A

DESSERTATION REPORT

ON

“PERFORMANCE APPRAISAL”
SUBMITTED TO GRAPHIC ERA UNIVERSTIY

“MASTER OF BUSINESS ADMINISTRATION”

(TWO YEARS FULL TIME DEGREE PROGRAMME)

SUBMITTED TO: SUBMITTED BY:

MS. RINKI RANA SATISH GAIROLA

M.B.A (IV SEMESTER)

R.NO: 1400597
(2009-2011)
GRAPHIC ERA UNIVERSITY
DEHRADUN

2
 PREFACE
The conceptual knowledge acquired by management students is best manifested in the
projects and training they undergo. As a part of curriculum of PGDM, I have got a
chance to undergo practical training in HEEP (BHEL) Haridwar. The present project
gives a perfect vent to my understanding of the Human Resource specially the most
modern concept of “Performance Appraisal” and organization behavior.

The project report entitled “Performance Appraisal” is based on theme of BHEL

Haridwar made by the BHEL in the last 5 years.
The report will provide all the information regarding the Performance of the
employees and their importance in HEAVY ELECTRICAL EQUIPMENT PLANT-
BHEL, HARIDWAR.

I also hope that this report will be beneficial for my next batches and for those who
are related to this topic.

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 ACKNOWLEDGEMENT

I express my sincere thanks to the Management of ‘HEEP (Heavy Electrical

Equipment Plant) of BHEL, Ranipur, Haridwar Unit for giving me an opportunity
to gain exposure on matter related to Project under the esteem guidance of Mr.

I hereby take this opportunity to put on records my sincere thanks to MS.

SANJAY under the light of whose able guidance I could complete this project in
an effective and successful manner.

I am also thankful to the rest of the staff of the SALES section for their valuable
suggestion and cooperation to achieve the task.

SATISH GAIROLA

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 B. H. E. L. A CORPORATE GIANT

Established in the late 50's BHARAT HEAVY ELECTRICALS LIMITED

(BHEL) is a name which is recognized across the industrial world. It is one of the
largest engineering and manufacturing enterprises in INDIA and is one of the
leading international companies in the power field. BHEL offers a wide spectrum
of products and services for core sectors like power transmission, industrial
transportation, oil and gas, telecommunication etc. Besides supply of non-
conventional energy systems. It has also embarked into other areas including
defense and civil aviation. A dynamic 63000 strong team embodies the BHEL
philosophy excellence through continuous striving for state of the art technology.
With corporate headquarters in NEW DELHI, fourteen manufacturing units, a
wide spread regional services network and projects sites all over India and even
abroad, BHEL is India's industrial ambassador to the world with export presence in
more than 50 countries.
BHEL's range of services extent from project feasibility studies to after sales
services, successfully meeting diverse needs through turnkey capability.
BHEL has had a consistent track record of growth, performance and profitability.
The world bank in its report on the Indian Public Sectors, has described BHEL as "
one of the most efficient enterprises in the industrial sector, at par with
international standards of efficiency". BHEL has acquired ISO 9000 certificate for
most of its operations and has taken up Total Quality Management (TQM).
All the major units/divisions of BHEL have been upgraded to the latest ISO-9001:
2000 version quality standard certification for quality management. All the major
units/divisions of BHEL have been awarded ISO-14001 certification for
environmental management systems and OHSAS-18001 certification for
occupational health and safety management systems.

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BHEL occupies an all-important niche as evident by its ranking by CII amongst
top eight PSUs based on financial performance. Recently in survey conducted by
business India, BHEL has been rated as seventh Best Employer in India.

International Business:-

BHEL has, over the years, established its references in over 60 countries of the
world. These references encompass almost the entire range of BHEL products and
services, covering Thermal, Hydro and Gas based turnkey power projects,
substation projects, and rehabilitation projects; besides a wide variety of products
like: Transformers, Compressors, Valves and Oil field equipment, Electrostatic
Precipitators, Insulators, Heat Exchangers, Switchgears, Castings and Forgings etc.

Some of the major successes achieved by BHEL have been in Gas-based power
projects in Oman, Libya, Malaysia, Saudi Arabia, Iraq, Bangladesh, Sri Lanka,
China, Kazakhstan; Thermal Power Projects in Cyprus, Malta, Libya, Egypt,
Indonesia, Thailand, Malaysia; Hydro power plants in New Zealand, Malaysia,
Azerbaijan, Bhutan, Nepal, Taiwan and Substation projects & equipment in
various countries. Execution of these overseas projects has also provided BHEL
the experience of working with world-renowned Consulting Organizations and
Inspection Agencies.

The Company has been successful in meeting demanding requirements

International markets, in terms of complexity of the works as well as technological,
quality and other requirements viz. HSE requirement, financing package,
associated O&M services to name a few. BHEL has proved its capability to
undertake projects on fast-track basis. BHEL has also established its versatility to

6
successfully meet the other varying needs of various sectors, be it captive power,
utility power generation or for the oil flexibility to exhibited adaptability by
manufacturing and supplying intermediate products.

B.H.E.L. IN INDIA:-
# REGIONAL OFFICES (POWER SECTORS)
***********************************
1. NEW DELHI (NORTHERN REGION)
2. CALCUTTA (EASTERN REGION)
3. NAGPUR (WESTERN REGION)
4. CHENNAI (SOUTHERN REGION)
# BUSSINESS OFFICES
*******************
1. BANGLORE
2. BARODA
3. BHUBANESHWAR
4. MUMBAI
5. CALCUTTA
6. CHANDIGARH
7. GUWAHATI
8. JABALPUR
9. JAIPUR
10. LUCKNOW
11. CHENNAI
12. NEW DELHI
13. PATNA

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14. RANCHI
15. SECUNDRABAD

# MANUFACTURING UNITS
1. BANGALORE
2. BHOPAL
3. GOINDWAL
4. HARDWAR
5. HYDERABAD
6. JAGDISHPUR
7. JHANSI
8. RUDRAPUR
9. RANIPET
10. TIRUCHIRAPALLY
# SERVICE CENTRES
BANGLORE
BARODA
CALCUTTA
CHANDIGARH
SECUNDRABAD
NEW DELHI
NAGPUR
PATNA
VARANASI

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COMPANY PROFILE:-
BHEL is India's largest engineering company and one of its kind in this part of the
hemisphere. It manufactures a wide range of state of the art power generation
equipment and systems besides equipment for industry, transmission, defense,
telecommunication and oil business.

The first plant of BHEL was set up in Bhopal in 1956, which signaled the dawn of
the heavy electrical industry in India. In the early 60's three more major plants
were set up in Haridwar, Hyderabad and Tiruchirapalli. The company now has 14
manufacturing divisions, 10 services centers and power sectors regional centers
besides project sites spread all over India and also abroad to provide prompt and
effective service to customers.

BHEL's business broadly covers conversions, transmission, utilizations and

conservation of energy in core sectors of economy that fulfill vital infrastructure
needs of the country. Its product have established an enviable reputation of high
quality and reliability, which is largely due to emphasizes placed all along on
contemporary some of the best technologies of the world from the leading
companies in U.S.A., EUROPE, and JAPAN together with technologies from its
own R&D centers technologies B.H.E.L.has consistently upgraded its design and
manufacturing facilities to international standards by acquiring and assimilating.

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VISION
A WORLD-CLASS, INNOVATIVE, COMPETITIVE AND PROFITABLE
ENGINEERING ENTERPRISE PROVIDING TOTAL BUSINESS
SOLUTIONS.

MISSION

TO BE THE LEADING INDIAN ENGINEERING ENTERPRISE PROVIDING

QUALITY PRODUCTS SYSTEM AND SERVICES IN THE FIELDS OF
ENERGY, TRANSPORTATION, INDUSTRY, INFRASTRUCTURE AND
OTHER POTENTIAL AREAS.

VALUES

• MEETING COMMITMENTS MADE TO EXTERNAL AND INTERNAL

CUSTOMERS.
• FOSTER LEARNING, CREATIVITY AND SPEED OF RESPONSE.
• RESPECT FOR DIGNITY AND POTENTAIL OF INDIVIDUALS.
• LOYALTY AND PRIDE IN THE COMPANY.
• TEAM PLAYING
• ZEAL TO EXCEL
• INTEGRITY AND FAIRNESS IN ALL MATTERS.

