonal relationships can influence the evaluation and the
decisions in the performance appraisal process. Therefore, the evaluators should be

31
trained to carry out the processes of appraisals without personal bias and effectively.

An organization comes across various problems and challenges Of Performance

Appraisal in order to make a performance appraisal system effective and successful.
The main Performance Appraisal challenges involved in the performance appraisal
process are as follows-

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DETERMINING THE EVALUATION CRITERIA

Identification of the appraisal criteria is one of the biggest problems faced by the
top management. The performance data to be considered for evaluation should be
carefully selected. For the purpose of evaluation, the criteria selected should be
in quantifiable or measurable term.

They should have the experience and the necessary training to carry out the
appraisal process objectively.

Prerequisites of Performance Appraisal-

The essentials of an effective performance system are as follows:

 Documentation: It means continuous noting and documenting the

performance. It also helps the evaluators to give a proof and the basis
of their ratings.

 Standards / Goals: The standards set should be clear, easy to

understand, achievable, motivating, time bound and measurable.

 Practical and simple format: The appraisal format should be simple,

clear, fair and objective. Long and complicated formats are time
consuming, difficult to understand, and do not elicit much useful
information.

 Evaluation technique: An appropriate evaluation technique should be

selected; the appraisal system should be performance based and
uniform. The criteria for evaluation should be based on observable and
measurable characteristics of the behavior of the employee.

 Communication: Communication is an indispensable part of the

Performance appraisal process. The desired behavior or the expected
results should be communicated to the employees as well as the
evaluators. Communication also plays an important role in the review
or feedback meeting. Open communication system motivates the
employees to actively participate in the appraisal process.

33
  Feedback: The purpose of the feedback should be developmental
rather than judgmental. To maintain its utility, timely feedback should
be provided to the employees and the manner of giving feedback
should be such that it should have a motivating effect on the
employees’ future performance.

 Personal Bias: Interpersonal relationships can influence the evaluation

and the decisions in the performance appraisal process. Therefore, the
evaluators should be trained to carry out the processes of appraisals
without personal bias and effectively.

CHALLENGES OF PERFORMANCE APPRAISALS

 It should be noted that performance appraisal is a simple yet complicated process

because it involves human beings. The challenges are many fold- Determining
the evaluation criteria: Identification of the appraisal criteria is one of the
biggest problems faced by the top management. The performance data to
be considered for evaluation should be carefully selected. For the purpose
of evaluation, the criteria selected should be in quantifiable or measurable
terms.

 Lack of competence: Top management should choose the raters or the

evaluators carefully. They should have the required expertise and the
knowledge to decide the criteria accurately. They should have the
experience and the necessary training to carry out the appraisal process
objectively.

 Errors in rating and evaluation: Many errors based on the personal bias
like stereotyping, halo effect (i.e. one trait influencing the evaluator’s
rating for all other traits) etc. may creep in the appraisal process. Therefore
the rater should exercise objectivity and fairness in evaluating and rating
the performance of the employees.

 Resistance: The appraisal process may face resistance from the employees
and the trade unions for the fear of negative ratings. Therefore, the

34
 employees should be communicated and clearly explained the purpose as
well the process of appraisal. The standards should be clearly
communicated and every employee should be made aware that what
exactly is expected from him/her.

PERFORMANCE APPRAISAL- CAREER DEVELOPMENT

Performance appraisal is a part of career development. The latest mantra being

followed by organizations across the world being – "get paid according to what you
contribute" – the focus of the organizations is turning to performance management
and specifically to individual performance. Performance appraisal helps to rate the
performance of the employees and evaluate their contribution towards the
organizational goals. Performance appraisal as Career Development leads to the
recognition of the work done by the employees, many a times by the means of
rewards and appreciation etc. It plays the role of the link between the organization
and the employees’ personal career goals.

It helps to identify the hidden talents and potential of the individuals. Identifying
these potential talents can help in preparing the individuals for higher
responsibilities and positions in the future. The performance appraisal process in
itself is developmental in nature.

Performance appraisal is also closely linked to other HR processes like helps to

identify the training and development needs, promotions, demotions, changes in the
compensation etc.

A feedback communicated in a positive manner goes a long way to motivate the

employees and helps to identify individual career developmental plans. Based on
the evaluation, employees can develop their career goals, achieve new levels of
competencies and chart their career in the right direction.

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BALANCE SCORECARD

To evaluate the organizational and employee performance in Performance appraisal

management processes, the conventional approach measures the performance only
on a few parameters like the action processes, results achieved or the financial
measures etc.

The Balanced scorecard – an approach given by Kaplan and Norton provides a

framework of various measures to ensure the complete and balanced view of
the performance of the employees. Balanced scorecard focuses on the measures that
drive performance. The balanced scorecard provides a list of measures that balance
the organizations internal and process measures with results, achievements.

The four Perspectives recommended by the managers to collect information are:

 The financial measures: The financial measures include the results like
profits, increase in the market share, return on investments and other
economic measures as a result of the actions taken.

 The customers’ measures: These measures help to get on customer

satisfaction, the customer’s perspective about the organization,
customer loyalty, acquiring new customers. The data can be collected
from the frequency and number of customer complaints, the time taken
to deliver the products and services, improvement in quality etc.

 The internal business measures: These are the measures related to the
organization’s internal processes which help to achieve the customer
satisfaction. It includes the infrastructure, the long term and short term
goals and objectives, organizational processes and procedures, systems
and the human resources.

 The innovation and learning perspective: The innovation and learning

measures cover the organization’s ability to learn, innovate and
improve. They can be judged by employee skills matrix, key
competencies, value added and the revenue per employee.

