DECLARATION

I hereby declare that this project report, titled PERFORMANCE APPRAISAL SYSTEM with reference to HINDUSTAN PETROLEUM CORPORATION LIMITED, VISAKHAPATNAM submitted by me in partial fulfillment of Master of Business Administration to ANDHRA UNIVERSITY, VISAKHAPATNAM is a genuine and bonafide work done by me and it is not previously submitted to any other institute / university for award of any degree /diploma.

M.V.DIVYA

Reg.no.111236002021

Acknowledgement

I acknowledge with profound gratitude, the management of Hindustan Petroleum Corporation Limited Malkapuram, Visakhapatnam for providing the opportunity in getting HR project in their esteemed organization. I acknowledge with profound gratitude, Department of Commerce & Management Studies, ANDHRA UNIVERSITY Visakhapatnam for allowing me to do my project in this organization. I express my sincere thanks to Sri GopiKrishna, Sri U.S.Sarma, and all executives, senior managers, employees and all staff members who helped a lot by clarifying the doubts with their lucid explanations and giving their valuable suggestions to complete the project successfully. My sincere thanks to V.SOMASEKHARAM, Associate professor for his valuable guidance and suggestions given through the project.

M V.Divya

CONTENTS
INDEX CHAPTER-1
INTRODUCTION OF THE STUDY NEED FOR STUDY OBJECTIVES OF STUDY METHODOLOGY LIMITATIONS OF THE STUDY

PAGE.NO

CHAPTER-2
INDUSTRY PROFILE COMPANY PROFILE

CHAPTER-3
THEOREITICAL FRAME WORK

CHAPTER-4
DATA INTERPRETION AND ANALYSIS

CHAPTER-5
FINDINGS SUGGESTIONS SUMMARY CONCLUSION QUESTIONNAIRE BIBLOGRAPHY

CHAPTER 1

INTRODUCTION OF THE STUDY NEED FOR STUDY OBJECTIVES OF THE STUDY METHODOLOGY LIMITATIONS OF THE STUDY

INTRODUCTION OF THE STUDY

Performance appraisal is the process of evaluation of an employee at higher levels by some qualified persons in oder to know whether the selection of an employee was right or wrong. Performance appraisal is related to personal promotional transfer, salary increases etc are all links with performance. performance apparaisal is a process of evaluating an employee performance of a job interms of its requirements. It is the evaluation or appraisal of the relative worth to the company of a man service on his jobs. Performance appraisal is the key ingredient of the performance management. Performance appraisal is a process of obtaining, analyzing, the recording information about the relative worth of an employee. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

A performance appraisal (PA) or performance evaluation is a systematic and periodic process that assesses an individual employees job performance and productivity. In view of the above situation one need to have meaningful insights on the performance appraisal system to understand, judge, frame and abide it.

Importance

1. Efficiency of employee:
It determines as to how efficiently the job is being done by the employee. An efficient employee may either to weeded out or persuaded to add just themselves.

2. Development Decissions:
It acts as a guide for employee development.employees come to know their weakness and management by organizing training and development program to develop themselves.

3. Basis of important decisions:

Performance appraisal provides a basis for making important decisions effecting employees. Eg: salary increments, promotions, transfer demonation , termination etc

4. Helps in improving performance:

When a performance appraisal program exists employee try their best to improve their performance. it puts a psychological pressure on the minds of the employees to show the better results to the management.

5. Improves growth relations:

It helps to maintain good group relations among the employees. They all work together and try best to show better performance.

6. Alter supervision:
It compels the supervision to be alert and remain active so as to distinguish efficient employee from inefficient ones.

7. Feedback to employee:
Employees are informed about their weakness after completing performance appraisal about which they were not aware of.

NEED FOR THE STUDY

Purpose of performance appraisal is to evaluate an employee according to some standards, to find out the strength and weakness inside the employee, to provide training and or rewards. Performance management facilitates improvement of quality of relationship amongst the members of the organization by encouraging sharing of expectations and building the climate of openness and mutuality. The significance of performance management has grown in recent times because most of the organizations are giving a lot of importance to employee development and talent management. Performance appraisal is an objective system to judge the ability of an individual employee to perform his tasks. A good performance appraisal system should focus on the individual and his development. Performance management is a much broader system as it is linked with the process of planning, implementing, reviewing and evaluating, for augmenting growth and productivity at both the individual and organizational level. To know the organizations benefits through performance appraisal system and different methods adopted in the performance appraisal and the advantages and disadvantages in adopting them by the organization.

OBJECTIVE OF THE STUDY

The main objectives of this study are as follows:

To analysis the existing Performance appraisal system in HPCL.

To find out the employer employees relationship in HPCL.

To know the impact of Performance appraisal system on employees performance.

To understand the strengths weaknesses of employees for the overall development of the organization.

To identify the training needs of employees based on their Performance appraisal.

To make suggestions in the appraisal system (if requires) , to make it as a guide to employees overall development.

METHODOLOGY OF THE STUDY

Methodology is scientific and systematic search for information on specific topic.the reliability of management decisions depond upon the quality of the data. Basically we have two types of data: 1. Primary data 2. Secondary data

Primary data: Primary data can be collected either through experience or through survey. Those which are collected a fresh and for the first time thus happen to be original in character that is called primary data. We collect primary data during the course of doing experiment in an experimental research but in the case we do research of the descriptive type and perform survey, and whether sample survey or census survey, then we can obtain primary data either through observation or through direct communication with respondents in one form or another of through personal interviews. Primary data collected through the following ways: 1. By observation. 2. Through telephone interviews. 3. By mailing of questionnaires. 4. Through schedules.

Secondary data:

secondary data means data that are already available that is they refer to the data which have already been collected and analyzed by someone else which have already been passed through the statistical process is called secondary data. Secondary data may be published data or unpublished data that data are available.

LIMITATIONS OF THE STUDY

Every study has its limitations because of the some particular reasons in the organizations. There are some limitations in the study.

My study is limited only to know the feedback of the employees about performance appraisal and their training needs after the appraisal.

There is no chance to know the pressure from peer, superiors and trade unions on employees which is highly confidential.

My study is limited to two months and it is not sufficient to know more details about the organization.

I could not collect the genuine feedback from employees since they were busy in their day to day activities and fear of their superiors.

CHAPTER -2

COMPANY PROFILE INDUSTRY PROFILE

COMPANY PROFILE

INTRODUCTION
Hindustan Petroleum Corporation Ltd. (HPCL) came into being in mid 1974 after the takeover and the merger of the erstwhile Esso and Lube India undertakings. Caltex was taken over by the Government in 1976 and subsequently merged with HPCL in 1978. Kosan Gas Company, the concessionaires of HPCL in the domestic LPG market, was taken over and merged with HPCL in 1979. HPCL thus came into being after merging four different organizations at different points of time. As we approach the new millennium, the Corporation too will be touching a significant landmark in its illustrious history.... & has completed 25 years of fruitful existence on July 15, 1999. HPCL operates two fuels refineries, one at Mumbai and the other at Visakhapatnam. In addition, the Corporation also operates a Lube Refinery, which is the largest in India and accounts for 41% of the country's capacity. Over the years, the Corporation has grown rapidly and has carved its own niche in the Petroleum Sector in India. It is clearly reflected in its impressive turnover of over Rs. 25,000 crores and a 20% market share which is largely due to its vast and strategically located Marketing & Distribution network comprising of 4 Zonal offices, 34 Regional Offices (including 10 LPG ROs), 22 Terminals, 32 LPG bottling plants, 9 Aviation Stations, 4 lube blending plants and a lube pipeline for

base oil evacuation from the Refinery, 90 Inland Relay Depots, 4327 retail outlets, 1622 SKO / LDO dealerships and 1463 LPG distributorships. With an aim to reach and meet the requirements of its wide customer base, the Corporation owns andOperates two cross - country pipelines; one from Mumbai to Pune and the other from Vishakhapatnam to Vijaywada, put together have a capacity to carry 7.77 million metric tonnes (MMT) of Petroleum Products. Our Corporation has been consistently rated in the "Excellent Category" as per the MOU evaluation, by the Government, for the past 7 years in succession. For manning the refining and marketing divisions, the Corporation has a large and skilled work force of more than 11,400 employees, working all over India at its various refining and marketing locations with a fair degree of decentralized administration. The marketing segment is controlled through four geographical zones, North, South, East and West. The Chairman & Managing Director and the full time four Functional Directors (Refineries, Marketing, Human Resources and Finance) are at the apex of the Corporation. The sweeping changes in the Indian Economy and the consequent fiscal restructuring in the recent years have led to an increase in competition amidst other challenges in the Petroleum Sector. HPCL has taken up to the challenges and is ready to face the emerging competition in different areas of its operations. The projects envisaged in the coming years encompass - modernization and expansion of the existing refining capacity, strengthening its marketing infrastructure by setting new terminals, depots, bottling plants with allied distribution facilities and emphasis on value addition and improvement in the quality of its products. The Corporation also has made a beginning in the area of

Oil Exploration & Production

with the incorporation of " Prize Petroleum

Company limited", in Joint Ventures and also has plans to make forays in the field of Power Generation. Simultaneously, HPCL embarked on a Business Process Re- engineering (BPR) exercise in early 1997. In keeping with the corporate strategy, the measures adopted as a result of BPR study focus on increased customer orientation, productivity improvement, technological up gradation, cost control and excellence in quality. This coupled with the bringing in of the latest in Information Technology will enable the Corporation to translate its vision into reality. The vision being to make HPCL a leading world classcompany in the field of Hydrocarbon and energy related sectors with a global presence. Appraising the performance of individuals, groups and organizations is a common practice of all societies. While in some instances these appraisal processes are structured and formally sanctioned, in other instances they are an informal and integral part of daily activities. Thus, teachers evaluate the performance of students, bankers evaluate the performance of creditors, parents evaluate the behavior of their children, and all of us, consciously of unconsciously evaluate our own actions from time to time. In social interactions, performance is conducted a systematic and planned manner to achieve widespread popularity in recent years. This particular study has been named as "PERFORMANCE APPRAISAL SYSTEM IN HPCL-VR". The present study has been made to know the present performance appraisal prevailing in the organization as well as the opinion of

management staff from various fields about the introduction of moderation processing the appraisal system in HPCL-VR.