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COMPANY'S BUSINESS MISSION AND OBJECTIVES
BUSINESS MISSION

To maintain a leading position as suppliers of quality equipment, systems and

services in the field of conversion of energy, for application in the areas of electric
power transportation, oil and gas exploration and industries. Utilize company's
capabilities and resources to expand business into allied areas and other priority
sectors of the economy like defence, telecommunications and electronics.

BUSINESS OBJECTIVES

GROWTH: -

To ensure a steady growth by enhancing the competitive edge of BHEL defence,

telecommunication and electronics in existing business, new areas and
international operations so as to fulfill national expectations from BHEL.

PROFITABILITY: -

To provide a reasonable and adequate return on capital employed, primarily

through improvements in operational efficiency, capacity utilization, productivity
and generate adequate internal resources to finance the company's growth.

CUSTOMER FOCUS: -

To build a high degree of customer confidence by providing increased value for his
money through international standards of product quality, performance and
superior services.

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PEOPLE- ORIENTATION: -

To enable each employee to achieve his potential, improve his capabilities,

perceive his role and responsibilities and participate and contribute positively to
the growth and success of the company. To invest in human resources continuously
and be alive to their needs.

TECHNOLOGY: -

Achieve technological excellence in operations by development of indigenous

technologies and efficient absorption and adaptations of imported technologies to
suit business need and priorities and provide the competitive advantage to the
company.

IMAGE: -

To fulfill the expectations which stakeholders like government as owner,

employees, customers and the country at large have from BHEL.

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 CONTRIBUTION OF BHEL IN VARIOUS CORE
SECTORS
BUSINESS SECTORS: -

BHEL's operations are organized around three business sectors, mainly power,
industry and international operations. This enables BHEL to have a strong
customer’s orientation, to be sensitive to his needs and respond quickly to the
changes in the market.

POWER SECTORS: -

Power is the core sector of BHEL and comprises of thermal, nuclear gas, diesel
and hydro business. Today BHEL supplied sets, accounts for nearly 66 % of the
total installed capacity in the country as against nil till 1969-70.
BHEL manufactures boilers auxiliaries, TG sets and associate controls, piping and
station C & I up to 500 MW rating with technology and capability to go up to 1000
MW range. The auxiliary products high value capital equipment like bowl and tube
mills, pumps and heaters, electrostatic precipitators, gravimetric feeders, fans,
valves etc.

BHEL has contracted so far around 240 thermal sets of various ratings, which
includes 14 power plants set up on turnkey basis. Nearly 85 % of World Bank
tenders for thermal sets floated in India have been won by the company against
international competition.

BHEL has adopted the technology to the needs of the country and local conditions.
This has led to the development of several technologies in house. The fluidized bed

13
boiler that uses low graded high-ash abrasive Indian coal is an outcome of such an
effort. With large-scale availability of natural gas and the sudden increase in
demand, BHEL began to manufacture gas turbines and now possesses two streams
of gas turbine technology.

It has the capability to manufacture gas turbines up to 200 MW rating and custom
built combined cycle power plants. Nuclear steams generators, turbine generators,
sets and related equipment of 235 MW rating have been supplied to most of the
nuclear power plants in India. Production of 500 MW nuclear sets, for which
orders have been received.

BHEL has developed expertise in renovation and maintenance of power plant

equipment besides specialized know how of residual life assessment, health
diagnostic and life extensions of plants. The four power sectors regional centers at
New Delhi, Chennai, Kolkata and Nagpur will play a major role in giving a thrust
to this business and focus BHEL's efforts in this area.

INDUSTRY SECTORS :-
BHEL is a major producer of large size thyristor devices. The products
include centrifugal compressors, high speed industrial drive turbines,
industrial boilers and auxiliaries, waste heat recovery boilers, gas
turbines, electric motors, drives, and control equipments, high voltage
transformers, switch gears and heavy castings and forgings.
Company in India with the capability to make simulators for power plants, defense
industrial process plants and other applications. An entry has been made in aviation

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industry for which BHEL has set up facilities and is now producing two seater
aircraft.
TRANSMISSION:-

A wide range of transmission products and systems are produced by BHEL to meet
the needs of power transmission and distribution sector. These include:
• Dry Type Transformers
• SF6 Switch Gears
• 400 KW Transmission Equipment
• High Voltage Direct Current System
• Series and Shunt Compensation Systems
In anticipation of the need for improved substations, a 33 KV gas insulated sub
station with micro processors base control and protection system has been done.

TRANSPORTATION:-

65 % of trains in Indian Railways are equipped with BHEL's traction and traction
control equipment. These include:
• Broad Gauge 3900 HP AC / DC locomotives
• Diesel Shunting Locomotives up to 2600 HP
• 5000 HP AC Loco with thyristor control
• Battery Powered Road Vehicles and Locomotives

RESEARCH AND DEVELOPMENT:-

BHEL has a corporate R & D center supported by R & D groups at each of the
manufacturing divisions. The dedicated effort of BHEL's R & D engineers have
produced several new products like automated storage retrieval system automated

15
guide vehicles for material transportation etc. Establishment of Asia's largest fuel
evaluation test facility at Tiruchy was high light of the year. This facility will
enable evaluation of combustion, heat transfer and pollution parameters in boilers.
Major R & D achievement include:
• Design manufacture and supply of countries first 17.2 MW industrial steam
turbines.
• Development of 4700 HP AC / DC loco for Indian Railways.
• Development of largest capacitor voltage transformers of 8800 PF 400 KV
rating.
• Development and application low cost ROBOTS for job loading/unloading.
According to ex- CMD Mr. R.K.D. Shah, "BHEL is spending Rs. 60 Crores on
Research and Development. Earning from product which has been
commercialized has gone up 26 % to Rs. 760 Crores."

Human Resource Development Institute:-

BHEL has envisioned becoming "A World Class Engineering Enterprise

committed to enhancing stakeholder value". Force behind realization of this vision
and the source of our competitive advantage is the energy and ideas of our 44,000
strong highly skilled and motivated people. The Human Resource Development
Institute situated in NOIDA, a corner-stone of BHEL learning infrastructure, along
with Advanced Technical Education Center (ATEC) in Hyderabad and the Human
Resource Development Center at the manufacturing Units, through various
organizational developmental efforts ensure that the prime resource of the
organization – the Human Capital is “Always in a state of Readiness”, to meet the
dynamic challenges posed by a fast changing environment. It is their constant

16
endeavor to take the HRD activities to the strategic level of becoming active
partner to the (organizational) pursuits of achieving the organizational goals.
TECHNICAL COLLABORATIONS:-
PRODUCT COLLABORATIONS
# Thermal Sets, Hydro Sets, Motors & Prommashexport
Control Gears. RUSSIA
# Bypass & Pressure Reducing Systems Sulzer Brother Ltd.
SWITZERLAND
# Electronic Automation System for Siemens AG.
Steam Turbine & Generators GERMANY
# Francis Type Hydro Turbines General Electric
CANADA
# Moisture Separator Reheaters Baloke Duerr
GERMANY
# Christmas Trees & Conventional Well National Oil Well

Head Assemblies USA

# Steam Turbines , Generators and Axial Siemens AG.
Condensers GERMANY
# Cam Shaft Controllers and Tractions Siemens AG.

Current Control Units GERMANY

# HDVC ABB
SWEDEN
# Programmable Controls ABB
SWITZERLAND
# Gas Turbines General Electric Co.
USA

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# Tube Mills Stien Industries
FRANCE
DIVISIONS OF BHEL:-
There are 20 Divisions of BHEL, they are as follows:
1. HEEP, Hardwar
2. HPEP, Hyderabad
3. HPBP, Tiruchy
4. SSTP & MHD, Tiruchy
5. CFFP, Hardwar
6. BHEL, Jhansi
7. BHEL, Bhopal
8. EPD, Bangalore
9. ISG, Bangalore
10. ED, Bangalore
11. BAP, Ranipet
12. IP, Jagdishpur
13. IOD, New Delhi
14. COTT, Hyderabad
15. IS, New Delhi
16. CFP, Rudrapur
17. HERP, Varanasi
18. Regional Operations Division ARP, New Delhi
19. TPG, Bhopal
20. Power Group (Four Regions and PEM)
MAJOR COMPETITORS OF BHEL:-
1. Ansaldo Italy