36
It focuses on the measures that drive the employee performance. The balanced
scorecard provides a list of measures that balance the organizations internal and
process measures with results, achievements and financial measures.

To establish a Performance Evaluation for employees that will serve as a formal

communication tool between employees and their supervisors concerning job
standards and employee performance standards.

Performance Evaluation is a systematic process of observing, assessing, and

interpreting one’s actual performance. Performance evaluation provides annual
feedback to staff members about job effectiveness and career guidance.
Performance Evaluation is very important in an organization, it is designed to
monitor employee performance carefully throughout the year. Describe the specific
action or behavior-focus on the performance, not on the performer. At the end of the
year employee and the manager jointly set objectives for the next appraisal period.

All objective should be set using the SMART format:

S= specific - it is clearly understood what needs to be achieved

M= measurable- there is a mechanism for assessing whether the goal has

been achieved or not.

A= Achievable- it is something within the employees capability and

responsibility

R= Relevance - important is in relation to the job or the

employee’s development

T= Time bound - there is date by which it should be

completed Performance Evaluation helps identify strengths and
areas for development.

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THE PERFORMANCE EVALUATION PROCESS

There are a number of methods of performance evaluation. No single methods can be

considered ideal in all circumstances. Supervisor is the primary course for the
performance information. This is the case in most organization because the supervisor
observes employees directly and has good knowledge about performance standards.
There are also alternative sources of performance information.

Supervisors are usually in the best position to evaluate performance. Supervisors are
responsible to provide employees with an overview of the performance evaluation
process. Supervisors should do Performance Evaluation in such a way that there
should be no discrimination on the base of age, race, color, religion, sex, sexual
orientation, disability, national origin, or status. A positive attempt must be made to
be as fair as

Job description should be reviewed, so that manager or supervisor can have a better
picture of an employee’s duties and they can evaluate fairly. Information should
also be taken form the alternative sources such as peers, customers and
subordinates, because for some jobs like sales teaching etc. supervisor may not
observe his or her subordinates’ performance on regular bases.

Appraise Performance -

Appraise the employee’s performance in each area of responsibility (refer to job

description).

Success should be measured against previously agreed upon objectives.

Performance should be rated on the result that is achieved in a fixed time period.

Performance Not Potential

Manager or Supervisor should rate or evaluate only employee’s performance and

not his or her potential.

Self – Assessment-

Employees undergo a self-assessment process and evaluate his or her

performance. Self-assessment process consists of the employee, using a copy
of the appraisal form, rating his / her achievement. The performance

38
evaluation meeting is a good time to talk about setting or re-defining
developmental goals. The employee then has the option of completing a self-
evaluation and returning it to the supervisor. The supervisor must give the
employee an opportunity to complete the evaluation.

Cross Rating-

Usually, evaluations are completed by one evaluator. In some cases, another

supervisor or manager within the organization may have important insights
regarding the employee’s performance. For example, if the employee worked
for another manager for a good part of the year, it would be necessary to seek
the views of the previous manager as well. Keep in mind that the goal is to
have a complete, objective, and fair appraisal of performance.

More Frequent Evaluations-

If an employee’s performance needs improvement, set a timeframe for

corrective action and re-evaluation. Discuss performance expectations, actions
etc. employee should meet those expectations and in a specific time manager
should re-evaluates employee’s performance. Annual evaluation must be
reviewed at mid-year, if improvement has occurred, this is noted. If
improvement has not occurred, the plan is reviewed and appropriate steps
taken. The employee’s mid-year review is documented and placed in his or her
departmental file.

For all employees, a mid-year review can be an important component of the

evaluation process. It helps supervisor to take time in evaluating his/her work
and performance which should look at progress on goals, other
accomplishments, as well as areas of concern.

Many organizations use performance evaluations provided by the peers.

39
Employee’s work in teams supervisors can take information from them ask
them to evaluate their team member.

Customers can also provide performance information. Collecting information

from customers can be costly and time consuming process. However,
performance information provided by customers is particularly useful for jobs
that require high degree of interaction with the public e.g. suppliers, sales
representatives.

The Performance Evaluation Meeting-

The interview with the employee is the most important part of the appraisal
process. Supervisor should maintain employee’s self-esteem at all times
during the session. Build rapport – project the right attitude, establish the
purpose of the meeting. An outline of the discussion will help both supervisor
and the employee keep to the subject. Supervisor should tell the employee the
order in which he will proceed. For example, tell the employee that he will
explain the process and what constitutes the different levels of performance,
discuss each category, discuss the rating, discuss future goals, and address any
concerns.

The annual performance evaluation meeting allows the supervisor and

employee to reflect and review the employee’s accomplishments, achievement
of goals, and areas of needed development. Focus on improvement, give only
necessary information. It is a time to share each person’s perception of the
employee’s work over the past year and to discuss differences. It is also time
to set goals for the next evaluation year or period.

One purpose of discussing performance with an employee is to provide the

employee with an objective evaluation of his/her performance as compared to
previous established goals and standards. In those situations where the goals
and standards have been met or exceeded, superior should praise the employee
40
 for the good performance, and if the established goals and standards have not
been met, then the supervisor should enter into a future oriented problem
solving discussion with the employee.

Individuals should be evaluated only for job responsibilities discussed in

advance and mutually understood by both supervisor and employee.

Each evaluation should include at a minimum a review of the employee’s job

description and assigned responsibilities, and an assessment of the employee’s
performance in the job, including strengths and areas in which improvement is
needed. The supervisor should review the results of all evaluations in detail
with his/her immediate supervisor. Such review should include a summary of
planned development efforts.

