A PROJECT ON PERFORMANCE APPRAISAL IN HUMAN RESOURCE

DEVLOPMENT
AT
OPTCL

A Project report submitted to NIIS Institution of Business Administration, Bhubaneswar, in

partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

By
SOUMYA SALINA TRIPATHY
(Reg. No.: 1406280109)
Under the Guidance of
Prof. SAGARIKA SATAPATHY
Department of Management Studies
NIIS Group of Institution of Business Administration

(Affiliated to Biju Pattnaik University of Technology)

Rourkela ,Odisha(2015-2016)
1

NIIS GROUP OF INSTITUTION

ODISHA-751054
BONAFIDE CERTIFICATE
This is to certify that the project entitled A PROJECT ON PERFORMANCE
APPRAISAL IN HUMAN RESOURCE IN OPTCL has been submitted by
Ms. SOUMYA SALINA TRIPATHY (Reg.No.1406280109) in partial fulfillment of
the requirement for the award of Master of Business Administration from NIIS
Group Of Institution. , who carried out the project work under my supervision.
This is to further certify to the best of my knowledge that this project has not been
carried out earlier in this institute and the university.

Certified that the above mentioned project has been duly carried out as per
the norms of the college and statutes of the university.

Prof.Sagarika Satapathy

Prof.Bhimasen Swain

(Internal Guide)

(Professor & HOD)

DECLARATION

I hereby declare that the project entitled A PROJECT ON PERFORMANCE

APPRAISAL IN HUMAN RESOURCE DEVELOPMENT IN OPTCEL
under the guidance of Prof. Sagarika satapathy submitted in partial fulfillment
of the requirements for award of the degree of MBA at NIIS Group of
Institution,Bhubaneswar, is an authentic work and has not been submitted to any
other University/Institute for award of any degree/diploma.

SOUMYA SALINA TRIPATHY

Reg. No.: 1406280109
MBA, NIIS GROUP
BHUBANESWAR

ACKNOWLEDGEMENT
Firstly I would like to express our immense gratitude
towards our institution NIIS Group Of Institution, which created a great platform
to attain profound technical skills in the field of MBA, thereby fulfilling our most
cherished goal.
I would thank my project guide, Prof.Sagarika satapathy
for given me this privilege of working under them and guiding me with their
expressive knowledge and providing me all the necessary information concerning
the project.
I am very much thankful to our DEAN.Prof.S.K DIXIT for
extending his guidance and cooperation in doing this project.
I am also thankful to our project coordinator Prof.Tanmaya
Satapathy for extending his cooperation in completion of Project.
I wish you to express sincere gratitude to our Head Mrs.Anita
satapathy (HRD)OPTCL for providing the opportunity to pursue my management
course in this college.
I convey my thanks to my beloved parents and my faculty who
helped me directly or indirectly in bringing this project successfully.

SOUMYA SALINA TRIPATHY

Reg. No.: 1406280109

INDEX
S. No:
Chapter 1.

CONTENTS
i. Introduction

PAGE NO.
5-10

ii. Preface
iii. Rational Of Study
Chapter 2.

i. Introduction to HR

11-14

Management
ii. Function of HR
Management
Chapter 3.

i. What is PA

15-23

ii. Methods of PA
iii. Field Review
Chapter 4.

i. Management by Objectives

24-26

Chapter 5.

Company Profile

27-47

Chapter 6.

Conclusion

48-58

INTRODUCTION

INTRODUCTION TOWARDS PERFORMANCE APPRAISAL

SYSTEM
Human Resource (or personnel) management, in the sense of getting things done through people,
is an essential part of every managers responsibility, but many organizations find it
advantageous to establish a specialist division to provide an expert service dedicated to ensuring
that the human resource function is performed efficiently.
People are our most valuable asset is a clich, which no member of any senior management
team would disagree with. Yet, the reality for many organizations are that their people remain
under valued, under trained and under utilized.
Performance Appraisal is the process of assessing the performance and progress of an employee
or a group of employees on a given job and his / their potential for future development. It
consists of all formal procedures used in the working organizations to evaluate personalities,
contributions and potentials of employees.

