CHAPTER I

INTRODUCTION

1.1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Behind the production of every product or service there are human mind, effort and man hours
(working hours) no product or service can be produced without help of human being. Human
being is the fundamental resource for making or constructing anything. Today many experts
claim that machines and technology are replacing human resource and minimizing their role or
effort. But even machines and technology have been build by the human aid and besides
companies have been continuously in search for talented, skilled and qualified professionals to
further develop latest machines and technology, which again have to be controlled or used by
humans to bring out products.
Human Resource Management is the process of recruitment, selection of employee, providing
proper orientation and induction, providing proper training and the developing skills, assessment
of employee (performance of appraisal), providing proper compensation and benefits,
motivating, maintaining proper relations with labor and with trade unions, maintaining
employee’s safety, welfare and health by complying with labor laws of concern state or country.
Performance appraisal is the development function of human resource management.

PERFORMANCE APPRAISAL
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance appraisal is
generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.

3. The employers are in position to guide the employees for a better performance.

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1.2 NEED & IMPORTANCE OF THE STUDY

Appraising the performance of individuals, groups and organizations is a common practice of all
societies. While in some instances these appraisal processes are structured andformally
sanctioned, in other instances they are an informal and integral part of dailyactivities.
Consciously of unconsciously evaluate our own actions from time to time. In social interactions,
performance is conducted a systematic and planned manner to achieve widespread popularity in
recent years.Performance appraisal is essential to understand and improve the employee's
performance through HRD.In fact, performance appraisal is the basis fore HRD. It wasviewed
performance appraisal was useful to decide upon employee promotion/transfer salary
determination and the like. But the recent developments in human resourcesmanagement indicate
that performance appraisal is the basis for employee development.Performance appraisal
indicates the level of desired performance level, level of actual performance and the gap between
these two. This gap should be bridged through humanresources development techniques like
training executive development etc.According to the past survey it was noticed that the
performance appraisalsystem in this company was not up to the mark. Hence there would be
scope for giving fewsuggestions as per my knowledge to improve the performanceappraisal
system which was quite essential for the better performance of the employees.

IMPORTANCE OF THE STUDY

Performance appraisals provide employees and managers with opportunities to discuss areas in
which employees excel and those in which employees need improvement.Performance appraisals
should be conducted on a regular basis, and they need not be directly attached to promotion
opportunities.
1. Personal Attention
During a performance appraisal review, a supervisor and an employee discuss theemployee's
strengths and weaknesses. This gives the employee individual face time with thesupervisor and a
chance to address personal concerns.
2. Feedback
Employees need to know when their jobduties are being fulfilled and when there areissues with
their work performance. Managers should schedule this communication on aregular basis.

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3. Employee Accountability
When employees know there will be regularly scheduled evaluations, they realize thatthey are
accountable for their job performance.
4. Communicate Divisional and Company Goals
Besides communicating employees' individual goals, employee appraisals provide the
opportunity for managers to explain organizational goals and the ways in which employees can
participate in the achievement of those goals

1.3 OBJECTIVES OF THE STUDY:

1. To study the process at performance appraisal at Bajaj.

2. To study the methods of performance appraisal adopted to evaluate employees at Bajaj.

3. To study the employee’s satisfaction of the performance appraisal system.

4. To make suggestion whenever necessary.

1.4 RESEARCH METHODOLOGY

The process used to collect information and data for the purpose of making business decisions.
The methodology may include publication research, interviews, surveys and other research
techniques, and could include both present and historical information.

1.4.1 Research design

A detailed outline of how an investigation will take place. A research design will typically
include how data is to be collected, what instruments will be employed, how the instruments will
be used and the intended means for analyzing data collected. This project is descriptive in nature.

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1.4.2 Sampling technique

A sampling technique is the name or other identification of the specific process by which the entities of

the sample have been selected. Random sampling technique is being used in this project.

SIMPLE RANDOM:

A simple random sample is a subset of a statistical population in which each member of the
subset has an equal probability of being chosen.

1.4.3 Sample size

The sample size is an important feature of any empirical study in which the goal is to make
inferences about a population from a sample. In practice, the sample size used in a study is
determined based on the expense of data collection, and the need to have sufficient statistical
power.

SIZE: A sample of 40 employees has been selected .Although it looks to be a small sample
keeping in view the large number of employees it has to be limited because of time constraint
Even then the sample size is not considered to be small. It is enough to draw conclusions.

1.4.4 Data collection:

1.4.4.1 Primary data

The primary data are those, which are collected freshly and for the first time, from the employees
directly. It is collected through the following methods.

1.Questionnaire: A structure of questionnaire was prepared and distributed among the employees
& workers.

2.Interview: Personal interviews and interaction with the employees and contractor labor.

3.Observation: By observing the working environment

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1.4.4.2 Secondary data

The secondary data are those which have already been collected by someone or else which have
been passed through statistical process. Sources of secondary data can be categorized into two
broad categories named published and unpublished statistics. Various sources are available
namely books, synergies monthly (Chakaravahini) books etc. and also collected from various
files, records and synergies casting Ltd.

1.4.5 Data analysis & Interpretation

 Simple percentage method and pictorial graphical presentation

Percentage of respondents    =   

1.5 SCOPE OF THE STUDY

This project is taken place at Siddi Vinayaka Bajaj, Bahadurpura, Hyderabad .The time
duration of this project is 40 days .Sample size of my project is 50 employees. The designation
of employees who were interviews are Branch Manager, HR Manager, Assistance Manager.

1.6 Organization of the study

The study is arranged in a logical pattern.

 First chapter consists of introduction to the study includes the need for study/significance
of study, objectives, Research methodology- Research design, Scope of the study, sample
design, sources of data,  tools and techniques used for data  analysis, structure of the
study with sound explanation.

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 Second chapter consists of literature review which reflects the relevant theoretical and
empirical background of the problem.

 Third chapter consists of the company profile which contains a brief historical retrospect
about the entire of study.

 Fourth chapter consists of data presentation, analysis and interpretations based on the
collected data from various primary and secondary sources

 Fifth chapter consists of findings and conclusions along with limitations and suggestions
is concluded with bibliography and the annexure which contains the Questionnaire.

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 CHAPTER II
LITERATURE REVIEW

2.1 LITERATURE SURVEY I

Effectiveness of performance appraisal on performance of employees

Muhammad Zohaib Abbas

I. INTRODUCTION

Performance appraisal is often regarded as the most critical function of human resource
management

(Selvarajan and Cloninger, 2008; Smither and London, 2009). Several prior studies have
revealed that suggested that effective performance appraisal system is the sign of integral
component of effectiveness of human resource management of an organization (Zapata-Phelan et
al., 2009). Performance appraisal has been studied widely in several organizations in the western
context. However, this particular topic has not been researched appropriately in the Asian context
specifically in perspective of Pakistan. Selvarajan and Cloninger (2009) have also noted that
performance appraisal is not effectively developed process within Pakistani organizations, but
the evidence and prior literature on this topic is rare. Moreover, the prior literature on this subject
aims at aspects and little emphasis is made on the empirical findings of the effectiveness of
performance appraisal and its influence on employee performance (Selvarajan and Cloninger¸
2008). Clearly, there is need to derive empirical findings on evaluation on effectiveness of
performance appraisal system and its influence on employee performance in the context of
Pakistan. De Nisi and Pritchard (2006) have also noted that extant research on performance
appraisal has excessively emphasized on psychometric issues rather than focusing on rigorous
and systematic approach to performance appraisal that is more likely to enhance motivation level
of employees for improving their performance. Roberson and Stewart (2006) found that
employees respond to performance appraisal system in three perspectives that are: a) perception

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of fairness, b) perception of accuracy, and c) performance appraisal satisfaction. On the other
hand, Selvarajan and Cloninger (2009) were of the view that performance appraisal provides
consistent feedback to employees that enables them to improve performance. Thus, a critical
issue in this regard is to assess and determine the factors that can influence outcomes of
performance appraisal. In this respect, the current study aimed at the evaluation of critical factors
associated with the effectiveness of performance appraisal system in Pakistan.

II. Originality of research

This paper has contributed to elaborate that how Pakistani organizations pursue performance
appraisal system. In this way, gap in literature has been filled regarding performance appraisal in
Pakistani organizations. The results of this study are based on the survey findings conducted with
employees of several organizations. In this way, empirical contributions have been made by the
researcher to elaborate effectiveness of performance appraisal system and its impact on
performance of employees.