Supervisor should give a favorable rating only when the individual has merited it.
Forget about giving people a “break”. Sometimes this is difficult to accomplish.
Supervisors have to be fair and, often, this means giving the benefit of the doubt.
However, if supervisor continue to do this over a period of time, then the
organization will find out that the standards set by the organization have been
lowered.

By lowering standards, employees produce less to attain the same level of

performance after the meeting; the supervisor is to write the final evaluation
document incorporating useful information from the employee’s self-evaluation.
Both the supervisor and employee must sign the final document. A copy of the final
document is given to the employee and the original copy goes in the personnel file.

If an employee disagrees with the final document of the evaluation, he or she may
indicate so by attaching an explanation of differing opinion and any documents
supporting that opinion.

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360 PERFORMANCE EVALUATION

The 360-degree performance evaluation is a common tool in human recourse

management. It is a mechanism for evaluating someone’s performance based on
feedback from every one with whom the individual comes in contacts supervisor,
coworker, subordinates, the general public. It is a method of collecting input from
many sources in an employee’s environment. This method of collecting evaluative
input is an excellent source of motivation for employees because it provides a truly
honest assessment of how the employee and his/her performance are viewed by a
verity of constituents.

The most challenging aspect of the 360-degree evaluation is the evaluators' concern
about confidentiality. When implementing this type of evaluation, it's best to assure
other employees that what they share will remain strictly confidential. Likewise,
explain to each employee that he will be evaluated by many people, including those
who know his work best. This type of feedback helps employee’s see themselves as
others see them and allows them to seriously examine their behavior. It can reveal
areas in which employees are performing particularly well and those areas in which
there is room for improvement.

360 Performance Evaluation

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This review process is also helpful for the supervisor. It can provide a more accurate
assessment of an employee’s performance and help eliminate accusations of
favoritism. The 360-degree process provides greater objectivity. And because the
feedback is submitted anonymously, it provides a supervisor with the most unbiased
and accurate information from which to draw performance conclusions.

360-degree evaluation and feedback system are tools that help employees building
new skills and improve their performance in generally by gathering information and
analyzing performance from several sources.

2.5 DEVELOPMENT PROCEDURE

Human Resource Development is the framework for helping employees develops

their personal and organizational skills, knowledge, and abilities. Human Resource
Development includes such opportunities as employee training, employee career
development, performance management and development, coaching, succession
planning, key employee identification, tuition assistance, and organization
development. The focus of all aspects of Human Resource Development is on
developing the most superior workforce so that the organization and individual
employees can accomplish their work goals in service to customers.

Human Resource Development can be formal such as in classroom training, a

college course, or an organizational planned change effort. Or, Human Resource
Development can be informal as in employee coaching by a manager. Healthy
organizations believe in Human Resource development and cover all of these bases.

Employee development consists of experiences and training opportunities designed

to enhance current employees’ knowledge and skills.

Development

Employee development, however, is a much bigger, inclusive "thing". For example,

43
if a manager pairs up a relatively new employee with a more experienced employee
to help the new employee learns about the job, that's really employee development.
If a manager coaches and employee in an ongoing way, that's employee
development. Or, employees may rotate job responsibilities to learn about the jobs
of their colleagues and gain experience so they might eventually have more
promotion opportunities. That's employee development. In other words employee
development is a broader term that includes training as one, and only one of its
methods for encouraging employee learning

Development is a broad, ongoing multi-faceted set of activities (training activities

among them) to bring someone or an organization up to another threshold of
performance, often to perform some job or new role in the future. Organization
intentions should be that they retain and motivate the very best people in there
workforce. This can be done via a combination of relevant learning programs, on
the job development. All learning programs should be part of an organization
strategic operating plan with the specific objective of correcting performance gaps
both an individual and organizational level so as to add value to performance
improvement, productivity and service.

 Annual Learning Needs Analysis

 What the business intends to achieve

 What knowledge, skills or attitude gaps exist that inhibit employee

achievement?

Identification of Learning Needs

44
All learning programs should be part of the Company’s strategic operating plan
with the specific objective of correcting performance gaps both at an individual and
organizational level so as to add value to performance improvement, productivity
and service.

Line Management’s Responsibility for Training

Line Management should understand their responsibilities to identify and satisfy

their employees learning needs and recognize that the majority of learning takes
place on the job. His / her responsibility shall be a key result area for them. Where
the learning take place away from the workplace, Line Managers should be fully
committed to, and practice, effective pre- and port-course / event briefings with
employees.

Employees should be made to understand the need for and the benefits of effective
learning and development and take ultimate responsibility for their own
development. Training should be a key result area for all Managers and Officers,
within the Performance Management Scheme. Companies can establish itself as a
Learning Organization through continuous coaching and self- development (through

45
internal and external means) at all levels. Each Manager and Line Manager should
have learning and development as an essential part of their job description

Personal Development Plans

Personal development plans (PDPs) provide a powerful, flexible way to link

employees' professional and personal development with the development of the
business. Personal development plan allow employees to answer the following
questions:

 How can I continually learn and grow in the next year?

 How can I do better in the future?

 How can I avoid performance problems faced in the past?

Personal Development Plan is more than training it is not the same as simply
putting groups of employees through traditional training programs. It focuses on the
development of the individual employee. Every employee should have a PDP.
Junior employees benefit from PDPs that help them to develop their roles within the
business. Typically, each employee's line manager should be responsible for the
employee's PDP.

Personal Development Plan objectives can be achieved through learning in the

workplace. Assign a suitably skilled manager or colleague to provide guidance to
the employee, as requested. More formal training can help to develop specific
knowledge and skills. Objectives that are common to many employees, or that
demand special expertise, are often suited to formal training. More senior or expert
employees may be highly motivated by achieving development objectives
independently.

