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A PROJECT REPORT PERFORMANCE APPRASIAL Organization : National Thermal Power Corporation

Submitted in the partial fulfillment of the requirement for the award of the degree MASTER OF BUSINESS ADMINISTRATION Session 2009-2011 SUBMITTED TO:Mrs. PRIYANKA SHRIVASTAV Faculty of MBA Dept. SUBMITTED BY:ANAMIKA MBA IIIrd Sem Roll No. 0928670003 VIT



This is to certify that Miss Anamika, Roll No: 0928670003 is a bonafide student of MBA IIIrd Semester during Session 2009-2011. The Summer Training Project Report entitled A Study of HR Function at NTPC, Dadri Super Thermal Power Project and A detailed study of Training and Development Activities and practices at NTPC with special Reference to NTPC Dadri . has been prepared by him/her in partial fulfillment of the award of Master Degree in Business Administration of U.P. technical University, Lucknow.

Name of Faculty Ms Priyanka Shrivastav


S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Topics Declaration Preface Acknowledgement Executive Summary Introduction The Organization NTPC Problem Undertaken Objective of Our Study Performance Appraisal - Theoretical Perspective Research Methodology Data Presentation Data Analysis Conclusions Recommendations Limitation Bibliography Annexure Questionnaire Page No. I II III IV 1 30 31 32 59 61 80 92 93 94 95 96 100

I, Anamika student of MBA 3rd semester in department of management studies, Vishveshwarya Institute of Technology hereby declare that the project report entitled Performance Appraisal System with reference to NTPC is my own work and the matter enclosed has not been submitted for the award of any other

degree or diploma in the university or anywhere and is conducted under the supervision of Mr. Anil kumar (Associate Manager, HR) NTPC Dadri. I hereby declare that all the data and information which this project contains is true as per my knowledge. During preparation of the project I was honest about the rules and regulation of NTPC and Business ethics. And I think no data of my project harms any reader of my project directly or indirectly.



The personnel or human resource of an organization are its most important and valuable assets. Therefore, the management of this resource becomes fundamental to all administrative activities and within the management of resources, performance appraisal occupies a significant niche and the subject matter of this

study is Performance Appraisal. Despites this phenomenal progress made in the area of Human Resource Management, the functional and process of performance appraisal continues to remain as major challenges, facing managers everywhere today and in the foreseeable future too. The personnel function in developing countries such as India has several distinct traits. It cannot be compared with the personnel function of advance countries or with that of under-developed countries though it has certain similarities with both. The element that causes these differences is size, ownership pattern, and style of management, government legislation and the socio-culture milieu prevailing in India. It is also necessary to point out that there is no uniformity in the formulation and practice of personnel policies in the country. These variations are caused by some of the factors indicated above as well as by the difference in each organizations philosophy and approach to its human resources. An attempt has been made to systematically analyze and present relevant research data. The changes that are taking place in existing or traditional personnel functions or practices are due to the increased importance being given to functions, such as selection or training, by organizations wanting to identify and utilize human resources as efficiently as possible. There is now an increasing concern for productivity and better utilization of human resources at the plant level in an increasingly competitive environment. These changes that are more towards expanding the role of the personnel function could also be, to some extent, attributed to behavioral science research into the understanding of human behavior at the work place

We are grateful to Mrs. Priyanka shrivastav for his guidance and support during the compilation of the project. We wish to thank Mr. Anil Kumar, (HR Manager) for giving us the permission to carry out the project at the National Thermal Power Corporation, Dadri.

We also wish to express our gratitude to all the faculty members at NTPC for their invaluable inputs. Last but not the least we thank the employees of NTPC for their co-operation in the course of our cource


National Thermal Power Corporation (NTPC) has emerged as a truly national power company, with power generating facilities in all the major regions of the country. NTPC is committed to the environment, generating power at minimal environmental cost and presenting the ecology in the vicinity of the plants. It has 17 power generating plants which contribute to 25% of total power supply in India. NTPC is ranked 3rd in India for employee satisfaction. People generally come to work to do a good job. What stands in their way? There are a variety of issues. An organization owes itself the ability to get as much from the minds of its people as it possibly can. Developing an employee and providing a path that leads to higher performance and individual development is often the difference between organizational success or failure. Doing that in a way that is in alignment with the organizations goals is How this can be accomplished. In todays fast changing world employee appraisal and how to enhancing the Performance of employeeis one of the most important issue faced by the Human Resource Development in analyzing and evaluating its employees as well as to retain them. It also gives the employees a chance to look back on what they have been doing. This project is based on enhancing employee performance through constructive appraisal system and thus providing developmental programs. It goes in depth into what Performance appraisal system is, what it stands for and what its impact on employee performance. It tries to explain the advantages and effectiveness of using two way appraisal system in the NTPC. It contains different types of approaches that can be used in different set of conditions. The project also tries to throw light on how theory can be put to practice. The employees who seek development may also seek opportunity. It is easier them to help grow within their own organization that it is for them to switch organizations and start new. Given development and room to grow, most employees will repay the investment through their loyalty. Employee assessment serves multiple objectives. It is centrally linked to the motivation of employees. It provides some of the essential components of effective motivational strategies; in particular, feedback that permits an employee to learn how well he or she is performing; goal or objective-setting that specifies what the person should be doing; team building that allows the employee to participate along with peers and his superiors in solving problems that impede his productivity; and monetary incentives that reward good performance. And special concerned to its impact on career planning programmes of NTPC A visit to NATIONAL THERMAL POWER CORPORATION, Dadri was of great help in my project.

ntpc is one of the organizations that are using Self Performance Appraisal system in their organizations. Here I met Mr. Anail kumar, the associate Manager of establishment HR NTPC, who is one of the committee members of this multi-source feedback guideline system. He told me about the feedback system they are using in NTPC, why are they using Performance feedback, what were the programs for career planning of employees, and their development etc. Here the objective of this project is to analyze the effectiveness of current employee appraisal programme which includes employee career planning and employee development strategies adopted by the NTPC and finding out the loopholes in actual practice. The methodology adopted was first of all finding what planning made by organization in terms of employee appraisal and enhancing their performance. A structured questionnaire was prepared and certain GETs and Executives were interviewed along with SBU Heads and HR professionals. Open questions were also asked to them in order to get their feedback and suggestion. Sampling was done on the basis of availability and convenience. For the purpose a sample of 300 respondents were selected. In addition to this I also interviewed those employees leaving the organization in this period. Their response and suggestions were analyzed and consolidated to reach to the recommendations. The employee appraisal system in NTPC is up to the mark where as it compare to the other manufacturing sector. The compensation given to the employees is best in the industry and almost all employees are satisfied with that but the following area need more concern subjectivity in performance appraisal not satisfactory, training and development not adequate, no systematic job rotation, no mentoring system. In the interview conducted it was revealed Performance appraisal system should need improvement. Personal interview and 360 appraisal system should be introduced. Better career path for the talented employees is inadequate. There is no description and also there is existence of favoritism in the work place. If these concerns are properly taken care of, then the performance of employee is enhanced. NTPC should develop its employee career and develop them. Enhanced Compulsory job rotation should be introduced up to 25% of employee. Training evaluation should also be there. Role clarity must be brought in the organization by having Job description for each employee, having properly defined reporting relationship and clearly communicating the performance expectations.

From humble beginnings in the 1880s, the Indian Power Sector has come a long way From one small unit in 1880s to 1362 MW in 1947 to over 550 Billion Units in 2006-07 1880s First electrification small hydel in Darjeeling 1889 Commercial production & Distribution starts in Calcutta Indian Electricity Act, 1910. 1947 Power generating capacity only 1,362 MW The Electricity (Supply) Act, 1948 SEB formation Creation of central generation companies CEA constituted 1956 Industrial Policy Resolution reserves production of power for public sector 1960s and 70s Impetus for expansion of rural electrification 1975 NTPC and NHPC set up 1989 NPTC set up. Renamed POWER GRID in 1992 1991 Liberalization; amendments in Electricity (Supply) Act 1992 Ministry of Power constituted 1995 Policy for Mega power projects introduced 1998 CERC and SERCs set up 2001 Energy Conservation Act 2003 New Electricity Act 2006-07 Power generation capacity stands at 551.7 Billion Units


Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco friendly technologies and contribute to society


NTPC Limited is the largest thermal power generating company of India. A public sector company, it was incorporated in the year 1975 to accelerate power development in the country as a wholly owned company of the Government of India. At present, Government of India holds 89.5% of the total equity shares of the company and FIIs, Domestic Banks, Public and others hold the balance. Within a span of 30 years, NTPC has emerged as a truly national power company, with power generating facilities in all the major regions of the country. Based on 1998 data, carried out by Data monitor UK, NTPC is the 6th largest in terms of thermal power generation and the second most efficient in terms of capacity utilization amongst the thermal utilities in the world.

NTPC's core business is engineering, construction and operation of power generating plants and also providing consultancy to power utilities in India and abroad. As on date the installed capacity of NTPC is 24,249MW through its 13 coal based (19,980 MW), 7 Gas based (3,955 MW) and 3 Joint Venture Projects (314 MW). NTPC acquired 50% equity of the SAIL Power Supply Corporation Ltd. (SPSCL). This Joint venture Company operates the captive power plants of Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74MW). NTPC is also managing Badarpur thermal power station (705 MW) of Government of India.

NTPC has set new benchmarks for the power industry both in the area of power plant construction and operations. It is providing power at the cheapest average tariff in the country. With its experience and expertise in the power sector, NTPC is extending consultancy services to various organizations in the power business. PIPES AT ASH POND

Ash Utilization Division to manage efficient use of the ash produced at its coal stations. This quality of ash produced is ideal for use in cement, concrete, cellular concrete, building material. NTPC has also taken proactive steps for ash utilization. In 1991, it set up

temperature in the areas by about 3c. NTPC is committed to the environment, generating power at minimal environmental cost and preserving the ecology in the vicinity of the plants. NTPC has undertaken massive afforestation in the vicinity of its plants. Plantations have increased forest area and reduced barren land. The massive afforestation by NTPC in and around its Ramagundam Power station (2100 MW) have contributed reducing the A "Center for Power Efficiency and Environment Protection (CENPEEP)" has been established in NTPC

with the assistance of United States Agency for International Development. (USAID). Cenpeep is an efficiency oriented, eco-friendly and eco-nurturing initiative - a symbol of NTPC's concern towards environmental protection and continued commitment to sustainable power development in India. POWER PLANT OPERATION

The operating performance of NTPC Ltd. has been considerably above the national average. The availability factor for coal stations has increased from 85.03% in 1997-1998 to 91.20% in 2004-2005, which compares favorably with international standards. The PLF has increased from 75.25 in 1997-98 to 87.51 % during the year 2004-05 which is the highest since the inspection of NTPC Ltd. However, for regions other than Eastern Region, which has power evacuation constraints due to low system demand, a PLF of 87.51 was achieved during this year. Over last ten years, employee productivity has almost doubled as measured by the ratio of turnover to number of employees.