2.1 Objectives

The purpose of the study is to understand effectiveness of performance appraisal in the Pakistani
organizations.

Specifically, factors influencing performance appraisal have been identified in the study.
Furthermore, this study also aimed to elaborate the influence of appraisal on employee
performance in Pakistani organizations. Finally, critical challenges involved in the performance
appraisal system will also be evaluated appropriately.

III. Literature Review

Employee performance appraisal is an effective tool or vehicle for assessment of employee

performance and implementation of strategic initiatives for the improvement of employee
performance (Lawler and McDermott, 2003). However, a considerable literature stream also
suggests that there exist dissatisfaction in employees regarding performance appraisal system
(Mercer, 2002; Roberson and Stewart, 2006; Moullakis, 2005). For instance, Morgan (2006)
noticed that performance appraisal in many organizations has not met of employees. In the same
vein, prior findings by Smither and London (2009) have elucidated that 80-90% managers reflect

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that performance appraisal has not been effective in improving employee and organization’s
performance. Performance appraisal has been regarded as the most critical human resource
function within organizations by which assessors or supervisors analyse and assess performance
of their subordinates (Keeping and Levy, 2000). the outcomes of performance appraisal assists
mangers to select specific pay rates, promotional decisions, development and training needs and
motivational factors for employees (Zapata-Phelan et al., 2009). In this regard, performance
appraisal system has been widely researched within organizational psychology to assess
employee performance. However, despite of resources applied and attention made to this
particular topic, prior researchers have found continuing dissatisfaction among employers and
employees about outcomes of performance appraisal systems in terms of unfair, inaccurate and
political outcomes (Rao, 2004; DeNisi and Pritchard, 2006). Therefore, it is important to study
the factors affecting outcomes of performance appraisal system. Literature has identified several
indicators that affect the outcomes of performance appraisal system. In this regard, one critical
factor is the appraisal source. This factor suggests that employee performance can be evaluated
through multiple sources such as supervisors, managers, self, peers and even customers (Wood
and Marshall, 2008). Another important characteristic of performance appraisal is the purpose
for which performance has been appraised or evaluated (Thurston, 2001), and typically,
performance appraisal systems are utilized for multiple purposes ranging from developmental
and administrative purposes. Feedback richness is also an effective indicator that may affect the
outcomes of performance appraisal. Feedback richness elaborates the specific appraisal
environment by which frequent, specific and timely feedback is provided by employees to
employers regarding job (Kinicki et al., 2004). Perceived accuracy of performance appraisal has
been regarded as an important aspect to evaluate the satisfaction and motivation in employees in
relation to performance appraisal (Wood and Marshall, 2008; and Selvarajan and Cloninger,
2009). In this regard, prior studies suggest that if employee perceive that appraisal outcomes are
accurate, they are more likely to recognize these results and act on them (Roberson and Stewart,
2006). On the other hand, employee perception of fairness also measures effectiveness of
performance appraisal outcomes (Young court et al., 2007). In this respect, previous studies have
suggested that justice or fairness of performance appraisal can be evaluated into three
dimensions. These are distributive, interactional fairness and procedural (Colquitt et al. 2001). In
this regard, distributive fairness represents the extent to which outcomes of appraisal are

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distributed fairly (Smither and London¸2009). In the appraisal context, the distributive context
relates with the ratings of performance appraisal gained by employees. On the other hand,
procedural fairness aims at the extent to which procedures deployed by organization for appraisal
are fair in deriving outcomes of appraisal (Zapata Phelan 2009). Contrary to this, the concept of
interactional fairness represents the extent to which employees receive treatment of peers and
supervisors during the process of appraising performance (Roberson and Stewart¸ 2006). Prior
studies about meta-analysis of performance appraisal and perceptions of justice suggest that it
enhances performance and satisfaction of employees (Roberson and Stewart¸ 2006). On the
contrary, appraisal satisfaction represents the contentment of employees with the results of
appraisal system. Levy and Williams (2004) suggest that analyzing employee satisfaction is
important as it determines reactions of employees towards appraisal. Contrary to this, motivation
represents the degree to which employees are willing to make improvements in their
performance (Roberson and Stewart, 2006). Some authors suggest that perceptions about fairness
hold a critical importance within organizations because it avoids negative outcomes such as
disruptive behaviors and employee turnover and also enhance positive outcomes of organizations
such positive citizenship, commitment and satisfaction with the job (Selvarajan and Cloninger,
2009). Thurston (2001) has addressed the specific aspects related with performance appraisal and
also reveal that effectiveness and success of appraisal system depends on reactions and feedback
of employees. This suggests that employee feedback is critical factor in assessing effectiveness
of appraisal system. This feedback can be positive or negative regarding outcomes of appraisal
system. Prior studies have revealed that positive feedback is more likely to be accepted whereas
employees often hesitate to accept negative outcomes of appraisal system (Rao¸ 2004). On the
other hand, Roberson and Stewart (2006) suggest that if negative feedback is delivered in an
effective and persuasive manner, employees will take it seriously and will focus on eliminating
the negative aspects in their performance. Prior literature has suggested that performance
appraisal is an effective system for attaining different objectives. In this regard, Selvarajan and
Cloninger (2009) have revealed that effective performance appraisal system results in improving
performance of employees and motivating them. In this regard, it can be identified who are the
weak performers and who strong performers within organizations are. In the same line of
thought, prior studies have identified five major outcomes of effective performance appraisal
(Rao¸ 2004). These are:

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1) using results of performance appraisal to improve employee performance,

2) enhancing motivation,

3) reducing employee turnover,

4) associating rewards and employee performance and

5) establishing equity among employees (Rao¸ 2004; Selvarajan and Cloninger, 2009).

Nurse (2005) has also discussed the impact of appraisal on employees and organizations. He
specifically suggested that results of appraisal provide information to managers to take further
steps about promotions and development of employees. On the contrary, Rao (2004) suggests
that weak areas of performance are identified through effective performance appraisal system. In
this way, managers can take decisions regarding training of employees to improve those weak
areas. Moving further, Teratanavat, Raitano and Kleiner (2006) suggest that effective
performance appraisal results in reducing stress level of employees. In this way, performance
appraisal system interlinks current, past and future performance of employees.

VI. Type of Research

The study has been conducted to analyse that how effective is performance appraisal in Pakistani
organizations. For this reason, quantitative analysis has been used to describe the research
problem. In this respect, quantitative analysis and data collection tools are used to describe
quantitative analysis between performance appraisal and employee performance. The
quantitative research has provided empirical investigation about research purpose regarding
effectiveness of performance appraisal and performance of employees in Pakistani organizations.
4.1 Type of Data

In this study, primary and secondary data have been used for investigating effectiveness of
performance appraisal within Pakistani organizations. The secondary data was used to know
what prior researchers have theorized about performance appraisal and employee performance.
This data provided theoretical investigation of research problem. On the other hand, primary data
was used to get empirical investigation about effectiveness of performance appraisal and its
influence on employee performance in Pakistani organizations.

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4.2 Data Collection Method

In this particular study, survey method was used for collecting primary data from employees of
different organizations within Pakistan. For collecting primary data, close ended questionnaire
was used. This questionnaire was composed in two sections. The first section of questionnaire
elaborated the demographical information about respondents whereas the second section
highlighted critical factors of performance appraisal in Pakistan. On a scale of 1-5, effectiveness
of performance appraisal was measured in this paper. For collecting data, self administered
survey was conducted with the employees of the Pakistani organizations. Quantitative data
analysis was used in this study for investigating empirical analysis of research problem. In
addition, statistical analysis was made to derive association between variables of the study. 4.3
Sample and Population For collecting data, survey technique was used in this study. For this
reason, a sample was used in the study. This sample was selected from different organizations of
the Pakistan. This sample was selected from different industries i.e. banking, manufacturing and
services. In this respect, non probability sampling technique was used in the study so that no
preference can be made in the sample selection. On this basis of non probability sampling, a
sample of 250 employees was selected from different organizations of Pakistan.

