“SUMMER TRAINING REPORT”

ON
PERFORMANCE APPRAISAL SYSTEM IN AN ORGANISATION
NEO DEVELOPERS PRIVATE LIMITED
SUBMITTED IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE
AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
TO
MAHARISHI DAYANAND UNIVERSITY ROHTAK

SOMANY INSTITUTE OF TECHNOLOGY AND MANAGEMENT REWARI

SUBMITTED TO SUBMITTED BY
MRs. RASHMI SHIVANI
MBA 3rd Sem
Reg. No. 1615140296

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 PREFACE

Managing human resources in today’s dynamic environment is becoming more and more
complex as well as important. Recognition of people as a valuable resource in the organization
has led to increases trends in employee maintenance, job security, etc.

My research project deals with “Performance Appraisal as carried out at Bharat Sanchar Nigam
Ltd. (BSNLK)”. In this report, I have studied &evaluated the performance appraisal process as it
is carried out in the company
The first section of my report deals with a detailed company profile. It includes the company’s
history: its activities and operations, organizational structure, etc. this section attempts to give
detailed information about the company and the nature of it’s functioning.
The second section deals with performance appraisal. In this section, I have given a brief
conceptual explanation to performance appraisal. It contains the definition, process and
significance of performance appraisal..

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 ACKNOWLEDGEMENTS

Preparing a project of this nature is an arduous task and I was fortunate enough to get support
from a large number of people to whom I shall always remain grateful. I would like to express
my gratitude to Neo developers Pvt Ltd.. for allowing me to undertake this project.

I would like thank for providing me with an opportunity to work for Neo developers Pvt Ltd.
I am also desirous of mentioning my profound indebtedness to Dr Vandana Gote, Faculty
member, Vishwakarma Institute of Management, for the valuable advice, guidance, precious
time and support she offered.
I would be failing in my duty if I do not acknowledge my gratitude to Dr S. Joshi, Director,
Vishwakarma Institute of Management, who motivated me a lot in carrying out this project.

Last but not the least, I would also like to thank all the respondents for giving me their precious
time, relevant information and advice without which I would not be able to complete this project.

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 CONTENTS

 Company Profile …………………………………….……………...………………6 – 11

 Introduction ……………………………….…….………………………………… 12 – 17
 Concept of performances appraisal ……………………………………………….. 18 – 21
 Obstacles in Performance Appraisal ……………………………………………….22 – 27
 Statement of problems …………….....……………………………….......…..……28 – 29
 Scope and need of the study ……..…………………………………………..…….. 30 –31
 Objective of the study …………………………………………………….….……. 32 - 33
 Importance and Purpose ………………………………..…………………….…… 34 – 36
 Benefits of Performance Appraisals ………………………………………………. 37 - 38
 Performance Structure in the Organization ….……………………………...…….. 39 - 46
 Research Study ……………………….……………………….……..……………. 47 - 54
 Data Analysis …………………………………….…………………...…………… 55 - 71
 Limitations ………………………………………………………….………………72 - 73
 Rating error in performance appraisal ………………………………....…..……… 74 - 75
 Findings and conclusions ……………………………………………….…………. 76 - 77
 Annexure …………………..…………………….………………...…….………....78 - 80

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COMPANY PROFILE

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 Neo Developers Pvt. Ltd
.NEO Developers Private Limited is a Non-govt company, incorporated on 15 Mar, 2007. It’s a
private unlisted company and is classified as ‘company limited by shares’.
Company’s authorized capital stands at Rs. 1500.0 lakhs and has 70.66673% paid-up capital
which is Rs 100.0 lakhs. NEO Developers Private Limited last annual general meet (AGM)
happened on 30 Sep, 2017. The company last updated its financials on 31 Mar, 2017 as per
Ministry of Corporate Affairs (MCA).
NEO Developers Private Limited is majorly in Construction business from last 14 years and
currently, company operations are active.
We are Neo Developers; we are here to redefine real estate with a new perspective. We don’t
build, we create awe- inspiring masterpieces. Our focus is to create unique spaces to soothe
residencies and businesses across the country.
We are dedicated towards bringing out the best from each and every space through our
unconventional methods. Neo Developers is grounded in the principles of commitment,
innovation and newness. Our diverse portfolio across prime locations such as Delhi, Gurgaon,
meets the demand of booming cities, and enhances the city’s reputation.
The company is promoted by the Anand family, under the guidance of an unputdownable leader-
Mr. Ashish Anand. He is the Marshall of NEO developers. His dedication, leadership skills,
strategic thinking and sensibility have helped NEO developers to reach new heights.
The world changes when we change our perspective. Come and see the world in the NEO way,
in a new perspective.
Neo Developers Private Limited is a Private incorporated on 15 March 2007. It is classified as
Non-govt company and is registered at Registrar of Companies, Delhi. Its authorized share
capital is Rs. 150,000,000 and its paid up capital is Rs. 106,000,096. It is inolved in Building of
complete constructions or parts thereof; civil engineering

Neo Developers Private Limited’s Annual General Meeting (AGM) was last held on 28
September 2019 and as per records from Ministry of Corporate Affairs (MCA), its balance sheet
was last filed on 31 March 2019.
NEO deploy its ability, dynamism and imaginative spirit to create benchmark into real estate and
other communal properties. A pacemaker when it comes to high value real estate suggestions.
We endeavor to create new assessment and diffusing pleasure in all the initiatives we take part
in.

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OUR PROJECTS
1. COMMERCIAL
NEO SQUARE, DWARKA EXPRESSWAY GURUGRAM
We bring you Retail, Food and Entertainment at NCRs smartest commercial district in
Delhi/NCR. We welcome you to a space that gives business and leisure with a whole new
perspective. As the premier development by experts enjoy the perfect location, perfect amenities
and the perfect lifestyle avenues for the modern Indian.
2. Villa
Luxury Farm House In Delhi NCR
Are you looking for Villas? Buying Villas in Delhi/NCR Region will be you right decision. We
are offering a great opportunity for investors by providing luxury independent farm house and
luxury villas in Delhi/NCR. Villas are better than Apartments when it comes to space and
privacy. We have great options in the areas of luxury farms and villas for our esteemed clients.
Along with nature’s touch and opulence at one place, you will also find better connectivity, good
quality infrastructure and premium facilities at these spaces.
3. Residential
Delhi NCR
We bring highly furnished and quality maintained residential property within Delhi NCR which
features world class amenities fulfilling needs for a perfect lifestyle. The apartments are well
built under guidance of experts to serve our esteemed clients with best infrastructure, providing
space and privacy with priority. All residential properties in Delhi NCR are surrounded by
fascinating malls, multiplexes, hypermarkets, food courts, and are well connected via public
transport making it the perfect location for your residence.
4. Affordable Housing
Delhi NCR
With continuous efforts of Government, authorities and builders a revolution of infrastructure
has begun in Delhi NCR. We welcome the community under lower income to invest in the most
affordable housing scheme in Delhi NCR. Providing apartments with most needed amenities and
good infrastructure. Located at a one of the best location of Delhi/NCR is surrounded by all the
requirement a resident may demand for. If you are looking for your dream home under the
affordable housing scheme launched by the Government we will prove to be the great help.

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We at NEO believe in providing an environment that encourages excellence and promotes an
atmosphere of openness, respect and trust, and bring a sense of teamwork, collegiality and
diversity to all we do. A career at NEO offers challenging and unmatched opportunities.
REAL ESTATE DEVELOPER
Our future success as a firm depends on our ability to offer our employees numerous
opportunities for personal and professional growth. We look for lateral thinkers who can add
value to our business and processes; have an excellent teamwork ethic, and are driven to take our
organization and their own careers to new heights.
Real estate development, or property development, is a business process, encompassing activities
that range from the renovation and re-lease of existing buildings to the purchase of raw land and
the sale of developed land or parcels to others. Real estate developers are the people and
companies who coordinate all of these activities, converting ideas from paper to real property.[1]
Real estate development is different from construction, although many developers also manage
the construction process
Developers buy land, finance real estate deals, build or have builders build projects, create,
imagine, control, and orchestrate the process of development from the beginning to end.[2]
Developers usually take the greatest risk in the creation or renovation of real estate—and receive
the greatest rewards. Typically, developers purchase a tract of land, determine the marketing of
the property, develop the building program and design, obtain the necessary public approval and
financing, build the structures, and rent out, manage, and ultimately sell it.[1]

Sometimes property developers will only undertake part of the process. For example, some
developers source a property and get the plans and permits approved before selling the property
with the plans and permits to a builder at a premium price. Alternatively, a developer that is also
a builder may purchase a property with the plans and permits in place so that they do not have
the risk of failing to obtain planning approval and can start construction on the development
immediately.
A development team can be put together in one of several ways. At one extreme, a large
company might include many services, from architecture to engineering. At the other end of the
spectrum, a development company might consist of one principal and a few staff who hire or
contract with other companies and professionals for each service as needed.