DATA COLLECTION

PRIMARY DATA

SECONDARY DATA

1) Personal interview with various officials and employees of the organization. 2) About 100 employees were interviewed through a questionnaire

1) Information from various publications and Journals. 2) Personal reports of Visakha refinery. 3) From Internet

Source of data:

Primary data: The primary data is obtained through information

From various officials and staff, personnel discussion.

Secondary data: This obtained through internet, records,

Publications and various books in the library.

Profile of HPCL History:

Hindustan Petroleum Corporation Limited (HPCL) has been formed through amalgamation of four established companies. Gradually, it has grown today as a second largest integrated Oil Refinery and Marketing Company in India. Merge of ESSO, Lube India Limited, Caltex Oil Refining India Limited and Kosan Gas Company Limited incorporated HPCL

Incorporation:
The company was first incorporated as Standard Vacuum Refining Company of India in July 1952 and later named as ESSO India Limited from March 1962. On July 12th, 1974 when ESSO and Lube India were nationalized, the company was renamed as HPCL with effect from July 15 th, 1974. Subsequently, Caltex was nationalized by Government of India and merged with HPCL in 1978. In the following year, the undertakings of Kosan Gas Company Limited, the concessionaries of HPCL in the domestic LPG market, were merged with HPCL. Hence, HPCL which is as amalgamation of various undertakings has been growing by leaps and bounds.

GROWTH:
HPCL had started its journey in a humble way in 1974 with one Refinery in Mumbai with a refining capacity of 3.5 million metric tonesper annum (MMTPA) and a Lube Refinery at Mumbai around 1.65 lakh metric tones per annum and a slender sales turnover of Rs. 36.7 croresand a net profit of Rs. 5.8 crores. But, with a dedicated and efficient team of employees and a flawless and growth-oriented strategy of Top Management, HPCL could succeed in achieving Navaratna Status in Industry apart from spreading its wings both within and outside the country by meeting class standards in Refining

Profile:
Hindustan Petroleum Corporation Limited (HPCL) came into being in 1974 after the takeover and merger of the Erstwhile ESSO and Lube India undertakings. Caltex was merged with HPCL in the domestic LPG market was taken over and merged with HPCL in 1979. HPCL is a listed Public Sector, India's second largest oil refining and accounts for more than 20% of the country's total refining capacity. It is one of the 'Navaratnas' identified by the Government of India as having potential to grow into a global giant. Its shares are one of the 30 shares forming BSE sensex. It has 85 Regional Offices, 37 Terminals/Tap of points, 92 Depots, 41 LPG Bottling plants and 7,313 Retail Outlets, 1,648 Kerosene Dealers, 2,202 LPG Distributors.

The corporation made a successful IPO in two stages during 1995 & 1997 and its share holding pattern is as follows: o GOI- 51.01% o Financial Institution - 21.49% o Fll's-11.05% o Banks-1.73% o MF's - 3.92% o NRI's - 0.37% o Employees - 0.35% o Public-10.08% The HPCL Group presently consists of HPCL, its 100% subsidiary, Guru Gobind Singh Refineries Limited and interests in seven joint ventures, Mangalore Refineries and Petrochemicals Limited (19.95%), Prize Petroleum Corporation Limited (50%), South Asia LPG Company Private Limited (50%), Hindustan Coals Limited (50%), Petronet India Limited (16%), Peronet MHB Limited (26%), Bhagyanagar Gas Limited (25%). During the year ending 31 st March, 2006 the turnover was Rs.76,90crores registering an increase of 18% over 2004-2005 after Tax was Rs.406 crores.

Refineries:
HPCL has two refineries. On the west coast is the Mumbai Refinery with a capacity of 5.5 millions metric tones per annum, while the other at Visakhapatnam on the east coast has a capacity of 7.5 millionsmetric tones per of

value added products like petrol, high speed diesel oil, superior kerosene oil annum. Both the refineries produce a number liquified petroleum gas, naphtha, aviation turbine fuel and others over 300 grades of Lubes, specialties and greases.

Marketing:
The marketing operations of HPCL are divided into three Strategic Business Units, Retail comprising of Petrol, Diesel and Automotive Lube sales, Direct Sales comprising of Lubes and Industrial & Government sales and LPG.

Storage and Distribution:

HPCL has a extensive national wide network comprising of pipe lines, terminals and depots for the storage and distribution of petroleum products across the country.

HPCL VISSION

"To be a World Class Company known for caring and delighting the customers with high quality products and innovative services across domestic and international markets with aggressive growth and delivering superior financial performance. The company will be a model of excellence in meeting social commitment, environment, health and safety norms and in employee welfare and relations".

HPCL MISSION
"HPCL, along with its joint ventures, will be a full integrated company in hydrocarbons sector of exploration and production, refining and marketing focusing on enhancement of productivity, quality and profitability, caring for customers and employees, caring for environment protection and cultural heritage. It will be also attaining scale dimensions by diversifying into other energy related fields and by taking up transnational operations". In order to achieve Vision objectives and to play effective roles in the emerging operating environment, the following corporate values have been made, which would be an integral part of decision making process.

Corporate Values or Objectives

Consistently provide top quality products with prompt and efficient services to ensure satisfaction. Be cost effective and emphasize on high productivity and profitability. Expedite redressal of employees, customers and shareholders grievances. Motivate employees for professional and social advancement at all levels in a participative environment. Develop capabilities and enhance effectiveness of employees through training and career planning. Reward share holders with consistent good returns.

HR VISION
"Excellence in harnessing the full potential of the employees for becoming a Global Energy Company".

HR MISSION "Your needs are our Business." HR SPIRITS

Satisfaction of Customers Pride Integrity Role Model Involvement and Commitment Transparency Spirit of Team Work

HPCL recruits its Management Staff by way of Officer Trainees through advertisement in national newspapers on all India basis. The recruitment process consists of written test, interview and group discussion. The candidates preferred for selection for Operations are from Engineering field (Chemical, Mechanical, Civil, Electrical and Instrumentation), for finance, charted

accountants and campus selection for Operations and HR officers from NT's and IIM's respectively. The recruitment for Non-Management staff in both technical and administrative fields is done based on the eligible candidates recommended by the local employment offices.

HUMAN RESOURCES IN HPCL HPCL recognizes its Human Resources as the key to achieve organizational excellence and a glaring identity in the competitive global arena. HPCL, with its Refineries in Mumbai and Visakhapatnam, zonal offices in Delhi, Mumbai, Kolkata, and Chennai, Terminals, Depots and regional offices in four corners of the country successfully runs its business in refining, marketing and distribution of petroleum products to both industrial sector as well as domestic sector. It has a wide network of retail dealership and LPG distributorships through which it supplies various light distillates like petrol, diesels, and LPG along with auto lubes to serve the day-to-day needs of its valued customers. These activities are carried out by its 11,300 employees (approx.) who serve the corporation at managerial, clerical and worker level, in order to enrich the skills of various of employees in fields IT, Technical, Safety, Management, Behaviors and office administration. HPCL conducts regular training programs as its own management training institutes at NIGDI, Pune apart from engaging external agencies for the purpose. HP team is headed by chairman & managing director at the helm of affairs with the four reporting directors Viz., human resources, marketing, refineries and finance.

Human Resource Planning in HPCL Manpower: The total manpower in HPCL - VR as of 1st April 2008 is
1154. Manpower is classified into two categories: Management Non-management Number of management employees - 492 Number of non-management employees - 662

Management
A Grade B Grade

are represented by grades A to I.