V. Results and Analysis

In this study, response rate of 83% was achieved that was adequate to analyse results to analyse
effectiveness of appraisal. In this study, statistical analysis methods were used to get empirical
evidence about impact of performance appraisal on employee performance. The descriptive
results of the study about gender of respondents revealed that 59% respondents were males
whereas 41% were females. During the sample selection, no priority was made between male or
female respondent. As far as the age of respondents is concerned, it was found that 17%
respondents were less than 20 years old, 31% respondents were between 20-29 years, 30% were
between 30-39 years, 19% were between 40- 49 years and 3% were either 50 years old or above.
When it comes to education level of respondents, the results revealed that 7% had primary
education, 20% were intermediates, 41% graduates and 20% either had masters level or higher
education level. The rest of the respondents had other technical level education. When

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respondents were asked about the fact that had their performance been appraised ever, 100%
respondents answered in yes and the rest of respondents answered in no. The frequency of
appraisal suggested that yearly appraisal is more evident in organizations. 19% respondents
revealed that their performance is appraised monthly, 28% respondents suggested that their
performance is appraised quarterly. There have been 21% respondents who suggested that semi
annually performance appraisal is conducted by organizations whereas 32% respondents
revealed that yearly performance appraisal is followed in their organizations. When asked about
performance appraisal mode, 11% respondents suggested that feedback mechanism is used to
appraise performance. 40% respondents pointed out written statement method, 28% pointed out
at ranking method and rest of the respondents highlighted face to face discussions for appraisal.

2.2 LITERATURE SURVEY II

Abstract

Today's working climate demands a great deal of commitment and effort from Employees, who
in turn naturally expect a great deal more from their Employers. Performance Appraisal must be
seen as an intrinsic part of a Manager's responsibility and not an unwelcome and time-consuming
addition to them. It is about improving performance and ultimate effectiveness. Performance
Appraisal is a systematic means of ensuring that Superiors and their staff meet regularly to
discuss past and present performance issues and to agree what future is appropriate on both sides.
This meeting should be based on clear and mutual understanding of the job in question and the
standards and outcomes, which are a part of it. In normal circumstances, Employees should be
appraised by their immediate Superiors on one to one basis .Often the distinction between
Appraiser & Appraise .Assessment concerns itself only with the past and the present . The staff is
being appraised when they are encouraged to look ahead to improve effectiveness, utilize
strengths, redress weaknesses and examine how potentials and aspirations should match up. It
should also be understood that pushing a previously prepared report across and desk Cursorily
inviting comments, and expecting it to be neatly signed by the Employee is not Appraisal- this is
merely a form filling exercise which achieves little in terms of giving staff any Positive guidance
and motivation. In SEMCO ELECTRIC PVT LTD, Chakan, my research was a "Study of
Employee's Performance Appraisal System" So to improve the condition it is necessary to review

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the performance of Employees. In this research, I had to study the current Performance Appraisal
system atSEMCO & check the effectiveness of current Appraisal system. (2013)

Performance Appraisal:

Appraising the performance of individuals, groups and organizations IS a common practice of all
societies. While in some instances these appraisals processes are structured and formally
sanctioned, in other instances they are an informal and integral part of daily Activities. Thus
teachers evaluate the performances of students, bankers evaluate the performance of creditors,
parents evaluate the behavior of their children, and all of us, consciously or unconsciously
evaluate our own actions from time to time.

What is Performance Appraisal?

Performance Appraisal is a method of evaluating the behavior of employees in the work spot,
normally including both the quantitative and qualitative aspects of job performance.

Performance here refers to the degree of accomplishment of the tasks that make up an
individual's job. It indicates how well an individual is fulfilling the job demands. Often the term
is confused with effort, but performance is always measured in terms of results and not efforts. A
student, for e.g., may exert a great deal of effort while preparing for the examination but may
manage to get a poor grade. In this case, the effort expended is high but performance is low. In
order to find out whether an employee is worthy of continued employment or not, and so
whether he should receive a bonus) a pay rise or promotion" his performance needs to be
evaluated from time to time.

OBJECTIVES OF THE RESEARCH

Primary Objective

●To study the employee's performance appraisal system in the SEMCO Electric Pvt. Ltd.

Secondary Objectives

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●To Study & analyze the effectiveness of present Performance Appraisal method being followed
in Organization.

●To collect feedback of Appraiser & Appraiser about the existing Performance Appraisal
method.

●To collect information about the drawback/shortcomings of the performance appraisal system
in place in the organization.

●To make suggestions, based on employee feedback .and other information collected with a view
to improve the appraisal system / process in the organization

SCOPE OF THE STUDY

This work is confined to study the appraisal process present in the organization. It also visualizes
real time scenarios in Industry. It explores some of the merits and demerits in existing system.

●This study comprises the complete plant level staff and is exhaustive depicting the Appraiser-
Appraiser relationship and the significance of the overall Appraisal system in the company, the
research was based on the study of the attitudes of the employees towards performance appraisal.
In order to understand the entire process I initially studied the performance appraisal system
where I found that appraisal is done annually.

●To study the attitudes of employee toward the performance appraisal I have selected
fewnumbers of employees who can represent the whole employees of the company.

RESEARCH METHODOLOGY:

The term research is composed of two words "re" & "search" which mean to search again,
Research for new fact or to modify the existing fact. Research methodology is one of the
important chapters which help the researcher to do the research work in a systematic way.
Research is the systematic way of solving the problem. Research is an original contribution to
the existing stock of knowledge making for its achievement. Research is the pursuit of truth with
the help of study, interpretation & comparison & experimenting. In research the various steps are
generally adopted by a researcher in studying research problems along with the logic behind
them .In short the research is the search for knowledge through objective and systematic methods

15
of finding solution of the problem. Research is the process which includes defining and refining
problem, formulating hypothesis or suggested solutions collecting, organizing & evaluating data;
making deduction & reaching conclusion and at last carefully testing the conclusions to
determine whether they fit the formulating hypothesis.

DEFINITIONS: Redman & Mar

- "Research as a systematic effort to gain new knowledge".

Advance Learner Dictionary

-"A careful investigation or inquiry especially through search for new fact in any branch of
knowledge".

P.V. Young

- "Research is nothing but an investigation of new facts or verifying old facts with help of
scientific knowledge is called research".

METHODS USED:

Since it is not possible to collect feedback from all the employees working in the organization, a
sample of 65 employees was selected for conducting the survey. An effort has been made to
cover as many departments as possible. All major

departments such as Personnel, Marketing, Export, Manufacturing, Finance, Training, Materials

etc have been covered under the survey.

SOURCES OF DATA:

Sample method is used for data collection. The types of data collected were-

●Primary Data

●Secondary Data

Primary data:

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It is the data which is collected for once own research purpose. The primary data was collected
through questionnaire & informal discussion & it is interpreted. The questions were framed so as
to gain maximum firsthand knowledge from workers, which were analyzed in order to arrive at
suitable conclusion. The primary data was collected through:

1. Questionnaires:

65 questionnaires were distributed covering various departments such as Personnel, Marketing,

Export, Manufacturing, Finance, Training, Materials etc.

2. Informal discussions:

Informal discussions were held with various employees in the organization, especially in the
Personnel department & the Training department. This helped me to gain additional information,
not only relating to the subject of my research but also other functions and activities.

Secondary data:

Secondary data were collected from past records and manual of the company, books, internet etc.
It is the data already collected, which is made available for reference purposes. In my research
the secondary sources used are, various files and records maintained by organization, HR
manual.

COLLECTION OF DATA:

Both primary and secondary data were collected for the purpose of the research. Primary data
was more useful in analyzing and finding out the drawbacks of industrial relation &disciplinary
action system in the organization. Secondary data was useful in gathering information about the
history & growth of the company, the industrial relation & disciplinary action system used in the
former years in the organization & the revised system that is being followed today, financial
position in recent years etc.

Sample size:

I have selected 65 Appraiser (Officer) +Appraisee (workers)] for questionnaire Random

Sampling Method for my research work.

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Data Analysis:

Data analysis is represented by Pie Chart.

Data Instrument

Questionnaire:

Data were collected from workers who were working in three shifts by taking interviews and
from employees working in administration, training and related departments.

LIMITATIONS: Employee Opinion;

Employee feedback may not be 100% reliable and accurate. Sometimes, they may keep back
information that may be detrimental to the image of the organization. Also some employees may
fear their superiors and refrain from furnishing any negative data.

Language Barrier: Since most of the lower cadre employees working in the organization are
not well-versed in English, hence questions were discussed in local language with such persons
and data was collected.

Time Factor: Since the time was limited, not all employees could be included in the survey. A
sample of 65 employees was selected for the purpose of conducting the survey and collecting
relevant data. All in all, the employees were very co-operative and helpful. In spite of their busy
schedules they took time out to fill the questionnaires and provide me with additional inputs and
information.