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2. Asea Brown Boueri Switzerland
3. Beehtel USA
4. Block & Neatch USA
5. CNMI & EC China
6. Costain U.K.
7. Electrim Poland
8. Energostio Russia
9. Electro Consult Italy
10. Franco Tosi France
11. Fuji Japan
12. GEC Alsthom U.K.
13. General Electric USA
14. Hitachi Japan
15. LMZ Russia
16. Mitsubishi Japan
17. Mitsui Japan
18. NEI U.K.
19. Raytheon USA
20. Rolls Royce Germany
21. Sanghai Electric Co. China

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 RECENT ACHIEVEMENTS OF BHEL

1. BHEL's R&D ops contribute Rs 1,151 cr to turnover in 2005-06 [May

19 2006] NEW DELHI: Bharat Heavy Electrical Ltd on May 18 said the
company has achieved a turnover of Rs 1,151 crore during 2005-06 through
products developed by in-house research and development operations. This
revenue was eight per cent of its total revenue of Rs 14,410 crore in 2005-
06. This was the result of a constant thrust on developing new technologies
and products, improving existing products and systems in terms of
reliability, cost and quality through in-house R&D efforts. The company
invested about Rs 150 crore on Research and Development of products and
systems during the year, which was among the highest in the country. The
company also filed for 84 patents, including three abroad, taking the total
number of patents filed till date to 339. Out of this, BHEL has been granted
26 patents and the rest are in various stages of processing. Thirteen
copyrights have also been filed. R&D and technology development are of
strategic importance to BHEL as it operates in a competitive environment
where technology is a major factor.
2. BHEL to manufacture 800 mw thermal sets [Apr 14 2006] Catching up

with the advancement in global technologies, Bharat Heavy Electrical Ltd

(BHEL), through the efforts of its corporate research and development
division in Hyderabad, is now equipped to manufacture 800 mw super-
critical thermal power sets in the country. Much sought-after by several
players in power generation, including APGenco, for its fuel efficiency, the
super-critical technology has been till now viewed as the sole domain of
developed world. As part of its effort to emerge as one of the global

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 technology players in power systems and other new technologies, the R&D
division of BHEL has started fresh initiatives by setting up centers of
excellence for surface engineering (CoE-SE) and intelligent machines and
robotics (CIMAR). According to the source, CIMAR would be set up at the
Corporate R&D division in Hyderabad at an initial investment of Rs 4.77
crore. Among the new products, the BHEL Corporate R&D has successfully
completed design, supply and commissioning of automated storage and
retrieval systems for four of the 13 warehouses at the Central Ordnance
Depot, Kanpur.

3. BHEL inks agreement with IIT Madras for new courses [Apr 25 2006]

Chennai: Bharat Heavy Electrical Ltd and the Indian Institute of

Technology-Madras have signed a memorandum of understanding for
collaborative research in the areas of design of boilers, manufacturing,
metallurgical engineering, mechanical engineering, information technology
and other areas of mutual interest. With the help of BHEL, Tiruchi, IIT-M
will establish a research centre at the BHEL campus for the purpose. IIT-M
will select MS/PhD research scholars to work as research associates/project
associates. BHEL on its part will make available its research facilities and
laboratories for the purpose. The collaboration has also given scope for IIT-
M to start two new courses one on energy engineering and another on
welding engineering. The courses will start from the academic year 2006-07.
BHEL, which designs power plant boilers for handling a variety of coals, is
also interested in getting into coal research.
4. BHEL secures Rs 80 cr export order from EETC [May 10 2006] NEW

DELHI: Bharat Heavy Electricals Ltd (BHEL) has bagged its largest ever
export order for transformers worth Rs 80 crore from Egyptian Electricity

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 Transmission Co (EETC). BHEL will supply 14 transformers of 125 MVA
to the state-run Egyptian company as a part of the order. These transformers
would be installed in eight sub-stations at different locations in Egypt. The
transformers, to be built at the company's Jhansi plant, would be installed
and commissioned under BHEL supervision. The company had earlier
executed a boiler project at Al Arish in Egypt. With the order for
transformers, BHEL has also established itself in the transmission market in
Egypt. BHEL had earlier reported a six-fold increase in its export orders
booking for the fiscal ended March 31 at Rs 3,348 crore. These orders
contributed to one-fifth of the company's total orders booked last year. With
this BHEL is poised to achieve a quantum growth in its export business
driven by consolidation in existing markets and widening its export base
through expansion of existing basket of products and services and entering
new markets.
BHEL net profit up 62 pc(the tribune,3 June 2006)BHEL has posted a net profit
of Rs 867.95 crore for the quarter ended March 31,2006, as compared to Rs
534.28 crore for the quarter ended March 31, 2005, an increase of 62.45
pc. Total income has increased from Rs 4,518.94 crore in Q4 FY 04-05 to
Rs 5728.96 crore for Q4 FY 05-06.It has posted a net profit of Rs 1679.16
crore for the year ended March 31,2006(FY 05-06) as compared to Rs
953.40 crore for the year ended March 31,2005. total income has increased
from Rs 9977.36 crore in FY 04-05 to Rs 13820.02 crore for FY 05-06.The
board of directors has recommended a final dividend of 20 percent of
equity of the company, making it to total of 145 percent of the equity share
capital of the company for the financial year 2005-06. this includes the
interim dividend of 40 percent and special dividend of 85 percent already
paid during the year.

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5. Workers’ participation in management yields savings at BHEL,

Hardwar DEHRA DUN, Nov 16: Empowerment of employees through the

"quality the areas of import substitution, revamping of old machine tools and
safety over the past two decades based on the principle of people-building
and mutual development, the "quality circle" was adopted by the BHEL’s
Hardwar Plant in the year 1981 and has, since then, yielded savings of nearly
Rs five crore, according to Mr Ashwini Dhar, Public Relations Officer of the
organization. The quality circle guides the combined efforts and knowledge
of workmen of a particular section. There are more than four hundred quality
circles actively working to enhance the excellence on the process, quality
and delivery fronts, Mr.Dhar said. Coordinators and facilitators along with
other members of the workers’ groups identify problems and think of
solutions collectively to prevent defects and maintain overall quality.
Mr.Dhar said upgrading, renovation and modernization of hydro sets
installed at various power stations equipped with BHEL and non-BHEL
equipment was being now undertaken by the Hardwar unit through its
research and development efforts. The Hardwar unit of BHEL has received
an order of Rs eight crore from Power Development Corporation, Jammu
and Kashmir, to carry out renovation and modernization of the lower Jhelum
Hydro Electric Project. This project is equipped with turbine and operator
equipment supplied by BHEL and the project was commissioned in 1980.
Another order, worth Rs thirty crore, was received by the BHEL plant for
renovation, modernization and uprating of the units of Ganguwal and Kotla
Hydro Electric Projects under Bhakra Beas
6. Management Board and will ensure an increased output of the generating

units by as much as twenty per cent. Earlier, one unit each of the above
machines was renovated and updated by the BHEL resulting in a similar

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output increase for these machines. More than a hundred sets of different
capacities supplied by BHEL, Hardwar, are commissioned at various power
stations all over the country. The hydro sets are tailor-made to suit varying
hydroelectric parameters. Mr Dhar said that at the Hardwar Plant,
excellent engineering and manufacturing facilities are available to
supply kaplan, francis, pelton and reversible hydro turbines along with
matching generators and associated equipment. (UNI)

24
25
The Heavy Electrical Equipment Plant (HEEP) located in Haridwar, is one of the
major manufacturing plants of BHEL. The core business of HEEP includes design
and manufacture of large steam and gas turbines, turbo generators, hydro turbines
and generators, hydro turbines and generators, large AC/DC motors and so on.
Heavy Electrical Equipment Plant, Hardwar of this Multi-unit corporation with
7467 strong highly skilled technicians, engineers, specialists and professional
experts is the symbol of Indo Soviet and Indo German Collaboration. It is one of
the four major manufacturing units of the BHEL. With turnover of 164059 lacs and
PBT of Rs.32489 lacs HEEP added 3000 MW of power to the National grid during
2005-06.
HEEP is engaged in the manufacture of Thermal and Nuclear Sets up to
1000MW, Hydro Sets up to HT Runner dia 6300mm, associated Apparatus
Control gears, AC& DC Electrical machines and large size Gas Turbine of 60-
200 MW. HEEP Hardwar contributes about 44% of India’s total installed
capacity for power generation with total capacity of Thermal, Nuclear &
Hydro Sets of over 45000MW currently working at a Plant Load Factor of
76% and Operational Availability of 86%. Inspite of acute recession in
economy, BHEL Hardwar received recent orders for Mejia-5&6,Sipat,
Bhatinda, Chandrapura, Bakreshwar, Santaldih, Bhilai, Dholpur.