Officers, Superintendents Senior Officers, Senior Engineers, Senior Superintendents Deputy Manager Managers Senior Manager Chief Manager Deputy General Manager General Manager Engineers,

employees

C Grade D Grade E Grade F Grade G Grade H Grade

I Grade

Executive Director

PROFILE OF PERFORMANCE APPRAISAL IN H.P.C.L VISAKHA REFINERY:

Performance Appraisal System consists of two parts : I. Goal Setting and Self Appraisal (P&DR, Part - A) II. Performance & Development Review The salient features of which are provided below:

I. Goal Setting and Self Appraisal (P&DR-Part A)

The goal setting and self appraisal form (P&DR- Part A) is given in the Annexure

i. Goal Setting :
Mutual Goal Setting at the beginning of the appraisal period is the cornerstone of the Performance Appraisal system because :

a. It provides direction/ reduces ambiguity

Setting targets / goals at the beginning of the period provides a direction to the Officer in which to channelise his efforts, so that he knows exactly what is expected of him.

b. It provides role clarity:

Goals and targets provide a definition of the expected individual contribution of an employee, vis -a -vis his superiors, peers and subordinates.

c. It provides more objective appraisal criteria:

Goals/ targets set at the beginning become the standards for evaluation which are clearly known to the Appraiser and Appraise. The form has provision for setting

goals in the new assignment in case an officer is promoted/ re-assigned during the year.

ii. Periodic Review and Counseling:

a. Mid-term review of achievements vise-a-vise goals/targets set at the beginning of the appraisal cycle also forms a part of the P&DR, Part A Form. This review enables the Appraise and Appraiser to identify the degree of achievement , facilitating /inhibiting factors and priority action areas. Midcourse corrections can be made and inter-se priorities redefined. b. The P&DR- Part A provides for Performance Reviews in Step III-1 to III-4.

iii. The Self Appraisal Discussion:

The P&DR, Part-A form gives an opportunity to the appraise to state the achievements vise-a-vise the goals/targets set, highlight outstanding achievements, identify factors beyond his control which prevented him from achieving his goals/ targets and elicit help from his supervisor, if required, to enable him perform his job better.

iv. The Self Appraisal Discussion:

This is one of the most important features of our Performance Appraisal system and provides for : a. An opportunity to establish a commonality of perceptions with regard to the contents of the Self Appraisal Form. b. An analysis of the employee's achievements taking into account factors which aided/hindered the same. c. Identification of personal factors which have facilitated/ inhibited performance. d. The appraise also identifies the training he requires as a part of his overall

Development Plan. Provision is also made to record appraise's plans for self development and areas requiring Supervisor's assistance. This forms an input to the appraiser while recommending training for the employee in the Performance Appraisal Form. e. A list of training programs is provided in the Self Appraisal Form for ready reference.

v. Short Appraisal Form

i. In cases where an officer has been transferred or held more than one assignment during the year, a short appraisal (Annexure II) is to be prepared by the concerned Supervisor for each assignment of more than three months duration. This appraisal is to be sent in a sealed envelope to the reporting officer at the new location to assist him in preparation of the Annual Appraisal of the concerned officer. ii. In cases, where officers have been transferred/ re-assigned after spending more than three months at a location, during the appraisal period, short appraisals of his subordinate officer will form a part of the handing over/ taking over formalities.

II. The Performance & Development Review (P&DR, Part - B):

The Performance Appraisal Form (P&DR, Part B) is given in Annexure III. In case an Officer is transferred during in between the appraisal period, then his appraisal is to be prepared by the Supervisor at the location where the employee has worked for the maximum period during the appraisal period. The process of preparing the Performance Appraisal involves:

a. Performance Analysis:
This analysis is recorded in Step 1.1 of the Appraisal format where the appraiser is expected to give his assessment of the employee's achievement vis-a-vis goals/ targets set keeping in mind environmental and personal factors which aided / hindered the employee's performance.

b. Identification of Strengths and Weakness / Managerial abilities /Competence.

As indicated earlier, certain personal factors which have aided / hindered an employee's performance are identified during the self appraisal discussion as well as in the course of Performance Analysis. These are to be enumerated in the space provided for the same, quoting instances of work performed well and areas where performance fell short of expectations. Eighteen managerial abilities / competence areas which have a bearing on performance have been identified and are listed. It may be emphasized in this regard, that only those factors which affect performance should be recorded in the Performance Appraisal. The appraiser is expected to based his training recommendations on factors identified in these steps.

c. Utilization of Training Programs : The purpose of this item is to assess the utility of training programs at the work place and also to assess whether the officer is utilizing the same for his self development. d. Development of subordinates: An item to assess the appraise's effectiveness in developing, training , appraising and counseling officers reporting to him is included in the Performance Appraisal Form. This important aspect of a Manager's role has been covered separately to

emphasize its importance as well as provide an input to the reviewing officers when appraisals go to them for review / moderation. e. The Rating Scale : i. In our Performance Appraisal System, ratings are given for accomplishments separately. The rating on accomplishments is to be based on achievements vise-avise goals and targets after analysing the factors which either favourably or adversely affected the employee's performance. ii. The overall rating is given based on the accomplishments, the managerial abilities /competence areas as well as strengths and weaknesses of the employee as related to his performance. While giving the overall rating, it is to be noted that accomplishments / performance is a very important factor in the Performance Appraisal System. Thus when the overall rating is recorded as better than the rating on accomplishments, the performance appraisal is taken up with the concerned countersigning authority for review / revision. iii. A five point rating scale is used in our Appraisal System. iv. The definitions of the ratings are clearly indicated in the guidelines for appraisers on page 1 of the Performance Appraisal Form and are to be strictly adhered to in order to avoid the common pitfall of over rating employees. Appraisal Completion schedule and Actions to be taken in case of noncompliance The appraisal completion schedule and the actions taken in case of non compliance is based on the philosophy that the appraise and the appraiser are both responsible for the completion of the performance appraisal requirements.

Target setting schedule 1. The target setting process is said to be complete when the targets set by the appraise are approved by the Reporting Officer and Reviewing Officer. 2. The schedule for completion of target setting process is given below.

Actions in case of non-compliance of target setting schedule 1. For all officers in their capacity as appraise, Reporting Officer and Reviewing Officer ,who do not adhere to the above mentioned dates, the PI/PLI payment of the previous year would be withheld till 31st January of the appraisal year.

Sl. No. Stage of Completion Final Date 1. Target setting by Appraisee30th April of Appraisal Year Approval of targets by Reporting Office 10th May of the Appraisal Year Approval of targets by Reviewing Officer 15th May of the Appraisal year 2. The withheld amount would be released in the month of February of the appraisal year provided the concerned officer (appraise or appraiser) have ensured that as on 31st January, their relative part in quarter 3 review is completed. 3. In case the target setting is not completed by the appraise by 30th June of the appraisal year, the appraise will not be eligible for PI/PLI payment of the current year. 4. In case the targets are pending with the Reporting Officer for more than 10 days, the appraisal document will be systemically escalated to the Reviewing Officer. 5. In case the quarterly reviews are pending with the Reporting Officer for more than 30days, the appraisal document will be systemically escalated to the Reviewing Officer.

6. In addition to the above mentioned criteria, the officers would be paid PI/PLI subject to the completion of below mentioned requirements. _ Completion of HRD 1 and HRD 2 for self and subordinates for the previous year. _ Completion of quarter one review for self and subordinates for the current year.

_ Submission of property returns online for the previous year.

HRD-II completion schedule 1. The HRD-II is said to be complete in all respects only when the HRD-II has been completed and submitted to HR Authority. 2. The schedule for completion of HRD-II is given below: Sl. No. Stage of Completion Final Date 1 Rated by Reporting Officer 31st May of the next appraisal year Actions in case of non-compliance of HRD-II completion schedule 1. If the appraise does not acknowledge the overall review comments of the Reporting Officer within 15 days of receiving the same, the appraisal document would be systemically escalated to the Reporting Officer for ratings. 2. The link to access the HRD1 and HRD2 for a particular appraisal year would be removed on 31st May of the next appraisal year. In no case, neither the appraisee nor the Reporting Officer would be allowed to access the link after the above mentioned date. 3. In case there is an appraisal document wherein rating by Reporting Officer is not

available as on 31st May (i.e. at the time of removal of link) such appraisal documents would be reviewed by the moderation committee. Performance Management Group would provide the relevant details such as history of the appraisal document, any communication between appraisee and appraiser etc to the moderation committee. The moderation committee would then review the facts to determine the officer responsible for the delay and accordingly a rating of 4 would be endorsed to the concerned officer.

General guidelines 1. In case of officers who are on deputation and where the Reporting Officer/Reviewing Officer is not an employee of HPCL, the provision of completing the appraisal in hardcopy format would be provided. The Officer is required to inform Performance Management Group about the mode of completion of appraisal. 2. In case of any disputes or interpretation issues the joint decision of the concerned Functional Director and Director-HR would be final and binding. Appraisal Completion criteria for Retiring/Resigning employees 1. In case the Officer is resigning/retiring after 45 days of the start of the appraisal year(1st April), he/she is required to set his/her own targets and approve the targets of all the subordinates under him/her. 2. Any Officer who is resigning/retiring after completion of 45 days in quarter one, quarter two or quarter three of the appraisal year, he/she is required to complete the quarterly reviews for self and all the subordinates for the respective quarters.