FINDINGS AND OBSERVATION

1. Company not followed the 360 degree feedback method in company. 2. Parameters of
appraisals for higher-level employees are too many. 3. 38 % employees say's the PAS in SEMCO
is complicated. 4. Maximum number of employees considered the PAS are held on only
organizations development. 5. The Appraises also expect that their Comments and Suggestions
should be taken in to account while conducting the appraisal. 6. From the survey it is evident that

18
both the Appraiser's and Appraisee's expectation from Performance Appraisal system are the
same i.e. “Determination of Promotion or Transfer” and “Salary Administration and Benefits”

7. Also a majority of Employees were satisfied with the current Appraisal system although they
requested for few changes. 8. Maximum number of employees says that the review of PAS is
taken only once in a year. 10. 100 % employees are aware about PAS in SEMCO.

CONCLUSION:

1. One of the factor that became very clear in the course of gathering information in the
organization is that majority of the employees were well aware of the system of performance
appraisal followed in the organization. 2. They are well acquainted with the subject and have
knowledge about the need and purpose to have a good appraisal system in place. 3. They even
suggested measures to make the system of appraisal in the organization a better one. 4. Most of
the employees in the organization are fairly happy with the appraisal system in the organization.
However the system should be modified to do away with personal biases, likes and dislikes of
the appraisers.

SUGGESTIONS / RECOMMENDATIONS

Company must Adopt the 360 Degree Feedback system for PA -

360 degree feedback system is a method of appraisal which is a full -circle, multi-source and
multi- rated system of obtaining information from peers, subordinates and internal and external
customers, about the employee's performance. Company should reduce the Parameters of
appraisals - The parameters, especially for appraising the higher-level personnel, (senior officers,
deputy managers, managers etc.) are many, and need to be reduced in number. Otherwise, it
becomes a long and cumbersome process for the appraiser. Lengthy forms be done away with-
Performance appraisal forms for senior officers and above is very lengthy and should be
modified and made shorter and simpler.

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2.3 Performance Appraisal

Performance Appraisal is the systematic evaluation of the performance of employees and to

understand the abilities of a person for further growth and development. Performance appraisal is
generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.

2. The supervisor the factors behind work performances of employees.

3. The employers are in position to guide the employees for a better performance.

2.4 Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

1. To maintain records in order to determine compensation packages, wage structure, salaries

raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.

3. To maintain and assess the potential present in a person for further growth and development.

4. To provide a feedback to employees regarding their performance and related status.

5. To provide a feedback to employees regarding their performance and related status.

6. It serves as a basis for influencing working habits of the employees.

7. To review and retain the promotional and other training programmes.

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2.5 Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by
following advantages:

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion

programmes for efficient employees. In this regards, inefficient workers can be dismissed or
demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance Appraisal
tries to give worth to a performance. Compensation packages which includes bonus, high
salary rates, extra benefits, allowances and pre-requisites are dependent on performance
appraisal. The criteria should be merit rather than seniority.

3. Employees Development: The systematic procedure of performance appraisal helps the

supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It also
helps in framing future development programs.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity
and importance of the selection procedure. The supervisors come to know the validity and
thereby the strengths and weaknesses of selection procedure. Future changes in selection
methods can be made in this regard.

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5. Communication: For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be sought
for in the following ways:

a. Through performance appraisal, the employers can understand and accept skills of
subordinates.

b. The subordinates can also understand and create a trust and confidence in superiors.

c. It also helps in maintaining cordial and congenial labour management relationship.

d. It develops the spirit of work and boosts the morale of employees

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating

performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future

2.6 STEPS INVOLVED IN PERFORMANCE APPRAISAL

1. Establish Performance Standards

2. Communicate Performance Expectation to Employee

3. Measure Actual Performance

4. Compare Actual Performance with Standards

5. Discuss the Appraisal with the Employee

6. Initiate Corrective Actions.

22
1. Establish Performance Standards:
The appraisal process begins with the establishment of performance standards. The managers
must determine what outputs, accomplishments and skills will be evaluated. These standards
should have evolved out of job analysis and job descriptions.

These performance standards should also be clear and objective to be understood and measured.
Standards should not be expressed in an articulated or vague manner such as “a good job” or “a
full day’s work” as these vague phrases tells nothing.

2. Communicate Performance Expectations to Employees:

Once the performance standards are established, this need to be communicated to the respective
employees so that they come to know what is expected of them. Past experience indicates that
not communicating standards to the employees compounds the appraisal problem.

Here, it must be noted that mere transference of information (relating to performance standards,
for example) from the manager to the employees is not communication It becomes
communication only when the transference of information has taken place and has been received
and understood by the employees’.

The feedback from the employees on the standards communicated to them must be obtained. If
required, the standards may be modified or revised in the light of feedback obtained from the
employees. It is important to note that communication is a two-way street.

3. Measure Actual Performance:

This is the third step involved in the appraisal process. In this stage, the actual performance of
the employee is measured on the basis of information available from various sources such as
personal observation, statistical reports, oral reports, and written reports.

Needless to mention, the evaluator’s feelings should not influence the performance measurement
of the employee. Measurement must be objective based on facts and findings. This is because
what we measure is more critical and important to the evaluation process than how we measure.

23
4. Compare Actual Performance with Standards:
In this stage, the actual performance is compared with the predetermined standards. Such a
comparison may reveal the deviation between standard performance and actual performance and
will enable the evaluator to proceed to the fifth step in the process, i.e., the discussion of the
appraisal with the concerned employees.

5. Discuss the Appraisal with the Employee:

The fifth step in the appraisal process is to communicate to and discuss with the employees the
results of the appraisal. This is, in fact, one of the most challenging tasks the manager’s face to
present an accurate appraisal to the employees and then make them accept the appraisal in a
constructive manner.

A discussion on appraisal enables employees to know their strengths and weaknesses. This has,
in turn, impact on their future performance. Yes, the impact may be positive or negative
depending upon how the appraisal is presented and discussed with the employees.

6. Initiate Corrective Action:

The final step in the appraisal process is the initiation of corrective action when it is necessary.
The areas needing improvement are identified and then, the measures to correct or improve the
performance are identified and initiated.

The corrective action can be of two types. One is immediate and deals predominantly with
symptoms. This action is often called as “putting out fires.” The other is basic and delves into
causes of deviations and seeks to adjust the difference permanently.

This type of action involves time to analyse deviations. Hence, managers often opt for the
immediate action, or say, “put out fires”. Training, coaching, counselling, etc. is the common
examples of corrective actions that managers initiate to improve the employee performance.

24
2.7 Important Factors that can Distort Performance Appraisal

25
2.7 4 GOALS OF PERFORMANCE APRAISAL

General Goals Specific Goals

Developmental Use Individual needs

Performance feedback

Transfers and Placements

Strengths and Development needs

Administrative Decisions / Uses Salary

Promotion

Retention / Termination

Recognition

Lay offs

Poor Performers identification

Organizational Maintenance HR Planning

Training Needs

Organizational Goal achievements

Goal Identification

HR Systems Evaluation

Reinforcement of organizational needs

Documentation Validation Research

For HR Decisions

Legal Requirements

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 2.8 TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS
Numerous methods have been devised to measure the quantity and quality of performance
appraisals. Each of the methods is effective for some purposes for some organizations only.
None should be dismissed or accepted as appropriate except as they relate to the particular needs
of the organization or an employee.

Broadly all methods of appraisals can be divided into two different categories.

 Past Oriented Methods

 Future Oriented Methods

PAST ORIENTED METHODS:

1.    Rating Scales: Rating scales consists of several numerical scales representing job related
performance criterions such as dependability, initiative, output, attendance, attitude etc. Each
scales ranges from excellent to poor. The total numerical scores are computed and final
conclusions are derived. Advantages – Adaptability, easy to use, low cost, every type of job can
be evaluated, large number of employees covered, no formal training required. Disadvantages –
Rater’s biases

2.    Checklist: Under this method, checklist of statements of traits of employee in the form of

Yes or No based questions is prepared. Here the rater only does the reporting or checking and
HR department does the actual evaluation. Advantages – economy, ease of administration,
limited training required, standardization. Disadvantages – Raters biases, use of improper weighs
by HR, does not allow rater to give relative ratings

3.    Forced Choice Method: The series of statements arranged in the blocks of two or more are
given and the rater indicates which statement is true or false. The rater is forced to make a
choice. HR department does actual assessment. Advantages – Absence of personal biases
because of forced choice. Disadvantages – Statements may be wrongly framed.

