PROJECT REPORT

STUDY AND EVALUATION OF PERFORMANCE APPRAISAL SYSTEM,

IFFCO, NEW DELHI

Submitted in the partial fulfillment of the requirement for the award of degree of

MASTER OF BUSINESS ADMINISTRATION

Under the Guidance of: Submitted by:

Mrs. SASMITA BIRABAR ADITYA SHARMA

PGDM(HRM)

XAVIER INSTITUTE OF MANAGEMENT, BHUBANESHWAR

 DECLARATION
I hereby declare that this project report o “tudy a d E aluatio of Pe fo a e
App aisal at IFFCO has ee o pletely p epa ed y e as a pa t of y su e
training project. This report is the outcome of my efforts and has not been
submitted anywhere else. The contents of this report are fully verified as per my
knowledge.

2
 ACKNOWLEDGEMENT
It is a matter of great pleasure to thank all those people who helped me in
completing this project successfully otherwise it would not have been possible.
Acknowledgement is not only a ritual, but also an expression of indebtness to all
those who have helped in the completion of this project.

I would like to express my deepest thanks to my project guide Mrs. Sasmita

Birabar, for her guidance and constant encouragement which she extended to me
throughout my project. I would also like to thank Mr. S.C. Gupta for his valuable
inputs.

Last but not the least, I would like to acknowledge the ongoing support of my
family and friends, whose patience and encouragement has been paramount in
making this project a reality.

3
 PREFACE
A performance appraisal (PA) or performance evaluation is a systematic and
pe iodi p o ess that assesses a i di idual e ployee’s jo pe fo a e a d
productivity in relation to certain pre-established criteria and organizational
objectives. Other aspects of individual employees are considered as well, such as
behavior, accomplishments, potential for future improvement, strengths and
weaknesses, etc

A central reason for the utilization of performance appraisals (PAs) is performance

i p o e e t i itially at the le el of the i di idual e ployee, a d ulti ately at
the le el of the o ga izatio . Othe fu da e tal easo s i lude as a asis fo
employment decisions (e.g. promotions, terminations, transfers), as criteria in
research (e.g. test validation), to aid with communication (e.g. allowing
employees to know how they are doing and organizational expectations), to
esta lish pe so al o je ti es fo t ai i g p og a s, fo t a s issio of o je ti e
feed a k fo pe so al de elop e t, as a ea s of do u e tatio to aid i
keeping track of decisions and legal re ui e e ts a d i age a d salary
administration. Additionally, PAs can aid in the formulation of job criteria and
sele tio of i di iduals ho a e est suited to pe fo the e ui ed
o ga izatio al tasks . A PA a e pa t of guidi g a d o ito i g e ployee
career development. PAs can also be used to aid in work motivation through the
use of reward systems.

4
 INDEX

Topic Page Number

1. Objective of study 7
2. Company profile 8-11
3. Introduction to topic 12-14
4. Performance appraisal at IFFO 15-19
5. Research methodology 20-21
6. Data analysis 22-36
7. Conclusion and recommendations 37-40
8. Findings 41-42
9. Bibliography 43
10. Annexure 44-47

5
OBJECTIVE
OF
STUDY

6
 OBJECTIVE OF STUDY

Any survey report begins with stating the objectives of the study:
therefore, the first step in the survey analysis deals with the objectives.
Next, the methodology adopted to collect the information required will
be dealt with, that is, the survey design will be described.

Generally, data sources include primary and secondary sources. Primary

data sources can provide a range of information and therefore should
e o sulted fi st. If they do ’t p o ide e essa y i fo atio fo the
research then secondary data is to be collected.

MAIN OBJECTIVES OF THE STUDY

 To study the current performance appraisal system of the organization and
identify the gaps between the current state and the desired state.
 To find out the performance dimensions relevant to the strategic plan of
the company.
 To identify the potential areas for the scope of improvement in the current
system and thereby in the organizational performance.
 To study the implications of an effective performance appraisal system on
the productivity of employees and the organizational performance as a
whole.
 To identify the key performance indicators and critical success factors for
achieving organizational excellence.

7
 CHAPTER : 1

INTRODUCTION
TO
COMPANY

8
 INTRODUCTION

Indian Farmers Fertiliser Co-operative Limited (IFFCO) was registered on

November 3, 1967 as a Multi-unit Co-operative Society. On the enactment of the
Multistate Co-operative Societies act 1984 & 2002, the Society is deemed to be
registered as a Multistate Co-operative Society. The Society is primarily engaged
in production and distribution of fertilizers. The byelaws of the Society provide a
broad frame work for the activities of IFFCO as a Co-operative Society.

IFFCO commissioned an ammonia - urea complex at Kalol and the NPK/DAP plant
at Kandla both in the state of Gujarat in 1975. After this another ammonia - urea
complex was set up at Phulpur in the state of Uttar Pradesh in 1981. The
ammonia - urea unit at Aonla was commissioned in the start of 1988.