Assembling a team of professionals to address the environmental, economic, private, physical

and political issues inherent in a complex development project is critical. A developer’s success
depends on the ability to coordinate and lead the completion of a series of interrelated activities
efficiently and at the appropriate time.

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MISSION
Our mission is to provide top quality professional service and support to a wide range of real
estate owners and investors with excellence and expertise in the real estate market that is
innovative and ambitious. Our team is dedicated to the highest standards, systems and
performance necessary to fulfill all the requirements of our clients. We understand that behind
every real estate transaction, there is always a person or family involved. To act in the best
interest of our clients at all times, by offering unquestionable ethics on all transactions and to
develop long-lasting relationships with our clients by offering exceptional service and utmost
customer satisfaction.
Let’s work together to grow together

VISION
Our vision is to transform the real estate industry through commitment to positive change to
achieve the highest possible standards of the real estate industry while establishing ultimate
client experience through our expert’s reliability, pursuit of excellence and comprehensive
expertise. We work to become an expert team which could become a choice for sellers, Realtors,
buyers, and highly talented professionals who value relationships over transactions, and demand
a superior work.

Happy Customers. Happy employees. More growth.

Sustainable Relationship with clients as it helps us to innovate and create together.
Keeping Customer Satisfaction in first priority.

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Message from the Chairman
The best time for a new beginning is now! Our organization values lie in the happiness of our
employees and appreciation from our customers. To build a happy and harmonious society, it is a
worthwhile attempt for us to build a happy business. We strive to fully undertake our social
responsibility, building a sustainable business, leading as an example of a happy business, and
ultimately achieving the shared vision of “home”. IN the coming years, NEO developers is
committed to being one of the most prestigious real estate developers and is determined to create
a new perspective in the field of real estate. The future holds many opportunities for everyone
and so the competition has always been with the very ‘us’. This helps us focus on what we do
better and how to raise our own bars of expectations for any given project. It explains our ability
to introduce new age infrastructures that fill the skyline as an elegant streak.

Message from director

These are very stimulating times. India is going through a methodical renovation. Neo
Developers started in 2007, but has today grown into a conglomerate. We are venturing ahead in
hitherto previously unexplored areas, forging strong alliances with national and international
companies, and opening offices all across the country and internationally. A highly skilled,
highly professional team of experts is managing all this growth, with the objective that our
commitments to our customers and partners are maximized further. Amongst all this growth, our
commitment to customers, partners and our employees is also getting strengthened.
The Company is focused on developing built-to-suit and multi-tenanted developments targeted
towards a range of customers, from individual users and small companies, to large corporate
groups in various sectors. Our commercial properties include both stand alone commercial sites
and properties as part of our integrated master planned projects
We value most of the requirements and preference of our customers for a truly customized,
comfortable and contemporary living with all modern features and amenities. The dedicated
professionals of Neo Developers are committed to espouse this distinct benchmark, right from
the design and development to every single stage of serving the customer. We have the vision to
evolve global lifestyles suited to contemporary needs and to cater people from all walks of life
with the finest habitats. People are looking for contemporary living space with an accent on
greenery and environment. We believe that blending of strengths and synergy of expertise
certainly leads to finer results.

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Introduction

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Introduction
In the present highly competitive environment, organizations have to ensure peak performance of
their employees continuously in order to compete at the market place effectively. Traditionally,
this objective was attempted to achieve through employee performance appraisal, which was
more concerned with telling employees where they lacked in their performance.
Though this served the purpose to some extent, it was not considered enough to raise the
employee performance at the most desirable level. Performance management has overcome this
problem to some extent.

Performance appraisals are essential for the effective management and evaluation of staff.
Appraisals help to develop individuals, improve organizational performance, and feed into
business planning. Formal performance appraisals are generally conducted annually for all staff
in the organization. Each staff member is appraised by his or her line manager. (Directors are
appraised by the CEO, who is appraised by the chairman or company owners, depending on the
size and structure of the organization).
Annual performance appraisals enable management and monitoring of standards, agreeing
expectations and objectives, and delegation of responsibilities and tasks. Staff performance
appraisals also establish individual training needs and enable organizational training needs
analysis and planning.
Performance appraisals data feeds into organizational annual pay and grading reviews, and
coincides with the business planning for the next trading year.

Performance appraisals generally review each individual’s performance against objectives and
standards for the trading year, agreed at the previous appraisal meeting. Performance appraisals
are also essential for career and succession planning.
Performance appraisals are important for staff motivation, attitude and behaviour development,
communicating organizational aims, and fostering positive relationships between management
and staff. Performance appraisals provide a formal, recorded, regular review of an individual’s
performance, and a plan for future development. In short, performance and job appraisals are
vital for managing the performance of people and organizations.

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An organisation’s performance appraisal system is an important, but often neglected, tool for
managing the effectiveness and efficiency of employees in the workplace, and there is
widespread contention that it is those employees that create competitive advantage.

As Drucker (1994) puts it, employees are our most valuable assets, and they can determine the
success and survival of an organisation. Appraisal is one way in which the efforts of those
employees can be aligned with the aims of an organisation and those employees can be
motivated and supported. Despite this, many organisations and managers fail to give appraisal
the attention and support it deserves.
Performance appraisal is an integral part of HRM and HRM deals with personnel is people.
“People” is the important and valuable resource that every organization or institution has in the
form of its employees.
Dynamic people can build dynamic organization. Effective employees can contribute to the
effectiveness of the organization. HRM has multiple goals, which include employees
competency development, employee motivation development and organization development.
Employees require a variety of competencies, knowledge, attitude, skills in technical area;
Managerial areas, behavioral and human relations areas and conceptual area to perform different
tasks or functions required by their jobs.
HRM aim at constantly the competency requirements of different individual to perform the job
Assigned to them, effectively and provides opportunities for developing these competencies. As
HRM deals with Humans it is necessary to keep a check on their performance after regular
interval of time given jobs, it is Necessary to corrective actions term or there is need to appraisal
their performance. The process of appraising For doing their work effectively is known as
performance appraisal system
It is very essential to understand and improve the employee’s performance appraisal is the basis
for HRD. It was viewed that performance appraisal was useful to decide upon employee
promotion/transfer, salary Determination and the like. Its roots in the early 20th century can be
traced to Taylor‟s pioneering Time and Motion studies. As a distinct and formal management
procedure used in the evaluation of work performance, Appraisal really dates from the time of
the Second World War – not more than 60years ago. Yet in a broader Sense, the practice of
appraisal is a very ancient art. In the scale of things historical, it might well lay claim to
Being the world’s second oldest profession. Performance appraisal measures the qualitative and
quantitative Aspects of job performance.
“There is a basic human tendency to make judgments about those one is working with, as well as
about Oneself.” Appraisal, it seems, 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 arbitrarily. 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 Judgments made will be lawful, fair,

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defensible and accurate. Performance appraisal systems began as simple Methods of income
justification. That is, appraisal was used to decide whether or not the salary or wage of an
Individual employee was justified.
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. Little consideration, if any, was given to
the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide
the only required impetus for an employee to either improve or continue to perform well
.Sometimes this basic system succeeded in getting the results that were intended; but more often
than not, it fail.
For example, early motivational researchers were aware that different people with roughly
equal Work abilities could be paid the same amount of money and yet have quite different levels
of motivation and Performance .These observations been confirmed in empirical studies. Pay
rates were important, yes; but they Were not the only element that had an impact on employee
performance. 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 from that time.

Human Resource (or personnel) management, in the sense of getting things done through people,
is an essential part of every manager’s responsibility, but many organizations find it
advantageous to establish a specialist division to provide an expert service dedicated to ensuring
that the human resource function is performed efficiently.

People are our most valuable asset” is a cliché, which no member of any senior management
team would disagree with. Yet, the reality for many organizations are that their people remain
under valued, under trained and under utilized.

Performance Appraisal is the process of assessing the performance and progress of an employee
or a group of employees on a given job and his / their potential for future development. It
consists of all formal procedures used in the working organizations to evaluate personalities,
contributions and potentials of employees
Performance Appraisal is the important aspect in the organization to evaluate the employees
performance. It helps in understanding the employees work culture, involvement, and
satisfaction. It helps the organization in deciding employees promotion, transfer, incentives, pay
increase

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Human Resource (or personnel) management, in the sense of getting things done through people,
is an essential part of every manager’s responsibility, but many organizations find it
advantageous to establish a specialist division to provide an expert service dedicated to ensuring
that the human resource function is performed efficiently.

