SYNOPSIS

ON

“STUDY OF EMPLOYEES PERFORMANCE APPRAISAL

SYSTEM”

Submitted as partial fulfillment for the award of

MASTER OF BUSINESS ADMINISTRATION DEGREE

Session 2018-20

Under Supervisor of Submitted by

Ms. Tamanna Ujjwal

Assistant professor 18012532041

Hindu institute of management

DEPARTMENT OF MANAGEMENT STUDIES

DEENBANDHU CHHOTU RAM UNIVERSITY OF SCIENCE AND

TECHNOLOGY MURTHAL, SONEPAT
 INTRODUCTION

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. 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.

BACKGROUND OF PERFORMANCE APPRAISAL

Performance appraisal is not something new. The appraisal system existed in early

centuries, though the nature of appraisal was not so formal and the tools used were not so
scientific. In fact the appraisal gained momentum in the post Second World War period
with the advent of professionalization in management. At the early stages the performance
appraisal was done just on the basis of the degree to which a person possessed certain
traits, which were considered essential for effective performance of a particular task.
Performance Appraisal of individuals, groups and organizations is common practice of
all societies.

The history of performance appraisal is quite brief. Its roots in the early 20th century can
be traced to Frederick Taylor’s pioneering time and motion studies. But this is not very
helpful, for the same might be said about almost everything in the field of modern human
resources management. As a distinct and formal management procedure of evaluation of
work performance, appraisal system was used dates from the time of the Second World
War. Yet in a broader sense, the practice of appraisal of employee’s performance in
different work places is a very ancient art. Appraisal, it seems, is both inevitable and
universal for human activities. In the absence of a carefully structured system of appraisal,
people will tend to judge the work performance of others, including subordinates, naturally,
informally and arbitrarily.

The human inclination to judge can create serious motivational, ethical and legal problems
in the workplace. Without a structured appraisal system, there is little chance of ensuring
that the judgments made will be lawful, fair, defensible and accurate. Performance
appraisal systems began as simple methods of income justification. That is, appraisal was
used to decide whether or not the salary or wage of an individual employee was justified.
The process was firmly linked to material outcomes. If an employee’s performance was
found to be less than ideal, a cut in pay would follow. On the other hand, if
their performance was better than the supervisor expected, a pay rise was in order. As a
result, the traditional emphasis on reward outcomes was progressively rejected. In the
1950s in the United States, the potential usefulness of appraisal as tool for motivation and
development was gradually recognized. The general model of performance appraisal, as it
is known today, began form that time.

ADVANTAGES

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

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.

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 include bonus, high
salary rates, extra benefits, allowances and pre-requisites are dependent on performance
appraisal. The criteria should be merit rather than seniority.

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 programmes.

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.

 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:
 Through performance appraisal, the employers can understand and accept skills of
subordinates.
 The subordinates can also understand and create a trust and confidence in superiors.
 It also helps in maintaining cordial and congenial labour management relationship.
 It develops the spirit of work and boosts the morale of employees.
 All the above factors ensure effective communication.

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.

OBJECTIVES OF THE STUDY

Performance Appraisal can be done with following objectives in mind:

Primary Objective

To study the employee's performance appraisal system in the manufacturing sector.

Secondary Objectives

● 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 will be 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 will comprise the complete plant level staff and exhaustive depicting the
Appraiser-Appraiser relationship and the significance of the overall Appraisal system in the
company, the research would base on the study of the attitudes of the employees towards
performance appraisal. In order to understand the entire process I will initially study the
performance appraisal system. This study will provide the base for further research.
 CONCEPTUALIZATION

Appraisal is the evaluation of worth, quality or merit. In the organization context,

performance appraisal is a systematic evaluation of personnel by superiors or others
familiar with their performance. Performance appraisal is also described as merit rating in
which one individual is ranked as better or worse in comparison to others. The basic
purpose in this merit rating is to ascertain an employee’s eligibility for promotion.