PREFACE

PREFACE
Managing human resources in todays dynamic environment is becoming more and more
complex as well as important. Recognition of people as a valuable resource in the organization
has led to increases trends in employee maintenance, job security, etc
My research project deals with Performance Appraisal as carried out at (GRIDCO). In this
report, I have studied &evaluated the performance appraisal process as it is carried out in the
company.
The first section of my report deals with a detailed company profile. It includes the companys
history: its activities and operations, organizational structure, etc. this section attempts to give
detailed information about the company and the nature of its functioning.
The second section deals with performance appraisal. In this section, I have given a brief
conceptual explanation to performance appraisal. It contains the definition, process and
significance of performance appraisal.
In the third section of my report, I have conducted a research study to evaluate the process of
performance appraisal at Bharat Sanchar Nigam Ltd.; this section also contains my findings,
conclusions, suggestions and feedback.
The forth and final section of this report consists of extra information that I related to the main
contents of the report. These annexure include some graphs and diagrams relating to the
company, graphs relating to the research study and important documents upon which the project
is based.

RATIONALE OF THE STUDY

10

RATIONALE OF THE STUDY

Performance Appraisal is the important aspect in the organization to

evaluate the employees performance. It helps in understanding the
employees work culture, involvement, and satisfaction. It helps the
organization in deciding employees promotion, transfer, incentives,
pay increase.

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INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

12

INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Human Resource (or personnel) management, in the sense of getting

things done through people, is an essential part of every managers
responsibility, but many organizations find it advantageous to
establish a specialist division to provide an expert service dedicated
to ensuring that the human resource function is performed
efficiently.
People are our most valuable asset is a clich, which no member
of any senior management team would disagree with. Yet, the reality
for many organizations are that their people remain under valued,
under trained and under utilized.
The market place for talented, skilled people is competitive and
expensive. Taking on new staff can be disruptive to existing
employees. Also, it takes time to develop cultural awareness,
product / process / organization knowledge and experience for new
staff members.

13

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

14

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

Following are the various functions of Human Resource Management that are essential for the
effective functioning of the organization:
1. Recruitment
2. Selection
3. Induction
4. Performance Appraisal
5. Training & Development
Recruitment
The process of recruitment begins after manpower requirements are determined in terms of
quality through job analysis and quantity through forecasting and planning.
Selection
The selection is the process of ascertaining whether or not candidates possess the requisite
qualifications, training and experience required.
Induction
a) Induction is the technique by which a new employee is rehabilitated into the changed
surroundings and introduced to the practices, policies and purposes of the organization.

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WHAT IS PERFORMANCE APPRAISAL?

16

WHAT IS PERFORMANCE APPRAISAL?

Performance Appraisal is defined as the process of assessing the performance and progress of an
employee or a group of employees on a given job and his / their potential for future development.
It consists of all formal procedures used in working organizations and potential of employees.
According to Flippo, Performance Appraisal is the systematic, periodic and an important rating
of an employees excellence in matters pertaining to his present job and his potential for a better
job.

CHARACTERISTICS
1. Performance Appraisal is a process.
2. It is the systematic examination of the strengths and weakness of an employee in terms of
his job.
3. It is scientific and objective study. Formal procedures are used in the study.
4. It is an ongoing and continuous process wherein the evaluations are arranged periodically
according to a definite plan.
5. The main purpose of Performance Appraisal is to secure information necessary for
making objective and correct decision an employee.

PROCESS
The process of performance appraisal:
1. Establishing performance standards

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2. Communicating the Standards

3. Measuring Performance
4. Comparing the actual with the standards
5. Discussing the appraisal
6.Taking Corrective Action

LIMITATIONS
1. Errors in Rating
2. Lack of reliability
3. Negative approach
4. Multiple objectives

5. Lack of knowledge

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METHODS OF PERFORMANCE APPRAISAL

19

METHODS OF PERFORMANCE APPRAISAL

The foregoing list of major program pitfalls represents a formidable challenge, even considering
the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing
away with appraisals themselves is like trying to solve the problems of life by committing
suicide. The more logical task is to identify those appraisal practices that are (a) most likely to
achieve a particular objective and (b) least vulnerable to the obstacles already discussed.
Before relating the specific techniques to the goals of performance appraisal stated at the outset
of the article, I shall briefly review each, taking them more or less in an order of increasing
complexity.
The best-known techniques will be treated most briefly.