3. In case the Officer is resigning /retiring after completion of 45 days in quarter four of the appraisal year, he/she is required to complete the review for quarter three for self and all the subordinates. 4. The officers are required to confirm the completion of the appraisal criteria as mentioned above to the performance management group for activation .

PERFORMANCE APPRAISAL & PROMOTION POLICY FOR OFFICER SPORTSMAN

Officer Sportsmen pursuing active sports career would not be covered by the promotion policy guidelines listed above. A separate policy for their progression has been developed which is as detailed below. a. Organization: Sports persons who are located at Mumbai would report to the Administration Department, HQO, Sports persons who are located at the other cities would report to the HR Dept of the zone. All sports persons would be treated as a 'Pool' resource, and given specific assignments in the field of Public Relations, Liaison, Co-ordination etc as and when required. Sports persons on such assignments would be asked to report to a specific person in user department, who would fill a "Short Appraisal Sheet" (Attachment A) at the end of the assignment, and forward the same to the Administration/ HR Department where the officer Sportsman is reporting. b. Performance Appraisal : Every sports person shall submit an Annual Sports Programme at the beginning of the Appraisal Year (i.e. April broken up by quarter as detailed in Annexure IV).

The Sports achievement would be reviewed and discussed at the end of every quarter. The short appraisal sheets received from Department Heads where sports persons have been assigned would also be discussed and noted in the achievements column. These reviews would form an input into the annual appraisal form and would be attached to the same.

c. Career Progression: Officer Sportsmen pursuing active sports career would be inducted in Salary Grade 'A' and promoted to salary grade 'B' on completion of eight years in the grade, subject to satisfactory performance. However, once a sportsman is absorbed into a main stream function, he would be governed by the promotion guidelines applicable to other officers of the Corporation, provided that he would be eligible for promotion only after one appraisal has been prepared in the main stream function.

PROFILE OF INDUSTRY

Where is Oil and Natural Gas found?

Most crude oil and natural gas originate form plant and animal life that thrived millions of years ago in swamps and oceans. The organic materials were deposited with mud and slit from streams and rivers the sediments eventually hardened to form sedimentary rock. Heat and pressure transformed the fort part of the plant and animals into solid, liquid or gaseous hydrocarbons known as fossil fuels(crude oil and natural gas).

Crude Oil:
Crude oil is a naturally occurring liquid found in formations in the Earth consisting of a complex mixture of hydrocarbons of various lengths like hydrogen, carbon and non-metallic elements such as sulphur, oxygen, nitrogen and other gases. Any shorter hydrocarbons are considered Natural Gas, while longer hydrocarbon chains are more solid, and the chains are coal. It is usually black or dark brown (although it may be yellowish or even greenish) but varies greatly in appearance, depending on its composition.

Exploration- The search for the Petroleum

Exploration is the act of searching or traveling for the purpose of discovery, e.g., of unknown regions, for oil, gas, coal, etc., Petroleum

is found in porous rock formation in the upper strata of some areas of the Earth's crust. Earth scientists in the Petroleum industry including Geologists, Geophysicists, Geochemists, Paleontologists study the rocks which got buried thousands of meters below the surface, how these rocks have been affected and transformed stretching back million of years to identify 'traps' with recoverable oil reserves. A trap is an oil reservoir, petroleum systems or petroleum reservoir is often thought of as being an underground 'lake' of oil, but it is actually composed of hydrocarbons contained in porous rock formations. Known reserves of petroleum are typically estimated at around 1.2 trillion barrels. Consumption is currently around 84 million barrels per day, or 31 billion barrels per year. At current consumption levels, current known reserves would be gone in about 32 years, around 2039. However, this ignores any new discoveries, changes in demand, better technology, population ingrowth, industrialization of third world countries and other factors. While oil is expected to remain a major source of energy in coming years, alternative energy development such as solar power, wind power, butanol, ethanol, photovoltaic, nuclear power, hydrogen, or oil from oil shale, and oil sands may increase in significance. Coal may also increase in use because of its existence in vast quantities in rapidly developing countries, such as China and India.

The Birth of the Industry:

The petroleum industry operates on the petroleum market. Petroleum is vital to nearly all other industries, if not industrialized civilization itself, and

thus is of critical concern to many nations. Oil accounts for a large percentage of the world's energy consumption, ranging from a low of 32% for Europe and Asia up to a high of 53% for the Middle East. Other geographic regions consumption patterns are as follows: South and Central America (44%), Africa (41%), and North America (40%). The world at large consumes 30 billion barrels (4.8km3) of oil per year, and the top oil consumers largely consists of developed nations in fact, 24% of the oil consumed in 2004 went to the United States alone. The production, distribution, refining and retailing of petroleum, taken as a whole represent one single largest industry in terms of dollar value on earth. Since the earliest record history, there have been accounts of crude oil and natural gas seeping to the earth's surface. The oil was used to caulk boats and buildings, grease wheels and dress the wounds of people and animals until the refining process was done in the 1850's. Oil was not commonly used as fuel of its foul smelling fume. Today the upstream of oil industry has grown to a great extent which includes more than 1000 explorations and production companies as well as hundred of associated business such as seismic and drilling contractor service and supply companies. The midstream sector includes oil and gas pipelines that connect production and consuming areas, other facilities extract sulphur and natural gas liquids, store oil and gas products and transport by truck, rail or tanker. The downstream sector consists of refineries gas distribution utilities oil product wholesalers, service stations and petrochemical companies. The exploration of the oil and natural gases are being done in countries like India, USA, Canada, UAE, Saudi and Russia, parts of Europe, Africa, Australia, and South America.

High technology is being used in exploring the reserves, which include: High-tech exploration enhanced recovery production method. Cold climate and offshore operations. _ Development of oil and sour gas recoveries. Gas processing, sulphur extraction and heavy oil upgrading. Construction and operation pipelines. Specialized controls and computer applications. Environmental protection technology and safety training. Innovative products and service that customer needs. Refining process that produces quickly petroleum based products. Whole minimizing the impact on the environment.

History of Oil and Natural Gas

Petroleum, in some form or other, is not a substance new in the world's history. More than 400 years ago, according to Herodotus and confirmed by Diodorus Siculus, asphalt was employed in the construction of the walls and towers of Babylon; there were oil pits near Ardericca (near Babylon), and a pitch spring on zacynthus. 10 great quantities of it were found on the banks of the River Issus, one of the tributaries of the Euphrates. The first oil wells were drilled in China in the 4th century or earlier. They had depths of up to 243 meters and were drilled using bits attached to bamboo poles. The oil was burned to evaporate brine and produce salt. Petroleum was known as 'Burning Water' in Japan in the 7th century.

In the 8th century, the streets of the newly constructed Baghdad were paved with tar, derived from easily accessible petroleum from natural fields in the region. In the 9 th century, oil fields were exploited in the area around modern Baku, and Azerbaijan to produce naphtha. The Geographer Masudide scribed these fields in the 10 th century and by macro polo in 13th century, who described the output of those wells as hundreds of shiploads. The earliest mention of American petroleum occurs in Sir Walter Raleigh's account of the Trinidad Pitch Lake in 1595. The modern history of petroleum began in 1846 with the discovery of the process of refining kerosene from coal by Atlantic Canada's Abraham Pineo Gesner. Russian Engineer F.N.Semyonov drilled the first modern oil well in 1848, on the Apsheron Peninsula northeast of Baku. Meerzoeff built the first Russian refinery in the mature oil's fields at Baku in 1861. At that time, Baku produced about 90% of the world's oil. The American petroleum industry began with Edwin Drake's drilling of 69-foot-deep oil well in 1859. The industry grew slowly in the 1800's driven by the demand for kerosene and oil lamps. It became a major national concern in the early part of the 20th century. By 1910, significant oil fields had been discovered in Canada, specifically in the province of Alberta. Petroleum production is a major industry in Canada. In 2005, almost 25,000 new oil wells were spud (drilled) in Canada. Daily, over 100 new wells are spud in the province of Alberta alone.

Origin of Oil and Natural Gas:

Most geologists view crude oil and natural gas as a product of compression and heating of ancient organic materials over geological time. According to this theory, oil is formed from the preserved remains of prehistoric zooplankton and algae, which have been settled to the sea bottom in large quantities under anoxic conditions. Terrestrial plants, on the other hand, tend to form coal. Over geological time, this organic matter mixed with mud and is buried under heavy layers of sediment. The resulting high levels of heat and pressure cause the remains to metamorphose, first into a waxy material known as kerogen which is found in various oil shale's around the world, and then with more heat into liquid and gaseous hydrocarbons are lighter than rock or water, these sometimes migrate upward through adjacent rock layers until they become trapped beneath impermeable rocks, within porous rocks called reservoirs. Concentration of hydrocarbons in a trap forms an oil field, from which drilling and pumping can extract the liquid. Three conditions must be present for oil reservoirs to form: o First, a source rock rich inorganic material buried deep enough for subterranean heat to cook it into oils; o Second, a porous and permeable reservoir rock for it to accumulate in; and o Last, a cap rock (seal) that it forms escaping to the surface.