“People are our most valuable asset” is a cliché, which no member of any senior management
team would disagree with. Yet, the reality for many organizations are that their people remain
under valued, under trained and under utilized.

The market place for talented, skilled people is competitive and expensive. Taking on new staff
can be disruptive to existing employees. Also, it takes time to develop ‘cultural awareness’,
product / process / organization knowledge and experience for new staff members.

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Philosophy behind Performance Appraisal:
Employee Appraisal techniques have been used for the first time during the First World War,
when Walter Dill Scot, the U.S. army adopted the man-to man rating system tor evaluating
military personnel. During the 1920-30 periods, rational wage structures for hourly paid workers
were adopted in industrial units. Under this system the policy of giving grade wage increments
on the basis of merit was accepted.
These employee plans were called merit-rating programmes. The trend followed till 1940’s. In
early 50’s however attention began to be devoted to the performance appraisal of technical,
professional and managerial personnel. Since then as a result of experiments and a great deal of
study, the philosophy of performance appraisal has undergone several changes.
After that came the rating -scale type, where emphasis was given on the factors, degrees and
points. Now, the older phrase merit rating is largely restricted to the rating of hourly paid
employees and is used frequently in developing criteria for salary adjustments, promotions,
transfers etc.
The later phrase, personnel appraisal places emphasis on the development of the individual as
and widely used to evaluate the employees. The table 8.1 given below marks the changes in the
appraisal criteria with time.
Performance Appraisal is the key ingredient of performance management. In a workgroup,
members, consciously or consciously, make opinion about others. The opinion may be about
their quality, behaviour, way of working, etc. Such an opinion becomes basis for interpersonal
interaction. In the same way, superiors form some opinions about their subordinates for
determining many things like salary increase, promotion, transfer etc.
In large organizations this is formalized and takes the form of performance appraisal.
Performance appraisal in some form has existed in old days also. For E.g-Wei dynasty
introduced performance appraisal in which an Imperial Rater used to appraise the performance of
members of the official family.

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Concept of Performance Appraisal

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Concept of Performance Appraisal:
Appraisal is the evaluation of worth, quality or merit. In the organization context, performance
appraisal is a systematic evaluation of personnel by superiors or others familiar with their
performance. Performance appraisal is also described as merit rating in which one individual is
ranked as better or worse in comparison to others. The basic purpose in this merit rating is to
ascertain an employee’s eligibility for promotion.
However, performance appraisal is more comprehensive term for such activities because its use
extends beyond ascertaining eligibility for promotion. Such activities may be training and
development, salary increase, transfer, discharge etc. besides promotion.
A formal definition of performance appraisal is as follows:
“Performance Appraisal is the process of evaluating the performance and qualification of the
employees in terms of the requirements of the job for which he is employed, for the purpose of
administration including placement, selection for promotion, providing financial rewards and
other actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally.”
Beach has defined performance appraisal as follows:
“Performance Appraisal is the systematic evaluation of the individual with regard to his or her
performance on the job and his potential for development.”
Performance appraisal is the area of performance management where the focus on performance
is the hardest to maintain. More often than not the appraisal turns into an assessment of the
individual rather than their performance. It is often exacerbated by the one-way nature of the
appraisal where managers tell performers what they think of their performance and/or of them.
The competency- based approach to performance further clouds the issue by looking at how
people perform rather than the outputs they produce. Once the employee has been selected,
trained and motivated, he is then appraised for his performance. Performance appraisal is the step
where the management finds out how effective it has been at hiring and placing employees. If
any problems are identified, steps are taken to communicate with the employee and to remedy
them.
“Performance appraisal” is a process of evaluating an employee’s performance of job in terms of
its requirements. It is the process of evaluating the performance and qualifications for purposes
of administration including placement, selection for promotions, providing financial rewards and
other actions, which require differential treatment among the members of a group as
distinguished from actions affecting all members equally.
Others regards it as a “process of estimating or judging the value, excellence, qualities or status
of some object, person or thing.” Individually and collectively, it is a part of all the other staffing
processes, viz., recruitment, selection, placement and indoctrination.
Heyel has defined:

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“Performance-appraisal is the process of evaluating the performance and qualifications of the
employees in terms of the requirements of the job for which he is employed, for purposes of
administration including placement, selection for promotions, providing financial rewards and
other actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally.”
According to Dale Yolder:
“Performance Appraisal includes all formal procedures used to evaluate personalities and
contributions and potentials of group members in a working organization. It is a continuous
process to secure information necessary for making correct and objective decisions on
employees.”
Performance Appraisal is the process through which an individual employee’s behaviour and
accomplishments for a fixed time period are measured and evaluated, normally including both
the quantitative and qualitative aspects of job performance.
Performance appraisal is a vehicle to:
1) Validate and refine organizational actions (e.g. selection, training); and
2) Provide feedback to employees with an eye on improving future performance.
Performance Appraisal is defined as the process of assessing the performance and progress of an
employee or a group of employees on a given job and his / their potential for future development.
It consists of all formal procedures used in working organizations and potential of employees.
According to Flippo, “Performance Appraisal is the systematic, periodic and an important rating
of an employee’s excellence in matters pertaining to his present job and his potential for a better
job.”
CHARACTERISTICS
 Performance Appraisal is a process.
 It is the systematic examination of the strengths and weakness of an employee in terms
of his job.
 It is scientific and objective study. Formal procedures are used in the study.
 It is an ongoing and continuous process wherein the evaluations are arranged
periodically according to a definite plan.
 The main purpose of Performance Appraisal is to secure information necessary for
making objective and correct decision an employee.

PROCESS

The process of performance appraisal:

1.    Establishing performance standards
2.    Communicating the Standards

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3.   Measuring Performance
4.   Comparing the actual with the standards
5.   Discussing the appraisal
6. Taking Corrective Action

LIMITATIONS
 Errors in Rating
 Lack of reliability
 Negative approach
 Multiple objectives
 Lack of knowledge

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Obstacles in Performance Appraisal:

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Obstacles in Performance Appraisal:
Every organization undertakes performance appraisal, either formally or informally. There are
certain barriers, which work against effective appraisal systems. Some of them are more
pronounced and need to be identified so that suitable measures can be taken to reduce their
impact to a minimum level.
These barriers have been grouped into three categories:
1. Faulty assumptions.
2. Psychological blocks.
3. Technical pitfalls.

1. Faulty Assumptions:
The germinating faulty assumptions between the superior and the subordinate create problems
during the appraisal.
i) The managers naturally wish to make fair and accurate appraisal of their
subordinates. Both superior and the subordinate show tendencies to avoid
formal appraisal processes, as well as to heed them in their respective work
roles. Their assistance lies partly in their psychological characteristics, partly
in their organizational roles and partly in technical deficiencies and the unwise
management of appraisal policies and procedures.

ii) The managers consider that the method they have selected for appraisal is the
best one and shall work for years. They expect too much from it and rely too
much on it. It should be recognized that no system can provide perfect,
absolutely defensible appraisals devoid of subjectivity.

iii) Sometimes managers believe that personal opinion is better than formal
appraisal and they find little use of systematic appraisal and review
procedures. However, this ‘management by instinct’ is not valid and leads to
bias, subjectivity and distorted decisions based on partial or inaccurate
evidence.
iv) Some managers feel that it is not valid to tell subordinates frankly about their
performance and how can it be improved. As such they tend to defeat the
basic purpose of appraisal by providing camouflaged information as far as
possible.

2. Psychological Blocks:

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 The value of any tool lies on the skills of the user. Therefore the utility of performance
appraisal depends upon the psychological characteristics of the managers. However
research tells us more about the inhibiting characteristics rather than facilitating
characteristics of people. There are several psychological blocks, which hinder the
effectiveness of the performance appraisal.

These are like:

i) Feeling of insecurity.
ii) Considering appraisal as an extra burden.
iii) Being excessively modest or skeptical.
iv) Feeling to treat subordinates failures as their deficiency.
v) Disliking of resentment by subordinates.

Because of these psychological barriers, managers do not tend to become impartial or

objective in evaluating their subordinates thereby defeating the basic purpose of
appraisal.

3. Technical Pitfalls:
The main technical, difficulties in appraisal fall into two main categories the criterion problem
and distortions

Criterion problem:
A criterion is the standard of performance the manager desires of his subordinates and against
which he compares their actual performance. Criteria are hard to define in measurable term or
objective term. Ambiguity, vagueness and generality of criteria are difficult hurdles for any
process to overcome.