ESSAY APPRAISAL
In its simplest form, this technique asks the rater to write a paragraph or more covering an
individual's strengths, weaknesses, potential, and so on. In most selection situations, particularly
those involving professional, sales, or managerial positions, essay appraisals from former
employers, teachers, or associates carry significant weight.
.

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GRAPHIC RATING SCALE

21

GRAPHIC RATING SCALE

This technique may not yield the depth of an essay appraisal, but it is more consistent and
reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work (is he
outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that
vary with the job but usually include personal traits like reliability and cooperation. It may also
include specific performance items like oral and written communication.

22

FIELD REVIEW

23

FIELD REVIEW
The field review is one of several techniques for doing this. A member of the personnel or central
administrative staff meets with small groups of raters from each supervisory unit and goes over
each employee's rating with them to (a) identify areas of inter-rater disagreement, (b) help the
group arrive at a consensus, and (c) determine that each rater conceives the standards similarly. .

FORCED-CHOICE RATING
Like the field review, this technique was developed to reduce bias and establish objective
standards of comparison between individuals, but it does not involve the intervention of a third
party.

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MANAGEMENT BY OBJECTIVES

MANAGEMENT BY OBJECTIVES
25

To avoid, or to deal with, the feeling that they are being judged by unfairly high standards,
employees in some organizations are being asked to set - or help set - their own performance
goals. Within the past five or six years, MBO has become something of a fad and is so familiar to
most managers that I will not dwell on it here.

RANKING METHODS
For comparative purposes, particularly when it is necessary to compare people who work for
different supervisors, individual statements, ratings, or appraisal forms are not particularly
useful. Instead, it is necessary to recognize that comparisons involve an overall subjective
judgment to which a host of additional facts and impressions must somehow be added. There is
no single form or way to do this.
The best approach appears to be a ranking technique involving pooled judgment.
The two most effective methods are alternation ranking and paired comparison ranking.
1. Alternation ranking:
Ranking of employees from best to worst on a trait or traits is another method for evaluating
employees. Since it is usually easier to distinguish between the worst and the best employees
than to rank them, an alternation ranking method is most popular. Here subordinates to be rated
are listed and the names of those not well enough to rank are crossed. Then on a form as shown
below, the employee who is highest on the characteristic being measured and the one who is the
lowest are indicated. Then chose the next highest and the next lowest, alternating between
highest and lowest until all the employees to be rated have been ranked.

26

2. Paired-comparison ranking:
This technique is probably just as accurate as alternation ranking and might be more so. But
with large numbers of employees it becomes extremely time consuming and cumbersome.
Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or
more people are asked to make independent rankings of the same work group and their lists are
averaged), are among the best available for generating valid order-of-merit rankings for salary
administration purposes.

COMPANY PROFILE
ABOUT US
27

ODISHA POWER TRANSMISSION CORPORATION LIMITED (OPTCL), one of the largest

Transmission Utility in the country was incorporated in March 2004 under the Companies Act,
1956 as a company wholly owned by the Government of Odisha to undertake the business of
transmission and wheeling of electricity in the State. The registered office of the Company is
situated at Bhubaneswar, the capital of the State of Odisha. Its projects and field units are spread
all over the State.
OPTCL became fully opeartional with effect from 9th June 2005 consequent upon issue of Odisha
Electricity Reform (Transfer of Transmission and Related Activities) Scheme, 2005 under the provisions
of Electricity Act, 2003 and the Odisha Reforms Act, 1995 by the State Government for transfer and
vesting of transmission related activities of GRIDCO with OPTCL. The Company has been designated as
the State Transmission Utility in terms of Section 39 of the Electricity Act, 2003.
Presently the Company is carrying on intra state transmission and wheeling of electricity under a license
issued by the Odisha Electricity Regulatory Commission. The Company is also discharging the functions
of State Load Despatch Centre. The Company owns Extra High Voltage Transmission system and
operates about 12,171.194 ckt kms of transmission lines at 400 kV, 220 kV, 132 kV levels and 115 nos. of
substations with transformation capacity of 14,0032 MVA having 293 nos of transformers.
The day-to-day affairs of the Company are managed by the Managing Director assisted by whole-time
Functional Directors as per the advice of the Board of Directors constituted. They are in turn assisted by a
team of dedicated and experienced professionals in the various fields.