4.    Forced Distribution Method: here employees are clustered around a high point on a rating
scale. Rater is compelled to distribute the employees on all points on the scale. It is assumed that
the performance is conformed to normal distribution.

27
Advantages – Eliminates Disadvantages – Assumption of normal distribution, unrealistic, errors
of central tendency.

5.    Critical Incidents Method: The approach is focused on certain critical behaviors of employee

that makes all the difference in the performance. Supervisors as and when they occur record such
incidents. Advantages – Evaluations are based on actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases, chances of subordinate improvement are
high. Disadvantages – Negative incidents can be prioritized, forgetting incidents, overly close
supervision; feedback may be too much and may appear to be punishment.

6.    Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviors

determine the points. They are said to be behaviorally anchored. The rater is supposed to say,
which behavior describes the employee performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions inherent in most rating techniques.

7.    Field Review Method: This is an appraisal done by someone outside employees’ own

department usually from corporate or HR department. Advantages – Useful for managerial level
promotions, when comparable information is needed, Disadvantages – Outsider is generally not
familiar with employees work environment, Observation of actual behaviors not possible.

8.    Performance Tests & Observations: This is based on the test of knowledge or skills. The tests
may be written or an actual presentation of skills. Tests must be reliable and validated to be useful.
Advantage – Tests may be apt to measure potential more than actual performance. Disadvantages – Tests
may suffer if costs of test development or administration are high.

9.    Confidential Records: Mostly used by government departments, however its application in

industry is not ruled out. Here the report is given in the form of Annual Confidentiality Report
(ACR) and may record ratings with respect to following items; attendance, self expression, team
work, leadership, initiative, technical ability, reasoning ability, originality and resourcefulness
etc. The system is highly secretive and confidential. Feedback to the assessee is given only in
case of an adverse entry. Disadvantage is that it is highly subjective and ratings can be
manipulated because the evaluations are linked to HR actions like promotions etc.

10.  Essay Method: In this method the rater writes down the employee description in detail
within a number of broad categories like, overall impression of performance, promoteability of

28
employee, existing capabilities and qualifications of performing jobs, strengths and weaknesses
and training needs of the employee. Advantage – It is extremely useful in filing information gaps
about the employees that often occur in a better-structured checklist. Disadvantages – It its
highly dependent upon the writing skills of rater and most of them are not good writers. They
may get confused success depends on the memory power of raters.

11.  Cost Accounting Method: Here performance is evaluated from the monetary returns yields
to his or her organization. Cost to keep employee, and benefit the organization derives is
ascertained. Hence it is more dependent upon cost and benefit analysis.

12.  Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of

different methods that compare performance with that of other co-workers. The usual techniques
used may be ranking methods and paired comparison method.

13. Ranking Methods: Superior ranks his worker based on merit, from best to worst. However
how best and why best are not elaborated in this method. It is easy to administer and explanation.

14. Paired Comparison Methods: In this method each employee is rated with another employee
in the form of pairs. The number of comparisons may be calculated with the help of a formula as
under.
N x (N-1) / 2

FUTURE ORIENTED METHODS:

1.    Management By Objectives: It means management by objectives and the performance is

rated against the achievement of objectives stated by the management. MBO process goes as
under.

 Establish goals and desired outcomes for each subordinate

 Setting performance standards
 Comparison of actual goals with goals attained by the employee
 Establish new goals and new strategies for goals not achieved in previous year.

29
Advantage – It is more useful for managerial positions.

Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting short-
term goals rather than important and long-term goals etc.

2.    Psychological Appraisals: These appraisals are more directed to assess employees potential

for future performance rather than the past one. It is done in the form of in-depth interviews,
psychological tests, and discussion with supervisors and review of other evaluations. It is more
focused on employees emotional, intellectual, and motivational and other personal characteristics
affecting his performance. This approach is slow and costly and may be useful for bright young
members who may have considerable potential. However quality of these appraisals largely
depend upon the skills of psychologists who perform the evaluation.

3.    Assessment Centers: This technique was first developed in USA and UK in 1943. An

assessment center is a central location where managers may come together to have their
participation in job related exercises evaluated by trained observers. It is more focused on
observation of behaviors across a series of select exercises or work samples. Assesses are
requested to participate in in-basket exercises, work groups, computer simulations, role playing
and other similar activities which require same attributes for successful performance in actual
job. The characteristics assessed in assessment center can be assertiveness, persuasive ability,
communicating ability, planning and organizational ability, self confidence, resistance to stress,
energy level, decision making, sensitivity to feelings, administrative ability, creativity and
mental alertness etc. Disadvantages – Costs of employees traveling and lodging, psychologists,
ratings strongly influenced by assessor’s inter-personal skills. Solid performers may feel
suffocated in simulated situations. Those who are not selected for this also may get affected.

Advantages – well-conducted assessment center can achieve better forecasts of future

performance and progress than other methods of appraisals. Also reliability, content validity and
predictive ability are said to be high in assessment centers. The tests also make sure that the
wrong people are not hired or promoted. Finally it clearly defines the criteria for selection and
promotion.

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1. 360-Degree Feedback: It is a technique which is systematic collection of performance data
on an individual group, derived from a number of stakeholders like immediate supervisors,
team members, customers, peers and self. In fact anyone who has useful information on how
an employee does a job may be one of the appraisers. This technique is highly useful in terms
of broader perspective, greater self-development and multi-source feedback is useful. 360-
degree appraisals are useful to measure inter-personal skills, customer satisfaction and team
building skills. However on the negative side, receiving feedback from multiple sources can
be intimidating, threatening etc. Multiple raters may be less adept at providing balanced and
objective feedback.

2. Behaviorally Anchored Rating Scales: (BARS) are designed to bring the benefits of both
qualitative and quantitative data to the employee appraisal process. BARS compare an
individual’s performance against specific examples of behaviour that are anchored to
numerical ratings. For example, a level four rating for a nurse may require them to show
sympathy to patients while a level six rating may require them to show higher levels of
empathy and ensure this comes across in all dealings with the patient. The behavioural
examples used as anchor points are often collected using Critical Incident Techniques (CIT),
which are procedures used for documenting human behaviour that have significance in a
particular area. BARS was originally developed to counteract the perceived subjectivity in
using basic ratings scales to judge performance, although BARS is still subject to criticism. It
is often accused of being subject to unreliability and leniency error.

3. Human Resource Accounting: It is a method to measure the effectiveness of personnel

management activities and the use of people in an organization.HRA is the process of
Assigning, budgeting, and reporting the cost of human resources incurred in an organization,
including wages and salaries and training expenses. Human resources are valuable assets for
every organization. Human resource accounting method tries to find the relative worth of

31
 these assets in the terms of money. In this method the Performance appraisal of the
employees is judged in terms of cost and contribution of the employees. The cost of
employees include all the expenses incurred on them like their compensation, recruitment
and selection costs, induction and training costs etc whereas their contribution includes the
total value added (in monetary terms). The difference between the cost and the contribution
will be the performance of the employees. Ideally, the contribution of the employees should
be greater than the cost incurred on them.

4. Customer feedback method: This method is truly one of the modern methods of performance
appraisal system. Customer feedback method is used, especially for sales staff who deal with
sales activity in the organisation. Under this method of appraisal system, customer feedback
is directly linked with employee performance. This method of assessment could be unbiased
and reliable since customers who are outsiders may give correct judgement about employee
performance than the insiders who are superiors. Companies like Cognizant and Wipro
software solutions are using customer feedback method to assess the performance of their
sales staff in order to hike salaries. Some industry experts say placing a higher weightage on
customer feedback may fail to motivate employees because customer feedback may vary
from customer to customer. Depending on the current state of mind, psychology and
perception of the customers may give different feedback for same degree of sales service.