Distortions:
Distortions occur in form of biasness and errors in making the evaluation.
An appraisal system has the following distortions:-

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 i) Halo effect:

This distortion occurs when the rater is influenced by rate’s one or two outstanding good or bad
performances and he evaluates complete performance accordingly. The ‘Halo’ effect refers to the
tendency to rate an individual consistently high or low or average on the various traits,
depending upon whether the rater’s overall impression of the individual is favorable or not. This
means that the halo effect allows one characteristics, observation or occurrence (good or bad) to
influence the rating of all performance factors.
The halo effect arises when the traits are unfamiliar, ill defined and involves personal relations.
This often occurs when the employee is more conscientious and dependable, that the appraiser
might become biased toward that individual to the extent that the appraisers rates him high on
many desired attributes or when the employee is more friendly to the appraiser.
Another type of halo effect occurs where the work team or informal group with which a
subordinate is associated influences the rater’s judgement. If the group is not well liked, this
attitude may work in the rating of the individuals, apart from the actual performance.
For e.g.:
The students may rate a faculty as ‘outstanding’ on all criteria preferably on the basis of few
appreciable things while they may appraise a lecturer as ‘lousy’ on the basis of being slow or
extremely demanding.
The halo effect problem can be minimized by:
a) Providing training for 5-10 minutes to the evaluators.
b) Restructuring the questions by requiring the evaluator to consider each
questioning dependently.
c) Ask the evaluator to appraise all rates on each dimension before
switching to the next dimension.
(ii) Central Tendency:

This error occurs when the rater marks all the rate’s as average. He fails to discriminate between
superior and inferior persons. The reason behind this may be lack of knowledge about the
behaviour of individuals, carelessness, lack of time or to avoid chaos.
(iii) First Impression (Primacy effect):
The appraisers first impression of a candidate may affect his evaluation of all subsequent
behaviour. In a positive primacy effect, the employee can do nothing wrong and in negative
primacy effect, employee can do nothing right.

26
(iv) Horn effect:
The rater’s bias is in the other direction, where one negative quality of the employee is being
rated harshly. For E.g, the rate rarely smiles; therefore he cannot work in teams.

(v) Constant errors:

Every evaluator has his own value system, which acts as a standard against which he makes his
appraisals. There are easy raters and tough raters. Relative to the actual performance some raters
have the tendency to give ‘high values’ to their employees while some assign ‘low values’ The
former is called as Positive leniency error and later is known as ‘Negative leniency error’. In
such a situation, the results of two raters are hardly comparable.
Holding meetings or training sessions for raters so that they may understand what is desired from
them can avoid the tendency.

(vi) Raters liking and disliking:

Managers being human beings have strong liking or disliking for people, particularly close
associates.
The rating is influence by personal factors and emotions and raters may weigh personality traits
more heavily than they realize. Raters give higher rating to whom they like and vice versa.

(vii) Miscellaneous biases:

Biasness against employees on ground of sex, race, religion or position is also a common error.
The rater may be influenced by organizational influence and give higher ratings to those holding
higher positions.

(viii) Social differentiation:

Rating is sometimes impeded by the evaluator’s style of rating behaviour. Rater’s can be high
differentiators-i.e., using all or most of the scale or low differentiators-i.e., using a limited range
of the scale. Low differentiators tend to ignore or suppress difference, perceiving the universe as
more uniform than it really is. High differentiators tend to utilize all available information to the
utmost extent and thus, are better able to perceptually deny anomalies and contradictions than
low differentiators.

27
(ix) Stereotyping:
Stereotyping is a mental picture, which an individual holds about a person because of that
person’s sex, age, religion, caste, etc. On such basis the rater grossly overestimates or
underestimates a person’s performance. For E.g. A person who has sophisticated urban
background and considers rural background as negative may rate employees from rural India
low.

(x) Recency effect:

Tine rater gives greater weightage to recent occurrences than earlier performance. For e.g., an
excellent performance that may be 6 or 7 months old is conveniently forgotten while giving a
poor rating to an employee ‘s performance which is not so good in recent weeks. Alternatively,
the appraisal process may suffer due to a ‘spill over effect”, which takes place when past
performance influences present ratings.

(xi) Poor Appraisal forms:

The appraisal process might also be influenced by the following factors relating to the forms that
are used by raters:

a. The rating scale may be quite vague and unclear.

b. The rating form may ignore important aspects of job performance.
c. The rating form may contain additional, irrelevant performance dimensions.
d. The forms may be too long and complex.

(xii) Lack of rater preparedness:

The raters may not be adequately trained to carry out performance management activities. This
becomes a serious limitation when the technical competence of a rate is going to be evaluated by
a rater who has limited functional specialization in that area. The raters may not have sufficient
time to carry out appraisals systematically and conduct thorough feedback sessions.

28
Sometimes the rate may not be competent to do the evaluations owing to a poor self-image and
lack of self- confidence. They may also get confused when the objectives of appraisal are
somewhat vague and unclear.

29
STATEMENT OF THE PROBLEM

30
STATEMENT OF THE PROBLEM

Much of literature dealing with Human Resource Management and its issues recognize
the Importance of performance appraisal system which occurs in the organization. All
organization faces the Problem of directing the energies of their staff to the task of achieving
business goals and objectives. In doing So, organization need to devise means to influence and
channel the behaviors‟ of their employees so as to Optimize their contributions. Performance
appraisals constitute one of the major management tools employed in This process.
The continuous evolution of organization towards the changes creates a great impact in
the life of the Business still, the business leaders are relying on the capacity of the people and
their performance towards their Job and roles in the organization. Whether a profitable or non –
profitable organization, the people has been Essential resources in the organization. Various
strategies had been effectively used for the employee according To their different needs and
areas that needs to sustain.
However, there is a little attention given in enhancing the employee performance
appraisal system. The present study was under taken to clarify certain questions related to the
care phase of Performance appraisal through regular assessment of progress toward goals focuses
the attention and efforts of An employee or a team.

31
SCOPE AND NEED OF THE STUDY

32
SCOPE OF THE STUDY
 This study provide appraisal feedback to employees and thereby serve as vehicles for
personal and career development and allow the management to take effective decision
against drawbacks for the well being of the employee‟s development.
 To improve employee work performance by helping them realize and use their full
potential in carrying out their firms‟ mission.
 The main aim of the study is to find out the effectiveness of performance appraisal &
development programme conducted at “Wipro Infrastructure Engineering”.
 This study helps to know the level of importance of appraisal system.
 The payroll and compensation decision, training and development needs, promotion,
demotions transfer including job analysis and providing superior support, assistance and
counseling.
 It considers both the job performance as well as the personal qualities of an employee.

NEED OF THE STUDY

 This study helps building progress towards organizational goals.
 To help the superior to have a proper understanding about their subordinates.
 To ensure organizational effectiveness through correcting the employee for standard and
improved Performance and suggesting the changes in employee behavior.
 It provides information about the performance ranks.
 To provide information this helps to counsel the subordinates.
 To facilitate fair and equitable compensation based on performance.

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Objectives Of The Study

34
Objectives Of The Study

PRIMARY OBJECTIVE:
To identify the actual performance of the employees and performance standards used in
performance Appraisal program (opinion, satisfaction, benefit, outcome, etc.).

SECONDARY OBJECTIVES

 To create and maintain a satisfactory level of performance.

 To identify the awareness level of performance appraisal technique among the
employees.
 To maintain records in order to determine compensation packages wage structure,
salaries raises etc.

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IMPORTANCE AND PURPOSE
OF PERFORMANCE
APPRAISAL

36
Introduction to Performance Appraisal
Once the employee has been selected, trained and motivated, he is then appraised for his
performance. Performance Appraisal is the step where the Management finds out how effective it
has been at hiring and placing employees. If any problems are identified, steps are taken to
communicate with the employee and remedy them.

“Performance Appraisal is a process of evaluating an employee's performance in

terms of its requirements”

Performance Appraisal can also be defined as the process of evaluating the performance and
qualifications of the employees in terms of the requirements of the job for which he is employed,
for purposes of administration including placement, selection for promotions, providing financial
rewards and other actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally.

37
Importance and Purpose
Performance Appraisal has been considered as the most significant an indispensable tool for an
organization, for an organization, for the information it provides is highly useful in making
decisions regarding various personnel aspects such as promotion and merit increases.
Performance measures also link information gathering and decision making processes which
provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting,
selection, training and compensation. Accurate information plays a vital role in the organization
as a whole. They help in finding out the weaknesses in the primary areas.
Formal Performance Appraisal plans are designed to meet three needs, one of the
organization and the other two of the individual namely:
 They provide systematic judgments to back up salary increases, transfers, demotions or
terminations.
 They are the means of telling a subordinate how he is doing and suggesting needed
changes in his behavior, attitudes, skills or job knowledge. They let him know where he
stands with the Boss.
 Superior uses them as a base for coaching and counseling the individual.