Birth of Oil Industry:

Since the earliest times, there have been instances of crude oil and natural gas seeping to earths surface. The oil was used to caulk boats and buildings, grease

vehicles and dress the wounds of people and animals until refining process emerged in 1850s. The worlds first oil refinery opened at Ploiesti, Romania in 1856. Several other refineries were built at that location with investment from United States companies. The Guinness Book of World Records now (October 2006) records the BP Amoco Refinery in Texas city, USA as a refinery with the largest capacity (43,300 barrels per day which is approx. 15,100,000 imperial Gallon).

Major sectors of Oil Industry

The oil industry is often divided into three major sectors: Upstream sector: This includes the searching for potential underground or underwater oil and gas fields, drilling of exploratory wells, which brings crude oil and raw natural gas to the surface. Midstream sector: This sector process stores, markets and transports commodity such as crude oil and natural gas liquids such as ethane, propane and butane. Downstream sector: This sector includes oil refineries, petrochemical plants, petroleum product distribution, retail outlets and natural gas distribution companies.

Use of Oil and Natural Gas:

Humans have utilized petroleum in an unrefined state for over 5000 years. Ancient Persian tablets indicate the medicinal and lighting uses of petroleum in

the upper echelons of their society. Ancient Chinese were also known to burn skimmed oil for light. The early 19th century ushered in petroleum's usefulness as a medicine and lubricant; other successful uses including lighting and heating. A petroleum industry emerged in North America in Canada and the United States, fueling the Industrial Revolution. Petroleum products are useful materials derived from crude oil (petroleum) as it is produced in oil refineries. According to crude oil composition and demand, refineries can produce different shares of petroleum products. Largest share of oil products is used as energy carriers, various grades of fuel oil and gasoline. Refineries also produced other chemicals, some of which are used in chemical process to produce plastic and other useful materials. Since petroleum often contains a couple of percent sapphire, large quantities of sulphur are also often produced as a petroleum product. Hydrogen and carbon in the form of petroleum coke may also be produced as petroleum products. The hydrogen produced is often used as an intermediate product for other oil refinery processes such as hydrogen catalytic cracking (hydro cracking) and hydrodesulphurization. Major Products of Oil Refineries Asphalt Diesel fuel Fuel oils Gasoline Kerosene Liquid petroleum gas Lubricating oil

Paraffin wax Tar

ORIGIN OF OIL INDUSTRY IN INDIA

India's first Prime Minister Jawaharlal Nehru, prior from 1947 to 1964, saw industrialization as the key to alleviating poverty. Industrilization not only promised self-sufficiency for our nation that had just regained political sovereignty, but also offered external economies accruing from technical progress. The result of appointing and spending million of rupees for industrialization in our five-year plan right from 2nd to 8th is the high level expertise we will be in direct competition with America and European Union for oil and natural gas from all over the world specially Middle East. The bottom line is that whoever gets to use the oil, will grow faster and eventually dominated the world. The DigboiRefinery was set up as Digboi in 1901 by Assam oil Company Limited, which was taken over by Indian Oil Corporation Ltd., with effect from 1981. Over a decade following Independence, various Multinational Companies have set up the following three Refineries in India: Standard Vacuum Oil (international) in Mumbai. Caltex Oil Refinery Ltd., at Visakhapatnam. Burma Shell at Mumbai. From 1961 onwards various other refineries were set up at Barauni, Koyali, Chennai and Cochin. Corresponding to a steep hike in Oil prices influenced by Gulf Oil producing countries in 1973, Government of India took a policy decision to nationalize the Oil Sector keeping in view the economic interest of

the country. This has resulted in formation of Hindustan Petroleum Corporation Limited (HPCL) by amalgamating the assets of ESSO Oil Company and its market activities.

INDUSTRY STRUCTURE

The Ministry of Petroleum & Natural Gas (MOP&NG) is entrusted with the responsibility of exploration and production of oil and natural gas, their refining, distribution and marketing, import, export and conservation of petroleum products and liquefied natural gas. Director General of Hydrocarbon (DHG), Oil Industry Development Board and Petroleum Planning and Analysis Cell support the Ministry. The following are the activities of MOP&NG in Oil Industry Sector: Exploration and exploitation of petroleum resources, including natural gas. Production, supply, distribution, marketing and pricing of petroleum including natural gas and petroleum products. Oil refineries, including lube plants. Additive for petroleum and petroleum products. Lube blending and greases. Planning, development and control of and assistance to all industries deal with any of the subject specified in this list. Planning, development and regulation of oilfield services.

A lion's share of 84% of Exploration and Production of Crude Oil and Natural Gas is from two major viz., Oil and Natural Gas Corporation (ONGC) and Oil

India Limited (OIL) while the Refining Sector is dominated by PUS's like Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL) Bharat Petroleum Corporation Limited (BPCL) Chennai Petroleum Corporation Limited (CPCL) Kochi Refineries Limited (KRL) in refining and marketing various Petroleum Fuels. Marketing of Petroleum Products has undergone a sea change with abolition of administered pricing mechanism since April 1st 2002 except for Kerosene and Liquid Petroleum Gas. In addition, the Oil Companies are given free hand to fix their own prices to get benefit from the competitive edge. India annually consumes about 3% of the world's total energy. The country is the world's 6th largest energy consumer and is in fact a new energy importer. There has been a gap between supply and availability of petroleum and petroleum products in India. Over the last 15 years or so, the demand for petroleum products as risen at an average rate of about 60%. The current requirement of crude oil in the country stands at around 112 MMT and this is likely to increase to about 190 MMT by 2011-12. Fuel oils presently up the majority of India's refinery output. Total refined product output from India's refineries has risen about 60% in the past decade.

Using Oil and Natural Gas:

During the refining of the petrochemicals, wide range of petroleum molecules comes in a wide variety of size and shapes strings and rings of carbon and hydrogen atoms. The methane in natural gas is the simplest and smallest. By comparison the molecules in paraffin wax and asphalt are complex and enormous. The hydrocarbon molecules are sorted, split apart, reassembled and blended in refineries and petrochemical plants. There, they become magnitude of products from gasoline to synthetic rubber.

Averistic Energy Source:

The petrochemicals industry exists because the people have become accustomed to the benefits of oil product and natural gas provides benefits like convenient, affordable transportation, warm houses and thousands of synthetic materials. India annually consumes about 3% of the world's total energy. The country is the world's 6th largest energy consumer and is in fact a new energy importer. There has been a gap between supply and availability of petroleum and petroleum products in India. Over the last 15 years or so, the demand for petroleum products as risen at an average rate of about 60%. The current requirement of crude oil in the country

stands at around 112 MMT and this is likely to increase to about 190 MMT by 2011-12. Fuel oils presently up the majority of India's refinery output. Total refined product output from India's refineries has risen about 60% in the past decade.

Major Players in Indian Oil Industry:

1) Indian Oil Corporation Limited. 2) Hindustan Petroleum Corporation Limited. 3) Bharat Petroleum Corporation Limited. 4) Madras Refinery. 5) Bongaigaon Refinery and Petrochemical Limited. 6) Cochin Refinery. 7) Numaligarh Refinery Limited. 8) Mangalore Refinery Limited. 9) Reliance Petrochemicals Limited.

CHAPTER-3
THEORETICAL FRAME WORK

THEORETICAL FRAMEWOKRK OF PERFORMANCE APPRAISAL

This chapter deals with the history of performance appraisal, the definition of performance appraisal, the need for the performance appraisal in the organizations, the various objectives of the performance appraisal, the process of performance appraisal, the methods that are generally followed in various organizations and finally the common mistakes that are committed during the implementation of the system.

What is performance appraisal?

The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylors pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War not more than 60 years ago. Yet in broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the worlds second oldest profession! A basic human tendency to make judgments about those one is working with, as well as about oneself. Appraisal, it seems, is both inevitable and

universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of other, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employees performance were found to be less than ideal, a cut on pay would follow. On the other hand, of there performance was better than the superior expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended, but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet

have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self- esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time.

MODERN APPRAISAL
Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvements and skills development. In many organizations but not all appraisal result are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal result are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions. By the same token, appraisal results are used to identify the poorer performance that may require some from of counseling, or in extreme causes, demotion, dismissal or decreases in pay. (Organizations to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay).

Whether this is an appropriate use of performance appraisal the assignment and justification of rewards and penalties- is a very uncertain and contentious matter.

DEFINITIONS:
Performance appraisal is a method of evaluating the behavior of employees in the work spot including both quantitative and qualitative aspects of job performance. A process in which employees strengths and weaknesses are identified to improve the performance on the present and future jobs. Performance Appraisal is a systematic review of individual or a groups performance on the job.