5. 180 degree appraisal: This process provides a formal opportunity for appraisers to discuss
and record their views on an employee’s performance. A 180 appraisal process also has the
added benefit of enabling employees to comment on their own performance. This invites a
two way conversation and helps to ensure a more rounded and objective performance
appraisal. Ideally, appraisers should have the opportunity to consider their thoughts on an
employee’s performance in the light of the appraisee’s comments prior to the performance
appraisal meeting. An easy way to achieve this is to use a pre appraisal form. As a key part of
the appraisal process, this pre appraisal form should be completed by appraisees and handed
back to the appraiser before the 180 appraisal meeting. Giving appraisers the chance to see an

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 employee’s comments beforehand helps appraisers to compare and reconcile their own
thoughts on performance with the appraisee’s thoughts. If organised professionally, one of
the greatest benefits of a 180 Degree Appraisal process is that it is simple to introduce and
administer. If your process is to be of real benefit, it is essential that appraisers and
appraisees have some knowledge of the appraisal process before they start it. For example, it
is important that they understand their roles and the dates they’ll need to keep to.

SELF APPRAISAL

Employee self-appraisal, within a performance management or annual performance review

system involves asking the employee to self-evaluate his or her job performance.

Typically, prior to meeting with an employee, the manager will ask the employee to complete an
evaluation form on his or her own, to be used as a basis for discussion during the annual
performance review meeting. Then at the meeting, the manager and employee discuss the self-
appraisal results, and negotiate final evaluations based on both the manager's perceptions and
those of the employee.

It's rare that self-appraisal or self evaluation results are used without discussion and negotiation
and they should not be.

Actual self evaluations as part of performance management can take the form of evaluating
progress towards pre-defined annual objectives and performance standards, involve the
employee in rating him or her self using the same rating form the manager uses, or even involve
self-ranking.

2.9 10 Rating errors to avoid in performance reviews

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Most HR professionals look forward to conducting annual performance reviews about as much
as a trip to the dentist, but as the economy improves, performance appraisal are going to be the
key for talent retention, a positive work environment, and the overall growth and productivity of
your organization. That said, there are also pitfalls to avoid when conducting your performance
reviews. In a BLR webinar titled "Stress-Free Performance Appraisals: Increase Productivity,
Engage Employees, and Retain Top Talent," Sharon Armstrong outlined 10 rating errors to
avoid.

Rating errors are factors that mislead or blind us in the appraisal process. Armstrong warned that
"appraisers must be on guard against anything that distorts reality, either favorably or
unfavorably." These are the 10 rating errors seen most often. They’re where we can really go off
track.

1. Central tendency. Clustering everyone in the middle performance categories to avoid extremes
of good or bad performance; it’s easy, but it’s wrong. This isn’t fair to employees who are really
making an effort, and it can be demoralizing.

2. Favoritism Overlooking the flaws of favored or "nice" employees, especially those whom
everyone likes.

3. Grouping. Excusing below-standard performance because it is widespread; "everyone does it."

4. Guilt by association. Rating someone on the basis of the company they keep, rather than on
the work they do.

5. The halo effect. Letting one positive work factor you like affect your overall assessment of
performance.

6. Holding a grudge. A dangerous luxury that may result in your ending up in court. Never try to
make employees pay for past behavior.

7. The horns effect. The opposite of the halo effect – letting one negative work factor or behavior
you dislike color your opinion of other factors

34
8. Bias. Allowing your bias to influence the rating. Bias can come from attitudes and opinions
about race, national origin, sex, religion, age, veterans’ status, disability, hair color, weight,
height, intelligence, etc.

9. Recency. Rating only recent performance, good or bad. Data should be representative of the
entire review period. If you’re not keeping good notes, you may not remember the whole period.
Armstrong noted that "you want to make sure, again, that you’re keeping records so that you can
adequately describe performance over an entire performance period."

10. The sunflower effect. Rating everyone high, regardless of performance, to make yourself
look good or to be able to give more compensation

CHAPTER- III
COMPANY PROFILE
Name of the company: Bajaj Auto limited

Logo:

Type of company: Public company

Traded As: BSE: 532977, NSE: BAJAJ-AUTO, BSE SENSEX Constituent, CNX Nifty
Constituent

Industry: Automotive

Founded: November 29, 1945

Founder: Jamnalal Bajaj

Headquarters: Pune

35
Key people: Rahul Bajaj (Chairman) Rajiv Bajaj (MD)

3.1 HISTORY OF THE COMPANY

Bajaj Auto Limited is an Indian two-wheeler and three-wheeler manufacturing company. Bajaj
Auto manufactures and sells motorcycles, scooters and auto rickshaws. Bajaj Auto is a part of
the Bajaj Group. It was founded by Jamaal Bajaj in Rajasthan in the 1940s. It is based in Pune,
Mumbai, with plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttara hand.
The oldest plant at Akurdi (Pune) now houses the R&D Centre 'Ahead'.

Bajaj Auto is the world's sixth-largest manufacturer of motorcycles and the fourth-largest in
India. It is the world’s largest three-wheeler manufacturer. [Not in citation given]

On May 2015, its market capitalization was ₹640 billion (US$9.5 billion), making it India's 23rd
largest publicly traded company by market value. The Forbes Global 2000 list for the year 2012
ranked Bajaj Auto at 1,416.

Bajaj Auto came into existence on 29 November 1944 as M/s Bachraj Trading Corporation
Private Limited. It started off by selling imported two- and three-wheelers in India. In 1959, it
obtained a license from the Government of India to manufacture two-wheelers and three-
wheelers and it became a public limited company in 1960. In 1970, it rolled out its 100,000th
vehicle. In 1977, it sold 100,000 vehicles in a financial year. In 1985, it started producing at
Waluj near Aurangabad In 1986, it sold 500,000 vehicles in a financial year. In 1995, it rolled
out its ten millionth vehicle and produced and sold one million vehicles in a year.
With the launch of motorcycles in 1986, the company has changed its image from a scooter
manufacturer to a two-wheeler manufacturer.

According to the authors of Globality: Competing with Everyone from Everywhere for
Everything, Bajaj has operations in 50 countries creating a line of bikes targeted to the
preferences of entry-level buyers.

36
3.2 OBJECTIVES

1. To Be Proud Indian MNC

2. To be at the fore font of technological innovation. Our vibrant engineering minds

consistently conceptualize new ideas, feeding breakthrough technologies and innovative
patents at our in-house R&D Center.

3. To be World class manufacturing. TPM is the way of life at Bajaj Auto. Latest
manufacturing technologies like robotics, automation build quality in our products.

4. To build the Culture of Empowerment. We provide our employees with high degree of
autonomy in their day-to-day decisions and to act on ideas.

5. To be Fair and Transparent Annual and Quarterly PMS . Objective goal setting, transparent
performance rewards and constructive feedback in our Performance Management System,
help you to exceed performance expectations by unleashing your potential

6. To be Amongst Top Quartile in industry compensation. Competence and performance are the
key drivers of our compensation policy. Best performing employees are awarded with
significant rewards.

7. To Employee friendly work practices. Our policies and systems like SAP and ESS, provide
transactional ease so that the tedium does not claim your time and leaves you free to take on
challenging targets.

8. To provide Superior “Quality of Life”. Constant efforts towards employee welfare ensure
that employees enjoy superior quality of life.

3.3 MISSION
 Focus on value based manufacturing.
 Continual Improvements.
 Total elimination of wastes.
 Pollution free and safe environment.

37
3.4 VISION
To attain world class Excellency by demonstrating value added products to customers.

3.5 CORPORATE VALUES

 Transparency Is how we characterize ourselves. It is a value that makes us worthy of
credibility through integrity, of trust through sensitivity and of loyalty through
interdependence.

 Learning is how we ensure proactivity.

It is a value that embraces knowledge as the platform for building well informed,
reasoned, and
Decisive actions.

 Innovation is how we create the future. It is a value that provokes us to reach beyond the
obvious in pursuit of that which exceeds the ordinary.

 Perfection is how we set new standards.

It is a value that exhibits our determination to excel by endeavoring to establish new
benchmarks all the time.

 Speed is how we convey clear conviction.

It is a value that keeps us sharply responsive, mirroring our commitment towards our
goals and processes.

3.6 PRODUCTS AND SERVICES

Bajaj manufactures and sells motorcycles, scooters, auto-rickshaws and most recently, cars.
Bajaj Auto is India’s largest exporter of motorcycles and three-wheelers. Bajaj Auto’s exports
accounted for approx. 35% of its total sales. 47% of its exports are made to Africa. Boxer
motorcycle is the largest selling single brand in Africa.