On the basis of merit rating or appraisal procedures, the main objectives of

Employee Appraisal are:
 To enable an organization to maintain an inventory of the number and quality of all
managers and to identify and meet their training needs and aspirations.
 To determine increment rewards and to provide reliable index for promotions and
transfers to positions of greater responsibility.
 To suggest ways of improving the employee s performance when he is not found to be up
to the mark during the review period.
 To identify training and development needs and to evaluate effectiveness of training and
development programmes.
 To plan career development, human resource planning based potentials.

38
Benefits of Performance Appraisals

39
Benefits of Performance Appraisals
 Measures an employee’s performance.
 Helps in clarifying, defining, redefining priorities and objectives.
 Motivates the employee through achievement and feedback.
 Facilitates assessment and agreement of training needs.
 Helps in identification of personal strengths and weaknesses.
 Plays an important role in Personal career and succession planning.
 Clarifies team roles and facilitates team building.
 Plays major role in organizational training needs assessment and analysis.
 Improves understanding and relationship between the employee and the reporting
manager and also helps in resolving confusions and misunderstandings.
 Plays an important tool for communicating the organization’s philosophies, values, aims,
strategies, priorities, etc among its employees.
 Helps in counseling and feedback.
Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee
meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job
performance. Employees are judged according to real outcomes, and not on their potential for
success, or on someone's subjective opinion of their abilities.
The guiding principle of the MBO approach is that direct results can be observed easily. The
MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied
elements that go to make up employee performance.
MBO advocates claim that the performance of employees cannot be broken up into so many
constituent parts, but to put all the parts together and the performance may be directly observed
and measured.

40
PERFORMANCE APPRAISAL
STRUCTURE IN THE
ORGANIZATION

41
Summary of the Performance Analysis System
A performance appraisal system manages the employee performance process of an organization
to evaluate the job performance of a team. It includes capturing qualitative and quantitative
feedback and turning them into actionable insights. These insights can improve the quality of the
team and the output by setting and monitoring goals
It is essential to have a streamlined process in place before implementing a performance
appraisal system. While the process may differ depending on the specific industry that
organization is in, there are a few key elements that should be included in the form as standard.
Listed below are some of the major components that a standard performance appraisal process
needs to have.
1. Employee self service
The major element of performance management is employee self evaluation. It enables
employees to look back at their performance and take responsibility for their performance
successes and improvement opportunities.
2. 360-degree appraisal
This step in the appraisal process focuses on gathering feedback on an employee’s performance
from different stakeholders across the organization, and sometimes, from external individuals.
This 360-degree feedback is usually made up of input from the line manager, peers, subordinates
or direct reports (if applicable), clients, customers, or third-party partnerships. This offers a
useful way to receive unbiased, specific, and well-rounded feedback on an employee’s
performance from different perspectives.
3. Manager performance appraisal
This is the most important step in the performance appraisal process. It comprises of tasks like
goal setting, progress tracking, quantitative employee rating, one-on-one discussions, and more.
4. Rewards and recognition program
In order to win the war for talent and retain top-performing employees, all organizations need to
keep their employees motivated by celebrating their accomplishments. Most top-performing
organizations have made rewards and recognition an integral part of their talent management
process.
5. Performance improvement plan
Keeping track of slipping performance and taking steps to remedy it is a crucial part of every
employee performance process. Based on employee performance trends, organizations need to
trigger a skill-specific performance improvement plan right after the evaluation phase
Each of these significant activities is also a cycle of highly integrated activities. The way that a
social system does an organizational cycle depends on its culture, its current life cycle and the

42
expertise of the leaders and managers in the system. The same is true for an individual,
depending on his or her personality, maturity and expertise in leading and managing oneself
However, the nature of the generic performance management cycle is changing as the world
around us is changing. This affects performance management in organizations, teams and
employees. See
Performance Management: Traditional and Progressive Approaches.
The purpose of the information in this topic is to convey the core concepts in organizational
performance management. Your proficiency – skills and abilities – in the concepts would come
from applying them over time, especially under the guidance of a person who is highly
experienced in apply them, as well.
What is Organizational Performance Management (OPM)?
We are used to thinking of ongoing performance management for employees, for example,
setting goals, monitoring an employee’s achievement of those goals, sharing feedback with the
employee, evaluating the employee’s performance and then rewarding the employee’s
performance. For those who did not effectively achieve their goals, the supervisor would work
with the employee to increase performance or ultimately to fire the employee. That foundational
performance management sequence applies to teams, internal recurring activities and
organizations, as well.
So OPM involves the recurring activities to establish organizational goals, monitor progress
toward the goals and make adjustments to achieve those goals more effectively and efficiently.
From a systems perspective, the overall goal of performance management is to ensure that the
organization and all of its subsystems (recurring processes, teams, departments and employees)
are all integrated and aligned together in an optimum fashion to achieve the overall results
desired by the organization. Here are two more definitions:
“The term ‘Performance Management and Measurement’ refers to any integrated, systematic
approach to improving organizational performance to achieve strategic aims and promote an
organization’s mission and values.” Hanine Salem
“Organizational performance management is the process of making sure that your company
resources are being properly used in pursuit of company goals.” George N. Root III
Setting performance standards, observing and providing feedback, and conducting appraisals
enables the Team Leader to achieve the best results through managing employee performance.
To begin the process, the Team Leader and the employee collaborates on the development of
performance standards. The Team Leader then develops a performance plan that directs the
employee's efforts toward achieving specific results, to support organizational growth as well as
the employee's professional growth. Discussion of goals and objectives throughout the year
provides a framework to ensure that employees achieve results through One on One and mutual
feedback. At the end of the rating period, the Team Leader appraises the employee's performance
against existing standards, and establishes new goals together for the next rating period.

43
As the immediate supervisor, the Team Leader plays an important role; his closest interaction
with the employee occurs at this level.

There are four key elements in the appraisal system:

1. Set objectives - Decide what the Team Leader wants from the employees and
agree these objectives with them.
2. Manage performance - Give employees the tools, resources and training they
need to perform well.
3. Carry out the appraisal - monitor and assess the employees' performance,
discuss those assessments with them and agree on future objectives.
4. Provide rewards/remedies - Consider pay awards and/or promotion based on the
appraisal and decide how to tackle poor performance.

Performance Standards
How does the Team Leader decide what's acceptable and what's unacceptable performance? The
answer to this question is the first step in establishing written standards.

Performance expectations are the basis for appraising employee performance. Written
performance standards let the Team Leader to compare the employee's performance with
mutually understood expectations and minimize ambiguity in providing feedback.

Having performance standards is not a new concept; standards exist whether or not they are
discussed or put in writing. When the Team Leader observes an employee's performance, he
usually makes a judgment about whether that performance is acceptable. Standards identify a
baseline for measuring performance. From performance standards, the Team Leader can provide
specific feedback describing the gap between expected and actual performance.

Guiding Principles
Effective performance standards:
 Serve as an objective basis for communicating about performance.

44
  Enables the employee to differentiate between acceptable and unacceptable results.
 Increase job satisfaction because employees know when tasks are performed well.
 Inform new employees of your expectations about job performance.

Key Responsibility Areas (KRA)

The Team Leaders in association with the Project Manager write performance standards for each
key area of responsibility on the employee's job description. The employee actively participates
in its development. Standards are usually established when an assignment is made, and they are
reviewed if the employee's job description is updated.
The discussions of standards include the criteria for achieving satisfactory performance and the
proof of performance (methods the Team Leader will use to gather information about work
performance).

Characteristics of Performance Standards

Standards describe the conditions that must exist before the performance can be rated
satisfactory. A performance standard should:
 Be realistic, in other words, attainable by any qualified, competent, and fully trained
person who has the authority and resources to achieve the desired result
 Describe the conditions that exist when performance meets expectations.
 Be expressed in terms of quantity, quality, time, cost, effect, manner of performance, or
method of doing
 Be measurable, with specified method(s) of gathering performance data and measuring
performance against standards.

Expressing Standards
The terms for expressing performance standards are outlined below:
 Quantity: Specifies how much work must be completed within a certain period of time.

 Quality: Describes how well the work must be accomplished. Specifies accuracy
precision, appearance, or effectiveness.

 Timeliness: Answers the questions, by when? , How soon? , Or within what period?

 Effective Use of Resources: Used when performance can be assessed in terms of

utilization of resources: money saved, waste reduced.

45
  Effects of Effort: Addresses the ultimate effect to be obtained; expands statements of
effectiveness by using phrases such as: so that, in order to, or AS shown by.