NEEDS OF PERFROMANCE APPRAISAL:

Provides information about the performance ranks basing on which decisions regarding salary fixation, conformation, promotion,transfer etc. Provide feedback information about the levels of achievement and behavior of subordinate. This information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work if necessary. Provide information which help to counsel the subordinate.

A process which employees identify strengths and weaknesses to improve the performance on the present and future jobs. Provide information about the performance ranks basing on which decisions regarding salary fixation, conformation, promotion, transfer etc. Provide feedback information about the levels of achievements and behavior of subordinate. This information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work if necessary. Provide information which help to counsel the subordinate. To prevent grievances and in disciplinary activities.

OBJECTIVES OF PERFORMANCE APPRAISAL:

Enables employees to develop role clarity continuously and consequently do right things and avoid time wastage. Develops a discipline of planning and review of ones own performance systematically. Increases mutuality between each employee and his superior and strengthen relationships.

 Helps to prepare employees for handling future responsibilities by continuously reinforcing development qualities. To be an instrument to ensure that employees give a desired level of performance by attaching rewards and punishment for variation in performance levels. To control the behavior of employees.

PURPOSE OF PERFORMANCE APPRAISAL SYSTEM

Effective performance appraisal systems contain two basic systems operating in conjunction: an evaluation system and a feedback system. The main aim of the evaluation system is to identify the performance gap (if any). This gap is the shortfall that occurs when performance does not meet the standards set by the organization as acceptable. The main aim of the feedback system is to inform the employee about the quality of his or her performance.(However, the information flow is not exclusively one way. The appraisers also receive feedback from the employee about job problems, etc.) One of the best ways to appreciate the purposes of performance appraisal is to look at it from the different viewpoint of the main stakeholders: the employee and the organization.

Employee viewpoint
From the employee viewpoint, the purpose of performance appraisal is four-fold 1) Tell me what you want me to do 2) Tell me how well I have done it 3) Help me improve my performance 4) Reward me for doing well

Organizational Viewpoint
From the organizations viewpoint, one of the most important reasons for having a system of performance appraisal is to establish and uphold the principle of accountability. For decades it has been known to researchers that one of the chief cause of organizational failure is non alignment of responsibility and accountability. Non alignment occurs where employees are given responsibilities and duties For, but are not held accountable for the way in which those responsibilities and duties are performed. What typically happens is that several individuals or work units appear to have overlapping roles. The overlap allows- indeed actively encourages each individual or business unit to pass the buck to the others. Ultimately, in the several non aligned systems, no one is accountable for anything. In this event, the principle

of accountability breaks down completely. Organizational failure is the only possible outcome. In cases where the non-alignment is not so severe, the organization may continue to function, albeit inefficiently. Like a poorly made or badly tuned engine, the non-aligned organization may run, but it will be sluggish, costly and

unreliable. One of the principle aims of performance appraisal is to make people accountable. The objective is to align responsibility and accountability at every organizational level.

Features of effective performance appraisal methods

Strong belief from both the sides. Proper performance planning. Focus on result-oriented appraisals. Objective assessment/rating Performance linked pay Regular appraisal interview Feedback and counseling creating a performance based culture.

PROCESS OF PERFORMANCE APPRAISAL SYSTEM:

There certain stages while evaluating the performance of an individual mostly they consider certain factors relating to the job and their behavior in the organization.

The following stages in the process of performance appraisal system: Step 1: Creating and setting up performance standards:
This should be done for every employee at each level in every department, accordance with the organizational goals. These standards should be clear and objective, capable of being understood and measured.

Step 2: Mutually set identifiable and measurable goals:

Setting mutually the identifiable and measurable goals communicate with the employees to discuss with them how best the goals can be set in an identifiable measurable manner. Seek information about their expectations regarding the performance standards.

Step 3: Measuring present level of performance:

The present level of performance in assessed by collecting information relating to it from managers and personal observation by oral or written reports.

Step 4: Comparing and appraising the present level of performance:

The focus here is to note the deviations in the actual performance from the set standards.

Step 5: Discussing the appraisal with the employees:

To ensure that the appraisal is transparent and free from bias or subjectivity, discuss with the concerned employees. The employees may raise his\her objections in case the appraisal is far from reality. Free exchange of such information reduces not only the scope for subjectivity errors in the process of appraisal but also may strengthen the morale and self-esteem of the employees. When the appraisal is discussed with the employees it is likely that the employees may take it positively or negatively. Particularly, where the appraisal is negative,

the employee is to be handled with a lot of care so that he does not get disillusioned.

Step 6: Identify and initiate the corrective action:

Identify and initiate the corrective action where necessary suitable corrective action may be identified and initiated immediately. At times, this may yield only temporary results. Immediate corrective action is often described as putting out fire . Most often, this may not be the solution. It is necessary to

identify the source of deviation and try to adjust the difference permanently. This calls for corrective action for permanent results. Though it may be difficult or time- consuming to go to the source of deviation, it saves time and resources tomorrow when the problem may get bigger.

PROCESS OF PERFORMANCE APPRAISAL SYSTEM

Create and setup performance standards (Starts with the employees)

Mutually set identifiable and

. measurable goals. Measures present level of performance.

Compare and appraisal present level of performance with standards.

Discuss the appraisal with the employee

Identify and initiate the corrective action.

BASIS OF PERORMANCE APPRAISAL

The principal basis of performance appraisal is to check how far the Performance of the employee has contributed to the attainment of the Organizational goals. The parameters to evaluate the performance widely differ from job to job. How ever, the common measures of performance Appraisal includes. Volume of sales Total revenue generated Return on investment Volume of production Quality standards achieved Operating costs Time saved

 Number of customers complaints processed or pending timely completion of the projects. Numbers of projects or orders completed or secured. Debt recoveries Loan Advances Deposits Mobilized. Number and Quality of training programs conducted Customer satisfaction level

WHO WILL APPRAISE?

The performance supervisor is the right person to evaluate the performance of the employee. It is because the supervisor monitors the progress of the employee on a day- to day basis. PEERS Peers are those who are more knowledgeable about the job or work. They will tell whether the performance of the employee is satisfactory or not by observing his Year long accomplishments or activities. SUBORDINATES The subordinates access the performance of the manager and this is not very common in our country, at least.

MANAGER BY HIMSELF OR HERSELF This is called self-appraisal. The manager is encouraged to access his own performance and forward this report to the management for necessary action. USERS OF SERVICES: Most of the times, the customers of the services are the real judges of the performance the department. The personnel in the service department can be assessed based on the customer satisfaction surveys. CONSULTANTS More often, an outside consultant is engaged for appraising the performance of the employee at different levels. This method is preferred to overcome the problem of bias or subjectivity in the process of appraisal. The success of performance appraisal richly depends on how best it is carried out in an unbiased manner performance appraisal is a tool to diagnose the deficiencies of the employees skill and Knowledge, and also to determine their training and development needs.

METHODS OF PERFORMANCE APPRAISAL: To make an effective evaluation of the performance of appraise, the appraiser should select a particular technique. Several methods and techniques of appraisal are available for measuring the performance of an employee. There are differed for various reasons. They are broadly categorized into two categories

 Traditional methods Modern methods

TRADITIONAL METHODS:
The traditional method lay emphasis on the rating on the individuals personality traits, such as initiative, dependability, drive, responsibility, creativity, integrity, leadership potential, intelligence, judgment, organization ability, etc, The various traditional methods are: Straight ranking method Man to man comparison method Grading Graphic rating scales Forced choice description method Forced distribution method Checklist Free from essay method Critical Incidents

 Group Appraisal Field Review Method . Paired comparison method

MODERN METHODS: Modern methods place more emphasis on the evaluation of work result job achievements than on personality traits. Result oriented appraisals tend to be more objective and worthwhile, especially for counseling and development purposes. The modern methods are: Assessment Centers Appraisal by Result or Management by Objective Human Asset Accounting Method Behaviorally Anchored Rating Scales (BARS) 360-Degree Performance Appraisal

360-Degree Performance Appraisal

This is one on the latest and widely used method of performance appraisal. In this method not only superior but also peers and subordinates do the appraisal. Hence this is a method where each and every person with whom the employee may interact during his work does the appraisal of one person. This is an effective method among all since this is method in which there is a possibility of hundred

percent discussions with people disregarding with their cadres and also possible for receiving more ideas from all. They may include the security guard, the receptionist, the sweepers evade boys and of course his superior, subordinates and peers.

IMPLEMENTATION & EVALUATION SYSTEM OF PERFORMANCE APPRAISAL: After developing a concrete performance appraisal system, its effective implementation and evaluation is proceeded with along with the rater, rate should also aware of the structure and content of the performance appraisal system the framework of evaluation process. Hence the rates should fully informed about these aspects because the information provided by them will not fully serve purpose with out having knowledge about these various aspects. Once the information is obtained from the rates, an unbiased and objective evaluation is done and the conclusion is derived. Performance Appraisal is a NINE- Step Process: Establish performance standards. Communicate standards \ expectations to employee. Measure actual performance by following the instructions. Adjust the actual performance with that of others and previous. Compare the adjusted performance with standards and find out

Deviations, if any. Compare the actual performance to employee concerned. Communicate the actual performance to employee concerned. Suggest changes in job analysis and standards, if any. Follow up performance appraisal report.