The Government of India has decided to accrue a special status to top profit making Indian Public Sector Enterprises, calling them the NAVRATANS (literally, nine jewels, thought now they number eleven). Recognizing its excellent performance and vast potential, Government of the India has identified NTPC as one of the jewels of Public Sector Navratans- a potential global giant. The company improved its ranking in Asia weeks survey of the top 1000 companies of the Asia- Pacific Region including Japan. In terms of sales and profit NTPCs ranking has improved from 344th to 299th and 40th to 31st


Ramagundam & Dadri power stations have been awarded with ISO 14001 certification for confirming to international standards of environmental management system. Lloyds Register Quality Assurance (LRQA) has awarded these certificate, a London based organization, which approves ISO certification worldwide. PMI at Noida also received the ISO 9001 certification by M/S LRQA. Signals power station is accredited with ISO 9002 certification. WORLD BANK APPRAISAL The World Bank has been periodically appraising the performance of NTPC. A few excerpts from the World Banks Performance Audit/Staff Appraisal Report of 1993 are: NTPC has demonstrated that Government owned utilities can be operated at efficiency levels comparable of those who owned utilities in India and well run utilities outside of India. On financial side, NTPC has been successful in increasing substantially and in diversifying resource mobilization for future project financing.


National Thermal Power Corporation has been the power behind Indias sustainable power development since November 1975. Contributing 26% of the countrys entire power generation, NTPC today lights up every 4th bulb in the country. With ambitious growth plans to become a 56000 MW, Power Company by 2017, NTPC the largest power

utility of India has already diversified into hydro sector. Further initiatives for greater organizational transformation have been approved under PROJECT DISHA. The company added 2000 MW during this years With a commendable performance in the areas of operation and maintenance, NTPC once again surpassed all Memorandum Of Understanding targets for the year 2002-2003 in the Excellent Category. NTPC stations recorded the highest ever PLF of 83.6% since the inspection of the corporation. Some highlights of excellence are: Turnover of Rs. 19984.58 crore. With 19% of the countrys installed capacity, NTPC contributed 26% of electricity Generated 140.85 billion units (BUs) an increase of 4.765 over previous years generation of 133.19 BUs. This is besides the generation of the NTPC SAIL JV Companies. Return On Capital Employed (ROCE) and Return On Net Worth (RONW) 10.88% and 12.13% respectively. 1000MW capacity added during 2002-03. The fourth 500 MW units at Talcher- Kaniha have also been synchronized in October 2003. Capacity addition of over 9370 MW planned for 10th plan. Projects totaling 5300 MW capacity under various stages of construction.


Shell Helen Keller Award 2002 for promoting employment opportunities to disabled people. Platts Global energy Award 2002 for commitment to community development. CORE-BCSD Corporate Social Responsibility Award 2001-02 instituted by TERI. ICC-UNEP World Summit Business Award for Sustainable Development Partnership. National Safety Award 2002 instituted by the British Safety Council, to seven NTPC stations. Best HR Practices Award 2002 instituted by Indian Society of Training & Development. World HRD Congress Award instituted by World HRD Congress. Golden Peacock National Training Award 2003 instituted by Institute of directors to PMI. Meritorious Productivity Award of the Government of India to 12 stations. Prime Ministers Shram award for the 17th year including two SHRAM RATNA. Vishvakarma Award by Ministry of Labor, Government of India. Climate Technology Initiative award. MoU Excellence Award of Government of India. CII Award for Excellence in Infrastructure. Greentech Environment Excellence Award. Best Employer National Award for the welfare of physically challenged people. Business Today Hewitt Best Employers Award.


Greentech Life time AAchievement Award

Achivement AWARDS

MoU Award for Excellence in Performance

green tech awards


Over the last three decades, NTPC has spearheaded development of thermal power generation in the Indian power sector. In this process, it has built a strong portfolio of coal and gas/liquid fuel based generation capacities. The company has made initial forays in the area of hydropower development and plans to have a significant share of hydropower in its future generation portfolio. Although NTPC is also offering technical services, both in domestic and international markets, through its Consultancy Wing, the generation business would continue to be the single largest revenue generator for NTPC. The Indian power sector is witnessing several changes in the business and regulatory environment. The legal and policy framework has changed substantially with the enactment of the Electricity Act 2003. In the foreseeable future, India faces formidable challenges in meeting its energy needs. Recently, a draft integrated energy policy has been issued, which addresses all aspects including energy security, access, availability, affordability, pricing, efficiency and environment. To meet the twin objectives of ensuring availability of electricity to consumers at competitive rates, as well as attract large private investments in the sector, a new Tariff policy has also been issued. The power sector thus offers a mixed bag of challenges and opportunities to players and NTPC would continue to review its business strategy and portfolio in light of these changes.

2009-02-29 01:18:25 Growth in electricity generation has decelerated to 6.6 per cent from 7.5 per cent in the corresponding period in 2008-09, the Economic Survey tabled in the Parliament by finance minister P. Chidambaram said. The government is expecting 9.5 per cent growth per annum in the power sector in the 11th Five Year Plan




Government Aid and naveraten company worlds largest coal base

2. Way ahead of its competitors Best Brand Name in the Industry

1. 2.

Not have the big collection of fuel Recovery of fund in long time

OPPORTUNITIES 1.It have GAS INDUSTRY which is having significant growth in the Near future 2.India require electricity in future THREATS 1. Huge Investments require fuel 2. . AVAILABILITY OF fuel is very difficult 3. Increasing more number of apartments at high costs

Power Supply Units India:

Power is derived from various sources in India. These include thermal power,hydropower or hydroelectricity, solar power, biogas energy, wind power etc. the distribution of the power generated is undertaken by Rural Electrification Corporation for electricity power supply to the rural areas, North Eastern Electric Power Corporation for electricity supply to the North East India regions and the Power Grid Corporation of India Limited for an all India supply of electrical power in India.

Thermal Power in India is mainly generated through coal, gas and oil.
India coal power forms a majority share of the source of power supply in India. The electric power in India is generated at various thermal power stations in India. The power generated at these thermal power plants is then distributed all over India through a network of power grid at regional and national levels. The power ministry organization responsible for the thermal power management in India is the NTPC.

Hydropower in India is one of the mega power generators in India.

Various hydropower projects and hydro power plants have been set up by the ministry of power for generation of hydro power in India. Various dams and reservoirs are constructed on major rivers and the kinetic energy of the flowing water is utilized to generate hydroelectricity. The power generator here is the running water. The hydroelectric power plants and the hydro power generation companies are managed by the National Hydro Electric Power Corporation (NHPC).

Wind Power in India is available in plenty as India witnesses high intensity winds in various regions due to the topographical diversity in India. Efforts have been made to utilize this natural source of energy available free of cost for wind
power generation. Huge wind energy farms have been set up by the government for tapping the wind energy by using gigantic windmills and them

Converting the kinetic energy of the wind into electricity by the use of power converters. The wind power advantages start with the very fact that a wind energy power plant does not require much infrastructure input and the raw material i.e. wind itself is available free of cost.

Solar Power in India is being utilized to generate electricity on smaller scale by setting up massive solar panels and capturing the solar power.

Solar power India is also being utilized by the power companies in India to generate solar energy for domestic and small industrial uses.

Nuclear Power in India is generated at huge nuclear power plants and nuclear power stations in India. A nuclear power plant generates the electricity using
nuclear energy. All the nuclear power plants in India are managed by the Nuclear Power Corp of India Ltd (NPCL). The electricity from all India nuclear plants is distributed by the NPCL as per the nuclear power project scheme.


Presently Director HR followed by Executive heads the HR function at NTPC Director HR who is assisted General Manager HRD who are than assisted by the team of General Manager, Assistant General Manager, Senior Manager, Manager, Senior Personal Officer and other Executives. The current focus of the HR department is essentially on looking after the companys policies, day-to-day personal and administrative matters like pay, salary administration, leave, and reimbursement of expenses. The internal recruitment is still done. They have full involvement with performance appraisal of employees and training and ongoing development. The government sets the salary structure; TA/DA and other benefits are well taken care of by the personnel and administration department. Each region of NTPC (Northern, Southern, Eastern, Western) has different HR divisions generally headed by GM or AGMs. Director (NR) has a medical wing with him nationwide. Every project site has medical hospitals & dispensaries headed by Deputy General Manager.NTPC has set up a Resettlement & Rehabilitation (R&R) center, which is monitored by government of India and headed by director (HR). Corporate social responsibility (CSR) s the new wing started by NTPC, which is headed by AGM &DGM, they directly report to director HR. This group work for social welfare and awareness i.e. employment of physical challenged people, community development as further an amount of Rs 72 million was allocated to Uttranchal government for street lightning and medical equipment for a forest hospital.

Director (HR)

Employee Relation HR Policy Division Welfare Employee Benefit

Executive Director

Power Management HR Recruitment Promotion Institute & Appraisals Noida


Industrial Engineering & Transfers Group



Level wise sanction of executive manpower has been structured on the basis of objective, which is approved by chief managing director that is as follows:

E1-Assistant officer E2- Senior officer E3- Executive Trainee equivalent to officer E3- Senior officer E4- Department manager E5- Manager E6- Senior Manager E7- DGM E7A- AGM E8- GM E9- Executive Director The above post has been sanctioned by the consultation with the concerned functional director.

Industry players and profile

The power sector reveals that it can be largely segregated into four different categories on the basis of type of players in the industry. These include: Central Government Corporations: which consist of corporations like the National Thermal Power Corporation (NTPC), Nuclear Power Corporation, National Hydro Electric Power Corporation (NHPC), and some other smaller players. State Government Corporations. Which consist of the various state electricity boards and other corporations that have been promoted by the respective governments. Poor management, transmission and distribution (T&D) losses and poor recoveries of dues are some of the factors, which are responsible for the plight of these corporations. Currently, the financial health of many SEBs is precarious and their revenue-raising capabilities are more or less dependent on assured guarantees from the respective governments. Private Sector Licensees: In the private sector, some companies had been given licenses to carry on generation and distribution activities. While some of these companies are generation and distribution companies, others like Surat Electricity are just distribution companies. Independent Power Producers: The Independent Power Producers (IPPs) are the companies that have been given a nod to set up generation capacities. Finally, a look at the regulatory structure of the sector indicates that various Acts govern the power sector.