38
Motorcycles in production are the Platina, Discover, Pulsar and Avenger and CT100. Bajaj also
distributes motorcycles in India for other manufacturers, such as the Kawasaki Ninja 250R, [11]
the Ninja 650R and new for 2012, the KTM Duke 200 & 390[citation needed] In FY 2012-13, it
sold approx. 3.76 million motorcycles which accounted for 31% of the market share in India. Of
these, approx. 2.46 million motorcycles (66%) were sold in India and remaining 34% were
exported.

Three wheelers:

It is the world's largest manufacturer of 3-wheelers and accounts for almost 84% of India’s three-
wheeler exports. During the FY 2012-13, it sold approx. 480,000 three-wheelers which was 57%
of the total market share in India. Out of these 480,000 three-wheelers, 53% were exported and
remaining 47% were sold in India.

Low cost cars:

In 2010, Bajaj Auto announced cooperation with Renault and Nissan Motor to develop a
US$2,500 car, aiming at a fuel efficiency of 30 kilometers per liter (85 mpg-imp; 71 mpg-US)
(3.3 L/100 km), or twice an average small car, and carbon dioxide emissions of 100 g/km.

On 3 January 2012, Bajaj auto unveiled the Bajaj RE60, a mini car for intra-city urban
transportation. The target customer group will be Bajaj's three-wheeler customers. According to
its Managing Director Rajiv Bajaj, the RE60 powered by a new 200 cc rear mounted petrol
engine will have a top speed of 70 kilometers per hour (43 mph), a mileage of 35 kilometers per
liter (99 mpg-imp; 82 mpg-US) and carbon dioxide emissions of 60 g/km.

Timeline of new releases

2009 Bajaj Pulsar 135, Bajaj XCD 135 cc, Bajaj Pulsar 150 DTS-in UG IV, Bajaj Pulsar 180
DTS-in UG IV, Bajaj Pulsar 220 DTS-in, Bajaj Discover 100 DTS-Si, Kawasaki Ninja 250R

2010 Bajaj Discover 150

2011 Bajaj Discover 125

39
2012 Bajaj RE 60 Mini car for intra-city urban transportation

2012 Bajaj Pulsar 200 NS, Discover 125ST 2013 Bajaj Discover 125ST, Discover 100T

2014 Bajaj Discover 150F, 150S 2015 Bajaj Platina 100 ES, Bajaj CT 100 (Re introduced),
Pulsar RS 200, Pulsar AS200, Pulsar AS150, Pulsar NS150, Bajaj Discover 125, Avenger 150 &
220 street

2016 Bajaj V15

3.7 HIERARCHY OF THE COMPANY

Mr. Rahul Bajaj – Chairman

Mr. Madhur Bajaj – Managing Director

Mr. Rajiv Bajaj – Executive Director

Mr. Sanjiv Bajaj – President (New Projects)

Mr. Eric Vas– President (research and development)

Mr. Abraham joseph President (Engineering)

Mr. Ilyas Ahmed ( HR manager)

3.8 Code of conduct:

1. The Company affirms that its competitiveness is interlinked with the well being of all
sections of the Indian society.
2. The Company believes that equal opportunity in employment for all sections of the society is
a component of its growth and competitiveness. It further believes that inclusive growth is a
component of growth and development of the country.
3. The Company affirms the recognition that lyrists to reflect socially disadvantages sections of
the society in the workplace has a positive impact on business.
4. The Company will not practice nor support conscious discrimination in any form.

40
5. The Company does not bias employment away from applicants belonging to disadvantaged
sections of society if such applicants possess competitive skills and job credentials.
6. The Company's selection of business partners is not based on any considerations other than
normal business parameters. In case of equal business offers, the Company will select a
business partner belonging to a socially disadvantaged section of society.
7. This Code of Conduct for Affirmative Action will be put up on the company web-site to
encourage applications from socially disadvantaged sections of society.
8. The Company makes all efforts for upskilling and continual training of all its employees in
order to enhance their capabilities and competitive skills. No discrimination of any type will
be shown in this process.
9. The Company may have a partnership programme with educational institution/s to support
and aid students from socially disadvantaged sections of society.
10. The Company will maintain records of Affirmative Action.
11. The Company has nominated Mr. Amrut Kumar Rath, President (HR), to oversee and
promote the Affirmative Action policies and programmes. He will be accountable to the
Chairman.
12. The Company will make available its learning and experiences as a good corporate citizen in
Affirmative Action to other companies desiring to incorporate such policies in their own
business.

3.9 AWARDS AND RECOGNITION:

1. Bajaj Pulsar 135 LS received Bike of the Year 2010 award from BBC – Top Gear and Bike
India.
2. Pulsar 220 DTS-Fi received the Bike of the Year 2008 award by all major Indian automobile
magazines like Overdrive, Auto Car, Business Standard Motoring and Bike Top Gear.

3. In 2006, Bajaj Auto won the Frost & Sullivan Super Platinum Award for manufacturing
excellence in its Chakan Plant.

4. It received award for The Most Customer Responsive Company in Automobiles category in a
survey conducted by Economic Times for the years 2004, 2006 and 2008.

41
5. Bajaj Auto received the Bike Maker of the Year award in ICICI Bank Overdrive Awards
2004.]

6. Bajaj Pulsar 180 DTS-i won the BBC World Wheels Viewers Choice Two Wheeler of the
Year 2003 award.

Acquisition:

Bajaj Auto bought a controlling stake in the Tempo Firodia company, renaming it "Bajaj
Tempo". Germany's Daimler-Benz, a long-time collaborator with Firodia because of their
ownership of the original Tempo works in Germany, owned 16% of Bajaj Tempo. Daimler sold
their stake back to the Firodia group in 2001, meaning that they once again held a controlling
interest, with BAL retaining 24% of the shares. It was agreed that Bajaj Tempo would gradually
phase out the use of the "Tempo" brand name, as it still belonged to Mercedes-Benz. The name
of the company was changed to Force Motors in May 2005, dropping "Bajaj" as well as
"Tempo", over the objections of Bajaj Auto with whom the company shares a long history as
well as a compound wall.

KTM Power Sports AG

In November 2007, Bajaj Auto acquired 14.5% stake in KTM Power Sports AG (holding
company of KTM Sport motorcycles AG). The two companies have signed a cooperation deal,
by which KTM will provide the know-how for joint development of the water-cooled four-stroke
125 and 250 cc engines, and Bajaj will take over the distribution of KTM products in India and
some other Southeast Asian nations. As on 31 March 2013, Bajaj Auto held 47.96% stake in the
company.

3.10 GROUP OF COMPANIES

Bajaj Auto is the flagship of the Bajaj group of companies. The group comprises of 34
companies and was founded in the year 1926.

The companies in the group are:

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1. Bajaj Auto Ltd.
2. 2.Bajaj Holdings & Investment Ltd.

3. Bajaj Finserv Ltd.

4. Bajaj Allianz General Insurance Company Ltd.

5. Bajaj Allianz Life Insurance Co. Ltd

6. Bajaj Financial Solutions Ltd.

7. Bajaj Auto Finance Ltd.

8. Bajaj Allianz Financial Distributors Ltd.

9. Bajaj Auto Holdings Ltd.

10. P T Bajaj Auto Indonesia (PTBAI)

11. Bajaj Auto Inter

3.11 POLICIES

TPM POLICY

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SHE POLICY

3.12 Plant locations:

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Bajaj Auto's has in all three plants, two at Waluj and Chakan in Maharashtra and one plant at
Pant Nagar in Uttranchal, western India.

Waluj : Bajaj range of motorcycles and three-wheelers

Chakan : Bajaj range of motorcycles

Pant Nagar: Bajaj range of motorcycles

3.13 Key Players in Market:

• Hero Honda Motors India Limited

• Bajaj Auto Ltd. (BAL)

• TVS Motor Company

• Honda Motorcycle Scooter India (P) Ltd.

• Yamaha Motors India Pvt. Ltd.

• Suzuki Motor Corporation

• LML (India) Limited

• Royal Enfield Motors India Limited

CHAPTER IV
DATA ANALYSIS & INTERPRETATION
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Q.1 Do you follow a formal performance appraisal system?

a) Yes

b) No

c) Neutral

Table 4.1: Formal appraisal system

OPTIONS RESPONSE PERCENTAGE

Yes 49 98%
No
Neutral 1 2%

Graph 4.1: Formal appraisal system

ANALYSIS AND INTERPRETATION: 98% of the employees are of the opinion that formal
performance appraisal system is followed at Bajaj, where as 2% of the employee’s states it as
neutral.