Performance appraisal is the systematic evaluation of employees with respect to their

performance on their job and their potential for development. A performance appraisal is
an evaluation done on an employee’s job performance over a specific period of time. The
works performed by the different employees differ in many aspects due to the difference in
their backgrounds, experiences, knowledge, skills, abilities, and aptitudes. Such differences
determine the need for training and development activities. It is the equivalent of a report
card on an employee and how their manager assessed their performance over the prior year.
So, it is necessary for management to identify such differences so that employees having
better job performance ability, skills and knowledge can be rewarded in one hand, and the
wrong placements of the employees may be checked through transfer or punishments on
other hands. In this regard, performance appraisal provides a measure in order to know the
level of performance so that the employee may improve his/her performance.
 REVIEW OF LITRATURE

Addison and Belfield (2008) offered a replication for Britain of Brown and Heywood’s
analysis of the determinants of performance appraisal in Australia. Although there are some
important limiting differences between the two data sets — the Australia Workplace
Industrial Relations Survey (AWIRS) and the Workplace Employment Relations Survey
(WERS) — they reached one central point of agreement and one intriguing shared insight.
First, performance appraisal is negatively associated with tenure: where employers cannot
rely on the carrot of deferred pay or the stick of dismissal to motivate workers, they will
tend to rely more on monitoring, ceteris paribus. Second, employer monitoring and
performance pay may be complementary. However, consonant with the disparate results
from the wider literature, there is more modest agreement on the contribution of specific
human resource management practises, and still less on the role of job control.

Asmu (2008) states that “Performance appraisal interviews” play a crucial role in internal
communication. Most of the research on performance appraisal interviews has focused on
strategic aims and interview design, but less attention has been given to the way in which
performance appraisal interviews actually take place. In this study, the focus will,
therefore, be to investigate how one of the crucial and most delicate activities in
performance appraisal interviews, namely, giving critical feedback, is conducted. The way
critical feedback is given is predominantly through negative assessments. The results
indicate that there is an orientation to critical feedback as a socially problematic action
despite the institutional character of the talk. Moreover, it can be seen that the more the
supervisor shows an orientation to negative assessments as being socially problematic, the
more difficult it becomes for the employee to deal with negative assessments. The study
ends by outlining various implications for the workplace.

Chen and Fu (2008) in their article titled “A systematic framework for performance
appraisal and compensation strategy” state that systematical strategic fit benefits
organization’s performance and makes the organization systemic. Researches on
performance appraisal strategy and compensation strategy are extensive, but most of them
only focused on the single subject without the synergy of them. An extensive literature
review is provided in this research to build up a systematic theoretical framework for
performance appraisal and compensation strategy. Four propositions of the criteria and
methods of performance appraisal and compensation strategy are inferred in this systematic
framework. Furthermore, four situations of 2×2 combinations with the criteria and above
methods are discussed for the new systematic performance appraisal and compensation
strategy. Through this framework, an organization can appropriately focus on employees’
representation or individual to evaluate and motivate employees in a rational or humanistic
way.

Herdlein, Kukemelkb and Turk (2008) in their article titled “A survey of academic
officers regarding performance appraisal in Estonian and American universities” state that
higher education in the Baltic Republic of Estonia is experiencing rapid change as the
country adjusts to a market economy in the post-Soviet era and adheres to principles
established through the Bologna Process. Research in the area of performance appraisal,
and the most effective approaches to motivate academic staff, is a key factor influencing
change in a rapidly developing society. Using qualitative research, a survey was submitted
to academic officers in 11 Estonian and four western New York (USA) colleges and
universities. A total of 29 individuals completed surveys in Estonia (a response rate of 69
per cent). A convenience sample of eight academic administrators returned instruments in
western New York, giving a response rate of 100 per cent. The results of the survey
indicated that appraisal systems within American higher education are similar and based on
a long tradition of connecting appraisal to the guidelines governing permanent appointment
(tenure). Appraisal within Estonian universities is still rather basic and unified systems do
not yet exist, as individual institutions employ a variety of procedures. The study was
intended to accelerate the process of performance appraisal in Estonia and Eastern Europe.