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ORGANIZATION STRUCTURE

29

30

Training & Development

The Restructuring of the Orissa Power Sector resulted in unbundling of the erstwhile Orissa State
Electricity Board into three separate entities of Hydro Generation, Transmission and Distribution
Organizations i.e. OHPC, GRIDCO and four Distribution Companies respectively.GRIDCO has further
been restructured into OPTCL(looking into transmission activities) and GRIDCO (looking into power
trading aspects).
One of the important objectives of the reform process is to facilitate development of the existing human
resource. In order to constitute effectively to this objective, the Department for International Development
of UK Government (DFID) have funded for establishment of two training centers:

The OPTCL Power Training center and The Management Training Center.

Training Center

External Center

Satutory Training

Industry Institute Interface

Training at Glance

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ASSESSMENT CENTERS

32

ASSESSMENT CENTERS
So far, we have been talking about assessing past performance. What about the assessment of
future performance or potential? In any placement decision and even more so in promotion
decisions, some prediction of future performance is necessary. How can this kind of prediction
be made most validly and most fairly?

360 DEGREE FEEDBACK

Many firms have expanded the idea of upward feedback into what
the call 360-degree feedback. The feedback is generally used for
training and development, rather than for pay increases.
Most 360 Degree Feedback system contains several common
features. Appropriate parties peers, supervisors, subordinates and
customers, for instance complete survey, questionnaires on an
individual. 360 degree feedback is also known as the multi-rater
feedback, whereby ratings are not given just by the next manager up
in the organizational hierarchy, but also by peers and subordinates.
Appropriates customer ratings are also included, along with the
element of self appraisal. Once gathered in, the assessment from the
various quarters are compared with one another and the results
communicated to the manager concerned.

33

Another technique that is useful for coaching purposes is, of course, MBO. Like the critical
incident method, it focuses on actual behavior and actual results, which can be discussed
objectively and constructively, with little or no need for a supervisor to "play God."

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Advantages

35

Advantages

Instead of assuming traits, the MBO method concentrates on actual

outcomes. If the employee meets or exceeds the set objectives, then
he or she has demonstrated an acceptable level of job performance.
Employees are judged according to real outcomes, and not on their
potential for success, or on someone's subjective opinion of their
abilities.
The guiding principle of the MBO approach is that direct results can be observed easily. The
MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied
elements that go to make up employee performance.

MBO advocates claim that the performance of employees cannot be

broken up into so many constituent parts, but to put all the parts
together and the performance may be directly observed and
measured.
Disadvantages

This approach can lead to unrealistic expectations about what can

and

cannot

be

reasonably

accomplished.

Supervisors

and

subordinates must have very good "reality checking" skills to use

MBO appraisal methods. They will need these skills during the

36

initial stage of objective setting, and for the purposes of selfauditing and self-monitoring.
Variable objectives may cause employee confusion. It is also
possible that fluid objectives may be distorted to disguise or justify
failures in performance.

37

Benefits of Performance Appraisals

38

Benefits of Performance Appraisals

Measures an employees performance.

Helps in clarifying, defining, redefining priorities and
objectives.
Motivates the employee through achievement and feedback.
Facilitates assessment and agreement of training needs.
Helps in identification of personal strengths and weaknesses.
Plays an important role in Personal career and succession
planning.
Clarifies team roles and facilitates team building.
Plays major role in organizational training needs assessment
and analysis.
Improves

understanding

and

relationship

between

the

employee and the reporting manager and also helps in

resolving confusions and misunderstandings.