Employee Development-

Employee development tends to focus on managers, but can be used for other

46
employees as well. It is important for companies because it helps retain employees
and ensures that the organization has capable employees for filling positions
throughout the company.

Employee development is crucial for the growth and prosperity of any business as
employees are one of the determining factors for the success of the company. The
more capable and qualified the employees the better the performance of the
company. When they are well trained, they can easily handle situations and please
customers ensuring customer retention.

Employee development program make positive contribution to organization

performance. A more highly-skilled workforce can accomplish more and a
supervisor’s group can accomplish more as employees gain in experience and
knowledge. Retaining an employee saves the organization a great deal of money.

One method of retention is to provide opportunities to develop new skills. The right
employee training, development and education, at the right time, provides big
payoffs for the employer in increased productivity, knowledge, loyalty, and
contribution.

Employee development initiatives are of benefit both to the individuals concerned

and to the organizations that they serve. Well-developed employees can help to
facilitate growth through being better informed and by jointly sharing the
organization’s vision; they are also better equipped to bring improvements to their
work environment and processes. Such employees are described as being "engaged"
or better connected with the organization and its leadership. These employees tend
to have confidence in the organization’s future direction and thereby put their
energies towards producing better results.

Development is to help the employee identify realistic growth and improvement

goals while working with their leader to develop and execute some positive actions
to reach those goals. Development occurs in an infinite number of ways. Actions
can be formal or informal, traditional or highly creative. The important thing is that
47
positive action occurs through a planned process that both the employee and the
leader agree is in the best interest of the individual and the company.

Employee development programs are essential to improve morale and to motivate

the employees to perform well. Employees like to learn new skills and meet
challenges and they are more motivated when they feel there is great potential for
personal growth. When the company shows interest in employee development, the
employee naturally has a greater interest in the company's development too.

Employee Development is the pursuit of any activity that leads to continuous

learning, personal growth, and which contributes to the achievement of both an
individual’s and their employer’s or organization’s objectives on the longer term.

It is difficult to discuss employee development as a formal human resources

initiative. Since the history of HR application that have been labeled as “employee
development” are so diverse. As an HR function, employee development has been
somewhat of a “catch all” basket for a basket for a variety of initiatives intended to
improve employee and organization performance. Accordingly, there is little or no
agreement among HR professionals or organization leaders on just what does or
does not constitute “employee development.”

“Development” includes the formal or informal acquisition of competencies, if only

at an “awareness” level. “Employment” includes an individual’s participation in
self- employment, working for an organization, volunteering, or similar activities
such as home-making or relationship building. Employee development, regardless
of the form it takes, is essential to the long-term success of organizations today.

Employee development, career development, career management, career planning,

career guidance, career coaching, career counseling, mentoring, and initiatives with
similar names and labels have been used by organizations.
48
Employee development is a continuous process that continues throughout the life
span, regardless of how many employers or what type of employment or other types
of settings the individual experiences. When an employer supports the spirit of
employee development as a business investment, great benefits to the organization
can be realized.

A major difficulty supervisors and employees encounter in matching needs with

activities is that of selecting the optimum developmental activity that is the activity
that provides maximum learning within the boundaries of the organizations:

 Mission,

 Budget,

 Workload,

 Travel,

 Staffing and

 Time constraints.

To minimize this problem, a variety of developmental approaches and strategies

should be considered. We often think of training only in terms of formal training
courses. There are several ways through which employees can reach the objectives
stated in their development plans. These include the following:

Managers or supervisors can assess improvement and progress over a period of time
and this makes it easier to identify a problem intervene and resolve problems

49
quickly. On the job training is also productive, as the employee is still working as
they are learning. As training progresses and the employee begins to feel more
confident, this confidence would allow them to work at a higher standard and
ultimately be more productive

Mentors need to be facilitators and coaches, not tutors or trainers. Mentors need
simply to open their minds to the guidance and facilitative methods of the mentor.
The mentor should not normally provide the answers for the mentored; instead a
mentor should ask the right questions (facilitative, guiding, interpretive, and non-
judgmental) that guide the mentored towards finding the answers.

Mentors teach through

 Sharing

 Modeling

 Guiding

 Advising

 Supporting

 Networking

Mentors share their own experiences both successes and failures. They teach
through stories and anecdotes, and offer insights that can only come with

50
experience.

Management by Objectives (MBO) is a process of agreeing upon objectives within

an organization so that management and employees agree to the objectives and
understand what they are in the organization.

The term "management by objectives" was first popularized by Peter Ducker in his
1954 book 'The Practice of Management'.

The essence of MBO is participative goal setting, choosing course of actions and
decision making. An important part of the MBO is the measurement and the
comparison of the employee’s actual performance with the standards set. Ideally,
when employees themselves have been involved with the goal setting and the
choosing the course of action to be followed by them, they are more likely to fulfill
their responsibilities.

UNIQUE FEATURES AND ADVANTAGE OF THE MBO PROCESS

The principle behind Management by Objectives (MBO) is to create empowered

employees who have clarity of the roles and responsibilities expected from them,
understand their objectives to be achieved and thus help in the achievement of
organizational as well as personal goals.

Some of the important features and advantages of MBO are:

1. Motivation – Involving employees in the whole process of goal setting

and increasing employee empowerment increases employee job
satisfaction and commitment.

2. Better communication and Coordination – Frequent reviews and

interactions between superiors and subordinates helps
to maintain harmonious relationships within the enterprise and also solve

51
 many problems faced during the period.