26
HISTORICAL PROFILE:-
The construction of heavy electrical equipment Plant commenced in
Oct.”1963”after indo- soviet technical co-operation agreement in
Sept.”1959”The first product to roll out from the plant was an electric motor
in January 1967.This was followed by first 100 MW Steam Turbine in
Dec.1969and first 100MW Turbo Generator in August 1971.The plant’s
“break even” was achieved in March 1974.BHEL went in for technical
collaboration with M/s Siemens, Germany to undertake design and
manufacture to large size thermal sets upto a unit rating of 1000 MW in the
year 1976.First 200 MWTG set was commissioned at Obra in 1977.The
continuum of technological advancement subsequently saw the
commissioning of 500 MW TG Set in 1984 .The technical cooperation of Gas
Turbine manufacture was also signed with M/s Siemens Germany.First 150
MW ISO rating gas Turbine was exported to Germany in Feb”1995”.Our 250
MW thermal set up at Dahanu Plant of BSES made a history by continuous
operation for over 150 days and notching up a record plant load factor
greater than 100%.

KEY COMPETITORS:-
Power Sector Giant of the World viz. Siemens Germany, ABB, General
electric of USA etc. are the major competitors of HEEP. All these are the
MNC’s and enjoy huge financial and R&D backup.

27
CORPORATE CITIZEN:-
HEEP Hardwars Strategic plans and its policy & strategy are commensurate
with BHEL Corporate / strategic Plan . As first PSU to adopt Corporate
Planning as a process . Board meetings for long –range development , BHEL
has always guided other PSU’s in their Corporate planning process .Board
meeting , monthly Management Committee meetings, Annual Revenue
Budget exercise , Mid term reviews , Apex TQ council reviews, Personnel
Heads Meet, Quality Heads Meet , Technology Meets , Product committees
meetings, Inter-Unit Quality Circle Meets etc. are the some of crore strengths
of BHEL Corporation’s vast network.

KEY CUSTOMERS AND SUPPLIERS :-

HEEP’s customer profile ranges from State Electricity Boards,Government Power

utilities like NTPC, NPC, NHPC to IPPs like Reliance Energy. HEEP has also
supplied Gas Turbine sets to overseas customers in Libya & Iraq. Power Sector
Regions of BHEL are its key internal customers. In view of expected market
scenario,BHEL has strategically decided that HEEP will concentrate on coal based
Higher Rating Thermal Sets for domestic market to fulfil the country’s vision of
adding 107,000 MW capacity to achieve ‘Power on Demand’ by 2012. Our key
customer, NTPC has drawn up plan for capacity addition of 20,000MW by 2012.
HEEP has planned for execution of 34,619MW by 2012.

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FAVOURABLE BUSINESS ENVIRONMENT:-
Power Sector has to grow over 10% annually to reach the 7% GDP level. Thus, the
demand for thermal sets will remain high. Central Electricity Authority (CEA) is
the guiding authority for Power Sector strategies in our country. BHEL
representatives, along with representatives from various domestic customers, are
an integral part of various committees formed by CEA. This enables us to guide
and understand the market requirements and future challenges. To meet the 11th
Five Year Plan target of adding 61,000MW, CEA has planned addition of 23 nos.
standardized 500MW sets for faster project execution and cost reduction. BHEL,
including HEEP, is a part of this process. CEA has standardized for the next
capacity of 800MW sets and has asked BHEL to prepare itself for manufacturing
and supply in the 11th Five Year Plan. BHEL has tied up with Siemens for
upgradation of technology. Further CEA’s stress on R&M of ageing Power Plants
is also providing business opportunity to unit.

MAJOR CHALLENGES:-
The favorable business scenario has given the unit a major challenge of
establishing Power Infrastructure of the country in close co-ordination with its key
customers. HEEP has committed itself to meet the country’s requirements. To cater
to the needs of higher rating sets of 800MW, HEEP has collaboration with
Siemens.
STRATEGIC CHALLENGES:-
• Key Business
• Cycle time reduction
• State of the art technology
• Cost reduction

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 • Operational
• Timely delivery
• Material cost reduction
• Productivity improvement
• Effective utilization of machines
• Human Resource
• Motivation of employees
• Skill & Knowledge management

MAJOR MILE STONES:-

1975 Job Redesign concept launched for FIRST time in India.

1978 well documented Suggestion Scheme launched.
1982 Launched Productivity Movement & Quality Circle. Concept
1993 of ISO 9001 quality System.
1995 Adopted EFQM model of TQM for achieving Business Excellence.
1997 BHEL one of the 9 PSE’s declared “Navratna” by Govt. of India .
1997 National Productivity Award for HEEP by the President of India.
1998 Certificate of Merit by National Productivity Council for Outstanding
Performance for 2nd consecutive year.
1998 Accreditation of U stamp.
1999 Accreditation of R Stamp from National Board of Boiler and Pressure
Vessel Inspector, USA .
1999 AD-Merkblatt HPO Recertification by RWTUV for Gas Turbine
Combustion Chambers
1999 INSAAN Award for Excellence in Suggestion for 9th consecutive

30
 year
1999 Launching of 5s concept
1999 PCRI recognized as Environmental Lab by Haryana State Board for
Prevention and Control of Pollution
1999 Accreditation of ISO 14001-Enviornment management system
2000 CII Site Visit for CII-EXIM Business Excellence Award-2000
2001 Top Management TQM Workshop at Rishikesh and HRDC
2001 INSAAN Award for excellence in Suggestion for 11th consecutive
Year
2001 Launching of QTM & RCA at HEEP Hardwar by CMD
2002 Launching of delivery Index, Turnover Index and Manufacturing
Index
2002 JBE Workshop of Apex TQM Group at Tehri to evolve Business
Policy
2003 Commendation for Strong Commitment to Excel in CII-EXIM
Bank Award
2004 Commendation for Significant Achievement in CIIEXIM
Bank Award.
2005 Award given by Institute of Cost and Works Accountants of
India for "Excellent Work in the field of Management
Accounting and Cost Concepts".

31
 INTRODUCTION

Performance appraisal is an important part of performance management. In itself it is not

performance management, but it is one of the ranges of tools that can be used to manage

performance. Because it is most usually carried out by line managers rather than HR

professionals, it is important that they understand their role in performance management and how

performance appraisal contributes to the overall aims of performance management.

The performance appraisal is often the central pillar of performance management. The

performance appraisal or review is essentially an opportunity for the individual and those

concerned with their performance – most usually their line manager to get together to engage in a

dialogue about the individual’s performance, development and the support required from the

manager. It should not be a top down process or an opportunity for one person to ask questions

and the other to reply. It should be a free flowing conversation in which a range of views are

exchanged. Performance appraisals usually review past behaviour and so provide an opportunity

to reflect on past performance. But to be successful they should also be used as a basis for

making development and improvement plans and reaching agreement about what should be done

in the future.

In many organizations - but not all - appraisal results are used, either directly or indirectly, to

help determine reward outcomes. That is, the appraisal results are used to identify the better

performing employees who should get the majority of available merit pay increases, bonuses,

and promotions.

32
This concept have get the recognition the evaluation of work performance, appraisal really dates

from the time of the Second World War - not more than 60 years ago, as a distinct and formal

management procedure were used in the evaluation of the work performance.