 Manner of Performance: Describes conditions in which an individual's personal

behavior has an effect on performance, e.g., assists other employees in the work unit in
accomplishing assignments.

 Method of Performing Assignments: Describes requirements; used when only the

officially prescribed policy, procedure, or rule for accomplishing the work is acceptable.

Performance Measurements
Since one of the characteristics of a performance standard is that it can be measured, the
Team Leader identifies how and where evidence about the employee's performance will be
gathered. Specifying the performance measurements when the responsibility is assigned will
help the employee keep track of his progress, as well as helping the Team Leader in the
future performance discussions.

There are many effective ways to monitor and verify performance, the most common of
which are:

 Direct observation
 Specific work results (tangible evidence that can be reviewed without the
employee being present)
 Reports and records, such as attendance, safety, inventory, financial records, etc.
 Commendations or constructive or critical comments received about the employee's
work.

Observation and Feedback (One on One)

Once performance objectives and standards are established, the Team Leader observes the
employees' performance and provides feedback. The Team Leader has a responsibility to
recognize and reinforce strong performance by an employee, and identify and encourage
improvement where it is needed. The Team Leader provides informal feedback almost every
day.
By observing and providing detailed feedback, the Team Leader plays a critical role in the
employee's continued success and motivation to meet performance expectations.

46
One On One Sessions
One on One is a method of strengthening communication between the Team Leader and the
employee. It helps to shape performance and increase the likelihood that the employee's results
will meet expectations. One on One sessions provide the Team Leader and the employee the
opportunity to discuss her progress toward meeting mutually established standards and goals. A
One on One session focuses on one or two aspects of performance, rather than the total review
that takes place in a performance evaluation.

Guiding Principles
Effective One on One can:
 Strengthen communication between the Team Leader and the employee
 Help the employee attain performance objectives
 Increase employee motivation and commitment
 Maintain and increase the employee's self-esteem
 Provide support

Key Elements of One on One

To make One on One sessions effective, the Team Leader keeps the following key
elements of One on One in mind while conducting such a session:
 Observe the employee's work and solicit feedback from others.
 When performance is successful, take the time to understand why.
 Advise the employee ahead of time on issues to be discussed.
 Discuss alternative solutions.
 Agree on action to be taken.
 Schedule follow-up meeting(s) to measure results.
 Recognize successes and improvements.
 Document key elements of One on One session.

Questions to Consider during One on One

To provide effective feedback the Team Leader must understand the elements of performance
and analyze marginal performance. These questions are kept in mind:
 How is the employee expected to perform?
 Does the employee understand these expectations? If not, why not?

47
  Does the employee know what successful results look like? How does the Team Leader
know?
 Does the employee know the performance is marginal? How does the Team Leader
know?
 Are there obstacles beyond the employee's control? Can the Team Leader remove them?
 Has the employee ever performed this task satisfactorily?
 Is the employee willing and able to learn?
 Does satisfactory performance result in excessive work being assigned?
 Does unsatisfactory performance result in positive consequences such as an undesirable
task being reassigned?

During the One on One Session

When the Team Leader conducts a One on One session to provide positive feedback to the
employee, he keeps the following points in mind:
 Describe the positive performance result or work habit using specific details.
 Ask the employee's opinion of the same product or behavior.
 Ask the employee to identify elements that contributed to success (adequate time or
resources, support from management or other employees, the employee's talent and
interest in the project).
 Discuss ways in which the Team Leader and the employee can support continued
positive results.
 Reinforce for the employee the value of the work and how it fits in with the goals of
the work unit or department.
 Show your appreciation of the positive results and your confidence that the employee
will continue to perform satisfactorily.
 If appropriate, document your discussion for the employee's file.

When the Team Leader conducts a One on One session to improve performance, he uses
the following format:
 Describe the issue or problem, referring to specific behaviors.
 Involve the employee in the problem-solving process.
 Discuss causes of the problem.
 Identify and write down possible solutions.
 Decide on specific actions to be taken by each of the Team Leader.
 Agree on a follow-up date.
 Document key elements of the session.
Follow-Up Discussion

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 During a follow-up discussion, the following steps are followed:
 Review the previous discussion(s).
 Discuss insufficient improvement and ask for reasons why.
 Indicate consequence of continued lack of improvement.
 Agree on action to be taken and set a follow-up date, if appropriate.
 Convey confidence in the employee.
 Document the discussion.

49
RESEARCH STUDIES

50
Aim of the Research
To ascertain the effectiveness of Performance Appraisal methodology used by the
Organization.

Objectives of the study

The following are the objectives of the study
 To develop my understanding of the subject
 Performance Appraisal System implemented in various Organizations
Varies according to the need and suitability. Through my research, I have
Tried to study the kind of Appraisal used in the Organization and the
Various pros and cons of this type of system.
 To conduct a study on social behavior.
 Social behavior is a very unpredictable aspect of human life but social
research is an attempt to acquire knowledge and to use the same for social
development.
 To enhance the welfare of employees.
 The Appraisal system is conceived by the Management but mostly does
not take into consideration the opinion of the employees. This can lead to
adverse problems in the Organization. Therefore by this study I have
attempted to put forth the opinion of the employee with respect to the
acceptability of the Performance Appraisal System.
 To exercise social control and predict changes in behavior.
 The ultimate object of my research is to make it possible to predict the
behaviour of individuals by studying the factors that govern and guide
them.

51
Research Design
A research design is a type of blueprint prepared on various types of blueprints available for the
collection, measurement and analysis of data. A research design calls for developing the most
efficient plan of gathering the needed information. The design of a research study is based on the
purpose of the study.

A research design is the specification of methods and procedures for acquiring the information
needed. It is the overall pattern or framework of the project that stipulates what information is to
be collected from which source and by what procedures.

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METHODS OF PERFORMANCE APPRAISAL

The foregoing list of major program pitfalls represents a formidable challenge, even considering
the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing
away with appraisals themselves is like trying to solve the problems of life by committing
suicide. The more logical task is to identify those appraisal practices that are (a) most likely to
achieve a particular objective and (b) least vulnerable to the obstacles already discussed. Before
relating the specific techniques to the goals of performance appraisal stated at the outset of the
article, I shall briefly review each, taking them more or less in an order of increasing complexity.
The best-known techniques will be treated most briefly.
Essay appraisal
In its simplest form, this technique asks the rater to write a paragraph or more covering an
individual’s strengths, weaknesses, potential, and so on. In most selection situations, particularly
those involving professional, sales, or managerial positions, essay appraisals from former
employers, teachers, or associates carry significant weight.
GRAPHIC RATING SCALE
This technique may not yield the depth of an essay appraisal, but it is more consistent and
reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work (is
he outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that
vary with the job but usually include personal traits like reliability and cooperation. It may also
include specific performance items like oral and written communication.
FIELD REVIEW
The field review is one of several techniques for doing this. A member of the personnel or
central administrative staff meets with small groups of raters from each supervisory unit and
goes over each employee’s rating with them to (a) identify areas of inter-rater disagreement, (b)
help the group arrive at a consensus, and (c) determine that each rater conceives the standards
similarly.
FORCED-CHOICE RATING
Like the field review, this technique was developed to reduce bias and establish objective
standards of comparison between individuals, but it does not involve the intervention of a third
party.

MANAGEMENT BY OBJECTIVES

53
To avoid, or to deal with, the feeling that they are being judged by unfairly high standards,
employees in some organizations are being asked to set – or help set – their own performance
goals. Within the past five or six years, MBO has become something of a fad and is so familiar
to most managers that I will not dwell on it here.
RANKING METHODS
For comparative purposes, particularly when it is necessary to compare people who work for
different supervisors, individual statements, ratings, or appraisal forms are not particularly
useful. Instead, it is necessary to recognize that comparisons involve an overall subjective
judgment to which a host of additional facts and impressions must somehow be added. There is
no single form or way to do this.
The best approach appears to be a ranking technique involving pooled judgment. The two most
effective methods are alternation ranking and paired comparison ranking.
ASSESSMENT CENTERS
So far, we have been talking about assessing past performance. What about the assessment of
future performance or potential? In any placement decision and even more so in promotion
decisions, some prediction of future performance is necessary. How can this kind of prediction
be made most validly and most fairly?
360 DEGREE FEEDBACK
Many firms have expanded the idea of upward feedback into what the call 360-degree feedback.
The feedback is generally used for training and development, rather than for pay increases.
Most 360 Degree Feedback system contains several common features. Appropriate parties –
peers, supervisors, subordinates and customers, for instance – complete survey, questionnaires
on an individual. 360 degree feedback is also known as the multi-rater feedback, whereby ratings
are not given just by the next manager up in the organizational hierarchy, but also by peers and
subordinates. Appropriates customer ratings are also included, along with the element of self
appraisal. Once gathered in, the assessment from the various quarters are compared with one
another and the results communicated to the manager concerned.
Another technique that is useful for coaching purposes is, of course, MBO. Like the critical
incident method, it focuses on actual behavior and actual results, which can be discussed
objectively and constructively, with little or no need for a supervisor to “play God.”