3. Clarity of goals

There are several limitations to the assumptive base underlying the impact of
managing by objectives, including:

1. It over-emphasizes the setting of goals over the working of a plan as a

driver of outcomes.

2. It underemphasizes the importance of the environment or context in

which the goals are set. That context includes everything from the
availability and quality of resources, to relative buy-in by leadership
and stake-holders.

3. Companies evaluated their employees by comparing them with the

"ideal" employee. Trait appraisal only looks at what employees should
be, not at what they should do.

4. It did not address the importance of successfully responding to

obstacles and constraints as essential to reaching a goal. The model
didn’t adequately cope with the obstacles of:

 Defects in resources, planning and methodology,

 The increasing burden of managing the information organization

challenge,

 The impact of a rapidly changing environment, which could alter

the landscape enough to make yesterday’s goals and action plans
irrelevant to the present.

When this approach is not properly set, agreed and managed by organizations, in
self- centered thinking employees, it may trigger an unethical behavior of distorting
the system of results and financial figures to falsely achieve targets that were set in
a short-term, narrow, bottom-line fashion

The use of MBO needs to be carefully aligned with the culture of the organization.

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While MBO is not as fashionable as it was before the 'empowerment' fad, it still has
its place in management today. The key difference is that rather than 'set'
objective from a cascade process, objectives are discussed and agreed, based upon a
more strategic picture being available to employees. Engagement of employees in
the objective setting process is seen as a strategic advantage by many.

A saying around MBO and CSF's --"What gets measured gets done"-- is perhaps the
most famous aphorism of performance measurement; therefore, to avoid potential
problems SMART and SMARTER objectives need to be agreed upon in the true
sense rather than set.

 360-degree appraisal

 Behavioral observation scale

 Behaviorally anchored rating scales

Trait-based systems, which rely on factors such as integrity and conscientiousness,

are also commonly used by businesses. The scientific literature on the subject
provides evidence that assessing employees on factors such as these should be
avoided. The reasons for this are two-fold:

1. Because trait-based systems are by definition based on personality

traits, they make it difficult for a manager to provide feedback that can
cause positive change in employee performance. This is caused by the
fact that personality dimensions are for the most part static, and while
an employee can change a specific behavior they cannot change their
personality. For example, a person who lacks integrity may stop lying
to a manager because they have been caught, but they still have low
integrity and are likely to lie again when the threat of being caught is
gone.

2. Trait-based systems, because they are vague, are more easily

influenced by office politics, causing them to be less reliable as a
source of information on an employee's true performance. The
vagueness of these instruments allows managers to fill them out based
on who they want to/feel should get a raise, rather than basing scores
53
on specific behaviors employees should/should not be engaging in.
These systems are also more likely to leave a company open to
discrimination claims because a manager can make biased decisions
without having to back them up with specific behavioral information.

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Controversy
Few issues in management stir up more controversy than performance appraisal.
There are many reputable sources - researchers, management commentators,
psychometricians - who have expressed doubts about the validity and reliability of
the performance appraisal process. Some have even suggested that the process is so
inherently flawed that it may be impossible to perfect it (see Derven, 1990, for
example).

At the other extreme, there are many strong advocates of performance appraisal.
Some view it as potentially "... the most crucial aspect of organizational life"
(Lawrie, 1990).

Between these two extremes lie various schools of belief. While all endorse the use
of performance appraisal, there are many different opinions on how and when to
apply it.

There are those, for instance, who believe that performance appraisal has many
important employee development uses, but scorn any attempt to link the process to
reward outcomes - such as pay rises and promotions.

This group believes that the linkage to reward outcomes reduces or eliminates the
developmental value of appraisals. Rather than an opportunity for constructive
review and encouragement, the reward-linked process is perceived as judgmental,
punitive and harrowing.

For example, how many people would gladly admit their work problems if, at the
same time, they knew that their next pay rise or a much-wanted promotion was
riding on an appraisal result? Very likely, in that situation, many people would deny
or downplay their weaknesses.

55
Nor is the desire to distort or deny the truth confined to the person being appraised.
Many appraisers feel uncomfortable with the combined role of judge and
executioner.

Such reluctance is not difficult to understand. Appraisers often know their appraises
well, and are typically in a direct subordinate-supervisor relationship. They
work together on a daily basis and may, at times, mix socially. Suggesting that a
subordinate needs to brush up on certain work skills is one thing; giving an
appraisal result that has the direct effect of negating a promotion is another.

The result can be resentment and serious morale damage, leading to workplace
disruption, soured relationships and productivity declines.

On the other hand, there is a strong rival argument which claims that performance
appraisal must unequivocally be linked to reward outcomes.

The advocates of this approach say that organizations must have a process by which
rewards - which are not an unlimited resource - may be openly and fairly distributed
to those most deserving on the basis of merit, effort and results.

There is a critical need for remunerative justice in organizations. Performance

appraisal - whatever its practical flaws - is the only process available to help
achieve fair, decent and consistent reward outcomes.

It has also been claimed that appraises themselves are inclined to believe that
appraisal results should be linked directly to reward outcomes - and are suspicious
and disappointed when told this is not the case. Rather than feeling relieved,
appraises may suspect that they are not being told the whole truth, or that the
appraisal process is a sham and waste of time.

56
Performance Appraisal and Pay
Research (Bannister & Balkin, 1990) has reported that appraises seem to have
greater acceptance of the appraisal process, and feel more satisfied with it, when the
process is directly linked to rewards. Such findings are a serious challenge to those
who feel that appraisal results and reward outcomes must be strictly isolated from
each other.