Overview of ntpc NTPC was set up in the central sector in the 1975 in response to widening demand & supply gap with the main objective of planning, promoting & organizing an integrated development to thermal power in India. Ever since its inception, NTPC has never looked back a

The only PSU to have achieved excellent rating in respect of MOU targets signed with Govt. of India each year. NTPC is poised to become a 40,000 MW gint corporation by the end of XI plan i.e. 2012 AD.

Lighting up one fourth of the nation, NTPC has an installed capacity of 19,291 MW from its commitment to provide quality power; all the operating stations of NTPC located in the National Capital Region & western have acquired ISO 9002 certification. The service groups like Engineering, Contracts, materials and operation Services have also bagged the ISO 9001 certification. NTPC Dadri, Ramagundam, Vindhyachal and Korba station have also bagged ISO 14001 certification. Today NTPC contributes more than 3 / 5th of the total power generation in India.

A Brief Introduction to NTPC

The largest power generation company in India under Central Government Current installed capacity 29,144 MW 18 coal based and 8 gas based power plants Setting up hydro power plants, developing coal mines for captive use, and exploring oil / gas blocks in consortium with partners Subsidiary & JV companies for taking up power generation, trading, and distribution business and for setting up of small hydro plants Setting up coal based power plant in Srilanka

Implementation of Supercritical Technolgy NTPC

In 1999 NTPC appointed an International consultant EPDC, Japan to study for adoption of super critical technology in NTPC EPDC evaluated supercritical technology from technical, economical and environmental point of view for Indian perspective. EPDC recommended supercritical technology for India and suggested following parameter. Main steam pressure 246 kg/cm2, Temperature-538/566 deg C NTPC implemented supercritical technology for two plants i.e Sipat-I (3X660MW) and Barh-I (3X660MW) with above parameter.

Supercritical Technology Analysis

Technology -Mature and established

Availability -Same as sub-critical Project Implementation-Essentially same as sub-critical O&M -By & large same as sub-critical Reduced Environmental Impact Most preferred parameters-246 Kg/cm2-538oC/566oC Materials proven and already in use Indigenous Supplier of Supercritical Technology are under developing stage.


Boiler-Once Through instead of drum type and use of superior material in certain pressure parts Piping-Reduced diameter. Superior Material. Turbine-Increase in thickness of various parts to suit higher parameters Feed Heaters-Increased thickness of tubes, water boxes and tube plate BFP-Increased motor rating. Higher thickness of certain parts Boiler Control-Change in philosophy Water Chemistry-No blow down. 100% flow CPU. Different chemistry control. No new superior material is used. Only the quantity of superior material increases.



Under Construction Capacity Addition Schedule


along NTPC to take up the construction of Kawas, Auraiya, Anta, Dadri and Gandhar Gas Power Project the HBJ Gas pipe line. The power plant consists of gas turbine generating units waste heat recovery boilers, steam turbo generator, ancillary electrical and mechanical equipments. The power generated at this power station is fed over 220 KV AC transmission system associated with this project to distribute the power in the various Regions. In the Power Sector, gas turbine drive generators are used. Gas turbines range in size from less than 100 KW up to about 140.000 KW. The gas turbine has found increasing application due to the following potential advantages over competive equipment. Small size and weight per horsepower Rapid loading capability Self-contained packaged unit Moderate first cost No cooling water required Easy maintenance High reliability Waste heat available for combined cycle Aplicapation. Low Gestation Period Low Pollution Hazards The function of a gas turbine in a combined cycle power plant is to drive a generator which produce electricity and to provide input heat for the steam cycle. Power for driving the compressor is also derived from gas turbine.


Introduction to Performance Appraisal
Once the employee has been selected, trained and motivated, he is then appraised for his performance. Performance Appraisal is the step where the Management finds out how effective it has been at hiring and placing employees. If any problems are identified, steps are taken to communicate with the employee and remedy them. Performance Appraisal is a process of evaluating an employees performance in terms of its requirements. Performance Appraisal can also be defined as the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed, for purposes of administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.

Importance and Purpose

Performance Appraisal has been considered as the most significant an indispensable tool for an organization, for an organization, for the information it provides is highly useful in making decisions regarding various personnel aspects such as promotion and merit increases. Performance measures also link information gathering and decision making processes which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting, selection, training and compensation. Accurate information plays a vital role in the organization as a whole. They help in finding out the weaknesses in the primary areas. Formal Performance Appraisal plans are designed to meet three needs, one of the organization and the

other two of the individual namely: o They provide systematic judgments to back up salary increases, transfers, demotions or terminations. o They are the means of telling a subordinate how he is doing and suggesting needed changes in his behavior, attitudes, skills or job knowledge. They let him know where he stands with the Boss. o Superior uses them as a base for coaching and counseling the individual. On the basis of merit rating or appraisal procedures, the main objectives of Employee Appraisal are: o To enable an organization to maintain an inventory of the number and quality of all managers and to identify and meet their training needs and aspirations. o To determine increment rewards and to provide reliable index for promotions and transfers to positions of greater responsibility. o To suggest ways of improving the employee s performance when he is not found to be up to the mark during the review period. o To identify training and development needs and to evaluate effectiveness of training and development programmes. o To plan career development, human resource planning based potentials. o To identify training and development needs and to evaluate effectiveness of training and development programmes. o To plan career development, human resource planning based potention


Human Resource are today universally acknowledged as the most valuable assets in any organization, and it is largely due to this that enlightened management are increasingly searching and researching for newer and better techniques of personnel management and administration. Performance Appraisal has acquired a new dimension as a result of the HRD movement. Despites the increasing research done by behavioral scientists, man still remains a very complex person, capable at the same time, however, of extremely high performance levels given the proper environment and motivation. Rao defines HRD as a process that continuously helps the employees in a planned way to acquire and sharpen capabilities needed for present and future work, to help them discover their potential and to develop an organization culture where collaboration and teamwork are valued. Performance Appraisal plays a key role in achieving the objectives of HRD. It can be used for performance planning and culture building. Appraisal can help in identifying development areas and growth potential. It can also be used for performance reviews and counseling. Effective appraisals should help in identifying strength and weakness of employees so that subsequent training and development activities can be used to reinforce strengths and overcome the weaknesses of the employees. Hence the appraisal is not merely a tool to judge the performance of the employees in the previous year, but also an opportunity to tap their potential and discover mechanisms to bring that potential the surface. In simple terms, Performance Appraisal may be understood as the assessment of an individuals performance in a systematic way, the performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed. A formal definition of performance appraisal is: It is a systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development. A more comprehensive definition is: Performance Appraisal is a formal, structured system of measuring and evaluating an employees job related behaviors and outcomes to discover how and why the employee is

presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit. Formal appraisal of an individuals performance began in the Wei dynasty (A.D. 221- 265) in China, where an Imperial Rater appraised the performance of members of the official family. A formal appraisal program has been perceived to be equally important in Indian business and industry, and a number of firms conduct it in one form or the other. In industry, performance appraisal is a systematic evaluation of personnel by superiors or others familiar with their performance because employers are interested in knowing about employee performance. Employees also wish to know their position in the organization. Appraisals are essential for making many administrative decissions: selection, training, promotion, transfer, wage and salary administration etc. Performance Appraisal thus is a systematic and objective way of judging the relative worth or ability of an employee in performing his tasks well and those who are not and the reason for such performance. In public enterprises, however, personnel management in the early years tends to follow the government procedures, but for the last two decades or so we see managements becoming increasingly aware of the necessity to professionalize personnel administration. The diversity of procedures and techniques for performance appraisal, ranging from much too prosaic too much too elaborate prevailing in the business and industrial establishments is positive staggering. Evaluation of employees is one of the most universal practices of management. It is applied formally or informally to all employee-operatives, technical, professional and executive. Many companies use formal plans primarily in connection with operative employees. The success of formal plans of evaluation depends upon the case with which they are planned, operated and controlled.

Objectives of Performance Appraisal

Data relating to performance assessment of employees are recorded, stored, and used for several purposes. The main purposes of employee assessment are: 1. To effect promotions based on competence and performance. 2. To confirm the services of probationary employees upon completing the probationary period satisfactorily. 3. To assess the training and development needs of employees.

4. To decide upon a pay raise where (as in the unorganized sector) regular pay scales have not been fixed. 5. To let the employees know where they stand insofar as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development. 6. To improve communication. Performance Appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the rater and the ratee. 7. Finally, performance appraisal can be used to determine whether HR programmes such as selection, training, and transfers have been effective or not. Broadly, performance appraisal serves four objectives (i). Developmental uses- Identification of individual needs. 1- Performance feedback. 2- Determining transfers and job assignments. 3- Identification of individuals strengths and developmental needs (ii). Administrative uses/Decisions- Salary PromotionRetention or Termination -Recognition of individuals performance Lay-offs Identification of poor performers (iii) Organizational Maintenance/objectives- HR planning 1-Determining organization training needs 2- Evaluation of organizational goal achievement 3- Information for goal identification 4-Evaluation for HR system 5- Reinforcement of organizational development needs.

(iv) Documentation- Criteria for validation research 1- Documentation for HR decisions 2- Helping to meet legal requirements

Performance Appraisal and Competitive Advantage

The objective of performance appraisal, listed above, points out the purposes that such an exercise seeks to meet. What needs emphasis is that performance evaluation contributes to firms competitive strength. Besides encouraging high level of performance, the evaluation system helps identify employees with potential, reward performance equitably and determine employees need for training. Specifically, performance appraisal helps an organization gain competitive edge in the following way \ Improving Performance Improving Performance Competitive Advantage Minimizing Dissatisfaction and Turnover Strategy and Behaviour Values and Behaviour Making Correct Decisions, Ensuring Legal Compliance An effective appraisal system can contribute to competitive advantage by improving employee job performance in two ways- by directing employee behavior towards organizational goal and by monitoring that behavior to ensure that the goals are met. Making Correct Decisions Appraisal is a critical input in making correct decisions on such issues as pay raise, promotion, transfer, training, discharges and completion of probationary periods. Right decisions on each of these can contribute to competitive strength of an organization. If promotion is made on performance, the promote feels motivated to enhance his or her performance. Ensuring Legal CompliancePromotion made on factors other than performance might land up a firm in a legal battle, thus diverting its focus on non-productive areas. Organizations can minimize costly performance related litigation by using appraisal systems that give fair and accurate ratings. Minimizing Job Dissatisfaction and Turnover

Employees tend to become emotional and frustrated if they perceived that the ratings they get are unfair and inaccurate. Such employees find that the efforts they had put in became futile and obviously get demotivated. Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction is increased turnover. Fair and accurate appraisal results in high motivation and increased job satisfaction. An organization having satisfied and motivated employees will have an edge over its competitors. Consistency Between Organizational Strategy and Behavior An organization needs a strategy consistent with the behavior of its employees if it were to realize its goals. A truism of organizational life is that people engage themselves in behaviors that they perceive will be rewarded. As employees want to be rewarded, they tend to occupy themselves more with those activities on which the organization emphasizes. The performance appraisal becomes not only a means of knowing if the employees behavior is consistent with the overall strategic focus, but also a way of bringing to the fore any negative consequence of the strategy-behavior fit. Thus, the performance appraisal is an important organizational mechanism to elicit feedback on the strategy- behavior link. Organizational Strategy and Performance Appraisal- The performance appraisal system serves many organizational objectives and goals. Besides encouraging high level of performance, the evaluation system is useful in identifying employees with potential, rewarding performance equitably, and determining the employees need for development. These are all the activities that should support the organizations strategic orientation.