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Sampling
An integral component of a research design is the sampling plan. Specifically, it
addresses three questions
 Whom to survey (The Sample Unit)
 How many to Survey (The Sample Size) &
 How to select them (The Sampling Procedure)

Making a census study of the whole universe will be impossible on the account of limitations of
time. Hence sampling becomes inevitable. A sample is only a portion of the total employee
strength. According to Yule, a famous statistician, the object of sampling is to get maximum
information about the parent population with minimum effort.

Methods of Sampling
 Probability Sampling is also known as random sampling or chance sampling. Under this
sampling design every individual in the organization has an equal chance, or probability,
of being chosen as a sample. This implies that the section of sample items is independent
of he persons making the study that is, the sampling operation is controlled objectively so
that the items will be chosen strictly at random.

 Non Probability Sampling is also known as deliberate sampling , purposeful and

judgmental sampling. Non-Probability Sampling is that which does not provide every
individual in the Organization with a known chance of being included in the sample.

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Data collection method
Collection of data is the first step in statistics. The data collection process follows the
formulation for research design including the sample plan. The data can be secondary or primary
 Collection of Primary Data during the course of the study or research can be through
observations or through direct communication with respondents on one form or another
or through personal interviews. I have collected primary data by the means of a
Questionnaire. The Questionnaire was formulated keeping in mind the objectives of the
research study.
 Secondary data means data that is already available i.e., they refer to data, which has
already been collected and analyzed by someone else. When a secondary data is used, the
researcher has to look into various sources from where he can obtain data. This includes
information from various books, periodicals, magazines etc.

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Research Methodology Adopted

Research Design : Descriptive research

Research Instrument : Structured Questionnaire
Sampling Plan
i) Sample Method : Non-Probability Sampling
(Convenience Sampling)
ii) Sample Size : 50
iii) Sample Unit : Employees who do not hold a
supervisory position

Sampling Design
Convenience Sampling, as the name implies, is based on the convenience of the
researcher who is to select a sample. Respondents in the sample are included in it merely
on account of their being available on the spot where the survey was in progress.

Source of Data
a) Primary Data : Structured Questionnaire
b) Secondary Data : Journals, Booklets, Company Data, etc.

57
DATA ANALYSIS

58
The above graph is a logarithmic representation of the employee age data and clearly shows the
median age of the sample population taken for the survey as 29. This is mainly due the expansion
policy of the company that has taken on board a large number of new and young employees to
fuel its growth plans.
Due to this a large group of creative employees have been inducted into the Organization. This
helps in maintaining the creative talent in the Organization, as the job profile requires them to be
creative.
Neo developers Pvt Ltd. will be continuing their expansion plans in the coming months and this
will lead to a further decease in the average age of the employees in the Organization.

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Data
Males 24
Females 26
Analysis
There is equality in terms of the ratio between males and females in Neo developers Pvt Ltd.
This can also be ascertained from the fact that the same ratio is present among the total strength
of 350+ employees in the company. The sample was carefully chosen to ensure that the study
gave an equal opportunity to both the sections to voice their opinion and there gain a truer
picture of the conclusions derived by the study. The balance of both the genders in the
Organization also gives rise to a good work atmosphere and better understanding between the
employees. This trend can also be witnessed in the supervisory ranks of Neo developers Pvt
Ltd. . This helps to remove many barriers that may exist due to various reasons.
The Management of Neo developers Pvt Ltd. strives to be an equal opportunity employer and
therefore does not try to discriminate on the basis of Gender.

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Data
1) Less than a Year 5 2) One Year 19 3) Two Years 14
4) Three Years 5 5) Four + Years 7
Analysis
Most of the employees in the Organization are relatively new because a majority of them (i.e.
66%) have between one and two years of experience in the Organization. This is mainly due to
the fact that the Organization is in a constant mode of growth and is therefore recruiting in a big
way. The expansion plans are done keeping in mind the proposed growth in business in the near
future.
Another reason is the fact that finding new talent for the required skills is a tough task because
market awareness about the career growth in this sector is very limited. Neo developers Pvt Ltd.
has inducted a lot of employees after providing them with training to ensure that their Human
resource requirements are met.

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Data
1) Yes 32
2) No - 180
Analysis
Thirty-two employees (i.e. 64%) have some amount of prior work experience before joining Neo
developers Pvt Ltd. Most of them are diploma holders in animation and were not aware of the
existence of such an industry. They came to know about the same only after seeing the
advertisements of the company in the newspaper. This also means that even though most of them
have worked prior to joining Neo developers Pvt Ltd, they do not have any hands-on experience
of the kind of work carried out by Neo developers Pvt Ltd.
This fact can also be interpreted as having no valid work experience at all prior to joining
the Organization.

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Data
1) Yes 27
2) No - 23
Analysis
Due to the fact that most of the employees have got no experience in this sector before, they did
not ask about the Performance Appraisal model used in the Organization. The respondents that
said that they were informed of the model during the interview were told so at the discretion of
the interviewer.
The company has however made it a point to inform the employee about the model before he
signs the acceptance letter. This prevents any ambiguities and misunderstanding about what is
expected of the employee before he joins the Organization.

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Data
1) Simple 37 2) Complicated 13 3) Objective - 17
4) Subjective - 33 5) Efficient – 32 6) Inefficient - 18
Analysis
From the above chart it can be inferred that, a majority of the sample respondents have found the
Appraisal Model to be simple and efficient on one hand but also subjective on the other hand.
The Appraisal model has been thoroughly dealt with during the training so the employees know
exactly what is expected of them. The HR department follows an open door policy which ensures
that any queries regarding the policy can be clarified to the employee s satisfaction. But the
employees are of the opinion that the subjective nature of the Appraisal system is one of the
main disadvantages. The fact remains that due to the kind of work carried out by Neo developers
Pvt Ltd. it becomes quite irrelevant to appraise on an objective basis.

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Data
1) Yes 27
2) No - 23
Analysis
About 54% of the respondents say that the Performance Appraisal System does give a true and
fair view of their contribution to the Organization. This does include employees who think that
their rating does not always turn up to be correct as per their opinion.
The group of respondents who have replied in the negative, also include candidates who say that
the appraisal does not turn out to be right most of the times but do show a fair view sometimes.
Since the appraisal is done o a quarterly basis and most of the candidates have not gone through
more than 2-3 rounds of appraisals, the data may not be entirely sufficient to reach any
conclusions.

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Data
1) Never - 2 2) Rarely – 8 3) Sometimes 13
4) Often – 20 5) Every time - 7
Analysis
This question was purposely put into the questionnaire to validate the answers for the previous
question. The breakup of the data clearly shows that 4% of the entire sample state that their
appraisal have never shown a fair view of their performance. If this can be combined with those
who are of the opinion that their appraisal rarely matches up to their expectations, this figure
goes up to consist about 20% of the population. That shows that 80% are satisfied with the
present system even though this includes satisfaction in varying degrees like the appraisal
matches up to the respondents expectations sometimes, often or every time.
This does show that the satisfaction level of the employees in this system is quite high and that
there is a general feeling of likeability among the respondents.

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Data
1) Once in a week - 14 2) Once a month - 17 3) Every 3 months 12
4) Every 6 Months - 3 5) Once a Year - 4
Analysis
Performance appraisal review is a constant process and lesser the frequency between the
appraisals, the better. The majority want (i.e. 86% which includes the first 3 options only) the
frequency of the appraisal to less than 3 months. The employees say that the longer the
frequency between appraisals, the more the chances of the appraisal not matching up to their
expectations because many performances get overlooked. If the appraisal is done on a more
frequent basis, the employee has a chance to find out the gaps in his / her
performance on a more regular basis which will help them to improve more on their performance
and thereby eliminate waste. The appraisal does not necessarily have to be a formal one. Even
informal performance appraisals done between formal appraisals but on a more frequent level
will most certainly help and go a long way in improving performance.

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Data
1) Very Low - 0 2) Low – 4 3) Average 13
4) High - 28 5) Very High - 5
Analysis
The satisfaction level of the Appraisal system is quite high as can be seen from the graph.
This is a good sign as increased level of satisfaction is the main emphasis of any appraisal
system. The curve tops at the rating of high and this includes about 56% of the population. The
bell curve shows that 92% have rated the Appraisal system as average , high or very high The
high Satisfaction level in the System could also be due to various reasons like monetary or non-
monetary incentives or growth parameters.
The satisfaction level also brings to light the efficiency of the management in devising an
acceptable Appraisal system.