Later, the traditional emphasis on reward outcomes was progressively rejected as it took only

into consideration the material outcome but not the morale, enthusiasm, attitude ability and self-

esteem. 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.

Performance reviews help supervisors feel more honest in their relationships with their

subordinates and feel better about themselves in their supervisorial roles. Subordinates are

assured clear understanding of what's expected from them, their own personal strengths and areas

for development and a solid sense of their relationship with their supervisor. Avoiding

performance issues ultimately decreases morale, decreases credibility of management, decreases

the organization's overall effectiveness and wastes more of management's time to do what isn't

being done properly.

PERFORMANACE APPRASAL

ORIGIN OF PERFORMANCE APPRAISAL

The history of performance appraisal is quite brief. Its roots in the early 20th century can be

traced to Taylor's 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.

33
There is, says Dulewicz (1989), "... 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 others, including subordinates, naturally, informally and arbitrarily. The human

inclination to judge can create serious motivational, ethical and legal problems in the workplace.

Without a structured appraisal system, there is little chance of ensuring that the judgments made

will be lawful, fair, defensible and accurate.

Performance appraisal systems began as simple methods of income justification. That is,

appraisal was used to decide whether or not the salary or wage of an individual employee was

justified. The process was firmly linked to material outcomes. If an employee's performance was

found to be less than ideal, a cut in pay would follow. On the other hand, if their performance

was better than the supervisor expected, a pay rise was in order. 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

34
gradually recognized. The general model of performance appraisal, as it is known today, began

from that time.

CONCEPT OF PERFORMANCE 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 improvement and skills

development.

In many organizations - but not all - appraisal results are used, either directly or indirectly, to

help determine reward outcomes. That is, the appraisal results 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 performers who may require

some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay.

(Organizations need to be aware of laws in their country that might restrict their capacity to

dismiss employees or decrease pay.)

Performance appraisals are essential for the effective management and evaluation of staff.

Appraisals help develop individuals, improve organizational performance, and feed into business

planning. Formal performance appraisals are generally conducted annually for all staff in the

organization. Each staff member is appraised by his or her line manager (Directors are appraised

by the CEO, who is appraised by the chairman or company owners, depending on the size and

structure of the organization). Annual performance appraisals enable management and

monitoring of standards, agreeing expectations and objectives, and delegation of responsibilities

35
and tasks. Staff performance appraisals also establish individual training needs and enable

organizational training needs analysis and planning. Performance appraisals data feeds into

organizational annual pay and grading reviews, and coincides with the business planning for the

next trading year. Performance appraisals generally review each individual's performance against

objectives and standards for the trading year, agreed at the previous appraisal meeting.

Performance appraisals are also essential for career and succession planning. Performance

appraisals are important for staff motivation, attitude and behavior development, communicating

organizational aims, and fostering positive relationships between management and staff.

Performance appraisals provide a formal, recorded, regular review of an individual's

performance, and a plan for future development.

DEFINITION OF PERFORMANCE APPRAISAL

According to Dulewicz (1989),

"... A basic human tendency to make judgments about those one is working with, as well as

about oneself."

“Any system of determining how well an individual employee has performed during a period of

time, frequently used as a basis for determining merit increases.”

“Performance appraisal is a systematic review of a person’s work and achievements over a recent

period, usually leading to plans for the future. “

In its most basic form, performance appraisal (or review) activities include documenting

achieved results (hopefully, by also including use of examples to clarify documentation) and

indicating if standards were met or not. The appraisal

usually includes some form of a development plan to address insufficient performance.

36
In personnel psychology, this term is used for the evaluation of the performance of an employee

or a group measuring their contributions to the goals of the organization by Performance

appraisal is a systematic review of a person’s work and achievements over a recent period,

usually leading to plans for the future.

One phase of the annual performance management cycle is performance appraisal, the process of

reviewing employee performance, documenting the review, and delivering the review verbally in

a face-to-face meeting.

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.

Performance appraisals should be positive experiences. The appraisals process provides the

platform for development and motivation, so organizations should foster a feeling that

performance appraisals are positive opportunities, in order to get the best out of the people and

the process.

In certain organizations, performance appraisals are widely regarded as something rather less

welcoming ('bollocking sessions' is not an unusual description), which provides a basis only on

which to develop fear and resentment, so never, never, never use a staff performance appraisal to

handle matters of discipline or admonishment, which should instead be handled via separately

arranged meetings.

CONTROVERSY WITH PERFORMANCE APPRAISAL

Few issues in management stir up more controversy than performance appraisal.

37
There are many reputable sources - researchers, management commentators, and

psychometricians - who have expressed doubts about the validity and reliability of the

performance appraisal process. Some have even suggested that the process is so inherently

flawed that it may be impossible to perfect it.

At the other extreme, there are many strong advocates of performance appraisal. Some view it as

potentially "... the most crucial aspect of organizational life" (Lawrie, 1990).

Between these two extremes lie various schools of belief. While all endorse the use of

performance appraisal, there are many different opinions on how and when to apply it.

There are those, for instance, who believe that performance appraisal has many important

employee development uses, but scorn any attempt to link the process to reward outcomes - such

as pay rises and promotions.

This group believes that the linkage to reward outcomes reduces or eliminates the developmental

value of appraisals. Rather than an opportunity for constructive review and encouragement, the

reward-linked process is perceived as judgmental, punitive and harrowing.

For example, how many people would gladly admit their work problems if, at the same time,

they knew that their next pay rise or a much-wanted promotion was riding on an appraisal result?

Very likely, in that situation, many people would deny or downplay their weaknesses. Nor is the

desire to distort or deny the truth confined to the person being appraised. Many appraisers feel

uncomfortable with the combined role of judge and executioner.

Such reluctance is not difficult to understand. Appraisers often know their appraisees well, and

are typically in a direct subordinate-supervisor relationship. They work together on a daily basis

and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work

38
skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is

another.

The result can be resentment and serious morale damage, leading to workplace disruption,

soured relationships and productivity declines.

On the other hand, there is a strong rival argument, which claims that performance appraisal

must unequivocally be linked to reward outcomes.

The advocates of this approach say that organizations must have a process by which rewards -

which are not an unlimited resource - may be openly and fairly distributed to those most

deserving on the basis of merit, effort and results.

There is a critical need for remunerative justice in organizations. Performance appraisal -

whatever its practical flaws - is the only process available to help achieve fair, decent and

consistent reward outcomes.

BENEFITS OF APPRAISAL

Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and

correct existing problems, and to encourage better future performance. There are some benefits

of appraisal they are:

1- Motivation and Satisfaction

Performance appraisal can have a profound effect on levels of employee Motivation and

satisfaction - for better as well as for worse.

39
Performance appraisal provides employees with recognition for their work efforts. The power of

social recognition as an incentive has been long noted. In fact, there is evidence that human

beings will even prefer negative recognition in preference to no recognition at all.

If nothing else, the existence of an appraisal program indicates to an employee that the

organization is genuinely interested in their individual performance and development. This alone

can have a positive influence on the individual's sense of worth, commitment and belonging.

The strength and prevalence of this natural human desire for individual recognition should not be

overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if

more attention were paid to it. Regular performance appraisal, at least, is a good start.

2- Training and Development

Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for

a supervisor and subordinate to recognize and agree upon individual training and development.

Performance appraisal can make the need for training more pressing and relevant by linking it

clearly to performance outcomes and future career aspirations.

3- Recruitment and Induction

Appraisal data can be used to monitor the success of the organization's recruitment and induction

practices. For example, how well are the employees performing who were hired in the past two

years? Appraisal data can also be used to monitor the effectiveness of changes in recruitment

strategies. By following the yearly data related to new hires (and given sufficient numbers on

which to base the analysis) it is possible to assess whether the general quality of the workforce is

improving, staying steady, or declining.

40
4-Employee Evaluation

Though often understated or even denied, evaluation is a legitimate and major objective of

performance appraisal.But the need to evaluate (i.e., to judge) is also an ongoing source of

tension, since evaluative and developmental prioritiesappear to frequently clash. Yet at its most

basic level, performance appraisal is the process of examining and evaluating the performance of

an individual.

NEED OF PERFORMANCE APPRAISAL

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 standard 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 viewpoints 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

41
 (4) Reward me for doing well.