Each step in the process is crucial and is arranged logically. The process as shown in figure is some what idealized. Many organizations make every effort to approximate the ideal process, resulting in first-rate appraisal systems. Unfortunately, many other fails to consider one or more of the steps and, therefore, have less effective appraisal system. The Performance Appraisal Process 1. Objectives of Appraisal Objectives of appraisal includes effective promotions and transfers, assessing training needs, awarding pay increases, and the like. The emphasis in all these is to correct the problems. These objectives are appropriate as long as the approach in appraisal is individual. Appraisal, in future, would assume system orientation. In the system approach, the objective of appraisal stretch beyond the traditional ones. In the system approach, appraisal aims at improving the performance, instead of merely assessing it.

Towards this end, appraisal system seeks to evaluate opportunity factors. Opportunity factors include the physical environment such as noise, ventilation and lightings, available resources such as human and computer assistance; and social Establish Job Expectations Design an Appraisal Program Appraise Performance Performance Interview Use Appraisal Data For Appropriate Purpose processes such as leadership effectiveness. These opportunity variables are more important than individual abilities in determining work performance. In the system approach, the emphasis is not on individual assessment and rewards or punishments. But it is on how the work system affects an individuals performance. In order to use a systems approach, managers must learn to appreciate the impact that the system level factors have on individual performance, and subordinates must adjust to the lack of competition among individuals. Thus, if a systems approach is going to be successful, the employee must believe that by working towards shared goals, everyone will benefit.

2. Establish Job Expectations The second step in the appraisal process is to establish job expectations. This includes forming the employees what is expected of him or her on the job. Normally, a discussion is held with his or her superior to review the major duties contained in the job description. Individuals should not be expected to begin the job until they understand what is expected from them.

3. Design Appraisal Programme Designing an appraisal programme poses several questiones, which need answers. They are, (i) Formal versus informal appraisal; (ii) Whose performance is to be assessed? (iii) Who are the raters? (iv) What problem are encountered? (v) How to solve the problems? (vi)What should be evaluated? (vii) When to evaluate? (viii) What methods of appraisal are to be used?

4. Appraisal the performance The next step in the appraisal is to measure the performance. We revert to the moral of the story narrated in the beginning of this chapter. The moral taught us that we need to measure the performance and not mere activities.

What then is performance? Performance is essentially what an employee does or does not do. Employee performance common to most jobs include the following elements: Quantity of output Quality of output Timeliness of output Presence at work Cooperativeness. In addition to these, other elements that deserve assessment, as told in the beginning of this chapter, are job knowledge, leadership abilities, judgment; supervision, versatility and health assessment should also include ones potential to performance and not just actual performance. Performance measurement needs to be based on the benchmarks listed above. These benchmarks vary from job to job. The job of a professor needs to be assessed against parameters that are different to those used to evaluate the performance of a sales representative.

5. Performance Interview -Performance interview is another step in the appraisal process. Once appraisal has been made of employees, the raters should discuss and review the performance with the ratees, so that they will receive feedback about where they stand in the eyes of superiors. Feedback is necessary to effect improvement in performance, especially when it is inadequate. Specifically, performance interview has three goals: (i) to change behavior of employees whose performance does not meet organizational requirements or their own personal goals, (ii) To maintain the behavior of employees who perform in an acceptable manner, and (iii) To recognize performance behaviors so that they will be continued. Raters offer feedback to the ratees through several methods tell and sell, tell and listen, problem solving and mixed. In tell and sell, also called directive interview, the interviewer lets assesses know how well they are doing and sell them on the merits of setting specific goals for improvement, if needed. They tell and listen interview provides the subordinates with chances to participate and establish a dialogue with their superiors. Its purpose is to communicates the raters perceptions about the ratees strength and weaknesses and let the subordinates respond to those perceptions. In the problem-solving or participative interview, an active and open dialogue is established between the superior and the subordinate. Not only are perceptions shared, but also solutions to problems are presented, discussed, and sought. Mixed interview is a combination of tell and sell and problem-solving interviews. Whatever be the approach followed, the emphasis in the interview should be on counseling and

development and not on critism, witch-hunting and buck passing. Because of the significance of appraisal interview, every effort must be made to make it effective. Guidelines given in the table will help make the interview successful. Guidelines for Effective Appraisal Interview Select a good time Minimize interruptions Welcome, set at ease Start with something positive Ask open-ended questions to encourage discussion Listen Manage eye contact and body language Be specific Rate behavior, not personality Layout development plan Encourage subordinate participations Complete form Set mutually agreeable goals for improvement End in a positive, encouraging note Set time for any follow-up meetings

6. Use of Appraisal Data The final step in the evaluation process is the use of evaluation data. The data and information generated through performance evaluation must be used by the HR department. It may be recollected that the most significant rewards employers offer to employees are: 1. Money to purchase goods and services required not only for current and future survival, but also for the luxuries modern life has to offer. 2. Te opportunity to use innate and learned skills and talents in a productive manner that the individual and his or her managers and co-workers recognize as valuable.

3. Opportunities to interact with other people in a favorable working environment. 4. Opportunities to learn, grow, and make full use of their potential. 5. A sense of performance and stability through the continuing existence of the organization and the job. 6. The opportunity to perform work assignments within an environment that not only protects, but promotes physiological, emotional and psychological health. In one way or another, data and information outputs of a performance-appraisal programme can critically influence these coveted employer-employee reward opportunities. Specifically, the data and information will be useful in the following areas of HRM: 1. Remuneration administration 2. Validation of selection programmes 3. Employee training and development programmes 4. Promotion, transfer and lay-off decisions 5. Grievance and discipline programmes 6. HR planning. Problem of criterion Differentiating between individuals is easy provided one knows what aspects to take into account. A very broad definition of criterion is that refers to the evaluative standards which measures a persons performance, attitudes, etc. At the lower levels of an organization, there are specific jobs, and certain tangible and objective standards of performance can be identified. Further up in the hierarchy, jobs become more complex and clear-cut, tangible standards of performance are difficult to specify. Irrespective of the level, by and large, most companies use eleven performance measures : quantity of work, quality of work, waste and breakage, money earned, job knowledge, job tenure, absenteeism, rate of advancement, selfjudgment by supervisors. These measures can be classified into three broad categories: 1. Personal Data 2. Production Data 3. Judgmental Data Personal Data: This includes personal history, number of times one has been absent, number of grievances, accidents, breakage, etc., all of which are often used to differentiate between good and bad performers, they studied what personal variables made them good or bad performers. However, there is little evidence to suggest that personal data can predict job performance. It is extremely

risky to use personal data as an indicator of performance. In fact, several studies suggest that the relationship between personal data measures and production measures is often very often very low. Thus, if these factors are used to define job success they should be considered relevant criteria in their own right, rather than simple substitutes for more direct measures of job productivity. Production Data: Rate and quality of work, and money earned, are direct measures of performance. These can range from units produced per hour to money earned or lost. Production data are useful for evaluating the performance of people only in some jobs and at some levels. Staff jobs vis--vis line jobs, higher level jobs vis--vis lower level ones, and performance in service organizations vis--vis production or engineering organizations are difficult to evaluate, if production is the only thing to be considered. Despites the fact that clear-cut output measures are available for some jobs; production data are not the most frequently used measure of performance. They have been used less extensively that can be expected. Initial studies on production as a measure of performance suggest that the time period between measures can make a substantial difference to the accuracy of the data. To get correct pictures of production and output, several samples over a number of time periods should be taken.

Judgmental Data: These include self-judgment, judgment by peers and superiors, and sometimes knowledge of the job. It is one of the most commonly used indicators of performance, and probably the one most loaded with errors and problems. Most of the problems arise because it is based on subjective assessment either by the individual, or by another individual for him. It is almost impossible to objectify subjective judgments. Merely giving two persons an answer to an essay test, and examining the reason for their evaluation can gauge the difficulty of using this indicator.

Performance Appraisal Methods:

1. Confidential Report: This is the traditional way of appraising employee performance. A confidential report by the immediate supervisor is still a major determinant of the subordinates promotion or transfer. The supervisor writes about a paragraph on his subordinates strengths, weaknesses, intelligence, attitude to work, attendance, conduct and character, work efficiency, etc. The format and pattern of the report varies with each supervisor. Form-1 and Form-2 gives examples of both unstructured and structured confidential report simply asks supervisors to estimate personal qualities and capabilities-particularly reliability, judgment, adaptability, etc. The superior is free to combine them in assessing the performance of the employee. The sample in form-2 gives 15 traits and characteristics and is so structured that the supervisor can give his comments on each one of them specifically and separately. The latter type of confidential report generates more data and information, in well-defined categories, then does the former variety.

2. Rating Scales: Merit rating or appraisal of the performance is an important tool in the hands of superiors to assess their subordinates. It is a systematic evaluation of an employee by some other qualified person who is familiar with the employees performance. These methods assess the degree of certain qualities required for the job such as industriousness, reliability and dependability. The degree is usually measured on a scale, which can vary from 3 points (good, average, and poor) to several points. This appraisal form defines not only traits and characteristics, but also scales positions. To some extent, it overcomes the abstractness of numerical scales. Common limitations of improperly designed merit rating system are: - it is just a record of opinion - there are zones of uncertainty - rating seldom tells the whole story - rating depends on raters ability and personal bias.

3. Ranking System: One of the disadvantages of the rating system is that it permits similar total scores for two or more individuals. The ranking system obviates this problem. The rater simply ranks employees in order of merit, which determines the employees ratings. Ranking can be determined either by looking at

the total individual and then ranking him in relation to others; or by first identifying several relevant traits, ranking employees separately on each of these traits, and then cumulating these trait rankings to arrive at the final employee ranking. The ranking system is simple, natural and useful when the number of employee evaluated by the same superior is small. Two disadvantages of the ranking system are: 1.It is difficult to rank employees apart from and between the top and bottom extremes; finer judgment has to be exercised here, which increases chance of errors. 2.The task of ranking individuals is difficult when there are over 20 or 25 cases.