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Data
1) Standards – 12 2) Monetary Incentives – 25 3) Freq of Appraisal 23
4) Appraiser - 3
Analysis
This question breaks up the different phases of the appraisal system and tries to come to derive a
conclusion as to the areas of improvement in the process of evaluation. Fifty percent of the
respondents say that there should be a change on the aspect of monetary incentives. This does
not refer to an increase in the monetary incentives but a more reasonable incentive structure that
will properly reward increased and efficient performance.
The frequency of appraisal is another aspect that needed review. The present system is a
quarterly one and the general opinion is that informal appraisals should be held on a more regular
basis. Standards of performance (i.e. benchmarks) should be improved according to 24% of the
respondents. Only 6% have stated the there should be change in the appraiser, which is an
inevitable sign of the operational efficiency of the system.

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Data
1) Not Important - 0 2) Less Important - 2 3) Important 14
4) Very Important - 22 5) Most Important - 12
Analysis
This question was put in to find out and analyze the importance of the Appraisal system to the
productivity of the employee. The data clearly shows that the recognition of the employee s
performance does have a direct impact on his / her efficiency. A vast majority of the respondents
(i.e. 68% which includes ratings of very important or most important ) affirm that their
performance is directly influenced by recognitions of their performance by the appraisal system.
None of the respondents have stated that the appraisal system had no effect on their productivity.
This points out to the fact that the Appraisal system goes a long way in determining the
productivity of the employees in an Organization. Therefore it is very important for any
Organization to devise their Performance Appraisal System carefully.

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Data
1) Yes 23
2) No - 27
Analysis
One on one sessions are conducted by Neo developers Pvt Ltd. during the appraisal system phase
to tell the employee on an individual level as to the rating given to him / her. Each session lasts
between 10 30 minutes. The team leader tries to justify his reasons on why he had given a
particular rating to an employee. Sixty four percent of the employees responded by saying that
the one on one sessions are not efficient in ironing out problems mainly because since they are
done on a formal basis so most employees consider it just as a formality which the appraiser uses
to impose the rating he has already given to an employee. The employee therefore does not
expect the rating to change after a one on one session with the supervisor.

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Data
1) 4 Points 10 2) 5 Points 16 3) 6 Points 9
4) 7 Points 8 5) 8 Points 5 6) 9 Points - 2
Analysis
This question is an attempt to analyze the perceived transparency of the rating among the
employees of the Organization. A majority of the employees have given a transparency rating of
5. The perception of the employees is since the appraisal is done on a quarterly basis, the
employee is not in a position to actually evaluate the basis of the rating he / she has received.
This causes a lot of ambiguity in the ratings. This is the primary concern due which almost 70 %
have given a rating of 6 and below. The respondents who have given a rating of 7 and above
have mostly given this rating because they have got good ratings in the past and feel that there is
not much required in terms of transparency as long as they get good ratings themselves.

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Data
1) Yes 21
2) No - 29
Analysis
The major reason for the decreased transparency rating might be due to the fact that 58 % of the
respondents did not feel free to express their displeasure, if any, to the rating given to them. This
can be due to decreased comfort levels with the appraiser. The appraisal system can only be
efficient if it takes into consideration the employee s side of the appraisal. There might be
various aspects that the appraiser might have accidentally overlooked or certain circumstances
misinterpreted which can be clarified if the employee is more open and comfortable with the
employer.

73
Data
1) 5 Points 2 2) 6 Points 6 3) 7 Points 14
4) 8 Points 16 3) 9 Points - 12
Analysis
The respondents were specifically told to rate the Appraisal system by setting aside any kind of
human intervention present in it by just evaluating its inherent structure and not efficiency in its
execution. This helps to ascertain whether there are any flaws in the Performance Appraisal
system. About 80 % of the sample has given a rating of 7 points and above. This shows the
system is generally acceptable to the employees and is a good sign for Neo developers Pvt Ltd.
The concern of the Organization should be to find out why the remaining 20 % are not very
highly satisfied with the system and find out ways and means to increase their acceptability of
the system.

74
LIMITATIONS

75
Limitations
The following are the limitations faced by me during the course of the study
 The sample consisted only of employees in the day shift. Employees of the night shift
were not considered for the purpose of study.
 There is no concrete basis to prove the response given is a true measure of the opinion of
all the employees as a whole.
 Convenient sampling was used as the mode of conducting the research.
 The questionnaire contained mostly multiple-choice questions; therefore many
respondents may not have given a proper thought before answering the questions.
 The response of the respondents may not be accurate thinking that the management might
misuse the data.
 Almost all of the questionnaires had the open-ended question no. 11, left unanswered.
 Sensitive company information cannot be displayed in the project report.
 Most respondents might be influenced by their peers in answering the questions.
 Due to the fact that most of the respondents were young, the questions might not have
been answered with due sincerity.

76
Rating Errors in Performance Appraisals

77
Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as
'rating errors'. These errors can seriously affect assessment results. Some of the most common
rating errors are: -

Leniency or severity: - Leniency or severity on the part of the rater makes the assessment
subjective. Subjective assessment defeats the very purpose of performance appraisal. Ratings are
lenient for the following reasons:

a)    The rater may feel that anyone under his or her jurisdiction who is rated unfarvol
will reflect poorly on his or her own worthiness.

b)    He/She may feel that a derogatory rating will be revealed to the rate to detriment
the relations between the rater and the ratee.

c)     He/She may rate leniently in order to win promotions for the subordinates and
therefore, indirectly increase his/her hold over him.

Central tendency: - This occurs when employees are incorrectly rated near the average or
middle of the scale. The attitude of the rater is to play safe. This safe playing attitude stems from
certain doubts and anxieties, which the raters have been assessing the rates.

Halo error: - A halo error takes place when one aspect of an individual's performance influences
the evaluation of the entire performance of the individual. The halo error occurs when an
employee who works late constantly might be rated high on productivity and quality of output as
well as on motivation. Similarly, an attractive or popular personality might be given a high
overall rating. Rating employees separately on each of the performance measures and
encouraging rater’s to guard against the halo effect are the two ways to reduce the halo effect.

Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or low score
are given only to certain individuals or groups based on the rater's attitude towards them and not
on actual outcomes or behavior; sex, age, race and friendship biases are examples of this type of
error.

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FINDING AND CONCLUSION

79
Findings and Conclusions
The following are the suggestions and conclusions derived from this particular
research study
Objectivity
One manager's idea of "self-starting ability" can be quite different than another's idea. The
question then arises as to how does one objectively evaluate "creativity ? If greater amount of
objectivity can be infused into the Appraisal system, it can help to bring more transparency.

Effective Communication
One function of performance appraisals is to help employees develop so they can contribute
more effectively. In order for the employees to develop and learn they need to know what they
need to change, where (specifically) they have fallen short, and what they need to do. If a
manager assigns a 1 (unsatisfactory) on a scale of 5, it does not convey much information to an
employee. It just says the manager is dissatisfied with something. In order to make it meaningful
and promote growth, far more information must be added to the appraisal process and the related
information should be transparently shared with the employee.

Fairness
Most employees resist being classified at the low end of the scale. Employees who are low rated
are more likely to resist the evaluation of the superior and argue, claiming that personal bias was
involved in the ratings.

Managerial Efficiency
The implementation of a Performance Appraisal System rests on the shoulders of the manager
and he must ensure that it is done properly. A good manager can make an average appraisal
system work and vice-versa.

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ANNEXURE

81
 Performance Appraisal Questionnaire

Q1. Is there a formal Appraisal system in your organization ?

Yes-
No-

Q2. Do you understand the basic objective of performance appraisal ?

Fully-
Partially-
No-

Q3. In your view does the performance appraisal system function fairly/equitable ?
Yes-
No-

Q4. How is your performance appraised individually, in team, or both ?

Individually-
Team-
Both-

Q5. Do you agree the performance appraisal system adopted by the firm is able to gauge the real
performance employee ?
Fully agree-
Partially-
Not at all-

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Q6. Is the appraisal system is able to show the area in which a person needs to implement ?
Yes-
No-

Q7. Is the appraisal system is able to show the progress one has made in order to his/ her target?
Yes-
No-

Q8. Performance appraisal system helps you in

Promotion planning-
Career planning-
Goal achievement-

Q9. Is the performance appraisal system is transparent?

Yes-
No-

Q10. Do you think the feedback is given to you is honest

Yes-
No-

83