VISION

To augment the incremental incomes of farmers by helping them to increase their

crop productivity through balanced use of energy efficient fertilizers, maintain the
environmental health and to make cooperative societies economically &
democratically strong for professionalized services to the farming community to
ensure an empowered, forward looking and confident rural India.

9
MISSION

IFFCO's mission is "to enable Indian farmers to prosper through timely supply of
reliable, high quality agricultural inputs and services in an environmentally
sustainable manner and to undertake other activities to improve their welfare".

-To provide to farmers high quality fertilizers in right time and in adequate
quantities with an objective to increase crop productivity.
-To make plants energy efficient and continually review various schemes to
conserve energy.
-Commitment to health, safety, environment and forestry development to enrich
the quality of community life.
-Commitment to social responsibilities for a strong social fabric.
-To institutionalise core values and create a culture of team building,
empowerment and innovation which would help in incremental growth of
employees and enable achievement of strategic objectives.
-Foster a culture of trust, openness and mutual concern to make working a
stimulating and challenging experience for stake holders.
-Building a value driven organisation with an improved and responsive customer
focus. A true commitment to transparency, accountability and integrity in
principle and practice.
-To acquire, assimilate and adopt reliable, efficient and cost effective
technologies.
-Sourcing raw materials for production of phosphatic fertilisers at economical cost
by entering into Joint Ventures outside India.

10
-To ensure growth in core and non-core sectors.
-A true Cooperative Society committed for fostering cooperative movement in the
country.

Emerging as a dynamic organisation, focussing on strategic strengths, seizing

opportunities for generating and building upon past success, enhancing earnings
to maximise the shareholders' value

11
 CHAPTER : 2

INTRODUCTION
TO
THE PROJECT

12
Career Development as a Part of Performance Management Program
One of the fundamental factors for bringing about an effective performance
management program is often one of the most forgotten. All too often supervisor
will mistakenly focus all of his or her resources entirely on rating and ranking the
workforce, dolling out promotions or laying off workers as need be. While these
steps are an essential element of performance management, they fall short in the
long run. To begin with, employees are left feeling as though their company has
neglected their individual career needs. This ultimately leads to higher employee
turnover and makes it difficult for an organization to retain top quality talent. This
is hy effe ti e pe fo a e a age e t i o po ates the o ke s’ eeds ith
that of the company. When engaging an employee base on the level of their
performance, the successful manager will work to align the co pa y’s goals ith
those of the individualized career paths to ensure a high level of worker loyalty
and long term productivity.

One area of particular concern for performance management is a large and

growing population of employees whose careers have reached the half way
marker. For many employees, this is a crucial time for climbing up a few more
steps on the corporate ladder. Unfortunately, the gaping absence of motivating
organizational structure present in many business environments kills the career
momentum for these people. This negatively affects the contribution made by
these employees to the overall output and productivity on a corporate level.

There are a variety of causes behind the lack of momentum within the halfway
crowd. As mentioned before, lack of organization is a major culprit. This really
stems from having little or no management at the top. Unfortunately, these
important causes for the slowdown are seldom recognized, and the fault becomes
that of the employees rather than the faulty system under which they work.

In order to combat this dilemma, one approach that has enjoyed widespread
success is the organized setting of goals. If an employee can visualize the steps it
takes to achieve a promotion, he or she will proactively take up the challenge to

13
improve his or her status. Another way to add to the challenge is to transfer an
employee to a different job area. This allows the workers to learn new skills and
become reignited in the process of advancement. A performance manger can
even knock the employee down a rung or two before making a transfer. However,
the supervisor should do so by showing the worker long term benefits of
advancement and thus not packaging the transfer as a demotion that would lead
to lower moral and productivity.

Employees want to work hard and develop their careers, but they must be given
the ight i e ti e. By aki g the o pa y’s i eased p odu ti ity a sha ed goal
between the employer and the employee, then positive results will be achieved
on both sides.

14
 PERFORMANCE APPRAISAL AT IFFCO

Performance appraisal in IFFCO, New Delhi, is done annually. For appraisal in

IFFCO, New Delhi, a SELF APPRAISAL form is given to the staff members and they
fill it up. And then after according to their self observation and through the
appraisal form filled by the staff members rating is given to the members.
Accordingly, incentives and promotions are granted.

In IFFCO, the majority of the staff members submit all the information timely to
their superiors.

Mr. R.P. Singh Director, head of IFFCO start with the following objectives of-

1. Evaluating performance of employees.

2. For making decision regarding promotion of employees.
3. Identifying the needs of training and development.
4. To evaluate the morals of the employees.
5. For the promotion of employees.