2. Paired comparison method: It is much simpler; requiring the rater to judge which of the two workers is superior, instead of having to arrange members of a large group of workers in order of excellence. It makes the rater compare one employee systematically with the others individually. The supervisor is provided with a bunch of slips each containing a pair of names. The rater puts a tick mark against the individual whom he considers the better of the two. The maximum number of pairs is indicated by the formula N(N-1)/2 , where N=total number of this method is that in a permutations and combinations increases, requiring more time from the evaluator. One disadvantage of this method is the number of permutations and combinations increases, requiring more time from the evaluator.

3. Forced Choice Method: The forced choice rating forms contains a series of groups of statements and the rater checks how effectively the statements describes each individual being evaluated. The rater is required to choose from several sets of adjectives or phrases, which best characterize the officer and which are most descriptive. This is also sometimes called a check list statement. The forced choice method attempts to make performance evaluation more objective.

4. Critical Incident Method: This involves three steps: A list of noteworthy (good or bad) on-the-job behavior, usually of specific instances, is first prepared. A group of experts then assign scale values to them. A group of experts then assign scale values to them, depending upon the degree of desirability for the job. The third step is constructing a checklist that includes incidents that define good and bad workers. Subsequently, superiors use these list for evaluating the worker. This method has to identify key

areas in which employees are weak or strong. It emphases rating on objective evidence rather on the subjective evolution of trades. Finally, the supervisor finds counseling easier since he knows his subordinates weakness.

5. Forced distribution method: In this the rater is forced to distribute his subordinates into performance categories such as outstanding, good, poor, etc. the rater distribute his subordinate his subordinates on scale locations which can be top 10 percent to bottom 10 percent, or any variation of percentages with values in between. The most often used distribution is 10, 20, 40, 20, 10 percent, which equates with a normal distribution. This method is useful for rating a large no.of employee. Problems in Performance Appraisal: None of the methods for appraising performance is absolutely valid or reliable. Those appraisal methods involve judgments of one kind or the other. The error of central tendency and the error of leniency are inherent in the process. The central tendency error refers to the tendency of not using extreme scale scores on the judgment scales; most of the rates are clustered in the middle. Errors of leniency are caused by the tendency of the lenient rates to put most of the ratees on the higher sides of the scale, while the tough rater places them on the lower side of the scale. Another problem is the halo effect or the tendency to allow the assessment on one trait to influence assessment on others. This arises when traits are unfamiliar, ill defined, and involves personal reaction. Another source of errors in performance evaluation is criterion contamination and bias because of variety of circumstances and functions beyond the control of the rater and the ratee. These are critical biases, and must be taken into account to make appraisals as objective as possible. Blum and nylon discuss the source of bias: 1.Opportunity bias: This results when the amount of output is influenced by factors beyond the control of employees. Some employees have better working conditions, supportive supervisors, more experienced co-workers, and hence their output may be greater than those others working on identical tasks. 2.Group characteristics bias: The characteristics of an individuals group make a dent in his performance. Cohesive group with high morale can produce more than less cohesive groups. Since the individuals performance is greatly determined by the groups definition of a fair days work, this factor must be kept in mind while evaluating the individual employees performance. 3.Knowledge of predictor bias: A raters knowledge of the performance of an employee on predictors can influence his appraisal rating. An employee who topped in the selection list might leave the impression

that he is the best among the employees, and hence may railroad the rater to better evaluation despite a moderate performance. The rater should never be permitted to have access to the employees solutions data. 4.Bias in rating: The raters own biases and competence in rating can influence the objective of performance appraisals. The halo effect, raters training, central tendency errors, etc are examples of this contamination. Although all appraisal methods are subject to validity and reliability tests there is very little evidence on these two counts. Since most appraisal methods involve personal judgment, it is difficult to ascertain their reliability and validity. Group appraisal methods and rating by multiple judges are some techniques, which can make evaluations reliable and valid. However there success is highly debatable. Are Performance Appraisals Still Beneficial And Appropriate? It is sometimes fashionable in the modern age to dismiss traditional processes such as performance appraisals being irrelevant or unhelpful. Be very wary however if considering removing appraisals from your own organizational practices. It is likely that the critics of the appraisal process are the people who cant conduct them very well. Its a common human response to want to jettison something that one finds difficult. Appraisals in whatever form, and there are various have been a mainstay of management for decades, for good reasons. Think about everything that performance appraisals can achieve and contribute to when they are properly managed. 1- Performance measurement- transparent, short, medium and long term 2-Clarifying, defining, redefining priorities and objectives 3-Motivation through agreeing helpful aims and targets 4-Motivation through agreeing helpful aims and targets 5-Training needs and learning desires assessment and agreement 6-Identification of personal strengths and direction including unused hidden strengths 7-Career and succession planning personal and organizational 8-Team roles clarification and team building 9-Organisational training needs assessment and analysis 10-Appraisee and manager mutual awareness, understanding and relationship 11-Resolving confusions and misunderstandings

12-Reinforcing and cascading organizational philosophies, values, aims, strategies, priorities, etc 13-Delegation, additional responsibilities, employee growth and development 14-Counseling and feedback 15-Manager development all good manager should be able to conduct appraisals well its a fundamental process The list goes on People have less and less face-to-face time together these days. Performance appraisals offer a way to protect and manage these valuable face-to-face opportunities. My advice is to hold on to and nurture these situations, and if you are under pressure to replace performance appraisals with some sort of (apparently) more efficient and cost effective method, be very sure that you can safely cover all the aspects of performance and attitudinal development that a well-run performance appraisals system is naturally designed to achieve. There are various ways of conducting performance appraisals, and ideas change overtime as to what are the most effective appraisals methods and systems. Some people advocate traditional appraisals and forms; other prefer 360 degree type appraisals. In fact performance appraisals of all types are effective if they are conducted properly, and better still if the appraisal process is clearly explained to, agreed by, the people involved. Purpose of Performance Appraisal and How to make it easier Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed into business planning. Formal performance appraisals are generally conducted annually for all staff in the organization. Staff members are appraised by their line manager. Directors are appraised by the CEO, who is appraised by the chairman or company owners, depending on the size and structure of the organization. Annual performance appraisals enable management and monitoring of standards, agreeing expectations and objectives and delegation of responsibilities and tasks. Staff performance appraisals also establish individual training needs and unable organizational training needs analysis and planning. Performance appraisals also typically feed into organizational annual pay and grading reviews, which commonly also coincides with the business planning for the next trading year. Performance appraisals generally review each individuals performance against objectives and standards for the trading year, agreed at the previous appraisal meeting.

Performance appraisals are also essential for career and succession planning for individuals, crucial jobs, and for the organization as a whole. Performance appraisals are also important for staff motivation, attitude and behavior development, communicating and aligning individual and organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individuals performance, and a plan for the future development. Job performance appraisals- in whatever form they take- are therefore vital for managing the performance of people and organizations. Managers and appraisees commonly dislike appraisals and try to avoid them. To these people the appraisal is daunting and time consuming. The process is seen as a difficult administrative chore and emotionally challenging. The annual appraisal is maybe the only time since last year that the two people have sat down together for a meaningful one to one discussion. No wonders then that appraisal are stressful- which then defeats the whole purpose. There lies the main problem and the remedy. Appraisals are much easier, and especially more relaxed, if the boss meets each of the team members individually and regularly for one-to-one discussion throughout the year. Meaningful regular discussion about work, career, aims, progress, development, hopes and dreams, life, common interests, etc., whatever, makes appraisals so much easier because people then know and trust each other which reduces all the stress and the uncertainty. Put off discussions and of course they loom very large. So dont wait for the annual appraisal to sit down and talk. The boss or the appraisee can investigate this. If you are an employee with a shy boss, then take the lead. If you are a boss who rarely sits down and talks with the people or whose people are not used to talking with their boss- then set about relaxing the atmosphere and improving relationships. Appraisals (and work) all tend to be easier when people communucate well and know each other. So sit down together and talk as often as you can, and then when the actual formal appraisals are due everyone will find the whole process to be far more natural, quick, and easy and a lot more productive too.

Challenges of Performance Appraisal

With the increase significance of performance appraisal, confronting the system is mounting. One serious challenge facing the performance appraisal system relates to assessment of self managed teams. Popularly called empowered teams, these self- managed teams create special challenges for performance appraisalempowered teams performs without supervisors. Historically, if one recalls, it is the supervisor who assesses the performance of his or her subordinates. Another challenges is that both, individual and team performance, need to be measured. A suitable device needs to be enhancing productivity. Other challenges are: Creates a culture of excellence that inspires every employee to improve and lend himself or herself to be assessed Align organizational objectives to individual aspirations Clear growth paths for talented individuals Provide new challenges to rejuvenate careers that have reached the plateau stage Forge a partnership with people for managing their careers Empower employees to make decisions without the fear of failing Embed teamwork in all operational processes Debureaucratise the organization structure for ease for flow of information. Appraisals, Social Responsibility and the Whole Person Development There is increasingly a need for performance appraisals of staff and especially managers, directors and the CEOs, to include accountabilities relating to corporate responsibility, represented by various converging corporate responsibility concept including: the Triple Bottom Line (profit people planet); corporate social responsibility (CSR); Sustainability; corporate integrity and ethics; Fair Trade, etc. The organization must decide the extent to which this accountability is reflected in job responsibilities; which would then naturally feature accordingly in performance appraisals. More about this aspect of responsibility is in the directors job descriptions section. Significantly also, while this appraisal outline is necessarily a formal structure this does not mean that the development discussed with the appraisee must be formal and constrained. In fact the opposite applies. Appraisals must address whole person development not just job skills or the skills required for the next promotion. Appraisals must not discriminate against anyone on the grounds of age, gender, sexual orientation, race, religion, disability, etc.