Organizational Viewpoint

From the organization's 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 causes of organizational failure is "non-

alignment of responsibility and accountability." Non-alignment occurs where employees are

given responsibilities and duties, 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 severely non-aligned system, 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

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 principal aims of performance appraisal

is to make people accountable. The objective is to align responsibility and accountability at every

organizational level.

42
 SCOPE & IMPORTANCE

SCOPE

This project report provide the details of the term “performance appraisal ” that is, How it came

into existence, its relevancy in the organization and for the employee, What all benefits it

provide, What process is followed for performance appraisal and to what extent it is efficient,

effective and satisfactory.

This report comprises of the issues, which make the 360-Degree Performance Appraisal a critical

Tool for organization, also it provide the suggestion that how it can work as effective tool for

performance evaluation in the industrial sector.

The researched had tried to view the things critically so as the suggestion can be proposed for the

issues which are up to the mark..

The scope of the report is that it can act as a base for taking some effective measures in respect

of issues, which are correlated to the organization performance appraisal.

IMPORTANCE

Performance appraisal is the process of evaluation the performances and qualification of the

employees in term of the requirement of the job which he is employed, for the purposes of

administration including placement selection for promotion, providing financial reward etc.

The present project report gives a real picture of organization. As well know that performance is

the key factors to productivity. I tried to analysis these techniques use researchers to improve the

method of the performance appraisal should be a continuous process and should be performed

with great care. The results can be used to modify that system and to fulfill the expectation of all

levels of management.

43
 LITERATURE REVIEW

The history of performance appraisal is quite brief. Its roots in the early 20th century can be

traced to Taylor's 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 a 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 world's second oldest profession!

There is, says Dulewicz (1989), "... a basic human tendency to make judgements 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 others, including subordinates, naturally, informally and arbitrarily.

The human inclination to judge can create serious motivational, ethical and legal problems in the

workplace. Without a structured appraisal system, there is little chance of ensuring that the

judgements made will be lawful, fair, defensible and accurate.

Performance appraisal systems began as simple methods of income justification. That is,

appraisal was used to decide whether or not the salary or wage of an individual employee was

justified. The process was firmly linked to material outcomes. If an employee's performance was

found to be less than ideal, a cut in pay would follow. On the other hand, if their performance

was better than the supervisor expected, a pay rise was in order. 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.

44
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.

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 improvement and skills

development.

Whether this is an appropriate use of performance appraisal - the assignment and justification of

rewards and penalties - is a very uncertain and contentious matter.

Few issues in management stir up more controversy than performance appraisal.

There are many reputable sources - researchers, management commentators, psychometricians -

who have expressed doubts about the validity and reliability of the performance appraisal

process. Some have even suggested that the process is so inherently flawed that it may be

impossible to perfect it

45
At the other extreme, there are many strong advocates of performance appraisal. Some view it as

potentially "... the most crucial aspect of organizational life" (Lawrie, 1990).

Between these two extremes lie various schools of belief. While all endorse the use of

performance appraisal, there are many different opinions on how and when to apply it.

There are those, for instance, who believe that performance appraisal has many important

employee development uses, but scorn any attempt to link the process to reward outcomes - such

as pay rises and promotions.

This group believes that the linkage to reward outcomes reduces or eliminates the developmental

value of appraisals. Rather than an opportunity for constructive review and encouragement, the

reward-linked process is perceived as judgmental, punitive and harrowing.

Many appraisers feel uncomfortable with the combined role of judge and executioner.Such

reluctance is not difficult to understand. Appraisers often know their appraisees well, and are

typically in a direct subordinate-supervisor relationship. They work together on a daily basis and

may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work

skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is

another.

The result can be resentment and serious morale damage, leading to workplace disruption,

soured relationships and productivity declines.

On the other hand, there is a strong rival argument which claims that performance appraisal must

unequivocally be linked to reward outcomes. There is a critical need for remunerative justice in

46
organizations. Performance appraisal - whatever its practical flaws - is the only process available

to help achieve fair, decent and consistent reward outcomes.

It has also been claimed that appraisees themselves are inclined to believe that appraisal results

should be linked directly to reward outcomes - and are suspicious and disappointed when told

this is not the case. Rather than feeling relieved, appraisees may suspect that they are not being

told the whole truth, or that the appraisal process is a sham and waste of time.

The Link to Rewards

Research (Bannister & Balkin, 1990) has reported that appraisees seem to have greater

acceptance of the appraisal process, and feel more satisfied with it, when the process is directly

linked to rewards. Such findings are a serious challenge to those who feel that appraisal results

and reward outcomes must be strictly isolated from each other.

There is also a group who argues that the evaluation of employees for reward purposes, and

frank communication with them about their performance, are part of the basic responsibilities of

management. The practice of not discussing reward issues while appraising performance is, say

critics, based on inconsistent and muddled ideas of motivation.

In many organizations, this inconsistency is aggravated by the practice of having separate wage

and salary reviews, in which merit rises and bonuses are decided arbitrarily, and often secretly,

by supervisors and managers. Yearly performance reviews are critical. Organization's are hard

pressed to find good reasons why they can't dedicate an hour-long meeting once a year to ensure

the mutual needs of the employee and organization are being met. Performance reviews help

supervisors feel more honest in their relationships with their subordinates and feel better about

47
themselves in their supervisor roles. Subordinates are assured clear understanding of what's

expected from them, their own personal strengths and areas for development and a solid sense of

their relationship with their supervisor. Avoiding performance issues ultimately decreases

morale, decreases credibility of management, decreases the organization's overall effectiveness

and wastes more of management's time to do what isn't being done properly.

METHODS OF APPRAISAL

Performance appraisal is defined as evaluating an employee’s current or past performance

relative to his or her performance standards. Performance appraisal is a very important part of

every organization in terms of measuring the progress of and developing employees into the type

of people that the organization wants on its staff.

There are many different ways to measure performance, each of which have certain strengths and

weaknesses.The approaches to appraisal can be classified into :

1-Past-oriented method

2-Future oriented method

Various Types of Appraisal Techniques

(A)-Past-oriented methods

1-Graphic Rating Scale

The graphic rating scale is the simplest, and most widely used technique for appraising

employee performance. This method is performed by assigning a rating for an employee for each

of several different traits such as dependability, initiative output, attendance, attitude, co-

operation etc. Each scale ranges from excellent to poor. The rater checks the appropriate

48
performance level on each criterion,then computes the employee total numerical score. The

number of points scored may be linked to salary increases whereby so many points equal a rise

of some percentage.

Advantages

The advantage of the graphic rating scale is that it is quick, and simple to use. There is very

little thought required on the part of the supervisor. The supervisor simply decides how well

each employee performs relative to each trait, and assigns a rating. No explanations, or specific

examples are required. It takes very little time so the supervisor can do many reviews in a

relatively short period of time.

Disadvantages

Unclear Standards: The rating scale may be too open to interpretation.

The Halo Effect: If a supervisor perceives an employee as doing poorly in one area, the

supervisor may tend to rate the employee low in all areas.

Central Tendency: The tendency of a supervisor to rate all employees as average.

Strictness/Leniency: This has about the same effect as central tendency. The supervisor ranks

all of the employees high, or all of them as low.

Bias: This is something that all supervisors need to be aware of when appraising the

performance of their employees. This is when the supervisor allows individual factors such as

age, race, and gender to affect ratings of certain employees.

2-Alternation Ranking Method

The alternation ranking method is when the supervisor pools all the employees together, and

picks the best employee, then the worst, and keeps going back and forth until all the employees

are ranked best to worst.

49
Advantages/Disadvantages

This method avoids central tendency because some employees have to be ranked high, while

others have to be low. The disadvantage is that it may be unfair because maybe all the

employees are doing fine, but somebody has to be at the bottom, even though the difference

between the top and bottom employee may not be a very wide gap. This method may also create

a rift between the employees, and that never makes for a good work environment.

3-Paired Comparison Method

This method compares each employee to all other employees on how well they perform each

trait. Each employee is put on a chart that represents one trait. Then one employee is rated

better than, or worse than all of the rest of the employees until a comparison is made of how well

that one employee performs relative to each of the other employees.