Q2. Which of the following methods are used for Performance appraisal?

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 a) Ranking method

b) Field review method

c) Behaviorally anchored rating scale

d) 360- Degree

Table 4.2: Methods of Performance appraisal

OPTIONS NO. OF RESPONDENTS PERCENTAGE
Field review method
Ranking method 30 60%
360- degree 20 40%
BARS

Graph 4.2: Methods of Performance appraisal

ANALYSIS AND INTERPRETATION: 60% of the employees are of the opinion that ranking
method od performance appraisal system is followed at bajaj, where as 40% of employees
opined that 360-degree appraisal system is followed.

Q3. How often is Performance appraisal conducted?

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 a) Quarterly

b) Half yearly

c) Yearly

Table 4.3: Timeline of Performance appraisal

OPTIONS RESPONSE PERCENTAGE

Quaterly 50 100%
Halfyearly
Yearly

Graph 4.3: Timeline of Performance appraisal

ANALYSIS AND INTERPRETATION: 100% of the employees are of the opinion that
performance appraisal is conducted on quarterly basis.

Q4. Employee’s opinion as to the present appraisal system?

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a)Fully satisfied

b) Satisfied

c) Can’t say

d) Dissatisfied

Table 4.4: Employee’s opinion

OPTIONS RESPONDENTS PERCENTAGE

Fully satisfied 20 40%
Satisfied 26 52%
Cant say 2 4%
Dissatisfied 2 4%

Graph 4.4: Employee’s opinion

ANALYSIS AND INTERPRETATION: 40% of the employees are fully satisfied with current
PA,where as 52% of the employees are satisfied , 4% of employees do not have an opinion, 4%
dissatisfied

Q5. In your opinion Performance appraisal system of your organization is related to which of the
following?

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a)Retention of employees

b) Recruitment system

c) Motivation

d) organization culture

Table 4.5: Relation of Performance appraisal

OPTIONS RESPONDENTS PERCENTAGE

Retention of employees 1 2%
Recruitment system 1 2%
Motivation 30 60%
Organisation culture 18 36%

Graph 4.5: Relation of Performance appraisal

ANALYSIS AND INTERPRETATION: 2% of employees of employees is oof opinion that

PA is for retention and 2% believe its for recruitment,60% believes PA is for motivation and
36% believe its for organization culture.

Q6. Do you receive any increment in your salary after Performance appraisal?

a) Yes

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 b) No

c) Neutral

Table 4.6: Relation of Performance appraisal with salary

OPTIONS RESPONSE PERCENTAGE

Yes 36 72%
No 10 20%
Neutral 4 8%

Graph 4.6: Relation of Performance appraisal with salary

ANALYSIS AND INTERPRETATION: 72% of the employees agree that performance

appraisal system helps in increment of salary, where as 20% of employees is of the opinion that
performance appraisal does not help in increment of salary, 8% of employees states it as neutral.

Q7. Do you think Performance appraisal helps people set and achieve meaningful goals?

a)Yes

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b) No

c) Neutral

Table 4.7: Effects of performance appraisal on goals

OPTIONS RESPONSE PERCENTAGE

Yes 42 84%
No 6 12%
Neutral 2 4%

Graph 4.7: Effects of performance appraisal on goals

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ANALYSIS AND INTERPRETATION: 84% of the employees agrees that performance
appraisal helps in achieving goals of the organization, where as 6 % of the employees opined that
it does not help in achieving goals, 2% of the employees states it as Neutral

Q8. Is the top level management partial in Performance appraisal?

a)Yes

b) No

c) Neutral

Table 4.8: Biased management

OPTIONS RESPONSE PERCENTAGE

Yes 5 10%
No 44 88%
Neutral 1 2%

Table 4.8: Biased management

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ANALYSIS AND INTERPRETATION: 10% of the employees are of the opinion that top
level management is partial during the evaluation process, where as 88% does not agree upon
this, 1% of the employees states it as neutral.

Q9.Do you think Performance appraisal helps to change behavior of employees?

a)Yes

b) No

c) Neutral

Table 4.9: Change in behavior

OPTIONS RESPONSE PERCENTAGE

Yes 42 84%
No 5 10%
Neutral 3 6%

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Graph 4.9: Change in behavior

ANALYSIS AND INTERPRETATION: 84% of the employees are of the opinion that
performance appraisal helps in changing the behavior of employees, where as 10% of the
employees opined that performance appraisal system does not help in changing the behavior of
employees, 6% states that its neutral.

Q10. Performance appraisal is conducted by?

a) HR manager

b) Employees

c) Customers

Table 4.10: Panel of performance appraisal

OPTIONS RESPONSE PERCENTAGE

HR manager 45 90%
Employees 5 10%
Customers

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 Graph 4.10: Panel of performance appraisal

ANALYSIS AND INTERPRETATION: 90% of the employees agree that HR managers

conduct performance appraisal, where as 10% of the employees opined that employees conduct
performance appraisal at bajaj.

Q11. Transfer, demotion, suspension and dismissal are based on Performance appraisal?

a) Yes
b) No
c) Neutral

Table 4.11: Transfer, demotion, suspension and dismissal

OPTIONS RESPONSE PERCENTAGE

Yes 30 60%
No 10 20%
Neutral 10 20%

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 Graph 4.11: Transfer, demotion, suspension and dismissal

ANALYSIS AND INTERPRETATION: 60% of the employees are of the opinion that
performance appraisal helps in Transfer, demotion, suspension and dismissal at bajaj, where as
20% of the employees are of the opinion that Transfer, demotion, suspension and dismissal are
not based on performance appraisal, 20% of the employees do not know.

Q12. Do limitations of performance appraisal affect the result of performance appraisal?

a)Yes

b)No

c) Neutral

Table 4.12: effect of limitations

OPTIONS RESPONSE PERCENTAGE
Yes 25 50%
No 18 36%
Neutral 7 14%

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 Graph 4.12: effect of limitations

ANALYSIS AND INTERPRETATION: 50% of the employees agree that result of

performance appraisal is affected by its limitations, where as 18% opined that it does not affect
the result, 14% of the employees states that its neutral.

Q13. Hold meeting in the beginning of the year to explain & clarify activity task & goals to be
achieved?

a)Yes

b)No

c) Neutral

Table 4.13: Meetings

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OPTIONS RESPONSE PERCENTAGE

Yes 39 78%
No 11 22%
Neutral
Graph 4.13: Meetings

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ANALYSIS AND INTERPRETATION: 78% of the employees agrees that meeting are held
every year initially, where as 22% do not agree upon.

CHAPTER V
FINDINGS, RECOMMENDATIONS, CONCLUSION &
LIMITATIONS
5.1 FINDINGS:

1. From the survey it is very much evident that a formal performance appraisal system is
followed at bajaj. Techniques used at bajaj are Ranking method and 360-degree.

2. Ranking method is the most popular method and 360-degree appraisal system was newly
started so that employees do not have any doubt of biasness.

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 3. The main motto of performance appraisal system is to motivate the employees and
promote them accordingly.

4. Formal Meetings are held quarterly and standard of performance is finalized once inputs
are taken from the employees.

5. 84% of employees takes performance appraisal process seriously and it helps in changing
their behavior positively towards work.

6. Most of the employees are fully satisfied and satisfied by the present performance
appraisal system.

7. Performance appraisal system at bajaj can lead to increment of salary.

5.2 RECOMMENDATIONS:
1. Self appraisal system should be followed as they can realize their strengths and
weaknesses more clearly.

2. Feedback from the immediate supervisor should be given more oftenly.

3. Company must set awards and recognition for the employees.

4. Proper complain channel for the employees should be started.

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5.3 CONCLUSION:

We can clearly conclude that Performance appraisal system at bajaj is contributing to its success
and changing behavior of employees positively towards work. Employees are well aware of their
appraisal system and they are also satisfied but ideally in the present day scenario, appraisal
should be done, taking the views of all the concerned parties who have some bearing on the
employee.

5.4 LIMITATIONS:

1. Project is limited of 50 employees only.

2. Although all attempts were made to make this an objective study, biases on the part of
respondents might have resulted in some subjectivity.

BIBLIOGRAPHY:
Books:
 Human resource development textbook by Aswathapa.
 Human resource development text book by S.P.Rao

Websites:
 www.Bajajauto.com
 www.slideshare.com
 www.businessballs.com

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