It is particularly important to avoid any comments, judgments, suggestions, questions or decisions that might be perceived by the appraisee to be based on age. Age along with the other characteristics stated above, is not a lawful basis for assessing and managing people, unless proper objective justification can be proven. When designing or planning and conducting appraisals, seek to help the whole-person to grow in whatever direction they want, not just to identify obviously relevant work skills training. Increasingly, the best employers recognize that growing the whole person promotes positive attitudes, advancement, motivation, and also develops lots of new skills that can be surprisingly relevant to working productively and effectively in any sort of organization. Developing the whole person is also an important aspect of modern corporate responsibility, and separately, whole person development is a crucial advantage in the employment market, in which all employers compete to attract the best recruits, and to retain the best staff. Therefore in appraisals, be creative and imaginative in discussing, discovering and agreeing whole person development that people will respond to, beyond the usual job skill-set, and incorporate this sort of development into the appraisal process. What factors make Performance Appraisal legally defensible? One reason companies use performance appraisals is to have some legally defensible means of making employment and job decisions that will Discourage frivolous law suits in the first place, or (A) Ensure the company is likely to win a court decision if the law suits goes to court. Performance appraisals can provide some protection provided they are done properly. If they are not done properly, then they become weapons for the other side in court cases, particularly in the areas of discrimination accusations and EEOC complaints. Keeping in mind that it is always the courts that decide, and they decide on the merits of a particular case, and that this should not be construed as legal advice, what are the characteristics of performance appraisal systems that are legally defensible? Employees are involved in establishing performance standards for their position Standards used are relevant to the essential elements of the job, and are clearly documented in writing Employees are informed of, understand, and sign off on critical job

requirements and expectations before the appraisal The system should not be based on comparisons between employees The performance appraisal is done annually and documentation of performance discussions is done properly Employees are allowed and encouraged to add their comments and responses any performance appraisal documentation. Managers who do performance appraisals must be provided with training Employees are informed of any performance reviews, and given an opportunity to advance of the formal performance reviews, and given an opportunity to rectify the problems. Why Performance Appraisal fails is summarized as follows: 1. The supervisor plays the dual and conflicting role of both judge and helper. 2. Too many objectives often cause confusion. 3. The supervisor feels that subordinate appraisal is not personally rewarding. 4. A considerable time gap exists between two appraisal programs. 5. The skills required for daily administration and employee development are in conflict. 6. Poor communication keeps employees unaware about what is expected from them. 7. There is a difference of opinion between the expectations of a supervisor and a subordinate, reflecting the latters performance.

Some other studies found:

1. Greater variation between raters than between ratees. 2. Feedback on appraisal is generally unpleasant for both supervisor and subordinates. 3. Very few supervisors possess the tact and insight to tell employees constructively how to improve their performance. The observations imply that supervisors in appraising their subordinates, and that pay little attention is paid by supervisors in appraising their subordinates, and that a gulf exists between decisions and their actual execution. Any appraisal program will involve time and money. The wise manager should plan a program with the minimum cost to give the maximum benefit. The rationale for using any particular method should be determined by the size, financial resources, and philosophy of the organization. Confidential report, peer rating or self-appraisals, requires less time and resources compared to some other methods. Besides selfappraisal generates self-growth. It is often said that supervisors avoid playing the role of judge. They feel uneasy criticizing a subordinates performance and are anxious least their adverse appraisal might hold up a promotion, salary increase or an unwanted transfer. Appraisal Interview: Evaluation whether positive or negative can be very useful if it is communicated to the employee. Many organizations require their supervisors, managers, and other raters to have periodic discussions with employees about their performance and particularly to communicate any negative evaluation so that the employee gets a chance to explain.

Appraisal interview serves these broad purposes: 1. They provide feedback to the employee that helps him ensure appropriate performance in future. 2. They help the organization to get some idea of its working. Often problems and issues raised by employees, difficulties faced in the execution of their duties, and way and means to improve the functioning, are brought to the surface. 3. The organization can ascertain the training needs of its employees, which is very important. Given the socio economic conditions in India, employer has a social obligation to ensure continuity of jobs for their employee. An appraisal interview gives an opportunity to the rater to access the abilities of the

employee and if necessary, suggest suitable remedial measures.

Management By Objectives:
Whatever may be the nature and strength of resistance to the performance appraisal, managements cannot relinquish this practice. Without employee appraisal, salary increase, reassignments or promotions cannot be administered rationally. Each of these areas has its specific problems and one of the solutions of modern times has been offered by Peter Drunkers concept of management by objectives (MBO). MBO calls on the subordinate to set his short-term performance goals in consultation with his superior, the subordinate appraises his own performance by evaluating it vis-- vis the goals. Before establishing a goal, the individual studies his job, assesses his potentialities, and formulates some specific plans to reach the goals. The supervisor is not the evaluator, but directs the goal setting process to ensure that it matches the objectives of the organization. MBO differs significantly from the traditional approach, for it shifts the emphasis from appraisal to analysis. The subordinate is no longer examined by his superior for his weaknesses, but examines himself to ascertain his strength and potential. It assumed that the individual knows, or is capable of learning, more than any one else about his own needs, strength and weaknesses. Employees cannot bear criticism and discussion of their personality traits, mannerisms, etc. In MBO, the accent is on performance the actions related to the goals rather than to the individuals personality. The superior helps the subordinate reach his own goals by specifying the steps. One major problem that companies face in implementing MBO is in defining objectives. In the same organization, the purpose of the worker is different from that of management. Once this hurdle is overcome, implementing MBO becomes easier.


Performance Planning and Appraisal System of NTPC NTPC has its won performance Appraisal system Participative Performance Appraisal System this the system where ones performance is appraised through discussion with his or her superior where both take active participation on deciding the actual performance by the degree of achieving prescribe objectives and his/her key performance Area (KPAs). The following objectives have been envisaged: To set clear Performance Goals for each employee. To ensure commitment to perform and To enable objective performance appraisal. Activities Performance plans, which will form the basis for appraisal, will be prepared for each appraisee in two parts a) Main activities / objectives to be accomplished /accomplished during the year (KPAsKey Performance Areas, Key Result Areas, or Objectives). b) Competencies required/possessed for accomplishing the objectives. The activities are briefly described below: Main activities, objectives to be accomplished during the year. KPAs are the main functions or activities an employee is expected to perform during the plan period in order to fulfill the companys goals and objectives. Individual (appraisee) will identify his/ her KPAs using the following steps: Listing the entire main activates in the job / role. Prioritizing the activities based on importance, time taken, dependence on the other value addition etc. Finalizing the main activities, KPAs in consultation with the superior (Appraiser). Dividing these KPAs further into KPAs for routine activities. The appraisee in format given in appendix will make entries. There may be some activities, which are not planned in the beginning of the year but are to be accomplished. These also should be included. Instead of calling KPAs, these activities may be called main activities.


Evaluation of performance, merit rating, or annual review... The idea of a merit rating is alluring. The sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise. The performance appraisal will be used as a tool to recognize and record the achievements, for rewards and promotions and for the identification of training and development needs in NTPC . The performance appraisal period will be April to March of the succeeding calendar year and the increment will be released before April of the year concerned. The appraisal forms should be sent to the respective heads of the department in February by the HR Department for evaluation and recommendations. The completed forms will be received by the HR department by First Week of March. The final consolidation of assessments will be put up to the Unit Head for approval by the third week of March and the individual letters of Increments Promotions will be issued on 1st April. The form consists of the following parts PART A: SELF-APPRAISAL To be filled in by the appraisee PART-B: PERFORMANCE APPRAISAL To be filled in by the ReportingAuthority/Superior PART C: PERFORMANCE COUNSELING To be filled in by Reporting Authority and to be discussed with the appraisee along with person in charge. PART D: SUMMARY OF ASSESSMENT To be filled in by Review Committee/Authority. PART E: POTENTIAL APPRAISAL To be filled in by the HOD / Unit head in consultation with the reporting Authority. PART F: DEVELOPMENT NEEDS -TO BE FIELD BY THE REVIEW AND EMPLOYEE I.E STRENGTHS, AREA OF IMPROVEMENT, TRAINING AND DEVELOPMENT ,CAREER GROWTH


The trainees will be appraised at least on a six-monthly basis during their training period. On successful completion of the training period the trainees will be placed on probation of 6 months. Before the completion of the probation the candidates will be appraised for their job performance as well as their grasp of Safety and Quality standards and procedures. For both the above processes the appraisal form used is given as. The respective heads of the department and the HR department will do these appraisals. Areas of strength of the trainees and the ability to understand the companys objectives and becoming a team player is given emphasis in deciding about the absorption of a trainee. On successful completion of the probationary period the candidates will be confirmed in the respective grades.


RESEARCH :Research is a common parlance refers to a search for knowledge. It is a scientific and

systematic search for pertinent information on a specific topic. According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions. Research methodology is the way to systematically solve the research problem. Research methodology just does not deal with research methods but also consider the logic behind the methods. It may be understood as a science of studding how research is done scientifically and systematically. In it, we study the various steps that are generally adopted by the researcher in study of his research problem along with logic behind them. It is necessary for researcher to know the research method, technique He must also clearly understand the producer would apply to problem given to him. All this means that it is necessary for the researcher to design methodology from problem to problem. Research methodology is a way to solve systematically the research problem. In it the researcher studies the various steps that are generally adopted by researcher in studying his research problem along with the logic behind them.


Review of related literature means researcher should undertake extensive literature survey connected with

the problem for this purpose, the abstracting and indexing journals and published or unpublished bibliographies are the first place to go to. Academic journals, conference proceeding, government reports books etc. must be tapped depending on the nature of the problem. In this process, it should be remembered that one source would lead to another. The earlier studies, if any, which are similar to the study in hand, should be carefully studied. A good library will be a great help to the researcher at this stage.

To study the performance appraisal system of NTPC.

To study the appraisal system in NTPC To analyze performance appraisal system. To identify the effectiveness of the appraisal process. To identify activeness of participation. To analyze the system in developing competency. During the research, researcher has considered following things according to her convenience.



Sum total of all the units that confirms to some designated part of specification is called universe. Researcher while conducting research work has selected Bharat Aluminium Company as universe.



The sample is the representative unit of population. The researcher has taken the employees as sample for this research. Since in this research the researcher has collected the sample according to her own convenience. So the sample is convenient sample and the sample size of the research is 300.

7. Size of the Sample

This refers to number of items to be selected from the universe to constitute a sample. The size of the sample should neither be excessively large, nor too small. It should be optimum. An optimum sample size is one, which fulfills the requirement of efficiency, representativeness, reliability, and flexibility.



Sample unit is the part of the universe taken from the universe for testing hypothesis. Researcher has taken the 100 SBU Heads, 100 Executives and 100 workers as sample unit.

The researcher adopted convenient Sampling Method. In this method the sample units are chosen primarily on the basis of convenience to the investigator. In this type of sampling, the researcher selects items for the sample deliberately; his choice concerning the items remains supreme. In other words, under this sampling the organizers of the inquiry purposively choose the particulars unit of the universe for constituting a sample on the basis that the small mass that they so select out of a huge one will be typical or representative of the whole.