Narcisse and Harcourt (2008) in their article titled, “Employee fairness perceptions of
performance appraisal: a Saint Lucian case study” identified the essential factors which
influence employees’ fairness perceptions of their performance appraisals, and determine
the applicability of these factors to the experiences of employees in a Saint Lucian public
service organization. Fairness perceptions are of three main types. First, distributive justice
refers to the perceived fairness of an actual appraisal rating. Second, procedural justice
refers to the perceived fairness of procedures used to determine the appraisal rating. Third,
interactional justice refers to the perceived fairness of the rater’s interpersonal treatment of
the ratee during the appraisal process. A qualitative case study method was used to gain a
rich understanding of employee perceptions of the fairness of their performance appraisals.
Data were obtained from both completed appraisal forms and interviews with 20
knowledgeable employees. All interviews were transcribed and assessed using a thematic
analysis. Overall, results show that distributive, procedural, and interactional justice factors
identified in the existing literature influence employee perceptions of fairness in their
appraisals. Results suggest that employees also consider four additional justice factors, as
yet not formally recognized in the justice literature, one distributive – the consistency in
reward distribution – and three procedural – appraisal frequency, job relevant criteria, and
rater and rate training.
 RESEARCH METHODOLGY

Research project requires the most suitable techniques or methods to come out with an
accurate result. To complete this research, methodologies are developed to refine the study
that enables researchers to generate information needed. It is important to have a well-
designed research methodology as the degree of accuracy and usefulness of a research is
directly affected by the methodology.

RESEARCH DESIGN

A research design is the set of methods and procedures used in collecting and analysing
measures of the variables specified in the problem research. Descriptive and analytical
research design will be used in this research.

SAMPLING DESIGN

Target population: manufacturing sector

Sampling unit: Appraiser (Officer) +Appraisee (workers)

Sample size: 50

Source technique: Simple Random Sampling

Data Collection Methods

Data can be collected through two main sources which include primary data and secondary
data. The mostly data are collected through the structured Questionnaire.

Primary data

Primary sources provide raw information and first-hand evidence. The primary data for the
study will be collected through survey method using structured questionnaire.

Primary source of data collection includes;

 Structured questionnaire
 Observation

Secondary data
 Secondary sources provide second-hand information and ideas from other researchers. The
secondary data for the research will be collected through;

 Journals
 Websites
 Books
 Earlier researches on similar topic

INSTRUMENT OF DATA COLLECTION

For the study purpose I will use the questionnaire method to collect the primary data.

TOOLS OF ANALYSIS

Statistical tools:

The collection of data will be used by use some statistical tools like central tendency and
correlation analysis and frequency distribution.

Charts and diagrams: In this research I will use chart and diagram for effective
representation of data for better understanding facts of research.

Data analysis is represented by Pie Chart.

Data Instrument

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

P.Subba Rao Chapter: Performance Appraisal Himalaya Publishing House.

Managing Human Resources & Personnel Management- R.S.Dwivedi Chapter:

Performance Appraisal Management Galotia Publishing Company

Human Resource Management Text & Cases- K. Ashwathappa Chapter: Performance

Appraisal I Management System P TAT A McGraw - Hill

www.Performanceappraisal.com

www.litraturereview.com
 PROPOSED CHAPTER PLANS

CHAPTER TOPIC

1 INTODUCTION TO THE TOPIC

2 OBJECTIVES OF THE STUDY

3 SIGNIFICANCE OF THE STUDY

4 FOCUS OF THE STUDY

5 CONCEPTUALIZATION

6 REVIEW OF LITRETURE

7 RESEARCH METHODOLOGY

8 BIBLIOGRAPHY