The appraisal takes place once in a year in the month of March-April the
appraisal report must be completed in all respects before the 30th of April
of every yeas of the preceding assessment year.

The appraisal report of the level below H1 shall be maintained by the

personal and Administration Department of the concerned unit, division,
head office.

15
 The performance should be rated with reference to the task or activities
assigned and/or undertaken and the results achieved thereof., during the
period under review, as can be identified and described as follows:

 Outstanding- Consistently exceptional performance despite

constraints.
 Very good- High level performance.
 Fair- Generally meets expectations.
 Poor- Doesn’t meet expectations, requirement of job.
 Rating of attributes characterizing effectiveness of the appraise should be,
as far as possible, based on sufficient evidence that can be adduced during
the period under review and not on isolated recent occasions; for imparting
objectivity to the assessment, the same should be based on facts and
relevant or significant instances, both positive or negative. Each attribute
should be taken independently of the other ones.

 Attributes of performance-

 Job knowledge
 Job performance
 Dependability

16
17
18
19
 CHAPTER : 3

RESEARCH
METHODOLOGY

20
 RESEARCH METHODOLOGY

OBJECTIVE OF THE PROJECT

 To assess the effectiveness of thePerformance Ecellence Plan and

Performace Development Plan of the company.
 To extract suggestions and views of the employees.
 To find out the constraints in Appraisal Process.
 To suggest improvemnts in the current appraisl system.
 To facilitate dialogue between mangers and employees/teams regarding
progress vs. perfromance and development objectives.
 To clarify job objectives.

METHODOLOGY

 Research approach
 Research design
 Sampling
 Measurement
 Scaling
 Data collection

HYPOTHESIS
The investigator has classified, tabulated and interpreted the data information, so
collected in a scientific manner and has drawn some fruitful results. Data has
been collected for the use of not only this research project but can be used in
some other projects as well.

21
CHAPTER : 4

DATA
ANALYSIS

22
 DATA ANALYSIS

PERFORMANCE APPRAISAL QUESTIONNAIRE

Q-1. Is there a formal appraisal system in your organization?

Yes- 30

No- 0

Total respondents- 30

35

30

25

20

YES
15

10

0
YES NO

23
Q-2. Do you understand the basic objective of performance appraisal?

Fully- 20

Partially-10

No-0

Total responses-30

25

20

15
FULLY
PARTIALLY
10 NO

0
fully Partially no

24
Q-3. In your view does the performance appraisal system function fairly/
equitably?

YES- 30

NO-0

TOTAL RESPONSES- 30

35

30

25

20

YES
15

10

0
YES NO

25
Q-4. How is your performance appraised- individually, in a team or both?

Individually-10

In Team-14

Both-6

Total responses- 30

16

14

12

10
INDIVIDUALLY
8
IN TEAM

6 BOTH

0
INDIVIDUALLY IN TEAM BOTH

26
Q-5. Do you agree that the performance appraisal system adopted by the firm is
able to gauge the real performance of employee?

Fully agree- 10

Partially- 20

Not at all- 0

Total respondents- 30

25

20

15
FULLY
PARTIALLY
10 NO

0
fully Partially no

27
Q-6. Is the appraisal system able to show the areas in which a person needs
improvement?

YES- 22

NO-8

Total respondents- 30

25

20

15
YES
NO
10

0
YES NO no

28
Q-7. Is the appraisal system able to show the progess one has made in order to
his/her set target?

YES- 17

PARTIALLY-13

NO-0

Total respondents- 30

18

16

14

12

10 YES
PARTIALLY
8
NO
6

0
YES Partially NO

29
Q-8. Performance appraisal helps you in:-

PROMOTION - 15

CAREER PLANNING-9

GOAL ACHIEVEMNT-6

Total respondents- 30

16

14

12

10
PROMTION
8
CAREER PLANNING

6 GOAL ACHIEVEMNT

0
PROMOTION CAREER GOAL

30
Q-9.Are you satisfied with the criteria adopted to appraise you?

YES- 22

NO-8

Total respondents- 30

25

20

15

YES
10

0
YES NO

31
Q-10. Is the performance appraisal system transparent?

YES- 16

NO-14

Total respondents- 30

18

16

14

12

10
YES
8 NO

0
YES NO

32
Q-11. Do you feel that the rewards are given according to your performance?

YES- 23

NO-7

Total respondents- 30

25

20

15
YES
NO
10

0
YES NO

33
Q-12. Do you think that the feedback given to you is honest?

YES- 30

NO-0

Total respondents- 30

35

30

25

20

YES
15

10

0
YES NO

34
Q-13. If development or improvement of any skill is required ( after doing
performance appraisal), is proper training given then?