The task of data collection begins after a research problem has defined. Researcher should keep in mind two types of data, primary data and secondary data. The primary data are those, which are collected afresh and for the first time, and thus happen to be original in character. The secondary data, on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical process. Researcher while conducting the research work has used primary source of data.

11.DATA COLLECTION TOOLS These are the tools used for collecting data. Researcher has gathered the data by administering questionnaire.


The term questionnaire refers to a self-administered process whereby the respondent himself/herself reads the questions and records his/her answers without assistance of an interviewer. Although the instrument is essentially question asking and data gathering tool. A questionnaire is more structured and standardized. The questionnaire consists of a number of questions printed or typed in a definite order on a form or a set of forms. This method of data collection is quite popular in case of big enquiries.

Percentage Method & Technique of Central Tendency was used by the researcher in the analysis of the data in his research. Percentage refers to a special kind of ratio. Percentages are used in making comparisons between two or more series of data. Percentages are used to describe relationships. Percentages can also be used to compare the relative terms, the distribution of two or more series of data. Measures of Central Tendency tell us the point about which items have a tendency to cluster. Such a measure is considered as the most representative figure for the entire mass of data. Measure of Central Tendency is also known as Statistical Average.

Summary of the Performance Analysis System

Setting performance standards, observing and providing feedback, and condution appraisals enables the Team Leader to achieve the best results through managing employee performance.

To begin the process, the Team Leader and the employee collaborates on the development of performance standards. The Team Leader then develops a performance plan that directs the employee's efforts toward achieving specific results, to support organizational growth as well as the employee's professional growth. Discussion of goals and objectives throughout the year provides a framework to ensure that employees achieve results through One on One and mutual feedback. At the end of the rating period, the Team Leader appraises the employee's performance against existing standards, and establishes new goals together for the next rating period. As the immediate supervisor, the Team Leader plays an important role; his closest interaction with the employee occurs at this level. There are four key elements in the appraisal system: 1. Set objectives - Decide what the Team Leader wants from the employees and agree these objectives with them. 2. Manage performance - Give employees the tools, resources and training they need to perform well.

Performance Standards
3. Carry out the appraisal - monitor and assess the employees' performance, discuss those assessments with them and agree on future objectives. 4. Provide rewards/remedies - Consider pay awards and/or promotion based on the appraisal and decide how to tackle poor performance.

How does the Team Leader decide what's acceptable and what's unacceptable performance? The answer to this question is the first step in establishing written standards. Performance expectations are the basis for appraising employee performance. Written performance standards let the Team Leader to compare the employee's performance with mutually understood expectations and minimize ambiguity in providing feedback. Having performance standards is not a new concept; standards exist whether or not they are discussed or put in writing. When the Team Leader observes an employee's performance, he usually makes a judgment about whether that performance is acceptable. Standards identify a baseline for measuring performance. From performance standards, the Team Leader can provide specific feedback describing the gap between expected and actual performance.

Guiding Principles
Effective performance standards: Serve as an objective basis for communicating about performance. Enables the employee to differentiate between acceptable and unacceptable

results. Increase job satisfaction because employees know when tasks are performed well. Inform new employees of your expectations about job performance.

Performance Standards
How does the Team Leader decide what's acceptable and what's unacceptable performance? The answer to this question is the first step in establishing written standards. Performance expectations are the basis for appraising employee performance. Written performance standards let the Team Leader to compare the employee's performance with mutually understood expectations and minimize ambiguity in providing feedback. Having performance standards is not a new concept; standards exist whether or not they are discussed or put in writing. When the Team Leader observes an employee's performance, he usually makes a judgment about whether that performance is acceptable. Standards identify a baseline for measuring performance. From performance standards, the Team Leader can provide specific feedback describing the gap between expected and actual performance.

Guiding Principles
Effective performance standards: Serve as an objective basis for communicating about performance. Enables the employee to differentiate between acceptable and unacceptable results. Increase job satisfaction because employees know when tasks are performed well. Inform new employees of your expectations about job performance.

Key Responsibility Areas (KRA)

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

Characteristics of Performance Standards

Standards describe the conditions that must exist before the performance can be rated satisfactory. A performance standard should: Be realistic, in other words, attainable by any qualified, competent, and fully trained person who has the authority and resources to achieve the desired result Describe the conditions that exist when performance meets expectations Be expressed in terms of quantity, quality, time, cost, effect, manner of

performance, or method of doing Be measurable, with specified method(s) of gathering performance data and measuring performance against standards

Expressing Standards
The terms for expressing performance standards are outlined below:

Quantity: Specifies how much work must be completed within a certain period of time. Quality: Describes how well the work must be accomplished. Specifies accuracy, precision, appearance, or effectiveness. Timeliness: Answers the questions, by when? , How soon? , Or within what period? Effective Use of Resources: Used when performance can be assessed in terms of utilization of resources: money saved, waste reduced. Effects of Effort: Addresses the ultimate effect to be obtained; expands statements of effectiveness by using phrases such as: so that, in order to, or as shown by. Manner of Performance: Describes conditions in which an individual's personal behavior has an effect on performance, e.g., assists other employees in the work unit in accomplishing assignments. Method of Performing Assignments: Describes requirements; used when only the officially prescribed policy, procedure, or rule for accomplishing the work is acceptable.

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

There are many effective ways to monitor and verify performance, the most common of which are: Direct observation Specific work results (tangible evidence that can be reviewed without the employee being present) Reports and records, such as attendance, safety, inventory, financial records, etc. Commendations or constructive or critical comments received about the employee's work.

Observation and Feedback (One on One)

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

One On One Sessions

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

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

Key Elements of One on One

To make One on One sessions effective, the Team Leader keeps the following key elements of One on One in mind while conducting such a session: Observe the employee's work and solicit feedback from others. When performance is successful, take the time to understand why. Advise the employee ahead of time on issues to be discussed.

Discuss alternative solutions. Agree on action to be taken. Schedule follow-up meeting(s) to measure results. Recognize successes and improvements. Document key elements of One on One session.

Questions to Consider during One on One

To provide effective feedback the Team Leader must understand the elements of performance and analyze marginal performance. These questions are kept in mind: How is the employee expected to perform? Does the employee understand these expectations? If not, why not? Does the employee know what successful results look like? How does the Team Leader know? Does the employee know the performance is marginal? How does the Team Leader know? Are there obstacles beyond the employee's control? Can the Team Leader remove them? Has the employee ever performed this task satisfactorily? Is the employee willing and able to learn? Does satisfactory performance result in excessive work being assigned? Does unsatisfactory performance result in positive consequences such as an undesirable task being reassigned?

During the One on One Session

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

Discuss causes of the problem. Identify and write down possible solutions. Decide on specific actions to be taken by each of the Team Leader. Agree on a follow-up date. Document key elements of the session.

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


Que.1 Are you aware of the performance appraisal system prevailing in ntpc?

Yes NO Confused

89% 8% 3%

Yes No Confused

Awareness of Appraisal system Interpretation:- (It has been concluded that at around 89% approx employees are aware of the appraisal system in their organization and 3% among them are little confused about the process and 8% of employees does not know about the process.)

Que.2 Does the appraisal system forms a two way participative process?

I) Agree II) Partially Agree

91% 7%



agree partially agree disagree

Interpretation(91% of the employees believe that the appraisal system is a two way participative process and a ranking method but rest 7% partially agrees to it and 2% totally disagrees.

Que.3 Are you satisfied with the current appraisal system? Satisfaction level of employees




9% 18%

To some extend -

yes no to some extend

Interpretation:(( During the research it was concluded that satisfaction level of appraisal system was considerable and 73% of the employees were satisfied but yet few employees were not satisfied.)

Que.4 Is the appraisal system fair enough to judge a persons skills ? Performance Appraisal System

To some extent


To large extent To very large extent Not at all

58% 21% 4%

To some extent To large extent to very Large extent Not at all

Interpretation: (In NTPC, ranking system is fair enough to judge a persons capability, but some of the employees still thinks that some more transparency should be made in process.)

Que.5 What is the purpose or benefit of Appraisal Process? Performance Appraisal System .

Identification of training needs. - 13% Increase in pay scale Promotion - 52% - 29%

Transfer Termination

4% 2%

Identification of training needs Inccrease in pay scale promotion Transfer Termination

Interpretation: ( Appraisal system assists an individual to have an increase in pay scale and also to identify the training needs if any.

Que6. How many times performance appraisal does take place? Appraisal Process

Once a year Twice a year Thrice a year Not known

18% 77% 3% 2%

Once a year Twice a year Thrice a year Not known

Interpretation: ( In NTPC appraisal process takes place after every 6 months for executives and it happens early for officers.)

Que.7 Does performance appraisal assisted you in your personal growth?

Personal Growth through appraisal

To some extent To large extent -

29% 52%

To very large extent Not at all -

13% 6%

To some extent To large extent To very large exyent Not at all

Interpretation: ( Employees believe that appraisal helps them to have their personal growth but still some more should be changed.)

Que.8 Does performance appraisal helps to develop competency in your organization?

Personal Growth through PA

Yes No -

62% 8%

To some extent -


Yes 62% No To some extent 30%

Interpretation: ( In NTPC appraisal helps to increase level of competency and hence they get a chance to improve their working.)

Que.9 Does PA system helps you to clear your objectives and assist you with proper aid?

Performance Appraisal system

Yes No To some extent

77% 5% 18%

Yes 62% No To some extent 30%

(Through ranking system employees got cleared of their roles and objectives. )

Que.10 Does the PA system motivates you in your work?

Motivation through Appraisal

Yes No To some extent -

53% 1% 46%

Yes 62% No To some extent 30%

Interpretation: The ranking system fair enough to motivate the employees

Que.11 Does Performance Appraisal system guides to realize potential of an individual? Appraisal assisting in realizing potential





Yes No

Interpretation: Appraisal process assists to realize the potential of the employees.

Que.12 Does your superior guide you about your performance?

Communication of appraisal results

Yes No -

94% 0% 6%

To some extent -

Yes No To some extent

Interpretation: In NTPC the appraisal process is a two way process and the results are communicated through one to one interviews.

Que.13 Does the self-assessment form assist you to realize your strength and weakness? Self Appraisal Forms





To some extent


Yes No To some extent

Interpretation: Self appraisal forms has been proved to be beneficial to evaluate ones own developmental areas.