COMPONENTS OF PERFORMANCE APPRAISAL EVALUTION:

As we have seen, performance evaluation can be made for a variety of reasons. So it is necessary to being by stating very clearly the objectives of the evaluation programmed. Hence to make the evaluation of performance appraisal efficient it includes the following components.

WHO OF APPRAISAL? This issue states who should be rated and who should do the rating. WHAT OF APPRAISAL? What of the performance appraisal consist in appraising nonsupervisory employees for their current performance, and managers for future potential? It also includes evaluation of human traits. WHY OF APPRAISAL? It is concerned with:

 Creating and maintaining a satisfactory level of performance of employees in their present jobs. Highlighting employee needs and opportunities for personal growth and development. Aiding in Decision-making between the supervisor and his subordinates. Providing useful criteria for determining the validity of selection and training methods and techniques and forming concrete measures for attracting individuals of higher caliber to the enterprise. WHEN OF APPRAISAL? The when of appraisal answers the query about the frequency of appraisal? WHERE OF APPRAISAL? The where of appraisal indicates the location where an employee may be evaluated? HOW OF APPRAISAL? Under How the company must decide what different methods are available and which of these may be used for performance appraisal.

BENEFITS OF APPRAISAL: It offers a rare chance for a supervisor and subordinate to have time out for a one-on-one discussion of important work issues that might not otherwise be addressed. Almost universally, where performance appraisal is conducted properly, both supervisors and subordinates have reported the experience as beneficial and positive. Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of the whole organization is enhanced. For many employees, an official appraisal interview may be the only time they get to have exclusive, uninterrupted access to their supervisor. Motivation and Satisfaction: Performance appraisal can have a profound effect on levels of employee motivation and satisfaction- for better as well as for worse. Performance appraisal provides employees with there recognition of their work efforts. The power of social recognition as an incentive has been long noted. Infect there is evidence that human beings will even prefer negative recognition in performance to no recognition at all.

Appraiser preparation: The bane of any performance appraisal system is the appraiser who wants to play it by ear. Stressing the importance and technical challenge of good performance appraisal should actively discourage such attitudes. Perhaps drawing their attention to the contents of this web site, for example, may help them to see the critical issues that must be considered. Employee participation: Employee should participate with their supervisors in the creation of their supervisors in the creation of their own performance goals and development plans. Mutual agreement is a key to success. A plan wherein the employees do not mean that employees do not mean that employees do not desire guidance from their supervisor indeed they very much do. Features of effective Appraisal Methods: For an effective method the following features should exist in the system. There should be strong belief from both the sides. Proper performance plannings should be done. Focus should be on result oriented appraisals. There should be objective assessment/rating

PROBLEMS OF PERFORMANCE APPRAISAL: The ideal approach to performance evaluation is that in, which the evaluator is free from personal biases, prejudices. This is because when an evaluation is objective, it minimizes the potential and dysfunctional behavior of the evaluator, which may be detrimental to the achievement of the organizational goals. There are many significant factors, which deter or impede objective evaluation.

These factors are:

HALO EFFECT: One factors excellent score affects the score or the other factor. HORN EFFECT: Unsatisfactory rating on one factor on one factor affects the score on other factor. STRICT RATING: Being over conservative and strict in rating. CENTRAL TENDENCY: Most of the factors are given average rating. LENIENT RATING: Being relatively more easy and lenient in a rating. LATER BEHAVIOUR: Being not\rant of most commonly demonstrated behavior during entire period. INITIAL IMPRESSION: Rating is influenced by the initial impression of the rate on the rater. SPILL OVER AFFECT: Using past rating unjustly to rate current Performance.

STATUS AFFECT: Rating affected by the status of the rate. SAME AS ME: Rating highly as the rater and rate share attitudes. DIFFERENT FROM ME: Rating lowly as the rater and rate have different and conflicting qualities and attitudes. common qualities and

CHAPTER-4
DATA INTERPRETION AND ANALYSIS

DATA INTERPRETION AND ANALYSIS

(1) Opinion about the present appraisal system

EXCELLENT VERY GOOD GOOD AVERAGE 1 13 16 6

OPINION ABOUT THE PRESENT APPRAISAL SYSTEM 1 6 13 EXCELLENT VERY GOOD 16 GOOD AVERAGE

INTERPRETATION: Majority of them respond that the present appraisal system in H.P.C.L is good. Considerable numbers of respondents rate it as very good. Very few feel it to be average.

This shows that the majority employees are satisfied with the present appraisal system. However improvisation of appraisal system can increase the number of satisfied respondents.

(2) Performance appraisal serves to the need of the employee STRONGLY AGREE AGREE DISAGREE STRONGLY DISAGREE
PERFORMANCE APPRAISAL SERVES TO THE NEED OF THE EMPLOYEE

6 27 3 0

STRONGLY AGREE 3 0 6 AGREE 26 DISAGREE STRONGLY DISAGREE

INTERPRETATION: Majority of the employees agree that the performance appraisal serves to the need of the employees current performance and his potential for development while

some strongly disagree to it. They disagree because the employee though capable of handling a task, sometimes may not reach the expected level .Ultimately it affects the appraisal.

(3) Appreciation of self rating by the employees

YES NO 25 11

APPRECIATION OF SELF RATING BY THE EMPLOYEES

11 YES 25 NO

INTERPRETATION: Majority of the respondents agree that self rating would be appreciated by the employees while some of them deny. From the data it can be analyzed that majority think self rating helps the employee to know his/her strength and weakness clearly so that they can focus on their weakness so as to convert them to strengths.

(4) Opportunity to the appraise to perform before the moderation committee YES NO 30 6
OPPURTUNITY TO THE APPRAISEE TO PERFORM BEFORE THE MODERATION COMMITTEE

YES 30 NO

INTERPRETATION: Majority agree that opportunity should be provided to the appraise to perform before the moderation committee because appraise can put forward some of their strengths which might not be recognized by his/her superior while appraising them. This helps to know the employee better. Some of the respondents deny because they think that it might not be possible to analyze strengths of an employee in a stipulated period of time.

(5)Moderation process of counterparts should be in an open forum

YES NO 25 11

MODERATION PROCESS OF COUNTER PARTS

11 YES 25 NO

INTERPRETATION: Majority agrees that the moderation process of counterparts should be in an open forum because the appraise can know the how better is his/her competitor to the next cadre than him/her. This helps the appraise to analyze what he/she has and what he/she needs to acquire to be promoted. Some do not agree that moderation process of counterparts should be in an open forum because this might increase the stress on the employee thereby there is a chance of getting demotivated and the competition may become unhealthy.

(6) Moderation process will increase transparency

YES NO 28 8
MODERATION PROCESS WILL INCREASE TRANSPARENCY

YES 28 NO

INTERPRETATION: Majority of the respondents agree that moderation process increases the transparency because each appraise has to perform before the panel and his/her peers to prove that he/she is the apt for being promoted. So the open moderation process helps in maintaining the transparency of the appraisal process. Some of the respondents do not agree that the moderation process will increase transparency because there are chances of bias to occur in case the appraisee has personal relation with any of the panel member.

(7) Due weightage is given to competence level in deciding individual rating

YES NO 27 9

DUE WEIGHTAGE GIVEN TO COMPETENCE LEVEL IN DECIDING INDIVIDUAL RATING

YES 27 NO

INTERPRETATION: Majority of them respond positively that due weigthage is given to the competency level in deciding an individual rating because the employee is analyzed not only on his/her work done but also on the capabilities within him/her to carry new and challenging targets for which competency level is vital.

(8) Unbias in measuring the

appraise performance in the present moderation process

STRONGLY AGREE AGREE DISAGREE STRONGLY DISAGREE 1 20 13 2

UNBIAS IN MEASURING THE APPRAISEE PERFORMANCE IN THE PRESENT MODERATION PROCESS

STRONGLY AGREE 2 1 13 20 DISAGREE STRONGLY DISAGREE AGREE

INTERPRETATION: Majority of the respondents agree that there is no bias in measuring the appraisee performance in the present moderation process because this process increases the transparency to a larger extent thereby creating a healthy competitive atmosphere between the employees.

It is interesting to know that a considerable number disagree that there is no bias in measuring the appraise performance in the present moderation process because though the transparency is increased, sometimes there is a chance of bias if the panel members favour a particular candidate due to various reasons like closeness with the appraise, regional feeling etc...