Advantages/Disadvantages

This is a good method that gives concrete evidence as to how well an employee does compared

to all other employees in the office. The problem would be that it would take a great deal of time

if there are many employees to compare, and many traits to judge them on. If one supervisor is

in charge of 25 employees and has to judge them on 15 different traits, this method would be

very time consuming.

4-Forced Distribution Method

This method, I’ve found in my research, is a very controversial way of appraising performance.

In this method, all employees are rated, perhaps using a graphic rating scale or similar methods,

and the ratings are added together to come up with an overall rating. Then, the employees are

placed into categories. For instance, the top 15% of the employees are considered high

performers, the next 20% are considered high-average performers, the middle 30% are the

50
average performers, the next 20% are the low-average performers, and the bottom 15% are

considered the low performers. This scale often results in the low performers being fired, and

puts pressure on the low-average performers to either get better, or they will be fired at the end

of the next review period.

Advantages/Disadvantages

The advantage to this method is that there is no central tendency, strictness, or leniency. All of

the people are grouped into very concrete and definitive categories. You have your best,

average, and worst employees. The disadvantage is where do you put the cutoff line? Should

you fire the bottom 10% or the bottom 15%? What happens when the cutoff line comes directly

between two people who have the same rating? Should you keep one person who outscores

another person by a mere one point? This method can get very messy. I will discuss this at more

length later on in this website.

5-Behaviorally Anchored Rating Scale (BARS)

Sometimes this is called behavioural expectation scales, are rating scales whose scales are

determined by statements of effective and ineffective behaviours.They are said to be

behaviourally anchored in that the scales represent a range of descriptive statements of behaviour

varying from the least to the most effective .The rater must indicate which behaviour on each

scale best describes an employee’s performance.

Advantages/Disadvantages

This provides a very accurate way to rate an employee. The supervisor can usually tell what an

employee would do in a certain situation, and has “anchors” to compare the employee to. The

disadvantage is that the scale would be difficult to develop. It would be difficult to decide on an

51
incident that would justify each ranking on the scale. It is also difficult to develop for positions

with varying responsibility.

6-Critical Incident Method

In this method, the supervisor keeps a record of uncommonly good and uncommonly undesirable

incidents that happen over the course of the review period. At the end of the period, the

supervisor and employee sit down and discuss each incident at length so the employee can get an

idea of what the supervisor likes and dislikes about the job that was performed.

Advantages/Disadvantages

The advantage to this method is that the supervisor has specific incidents to judge performance

by. Rather than saying something vague like, “I think your customer service skills are overall

pretty good,” this supervisor can bring up something more specific to justify why he or she

thinks the employee’s customer service skills are good. The disadvantage is that there is really

no way to compare the employees to one another because the critical incidents are going to be

different for each person. The supervisor can’t compare apples to apples.

7-Field Review Method

This is an appraisal by someone outside the assesee’s own department usually some one from the

corporate office or the HR department. The outsider reviews employee records and holds

interviews with the rate and his or her superior. The method is primarily used for make

promotional decision at the managerial level.

(B) Future-oriented appraisals

1-Management by Objectives Method (MBO)

The Management by Objectives Method involves setting specific goals with each employee and

at the end of the review period the manager and employee review what progress is made. These

52
goals represent specific, and measurable targets, meaning that these goals cannot be vague.

There are six steps involved in MBO: Setting organizational goals; Setting departmental goals;

Discussing departmental goals; Defining expected results; Performance reviews; and Providing

feedback.

Advantages/Disadvantages

The advantage is that MBO is tied to jointly agreed-upon performance objectives. In other

words, the review process means looking at the goals that were set, and asking if the employee

met those goals. The disadvantage is that MBO is very time consuming. The organization and

the department have to be on the same page with respect to the goals that both are trying to

achieve. It is also a very time-consuming process to come up with goals for each individual

employee. MBO also doesn’t work well for employees who have little discretion over how their

jobs are performed. 3, 4

2-Psychological appraisals

Large organizations employ full-time industrial psychologists.When psychologists are used for

evaluations, they assess an individual’s future potential and not past performance. The appraisal

normally consists of in-depth evaluations. The psychologist then writes an evaluation of the

employee’s intellectual, emotional, motivational and other work-related characteristics that

suggest individual potential and may predict future performance.

MEANING OF 360° PERFORMANCE APPRAISAL

360° appraisals are a powerful developmental method and quite different to traditional manager-

subordinate appraisals (which fulfill different purposes). As such a 360° process does not replace

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the traditional one-to-one process - it augments it, and can be used as a stand-alone development

method. Its commonly called as “360 Degree Feedback..”

The individual first completes a self assessment, rating themselves over a serious of specific

behaviors. They then select a number of working colleagues and categories as e.g. Manager,

Colleague, and Team Member. Each selected person then assesses the individual for their current

performance under the same series of behaviors using a simple rating scale mechanism.

The feedback is then summarized and collated for the individual as a series of reports. Each

report is designed to emphasize a different aspect of the feedback e.g. Strengths, Development

Areas, Opinion Differences.

Once the individual has received the report they are in a position to identify which behaviors are

seen as in need of improvement and to choose appropriate development actions.

360 degree respondents can be the appraisee's peers, up-line managers/execs, subordinate staff,

team members, other staff, customers, suppliers - anyone who comes into contact with the

appraisee and has opinions/views/reactions of and to the appraisee.

360-degree feedback system is developed on the basis of the requirements of the organization by

running a half-day or full day workshop (depending on extent and complexity of the required

process) involving the appraisees or a sample group, during which process and materials can be

created and provisionally drafted. The participative workshop approach as ever will give you

something that's wholly appropriate and 'owned' instead of something off-the-shelf or adapted,

which would be arbitrary, mostly inappropriate and impracticable (in terms of criteria and

process), and 'not invented here', i.e., imposed rather than owned.

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It would recommend against restricting the 360 feedbacks to peers and managers only - it's a

waste of the potential of the 360-degree appraisal method. To use the feedback process for its

fullest '360 degree' benefit involve customers (in the broadest sense - could be patients, students,

users, depending on the organization), staff, suppliers, inspectors, contractors, and others for

whom good working relationships and understanding with the appraisee affect overall job

performance, quality, service, etc.

Developing 360 degree appraisals systems process make ideal subjects for a workshops, which in

itself contains some very helpful developmental benefits and experience for all involved. If

you're not able to get everyone together for a workshop you should solicit input and ideas -

particularly about appraisal criteria and respondents and anonymity - then draft out process and

materials - then issue for approval, then pilot, review, adapt and then implement. Adapt, improve

and develop on an ongoing basis.

If 360 degree feedback results are to be analysed collectively to indicate the overall/total

situation (ie., to assist in determining organizational training and development needs for

instance), think carefully about the feedback form scoring system and particularly its suitability

for input to some sort of analysis tool, which could be a spreadsheet, and therefore numerically

based requiring numerical scores, rather than words, (words of course are more difficult to count

and measure, and while words and description assessment enables more subtlety, they also allow

more room for misunderstanding and misinterpretation).

DEFINITION OF 360-DEGREE PERFORMANCE APPRAISAL

“360° appraisal is a proven method of helping individuals reviews their performance

through the eyes of their working colleagues.”

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360° appraisals involve the appraisee receiving feedback from people (named or anonymous)

whose views are considered helpful and relevant. The feedback is typically provided on a form

showing job skills/abilities/attitudinal/behavioral criteria and some sort of scoring or value

judgment system. The appraisee should also assess himself or herself using the same feedback

instrument or form.

360 appraisals are often used as a support aid for management development training.

Managers can use the 360 report to focus on areas of the course which have been highlighted by

colleagues.

“360° appraisal is also highly effective as a self-development tool as it provides managers

with key information, which they would otherwise find hard to obtain.”

Since the manager's involvement in the process is maximised, 360° performance appraisal is

experienced as a convivial, effective and non-threatening solution.

It allows progress to be monitored over the course of time. In order to derive the full benefit of

the process, a high quality support to each participant should be included in its implementation.

ADVANTAGES AND DISADVANTAGES OF 360-DEGREE

PERFORMANCE APPRAISALS

ADVANTAGES
1. Provides a more comprehensive view of employee performance.