There is also a group who argues that the evaluation of employees for reward
purposes, and frank communication with them about their performance, are part of
the basic responsibilities of management. The practice of not discussing reward
issues while appraising performance is, say critics, based on inconsistent and
muddled ideas of motivation.

57
 RESEARCH METHODOLOGY

Research methodology is a systematic way, which consists of series of actions or steps

necessary to effectively carry out research and the desired sequencing of these steps. The
research is a process of involves a number of interrelated activities, which overlap and do
rigidly follow a particular sequence. It consists of the following steps

 Formulating the objective of the study

 Designing the methods of data collection
 Selecting the sample plan
 Collecting the data
 Processing and analyzing the data
 Reporting the findings

Objective of Study

Research Design

Sample Design

Data Collection

Data Analysis
RESEARCH OBJECTIVES

Reporting of Findings

 To study of about Performance Appraisal System of Quantum IT Innovations.

58
 RESEARCH DESIGN
Research design specifies the methods and procedures for conducting a particular
study. A Research design is the arrangement of conditions for collection and analysis of the
data in a manner that aims to combine relevance to the research purpose with economy in
procedure. Research Design is broadly classified into three types as

 Exploratory Research Design

 Descriptive Research Design
 Hypothesis testing Research Design

On the basis of the objective of study, the study which is concerned with describing
the characteristics of a particular individual or of group of individual under study comes
under Descriptive Research design.

Descriptive Research Design:-

In this research design the objective of study is clearly defined and has accurate
method of measurement with a clear-cut definition of population that is to be studied.

Descriptive Research Design:-

To steps are involved in formulating the research problem:
 Understanding the problem.
 Rephrasing the problem into meaningful terms form an analytical point
of view.
The training sessions are conducted in the beginning of training in order
To make us clear about the tasks provided and how handle the different situation

The research design used in this study is descriptive which includes interviewers.
Questionnaire and unit fact-findings enquiries with the employees

SAMPLING:
Sample is Researcher collect needed information from various persons who are associated
with this subject. When such associated persons are in new number research can get
information from all of them in such some people among associated persons are selected and
collect information from them. These selected persons represent the whole universe and are
called sample.

59
Sampling unit
The sampling for this research was Bharat Electronics Limited Employees were available for
interview.

Sampling frame
Sampling frame for this survey was least 100 officers & 100 workmen’s

Sampling size
Sample size for the objective (Performance Appraisal system) sample size cover for the
various departments such as

Questionnaire Design
The questionnaire for this survey includes both open ended and close ended questions.

Why questionnaire
Now a days questionnaire are commonly used to collect data that is specific are crucial to the
success of business venture. With out doubt questionnaire allow to gather information that
can be found else where from say secondary information such as Manuals, Books and internet
resources this is because information collected is fresh and unique. Questionnaire helps in
identifying the following key points.
 Study about Organization’s Performance Appraisal system
 Employee’s awareness about Performance Appraisal system
 Employee’s attitude towards existing Performance Appraisal system

Way of issuing questionnaire

It was personal interview (face to face). It helped in directly asking the question to data
available through this is a time consuming processed interviewers have little time to think.

Research study
A research study for the project on performance appraisal system this is done through
questionnaire to employees. Research is a systematic and in depth study to find out the
awareness and attitude towards PAR among employees.

60
 COLLECTION OF DATA

The procedure for collection of data depends upon various considerations Availability
of resources like money time manpower etc also affects the choice of procedure.

Primary data

 Direct personal observation

 Indirect oral interviews
 Information through manuals& websites
 Information through questionnaire filled by respondents

Questionnaire
The questionnaire a list of question to be asked from the respondent s the it also
contains a suitable space where the answer can be offered a better questionnaire form, which
has completed, by an interviewer.

Types of questionnaire
 Structured – non disguised
 Structured – disguised
 Non structured – non disguised
 Non structured – disguised

Secondary data
Secondary data mean that are already available that is they refer the data which have
already been collected and analyzed by some one else when the researcher utilizes secondary
data that has to look into various sources where he can obtain. In this case he certainly not
confronted with the problems that are usually data nor unpublished data associated data
associated with the collection of original data secondary data may either be published.

61
 TOOLS OF ANALYSIS

Analysis may be categorized as descriptive analysis and (inferential analysis is often known
as statistical analysis)

Descriptive Analysis: -

Descriptive analysis is largely the study of distribution of one variable this study provide us
profile of companies, workgroups and person & other subject on any of a multitude of
characteristics such as size composition.

Inferential Analysis: -
Inferential analysis is concerned with the various tests of significance for testing hypothesis in
order to determine with what validity data can be said to indicate some conclusion.

62
 DATA ANALYSIS

DATA WORK SHEET OF OFFICERS

Options  
Question No. (a) % (b) % (c) % (d) % NIL Total persons
1 90 10 0 0 0 100
2 75 15 5 5 0 100
3 34 60 4 2 0 100
4 15 85 0 0 0 100
5 50 30 10 8 2 100
6 95 5 0 0 0 100
7 65 28 2 3 2 100
8 78 10 10 0 2 100
9 42 30 16 10 2 100
10 80 18 0 0 2 100
11 70 20 10 0 0 100
12 65 24 10 0 1 100
13 80 20 0 0 0 100
14 40 10 40 10 0 100
15 52 25 12 10 1 100
16 55 25 10 10 0 100
17 90 10 0 0 0 100
18 20 40 10 30 0 100

DATA WORK SHEET OF WORKMEN

Options  
Questio0n No. (a) % (b) % (c) % (d) % NIL Total persons
1 80 20 0 0 0 100
2 70 20 10 0 0 100
3 10 10 10 70 0 100
4 50 50 0 0 0 100
5 0 100 0 0 0 100
6 78 10 10 0 2 100
7 60 20 15 5 0 100
8 50 30 10 8 2 100
9 80 20 0 0 0 100
10 65 35 0 0 0 100

63
 QUESTIONNAIRE PRESENTATION WITH PIE CHART
(FOR OFFICERS)

Question No. 18
Question No. 01

1
30% 20%
2 1
10% 3
40%
2
4
10% 3
90% 5
4
5

1:- This pie

chart is shows about
90% of officers are aware of current performance appraisal System & 10% are not aware of
current PAR System.