Que.14 Does the reward system after appraisal satisfies you? Reward System In Appraisal





To some extent


Yes No To some extent

Interpretation: The employees of NTPC are satisfied enough through the reward


The process of performance appraisal helps the employees and the management to know the level of employees performance compared to the standard/predetermined level. It was viewed that performance appraisal was useful to decide upon employees promotion/transfer, salary determination and the like. It has become the basis of employee development. Performance appraisal indicates the level of desired performance level, level of actual performance and the gap between the two. Organizations are likely to develop performance-oriented cultures, in which high performers are seen to receive extra rewards and lower performers receive lower rewards. If an employees performance were

found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration was given to the developmental possibilities of appraisal. Findings through questionnaire: In NTPC the appraisal process is a two-way participative process and it happens at every 6 months. Superior communicates their performance and the area of lacking. At about 73% of the employees are satisfied with the current appraisal system in the organization. The communication level is very good in the organization and thus helps to achieve the target easily. 94% employees believe that performance appraisal has contributed to their personal growth. 62% employees believe that appraisals develop a high level of competency among them. 77% believes that it help to clear their objectives and what their superior wants to get from them. 53% of the employee believes that it has always motivated them. 96% believes that it helps to realize potential of an employee. Self-appraisal form also helps to realize the employees potential. 58% believes that current performance appraisal system is fair enough to evaluate their potential and workings. 67% of the employees believe that implementing 360 degree performance appraisal would be beneficial to the employees and the organization. During survey it was found that Employees were getting confused when asked about the awareness related questions. Performance appraisal definitely set goals and objectives for employees work and get them promoted and rewarded as per but it does not provide much opportunity to set employees future career planning and

recognizing the talents. No compulsory job rotation practice exists in NTPC. Employees are partially satisfied by their performance appraisal procedure. They are not very much motivated by their ratings and cannot get their development through these. Almost all employees accept that the training and development program is very good of Balco but the main problem is that training need assessment is not done properly and many times the same employees are given training again and again ignoring the training needs of others. Every department head has to follow the performance bell and during every appraisal, the employees would be classified in different tiers. The department head decided to classify the employees not on Performance but just on quota system. The purpose of the performance appraisal and classification is not at all achieved. For each employee Job description should be made in which duties and responsibilities of the employee should be clearly mentioned. The Knowledge, skills and abilities required to perform the work should be stated clearly. This will bring more transparency in the job.

Performance appraisals are an integral part of managing performance, and unmanaged performance simply cannot be allowed to happen. The process of managing performance is essentially one of their performances. It starts with the setting of performance expectations and ends with sanction-rewards and penalties on appraised performance. Relationship and mutual understanding develops more quickly with greater frequency of meetings between manager and staff members.

360-degree appraisal system can be introduced as a powerful developmental method and quite different to traditional manager-superior appraisal and can stand alone as developmental method. Ensure that 360-degree appraisal method is introduced and applied from top-down and not bottom up. Staff members can be better prepared for the formal appraisal, giving better results, and saving management time. Training and development actions can be broken down into smaller programs, increasing success rates and motivational effect as a result. Performance appraisal should be used not only for giving performance-based incentives but also to identify average and below average employees and train and develop to make them good performers. Appraisal should be done twice a year for executives. Training need assessment should be done strictly and training should be given on that basis because different employees have different training needs. Employees should be motivated regularly by their superiors and SBU heads to come up with their training needs. Motivational training should be given to all employees at least in every quarter and it should be made compulsory for each employee to attend it. Appraising talent which involves exploring the actual results achieved by employees within those areas where theyre held accountable and to examine the level of skills or competencies deemed critical to current and future jobs and organizational success. In relation to a talent management programme, certain specific areas are important. For example, the appraisal will not only include an examination of performance, but will also inevitably include a forecast of potential, which is a prediction of how many job levels an employee can reach within the organization based on their past or current performance approaches, training or development needs, career preferences and actual and projected competency levels. Here, scales are often used in reporting potential to attain managerial or leadership skills, as well as in the delivery of organizational objectives 360 Appraisal system should be used in place of the current system in which in addition to the superiors,

colleagues and subordinate all around the employee will also appraise him. This will reduce the personal biases occurring due to superior subordinate relationship. The details of appraisal report should be kept confidential including the rating. Proper training should be provided to the appraisers regarding the process and proper method of conducting performance appraisal. The company has recently started Global leadership program in which key employees are exchanged in different companies of the group for a term of 1 or more year which provide them international exposure and experience. Individual development report of these key employees are made by the management and SBU head based on his past performance and according to his/her KRA future track record for the employee is planned. For special achievements and extra effort CEO kitty (cash reward) is given to the employees in order to motivate them further. Key employees are sent abroad for training to enhance their skill and knowledge on written bond of 1-3 years. Rotate employees to provide them new challenges and new assignments. Companies practicing off shoring need to provide new challenges and opportunities for skills development through training or job rotation. It may become the only reason your best employees stay with you. For each employee Job description should be made in which duties and responsibilities of the employee should be clearly mentioned. The Knowledge, skills and abilities required to perform the work should be stated clearly. Provide your best employees with challenging work, show consequences to those employees who are underperforming and respond to employees' work-family balance and other needs. Reward Managers who help good employees grow within the company. Conducting the performance appraisal in a timely fashion, as close as possible, or even before the employee's scheduled review date. Offering a balanced evaluation of both the employee's strengths and of their weakness Including a review of key performance areas or projects where an employee has performed well. A bit of praise can go a long way to lifting an employee's morale and feelings of success on the job. Natural interaction during the performance appraisal process - give the employee a chance to speak their mind as well as help come up with future goals, as well as steer areas of improvement.

Set goals for the next appraisal period that is quantifiable and achievable. If you have specific projects in mind use those as a measure of the performance. If you made a list of goals from the last review period, go over these with the employee as well and talk about how the employee achieved or failed to achieve the goals and why. Don't tie the employees performance to a salary increase. It is normal for the employee to expect that a review will also include an increase as this is traditional, but you should clearly state that the review is about performance and not about salary. To implement Executive Management Development Programme . In order to improving the employee career planning in BALCO management should develop a programme named above. The criterion for selection must be certain standard.

Due to some strict rules of the company, all documents cannot be accessed. Due to the busy schedules of SBU Heads and employees, they are unable to impart time to us. Sometimes respondents were roaming from one plant to another so they are not available to guide us. Due to low awareness of worker they are unable to give proper view. Due to poor communication level between employees and workers accurate

results cannot be founded.

GOOD MORNING/AFTERNOON/EVENING sir/madams I am ANAMIKA from VISHVESHWARYA INSTITUTE OF TECHNOLOGY. Currently doing my summer internship here in NTPC for the period of 2 months in the HR department and working on project named Performance Appraisal System and its role in enhancing employee performance at NTPC under the guidance of Mr Anil Kumar (Associate ManagerHR), for this I would like to know your views on certain things. Are you aware of the appraisal system in your organization? When does appraisal process takes place in your organization? Are you satisfied with the appraisal system in your organization?

Does appraisal system benefit you? If yes then how? Does it assist you in your personal growth? Does it help to develop certain level of competency in your organization? Does it help you to clear your objectives| and job roles? Does it acts as a motivating agent in your work? Is the process effective enough to realize your potential? Is the process fair enough to communicate your performance rating? Does the self assessment form assist you to realize your potential? Does the reward system helps you to get satisfaction through your performance? What is the performance level that you expect from your employees? Does the employee perform according to your expectation? Do you feel that if employee career planning and development is done properly then it will result in improving the performance of employee? If yes give suggestion in this regard. Do you think that employee working under you understand their goals and duties properly? What is being done to ensure this? How frequently job movements take place in your division? Do frequent internal job movements helps in increasing the productivity of the job or the person development? What are the programs and processes that facilitate the internal job movements? Do you have any suggestion in this regard? Is the HR department supporting the employee career development efforts? Why do you feel so? Give suggestion how can this be done effectively? Do you think that tools and training provide employees with opportunities to grow in their current job? Why do you feel so? What are the tools and training require for providing employees with opportunities to grow in their current job as well as in their career? Do you feel that you are adequately planning for developing high performers? What kind of recognition you want for this? Do you think that employee require some more development programs for their career growth? Any suggestion in this regards? Do you satisfied with the current employee appraisal strategies and policy made

HR department? Do you think that employee assessment program is implemented properly? Give suggestion how can this be done effectively? Do you feel that job rotation and job enrichment is the best tool for individual career assessment and development? If yes then it should be encouraged more? How do you help your staff develop their career competency in your company? By courseware, by training, or teaching? Or? Do you feel that training programme helps in increasing the performance? Do you feel that training programme helps in career growth for an employee? What can you do to help your employees achieve best performance? Thank you, sir/maam for sparing time out of your busy schedule and improving me with your valuable inputs.


Arun Monappa & Mirza S Saiysdain : Personnel Management, Tata Mc Graw Hill Publishing Company Limited, New Delhi, 11th edition, 1991.

Arun Monappa & Mirza S Saiysdain : Personnel Management, Tata Mc Graw Hill Publishing Company Limited, New Delhi, 2nd edition.

Rudrabasavaraj. M.N : Dynamic Personnel Administration- management of human resource, Himalaya Publishing House.

Lakshmipathy. V : Performance Appraisal In Public Enterprises, Himalaya Publishing House, 1st edition, 1985.

Jucius. J. Michael : Personnel Management, D.B. Taraporevala Sons & Co. Private Ltd.

Chatterjee .N.N : Performance Appraisal Systems- in public enterprise, Scope Publications.

Que.1 Are you aware of the performance appraisal system prevailing in ntpc?

1. 2. 3

Yes NO Confused

Que.2 Does the appraisal system forms a two way participative process?

1. Agree 2. Partially Agree 3.Disagree

Que.3 Are you satisfied with the current appraisal system? Satisfaction level of employees

1.Yes 2. No

3. To some extend Que.4 Is the appraisal system fair enough to judge a persons skills ? Performance Appraisal System

1. 2. 3. 4.

To some extent To large extent To very large extent Not at all

Que.5 What is the purpose or benefit of Appraisal Process? Performance Appraisal System .

1. 2. 3. 4. 5.

Identification of training needs. Increase in pay scale Promotion Transfer Termination -

Que6. How many times performance appraisal does take place? Appraisal Process

1. 2. 3. 4.

Once a year Twice a year Thrice a year Not known

Que.7 Does the self-assessment form assist you to realize your strength and weakness? Self Appraisal Forms






To some extent

Que.8 Does performance appraisal helps to develop competency in your organization? Personal Growth through PA





3. To some extent

Que.9.Does performance appraisal assisted you in your personal growth? Personal Growth through appraisal

1. To some extent

2. To large extent


To very large extent -


Not at all

Que.10. Does your superior guide you about your performance? Communication of appraisal results 1.Yes -



To some extent -

Que.11 Does Performance Appraisal system guides to realize potential of an individual? Appraisal assisting in realizing potential