39

 Plays an important tool for communicating the organizations

philosophies, values, aims, strategies, priorities, etc among its
employees.
Helps in counseling and feedback.

Rating Errors in Performance Appraisals

40

Rating Errors in Performance Appraisals

Performance appraisals are subject to a wide variety of inaccuracies

and biases referred to as 'rating errors'. These errors can seriously
affect assessment results. Some of the most common rating errors
are: Leniency or severity: - Leniency or severity on the part of the rater
makes the assessment subjective. Subjective assessment defeats the
very purpose of performance appraisal. Ratings are lenient for the
following reasons:
a) The rater may feel that anyone under his or her
jurisdiction who is rated unfavorably will reflect poorly
on his or her own worthiness.
b) He/She may feel that a derogatory rating will be revealed
to the rate to detriment the relations between the rater and
the ratee.
41

c) He/She may rate leniently in order to win promotions for

the subordinates and therefore, indirectly increase his/her
hold over him.
Central tendency: - This occurs when employees are incorrectly
rated near the average or middle of the scale. The attitude of the
rater is to play safe. This safe playing attitude stems from certain
doubts and anxieties, which the raters have been assessing the rates.
Halo error: - A halo error takes place when one aspect of an
individual's performance influences the evaluation of the entire
performance of the individual. The halo error occurs when an
employee who works late constantly might be rated high on
productivity and quality of output as well ax on motivation.
Similarly, an attractive or popular personality might be given a high
overall rating. Rating employees separately on each of the
performance measures and encouraging raters to guard against the
halo effect are the two ways to reduce the halo effect.
Rater effect: -This includes favoritism, stereotyping, and hostility.
Extensively high or low score are given only to certain individuals
or groups based on the rater's attitude towards them and not on
actual outcomes or behaviors; sex, age, race and friendship biases
are examples of this type of error.
42

Primacy and Regency effects: - The rater's rating is heavily

influenced either by behavior exhibited by the ratee during his early
stage of the review period (primacy) or by the outcomes, or
behavior exhibited by the ratee near the end of the review period
(regency). For example, if a salesperson captures an important
contract/sale just before the completion of the appraisal, the timing
of the incident may inflate his or her standing, even though the
overall performance of the sales person may not have been
encouraging. One way of guarding against such an error is to ask the
rater to consider the composite performance of the rate and not to be
influenced by one incident or an achievement.
Performance dimension order: - Two or more dimensions on a
performance instrument follow each other and both describe or
rotate to a similar quality. The rater rates the first dimensions
accurately and then rates the second dimension to the first because
of the proximity. If the dimensions had been arranged in a
significantly different order, the ratings might have been different.
Spillover effect: - This refers lo allowing past performance
appraisal rating lo unjustifiably influence current ratings. Past
ratings, good or bad, result in similar rating for current period

43

although the demonstrated behavior docs not deserve the rating,

good or bad.

ROLES IN THE PERFORMANCE APPRAISAL PROCESS

44

ROLES IN THE PERFORMANCE APPRAISAL PROCESS

a) Reporting Manager
Provide feedback to the reviewer / HOD on the
employees behavioral traits indicated in the PMS
Policy Manual
Ensures that employee is aware of the normalization /
performance appraisal process
Address employee concerns / queries on performance
rating, in consultation with the reviewer
b) Reviewer (Reporting Managers Reporting Manager)
Discuss with the reporting managers on the behavioral
traits of all the employees for whom he / she is the
reviewer
45

 Where required, independently assess employees for

the said behavioral traits; such assessments might
require collecting data directly from other relevant
employees
c) HOD (In some cases, a reviewer may not be a HOD)
Presents the proposed Performance Rating for every
employee of his / her function to the Normalization
committee.
HOD also plays the role of a normalization committee
member
Owns the performance rating of every employee in the
department
d) HR Head
Secretary to the normalization committee
Assists

HODs

Reporting

Managers

in

communicating the performance rating of all the

employees
e) Normalization Committee
Decides on the final bell curve for each function in the
respective Business Unit / Circle
46

 Reviews the performance ratings proposed by the

HODs, specifically on the upward / downward shift in
ratings, to ensure an unbiased relative ranking of
employees on overall performance, and thus finalize
the performance rating of each employee

KEY CONCEPTS IN PMS

47

KEY CONCEPTS IN PMS

In order to understand the Performance Management System at BHARTI, some concepts need to
be explained which play a very important role in using the PMS successfully. They are:
KRAS (KEY RESULT AREAS): The performance of an employee is largely
dependent on the KRA score achieved by the employee during that particular year. Thus,
it is necessary to answer a few basic questions i.e.
o

What are the guidelines for setting the KRAs for an employee?