(9) Opinion on introduction of eappraisal system

EXCELLENT VERY GOOD GOOD AVERAGE 8 18 7 3

OPINION ON INTRODUCTION OF EAPPRAISAL SYSTEM

3 7

8 EXCELLENT VERY GOOD 18 GOOD AVERAGE

INTERPRETATION: Majority of them respond that the introduction of e-appraisal system is very good because due to the online form of appraisal system the appraise can receive the appraisal with no delay and no variations. Some of them also respond that e-appraisal is excellent .On an overall it can be concluded that majority are willing to continue the online appraisal system

(10) Review of target period

QUARTERLY HALFYEARLY YEARLY 28 5 3

REVIEW OF TARGET PERIOD

3 QUARTERLY 28 HALF-YEARLY YEARLY

INTERPRETATION: Few of the respondents are willing to have the review period of the appraisal system on yearly basis. While few of them respond that it should be on half yearly basis. This is because the appraise gets a chance to look into his/her loop holes and work better for the remaining half year. Majority of them respond that the review period should be on quarterly basis. This is because it helps them nurture their skills continuously according to the requirements.

(11)Rating for the Balance Scorecard in the current appraisal system

EXCELLENT VERY GOOD GOOD AVERAGE 2 18 15 1

RATING FOR BALANCE SCORE CARD IN THE CURRENT APPRAISAL SYSTEM

1 2 15 18 EXCELLENT VERY GOOD GOOD AVERAGE

INTERPRETATION: Majority of the respondents rate the current appraisal system based on Balanced Scorecard serves very good to the employee need as well as the organizational growth. This is because Balanced Scorecard provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. This helps the appraise to grow both in terms of individual and the organizational interest.

(12) Acceptance of 360 Degree Appraisal is low among employees

STRONGLY AGREE AGREE DISAGREE STRONGLY DISAGREE 2 21 12 1

ACCEPTANCE OF 360 DEGREE APPRAISAL IS LOW AMONG EMPLOYEES

STRONGLY AGREE 1 2 12 21 AGREE DISAGREE STRONGLY DISAGREE

INTERPRETATION: Majority of them agree that the acceptance of 360 Degree was low among the employees because it considers the opinion of not alone the superior but also the subordinate. This was not welcomed by majority of the senior employees of the organization who mostly were attached to the traditional way of appraisal system. It is interesting to note that there is considerable amount of respondents who were contradicting to the statement. This shows that there are employees who are willing to include the opinion of the subordinates along with the superiors in their appraisal.

(13) Feedback from the supervisor

CONSTRUCTIVE APPRECIATIVE DEVELOPMENTAL ORIENTED ALL OF THE ABOVE 4 6 7 19

FEEDBACK FROM THE SUPERVISOR

CONSTRUCTIVE 4 6 19 7 APPRECIATIVE DEVELOPMENTAL ORIENTED ALL OF THE ABOVE

INTERPRETATION: Majority of the employees receive a Constructive, Appreciative and Developmental Oriented Feedback from their superiors. This is because it helps the appraise for his/her overall growth. While some receive Development Oriented and some Appreciative Feedback from their superiors. Few respondents receive only constructive feedback from their superior.

CHAPTER 5
SUMMARY FINDINGS SUGGESTION CONCLUSION QUESTIONNAIRE

SUMMARY

Appraisal is the evolution of the worth, quality or merit. In the organization context, performance appraisal is a systematic evaluation of personnel by superiors or others familiar with their performance. Performance appraisal is also described as merit rating in which one individual is ranked as better or worse in comparison to others. The basic purpose in this merit ranking is to ascertain an employees eligible for promotion. As per the observation in the organization and interaction with various working employee and the management personnel, it is concluded in this way. Employee performance appraisal should follow in HPCL as it was prevailing earlier i.e. systematic assessment of how well the employee is performing their jobs in relation to established standards and the communication of the assessment to employee. From research done on performance appraisal system of the organization it has been found out that the system is successfully helping the organization to improve the performance of the employee as well as it is helping in the development of future career goals. Majority of them agreed that appraisal system is helping them to develop their career goals.

FINDINGS

1. HPCL follows the scale rating system. 2. It is observed that in this organization till now they have achieved many awards and achievements.

3. Based on the traits the employee performance will be evaluated yearly for the non executives and quarterly for the executives.

4. The respondents feel that a perfect appraisal system must address the issues related to salary, skills development and promotions.

SUGGESTIONS

1. The management has to modify the present appraisal system to suit the existing changes in the organization.

2. The management has to maintain good cooperation with all levels of the employees, and then it will lead to organization development.

3. They have to spend more time with employees to enhance their performance in work. 4. Management should give equal opportunity to all employees to show their talent and skills in achieving the organizational objectives effectively.

5. The appraisal system should be used as a guiding tool for the development of the employees not as a threat to the employees growth.

CONCLUSION

To conclude, we can say that employees were satisfied with the performance appraisal system of the organizations.

Performance appraisal has many uses such as allocating, reward, identifying areas where development efforts are needed. The study is done to know the satisfaction level of the employees performance on their present job . The basic purpose of performance appraisal is to know how well the employee is performing on the job and to establish a plan for his improvement.

Finally we can say that HPCL will continue to reach their targets with efficiency and development of human skills under the present dynamic leadership.

The appraisal system is the corner stone of HRD activities as it is the major source of input to decisions regarding placement, promotions, training and development

QUESTIONNAIRE

(1) What is your opinion about the present performance appraisal system in your organization? (a) EXCELLENT (c) GOOD (b)VERY GOOD (d) AVERAGE [ ]

(2) Performance appraisal system at H.P.C.L serves to the need of the employees current performance and or his potential for development? (a) STRONGLY AGREE (c) DISAGREE (b) AGREE (d) STRONGLY DISAGREE [ ]

(3) Do you think that in the existing system, self rating would be appreciated by the employees? (a) YES (b) NO [ ]

(4) Do you think that opportunity should be provided to appraise to be appraised by the moderation committee? (a) YES (b) NO [ ]

(5) Do you prefer that the moderation process of all your counterparts/peers should be in an open forum?
(a) YES (b) NO [ ]

(6) The open moderation process will increase the transparency of the appraisal system in H.P.C.L? (a) YES (b) NO [ ]

(7) Do you think that due weightage is given to the competence level in deciding an individual rating? (a) YES (b) NO [ ]

(8) Competency level should be assessed through: (a) COMPETENCY ASSESSMENT TEST (b) SUPERVISOR FEEDBACK

(c) SUPERVISOR, PEER, SUBORDINATE FEEDBACK (d) ALL OF THE ABOVE [ ]

(9) Do you think in the present remote moderation process appraise performance is being measured without any bias? (a) STRONGLY AGREE (c) DISAGREE (b) AGREE (d) STRONGLY DISAGREE [ ]

(10) What do you think about introduction of e-appraisal system in your organization? (a) EXCELLENT (c) GOOD (b) VERY GOOD (d) AVERAGE [ ]

(11) Period for the review of target period should be? (a) QUATERLY (b) HALF-YEARLY (c) YEARLY [ ]

(12) The acceptance of 360 Degree Appraisal was low among the employees. Your opinion on the statement. (a) STRONGLY AGREE (c) DISAGREE (b) AGREE (d) STRONGLY DISAGREE [ ]

(13) Which type of feedback do you receive from your boss? (a) CONSTRUCTIVE (c) DEVELOPMENT ORIENTED (b) APPRECIATIVE (d) ALL OF THE ABOVE [ ]

(14) Does your system of prefect encourage employee involvement in the goal setting process? (a) Yes (c) Sometimes true (b) No (d) Not necessary [ ]

(15). How do you define your own goals ? (a) Time Bound (c) Superior help (e) All the above (b) Quality of work (d) compare with peers [ ]

(16) Are your capabilities considered at the time of setting goals? (a) High consideration (c) Below average (b) Medium (d) No consideration [ ]

(17). Do you recommend seniority based or performance based at the time of promotion? (a) Seniority Based (c) Both (b) Performance Based (d) If any ____________ [ ]

(18) Are the rating given to you in past 5years are up to your expectations? (a) More than expected (c) Below the expectation (b) To the expectations (d) Neutral [ ]

19. In your experience, nearness to the bosses has positive impact or your real performance ? (a) Real performance (c)None (b) Nearness (d) If any_________ [ ]

20. Does the system of perfect really recognition / reward to the employees in the organization? (a) Appraisal only (c) Variable pay (b) Increment only (d) All the above [ ]

21. Are the problems relating to your work are considered at the time of appraisal? (a) High consideration (c) Below average (b) Moderate consideration (d) No consideration [ ]

22. What action could be taken to improve your performance in your current position by you and your boss? (a) Training programmers (c) Development of skills (b) Hard working (d) Personality development [ ]

23. Express your view relating to the rating of L+1 and L+2 . (a) Always similar (c)Fair (b) Always differ (d) Unsatisfied [ ]

24. How do you feel about the Apex Review Committee? (a) Highly satisfied (c) Neutral (b) Satisfied (d) Less satisfied [ ]

BIBLOGRAPHY

K.K AHUJAS HUMAN RESOURSE MANAGEMENT, Kalyani publishers. ASWATHAPPAs HUMAN RESOURCE AND PERSONNEL MANAGEMENT Tata Mc Graw-Hill P.SUBBA RAOs HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS, Himalaya publishing house.

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