YES- 20

NO-10

Total respondents- 30

25

20

15
YES
NO
10

0
YES NO

35
Q-14. Are you satisfied with the current performance appraisal system?

YES- 24

NO-6

Total respondents- 30

30

25

20

15 YES
NO

10

0
YES NO

36
 CHAPTER : 5

RECOMMENDATIONS
&
CONCLUSION

37
 CONCLUSION

At IFFCO, performance appraisal is conducted annually. The immediate boss who

has been observing the immediate subordinate throughout the year rates him
according to the self appraisal form filled and also through personal observation
under following factors:

a. Quality of work
b. Quantity of work
c. Job knowledge
d. Dependability
e. Innovation and creativity
f. Ability to learn
g. Attendance
h. Reaction to criticism
i. Discipline
j. Customer relations
k. Subordinate development

 The rating given is confidential and out of the knowledge of their

subordinates. Accordingly, promotions and incentives are granted to the
deserving ones.

 Rating given to the senior production officers is done confidentially and

whatever information is filled in the self-appraisal form is not cross
questioned.

38
 The sole objective for taking part in performance appraisal of senior officers
at IFFCO is to get awarded with promotions and incentives but the basic
reason why performance appraisal is conducted is to develop the
performance and attitude.

 Senior officers of IFFCO follow the procedure of performance appraisal

given by the senior managers because they have monotony in their work
and they have no time for any innovation or creativity.

39
 RECOMMENDATIONS
 The company should appraise the performance of the workers by giving
them some incentives, which would motivate them to work to their fullest
capacity and to encourage them to work more and show good and better
results.
 For the top management of the company it should offer them holiday
package, appraise performance by recognizing their work in their meetings
etc. this will help in raising their morale and therefore they will work
ha de . Most of the e ployees do ’t a t fi a ial help athe they ould
like some recognition for their work.
 For the lower income earning group the company should increase their
wages, offer them pension schemes, and also provide them medical
facilities etc. because they want financial help from the company to insure
their proper living.
 The company should also keep changing the raters for performance
appraisal system from ti e to ti e so that they do ’t e o e ias at a y
time for any employee.
 The method of the company should be changed periodically so that the
employees have no chance to complain for the method.
 The criteria decided upon which the performance has to be rated should
not be fixed, it should be changed from time to time.
 The standards of the rating should be very specific, clear and concise.
 There should be a feeling of team work in the organization.
 The system should be cost effective and it should suit the budget of the
company.

40
CHAPTER: 6

FINDINGS

41
 FINDINGS

1. Performance appraisal at IFFCO, New Delhi is done annually.

2. For the above mentioned appraisal, a self appraisal form is given to the
staff members, so that they can fill it. Simultaneously a form is given to
their colleagues to rate them. A rating is given to the employee after taking
in consideration the self appraisal form as well as the rating given by the
staff members.
3. Promotions and incentives are given to an employee according to his or her
performance rating.
4. At IFFCO, majority of the staff submits all the information regarding
appraisal well within time to their supervisors.
5. All officers agree that performance appraisal system helps them to perform
better.

42
 BIBLIOGRAPHY

This project required a lot of literature survey before it can into this
form. Following references were made

BOOKS

Human Resource Management- VSP Rao

Human Resource Management- K Ashwathappa

WEBSITES

www.iffco.com

www.wikipedia.org

www.google.com

Brochures,files, data, annexures and annual reports of IFFCO

43
 ANNEXURE
Performance Appraisal Questionnaire

Q-1. Is there a formal appraisal system in your organization?

Yes-

No-

Q-2. Do you understand the basic objective of performance appraisal?

Fully-

Partially-

No-

Q-3. In your view does the performance appraisal system function fairly/
equitably?

YES-

NO-

Q-4. How is your performance appraised- individually, in a team or both?

Individually-

In Team-

44
Both-

Q-5. Do you agree that the performance appraisal system adopted by the firm is
able to gauge the real performance of employee?

Fully agree-

Partially-

Not at all-

Q-6. Is the appraisal system able to show the areas in which a person needs
improvement?

YES-

NO-

Q-7. Is the appraisal system able to show the progess one has made in order to
his/her set target?

YES-

PARTIALLY-

NO-

45
Q-8. Performance appraisal helps you in:-

PROMOTION -

CAREER PLANNING-

GOAL ACHIEVEMNT-

Q-9.Are you satisfied with the criteria adopted to appraise you?

YES-

NO-

Q-10. Is the performance appraisal system transparent?

YES-

NO-

Q-11. Do you feel that the rewards are given according to your performance?

YES-

NO-

46
Q-12. Do you think that the feedback given to you is honest?

YES-

NO-

Q-13. If development or improvement of any skill is required ( after doing

performance appraisal), is proper training given then?

YES-

NO-

Q-14. Are you satisfied with the current performance appraisal system?

YES-

NO-

DEPARTMENT__________________

DESIGNATION__________________

EXPERIENCE __________________

47