Question No. 02

5% 1
5%
2
15%
3
75% 4
5

2:- According to 75% the current P.A. System is two tire System ,according 15%
,Three tire system ,5% four tire system and 5% are not aware current performance appraisal
System.

64
 Question No. 03

1
2%
34% 2
4%
3
60% 4
5

3:- According to 34%

two tire systems consist of appraise & Appraiser, 60% IA & RA, 4% HOD & GM & 2%
immediate superior & HOD.

Question No. 04

1
15% 2
3
85%
4
5

4:- About 85% of officers are performance appraisals assessed by point system, 10%
through Mark System 0% are not aware any group.

65
 Question No. 05

1
8% 2%
10% 2
50%
3
30% 4
5

5:- About 50% of Officers agree that task Setting provides objectively in appraising their
performance less than 30% of the officers are not fully agree with the statement 10% are
neutral & disagree 2% are not fill the questionnaire.

Question No. 06

1
5%
2
95% 3
4
5

6:- About 95% officers are says yes for completing Quarterly Task setting in time ,rest
due to some reason its not completed in time, such cases; lack of seriousness & ambiguity.

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 Question No. 07

3% 1
2% 2%
2
28%
3
65% 4
5

7:- Above 60% of the officers agree that self-appraisal system Proves to be effective &
rest of officers do not completely agree with it.

Question No. 08

1
10% 2%
2
10%
3
78% 4
5

8:- About 78% of officers are says that appraiser and appraise should be responsible for
ensuring objectivity and reducing biasness the “Performance Appraisal system ,10% are says
appraiser & appraise and peer & 10% says appraiser & appraise and peer & subordinate ,2%
are not fill the questionnaire.

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 Question No. 09

1
16% 10% 2%
42% 2
3
30%
4
5

9:- More than 40% officers are agree that skill possessed by an officers vary ,30% are
partially agree and 16% are Neutral ,less than 15% are not agree with its.

Question No. 10

18% 1
2%
2
3
80% 4
5

10:- About 80% officers are getting regular feedback on their performance but less than
20% are not getting
Question No. 11
regular feedback.

1
20% 10%
2
3
70% 4
68 5
11:- About 70% of officers are agree that feedback is beneficial for improving their
performance ,20% are partially agree and 10% are neutral.

Question No. 12

1
10% 1% 2
24%
3
65% 4
5

12:- 65% of the officers accepts that current PAR is an effective tool for evaluating the
employee performance,20% partially agree with this and 10% are neutral.

Question No. 13

20% 1
2
3
80% 4
5

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13:- About 80% of officers are accept that current PAR System reflect the training need,
20% are not accepts this.

Question No. 14

1
10% 40% 2
3
40%
4

10% 5

14:- 40% of the officers consider that the relevance of PAR system in deciding promotion,
10% are says deciding incentives and 40% agree with training and development, 10% are
accepting the programme succession planning.

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 Question No. 15

1
10% 1%
12% 2
52% 3
25% 4
5

15:- According to 52% of officers are accepts the existing PAR system ensure due
recognition talented employee in term of promotion ,rewards and others, 28% are partially
agree and 12% are neural ,10% are disagree.

Question No. 16

1
10%
10% 2
55% 3
25% 4
5

16:- More than 55% of officers are completely agree that the existing PAR system is
helpful in wholesome development of employee and 25% are partially agree,10% disagree,
10% are neutral.

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 Question No. 17

1
10% 2

90% 3
4
5

17:- About 90% of the officers are completely satisfied with the current PAR system, rest
10% are not satisfied with the current performance appraisal system.

Question No. 18

30% 20% 1
2
3
40% 4
10% 5

18:- About 20% of the officers are say management is responsible to your innovativeness
and 40 % are says only personal problem, 10% are tell the official problem 30% are says
career aspiration.

72
 FINDINGS
 The PAR system has been reviewing time to time to improvise the ways to assess
the effectiveness, potential, development need & career sketch of the individual
for the management to formulate HRD programme into meet organization needs.

 There is problem in collecting the PAR forms back more often the forms were not
received on time. The main problem is therefore of coordination.

 Manager has to perform a very daunting list of time consuming tasks standing
with recalling which worker need to be reviewed each month, arranging appraisal
meeting with them, collection the relevant performance data, filling out the
appraisal forms & documenting the employee’s performance.

 PA is not actually for workmen it’s basically for the officers. Previously workmen
were judged on the ground of ability, attendance & conduct through gradation
system but this time the new marking system is introduced.

 The culture of confidentiality persists due to which PA will never be a readily

undertaken exercise. Adverse remarks are communicated to employees in writing
confidentially by the reporting officers.

IA, RA & PRB consist of senior officers than the appraisee. Subordinate, peer,
customer or suppliers are not included in the PA committee. Thus the Appraisal
system is by higher level

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 CHAPTER 4

SUMMARY & COCLUSIONS

SUMMARY

Following are the summary that would help to make the performance appraisal
systems more effective:

Top-down communication of organizational goal policies would enable individual

KRA / KPA to be aligned more surely with the organizational goals. The
assessment of the KRA on quarterly basis combined with greater interaction
between superiors and subordinates would ensure that the KRAs being assessed are
relevant and are focused on the goals and objectives of the organization.