How does an employee write down his KRAs for a particular financial year?

KRAs: The Four Perspectives.

How is the KRA score calculated for an employee on the basis of the targets sets
and targets achieved?

BEHAVIORAL TRAITS: Some of the qualitative aspects of an employees

performance combined with the general behavioral traits displayed by the employee
during a year constitutes his behavior traits. An employee is assigned the rating on the
basis of the intensity of the behavior displayed by him. They play a very important role in

48

the deciding the final performance rating for an employee as is even capable of shifting
the rating one level upwards/downwards.
BHARTI 2010 LEADERSHIP COMPETENCY FRAMEWORK: This competency
framework is a simple and structured way to describe the elements of behaviors required
to perform a role effectively. This framework also tries to assess the performance of an
employee objectively.
THE PERFORMANCE RATING PROCESS: The rating process tries to explain the
four different types of rating that an employee can achieve i.e. EC, SC, C and PC. It also
explains the criteria, which is considered for awarding any of these ratings to the
employee.
PROMOTION AND RATING DISRTRIBUTION GUIDELINES: The promotion
and normal distribution guidelines provide the framework within which the performance
appraisal process has to work. It is very important that the HR department pays due
attention to these guidelines while preparing the bell curves for various functions and the
consolidated bell curve for all the functions. These guidelines also help in deciding upon
the promotion cases in a year.

49

PERFORMANCE RATING PROCESS

50

PERFORMANCE RATING PROCESS

EXCEPTIONAL CONTRIBUTOR (EC)

SIGNIFICANT CONTRIBUTOR (SC)

Performs consistently and substantially

above expectations in all areas

areas

Achieves a final score greater than or

equal to 115%

Performs above expectations in all

Achieves final score between 100114%

Consistently delivers on stretch targets

Is proactive

Spots

and

anticipates

problems,

Versatile in his/ her area of operation

Develops creative solutions and

implements solutions

Sees and exploits opportunities

Delivers ahead of time

Sees the wider picture-impacts across

require little / minimal supervision

Sets examples for others

Take ownership of own development

Coaches others

business

Focuses on whats good for the business

51

Seen as role model by others

Demonstrates business initiative

Is self motivated

Supportive team player

Leads own team very effectively

Demonstrate functional initiative

Recognized as exceptional by other

functions as well

Motivates others to solve problems

Develops others

Provides open and honest feedback

Able

to

establish

and

lead

cross-

functional teams

52

CONCLUSION

53

CONCLUSION:
This presents the summary of the study and survey done in relation to the
Recruitment and Selection in GRIDCO. The conclusion is drawn from the study
and survey of the company..
GRIDCO has undergone many structural and functional changes. Many reform
activities have been undertaken to improve upon its working.
But never has it been felt necessity to review about how effectively these reforms
have been conducted. Whether, they have fulfilled the purpose for which they were
made or not.
Most of the employees were satisfied but changes are required according to the
changing scenario as recruitment process has a great impact on the working of the
company as a fresh blood, new idea enters in the company.
Selection process is good but it should also be modified according to the
requirements and should job profile so that main objective of selecting the
candidate could be achieved.
I hope that they would undertake my work in a positive sense and realize the value
and importance or HR audit. I hope that the higher authorities of GRIDCO
authorities too would realize its importance and implement it in their organization
to improve and enhance upon their functioning.

54

WEBSITE

To complete my sip project work on OPTCL LTD. I used the following websites1. www.google.com
2. Slideshare.com
3. Wikipedia.com
4. Optcl.co.in

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