One of the reasons why it was being felt that the appraisals were being carried out
as routine exercise and not with seriousness was because training was not being
imparted despite training needs being discussed during the Performance Reviews.
Thus, it is essential that training and development need to be met as soon as the
company situation improves. In order to ensure that the morale and commitment of
the employees are strengthened.

Objectivity in appraisals is required by the system. However, managers often rate

sub- ordinates subjectively for a variety of reasons such as empathy for someone
whose work is suffering because of temporary problems, to avoid airing the
department’s dirty laundry, to avoid confrontation with a hard to manage employee
etc. deflation of ratings does not occur as frequently as inflation because managers
fear the consequences of deflation appraisals more than those of inflating them.
Subjectivity in performance appraisals could be controlled if the managers are
persuaded to coach and monitor their sub-ordinates continually and provide timely
feedback to them.

The annual performance appraisal could be more effectively if it were just one part
of broader performance management system, in which employees get feedback at
regular intervals throughout the year. Thus, if mangers were to evaluate
performance as they went along, the correct rating would seem the only logical
choice at the end. The better communications as a result of frequent interactions

74
between the managers and the subordinate work make the performance appraisal
system work.

Most appraisers felt that a one-day workshop consisting of training for the
appraisers on objectivity as an appraiser, appreciation of the objectives of
performance appraisal scheme and how it operates in the event of a new scheme
being introduced or in the case of a first time appraiser would be useful.

Thus, one day training program for appraisers would therefore, refresh them on the
basic objectivity of the scheme, and clear any doubts they might have about its
implementation.

Developing counseling skills in appraisals would develop more effective

relationships within the organization because there are certain “people’s problem”
which may not be directly related to work, but which would affect the ability of the
employee to perform efficiently.

Thus, counseling within the organizational constraints would be and effective way
in which managers could help their sub-ordinates and peers and get to know them
better. This would in turn result in more effective performance appraisals.

75
 CONCLUSION

Based on the analysis, the following conclusions have been arrive at:-

There appears to be a lack of communication of the organizational plans / goals

throughout the organization. This is evident from the fact that the individual’s goals
are not really being aligned with the organizational goals due to the lack of clarity.

There has been a great deal of dissatisfaction expressed over the fact that training
and development needs are not being met despite having discussed them during the
performance review discussion. This has resulted frustration among the employees.
However, in the light of the current situation of the company, they seem to
understand; the reason and we are willing to wait until the company is in a position
to train its employees.

The appraiser’s as well as the appraises feel that some appraisals are being
conducted subjectively and not objectively. This is due to a certain bias, which is
present among most appraisers.

Most appraisers feel that their superior’s discussed their work performance with them
frequently apart from during the appraisal interview. it was found that routine matters
were being discussed rather than the appraise KRAs / KPAs and how he was
progressing with them.

During the performance review discussion appraises were of the opinion that the
appraisers were never appreciative of the effort put in by the appraise to get their
work done and were critical about those aspects of their goals which were too
achieved.

76
BIBLIOGRAPHY

Books

- “Managing Human Resources”, Casio F. published by Mc Grammnally

International editions, third edition, 1992.

- “Planning for Performance Management”, Manish Sinha, published by

Human Resource Capital, Jan., 1998.

Magazines

- India Today

- Business Today

Newspapers

- Indian Express

- Times of India

Websites

- www.ashokleyland.com

- www.google.com

77
Questionnaire (10 to 15 questions)

1. In your company, the key competencies required for each job are already
identified? (i) Very True (ii) True (iii) Partly True (iv) Not True

2. There are mechanism that help employees develop their potential for the
next rung of job? (i) Very True (ii) True (iii) Partly True (iv) Not True

3. Employees regularly receive feedback about their potential for higher level
jobs?

(i) Very True (ii) True (iii) Partly True (iv) Not True

4. Job rotation is practiced widely to help people develop their potential in new
areas?

(i) Very True (ii) True (iii) Partly True (iv) Not True

5. Your company’s promotion policies are clearly defined and shared with all
employees? (i) Very True (ii) True (iii) Partly True (iv) Not True

6. Promotions are based strictly on need rather than to reward individuals? (i)
Very True (ii) True (iii) Partly True (iv) Not True

7. The appraisal system gives each appraise an idea of what is expected of

him next year? (i) Very True (ii) True (iii) Partly True (iv) Not True

8. It is designed to aid the appraise and appraiser jointly understand the

former’s job? (i) Very True (ii) True (iii) Partly True (iv) Not True

9. The performance appraisal provides an opportunity for self-review and

reflection?

(i) Very True (ii) True (iii) Partly True (iv) Not True

10. The appraisal procedure allows the appraise to express his developmental
needs?

(i) Very True (ii) True (iii) Partly True (iv) Not True

78
11. The system has scope to correct the biases of the assessor through a super
review?

(i) Very True (ii) True (iii) Partly True (iv) Not True

12. The appraisal system provides for a frank discussion between appraisers
and appraise? (i) Very True (ii) True (iii) Partly True (iv) Not True

13. The procedure allows for the communication of CEO‘s goal to the
workforce? (i) Very True (ii) True (iii) Partly True (iv) Not True

14. The appraisal system brings out the training needs of the employees? (i) Very
True

(ii) True (iii) Partly True (iv) Not True

15. The performance appraisal system clarifies the career prospects, aspirations
and intentions? (i) Very True (ii) True (iii) Partly True (iv) Not True

79