2. Increases credibility of performance appraisal.

3. Feedback from peers enhances employee self-development.

4. Increases accountability of employees to their customers.

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 5. The combination of opinions can approximate to an 'accurate' view

6. Comments expressed by several colleagues tend to carry weight

7. Peers and staff, not by manager alone, best judge some skills

8. Feedback may be motivating for people who undervalue themselves

9. The wider involvement help to engender a more honest organizational culture.

10. Improves employee performance

11. Strengthens relationships

12. Focuses employees on performance related factors.

DISADVANTAGES

1. Time consuming and more administratively complex.

2. Extensive giving and receiving feedback can be intimidating to some

employees.

3. Requires training and significant change effort to work effectively.

4. Can be administratively burdensome

5. Results can be difficult to interpret

6. Feedback can be damaging unless handled carefully and sensitively

7. Can generate an environment of suspicion and cynicism if not managed openly and

honestly.

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 REASONS FOR ADOPTING 360-DEGREE FEEDBACK

A key purpose driving the present use of 360 degree feedback is the desire to further

management or leadership development. Providing feedback to managers about how they are

viewed by direct subordinates, peers, and customers/clients should prompt behaviour change.

Many managers have not received as much honest feedback as is necessary for an accurate self-

perception. When anonymous feedback solicited from others is compared with the manager's

self- evaluations, the manager may form a more realistic picture of his or her strengths and

weaknesses. This may prompt behaviour change if the weaknesses identified were previously

unknown to the manager, especially when such change is encouraged and supported by the

organization.

Other potential benefits of 360 degree initiatives are targeted ultimately toward organisational

change and improvement. By increasing managerial self-awareness through formalized 360

degree or upward feedback, an organisation's culture will become more participatory and will be

able to react more quickly to the needs of internal and external customers. This should ultimately

lead to increasing levels of trust and communication between managers and their constituents,

fewer grievances, and greater customer satisfaction.

In addition to the logical, performance-based reasons for pursuing a 360 degree feedback

program, at least three other reasons account for its proliferation.

BASICS OF CONDUCTING PERFORMANCE APPRAISALS

Yearly performance reviews are critical. Organizations are hard pressed to find good reasons

why they can't dedicate an hour-long meeting once a year to ensure the mutual needs of the

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employee and organization are being met. Performance reviews help supervisors feel more

honest in their relationships with their subordinates and feel better about themselves in their

supervisoral roles. Subordinates are assured clear understanding of what's expected from them,

their own personal strengths and areas for development and a solid sense of their relationship

with their supervisor. Avoiding performance issues ultimately decreases morale, decreases

credibility of management, decreases the organization's overall effectiveness and wastes more of

management's time to do what isn't being done properly. Conduct the following activities.

1. Design a legally valid performance review process; consider these legal requirements of

the performance review process: Patricia King, in her book, Performance Planning and

Appraisal, states that the law requires that performance appraisals be: job-related and valid;

based on a thorough analysis of the job; standardized for all employees; not biased against any

race, color, sex, religion, or nationality; and performed by people who have adequate knowledge

of the person or job. Be sure to build in the process, a route for recourse if an employee feels he

or she has been dealt with unfairly in an appraisal process, e.g., that the employee can go to his

or her supervisor's supervisor. The process should be clearly described in a personnel policy.

2. Design a standard form for performance appraisals, and include the name of the employee,

date the performance form was completed, dates specifying the time interval over which the

employee is being evaluated, performance dimensions (include responsibilities from the job

description, any assigned goals from the strategic plan, along with needed skills, such as

communications, administration, etc.), a rating system (e.g., poor, average, good, excellent),

space for commentary for each dimension, a final section for overall commentary, a final section

for action plans to address improvements, and lines for signatures of the supervisor and

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employee. Signatures may either specify that the employee accepts the appraisal or has seen it,

depending on wording on the form.

3. Schedule the first performance review for six months after the employee starts

employment. Schedule another six months later, and then every year on the employee's

anniversary date.

4. Initiate the performance review. Tell the employee that you're initiating a scheduled

performance review. Remind them of what's involved in the process. Schedule a meeting about

two weeks out.

5. Have the employee suggest any updates to the job description and provide written input

to the appraisal. Have them record their input concurrent to the your recording theirs. Have

them record their input on their own sheets (their feedback will be combined on the official form

later on in the process). You and the employee can exchange each of your written feedback in the

upcoming review meeting. (Note that by now, employees should have received the job

descriptions and goals well in advance of the review, i.e., a year before. The employee should

also be familiar with the performance appraisal procedure and form.)

6. Record your input to the appraisal -- always reference the job description and associated

formal goals for basis of review. Be sure you are familiar with the job requirements and have

sufficient contact with the employee to be making valid judgments. Don't comment on the

employee's race, sex, religion, nationality, or a handicap or veteran status. Record major

accomplishments, exhibited strengths and weaknesses according to the dimensions on the

appraisal form, and suggest actions and training or development to improve performance.Always

address behaviors, not characteristics of personalities.

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7. Hold the performance appraisal meeting. State the meeting's goals of exchanging feedback

and coming to action plans, where necessary. In the meeting, let the employee speak first and

give their input. Respond with your own input. Then discuss areas where you disagree. Attempt

to avoid defensiveness; admitting how you feel at the present time, helps a great deal. Discuss

behaviors, not personalities. Avoid final terms such as "always," "never," etc. Encourage

participation and be supportive. Come to terms on actions, where possible. Try to end the

meeting on a positive note.

8. Update and finalize the performance appraisal form. Add agreed-to commentary on to the

form. Note that if the employee wants to add attach written input to the final form, he or she

should be able to do so. The supervisor signs the form and asks the employee to sign it. The form

and its action plans are reviewed every few months, usually during one-on-one meetings with the

employee.

9. Note that if the supervisor has been doing a good job supervising, then nothing should be

surprising to the employee during the appraisal. Any performance issues should have been

conveyed when they occurred, so nothing should be a surprise in the review meeting.

TECHNIQUES OF PERFORMANCE AND APTTITUDE ASSESSMENTS

All of these performance assessment methods can be used in conjunction with others in the list,

depending on situation and organizational policy.

 Formal annual performance appraisals

 Probationary reviews

 Informal one-to-one review discussions

 Counseling meetings

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  Observation on the job

 Skill- or job-related tests

 Assignment or task followed by review, including secondments (temporary job cover or

transfer)

 Assessment centres, including observed group exercises, tests presentations, etc.

 Survey of opinion of others who have dealings with the individual

 Psychometric tests and other behavioral assessments

 Graphology (handwriting analysis)

Where any of these processes is used, the manager must keep a written record, and must ensure

agreed actions are followed up. The notes of all review situations can then be referred to at the

formal appraisal.

Holding regular informal one-to-one review meetings greatly reduces the pressure and time

required for the annual formal appraisal meeting.

PERFORMANCE APPRAISALS PROCESS

1. Prepare – Prepare all materials, notes agreed tasks and records of performance,

achievements, incidents, reports etc - anything pertaining to performance and

achievement - obviously include the previous performance appraisal documents and a

current job description. A good appraisal form will provide a good natural order for

proceedings, so use one. If your organization doesn't have a standard appraisal form then

locate one, or use the template below to create one, or download the new performance

appraisal form from the free resources section. Organize your paperwork to reflect the

order of the appraisal and write down the sequence of items to be covered. If the

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 appraisal form includes a self assessment section and/or feedback section ensure this is

passed to the appraisee suitably in advance of the appraisal with relevant guidance for

completion. A sample performance appraisal template is available free below, which you

can use as is or adapt to create your own form.

2. Inform - Inform the Appraisee - ensure the appraisee is informed of a suitable time and

place (change it if necessary), and clarify purpose and type of appraisal - give the

appraisee the chance to assemble data and relevant performance and achievement records

and materials. If the appraisal form does not imply a natural order for the discussion then

provide an agenda of items to be covered.

3. Venue - Ensure a suitable venue is planned and available - private and free from

interruptions - observe the same rules as with recruitment interviewing - avoid hotel

lobbies, public lounges, canteens - privacy is absolutely essential (it follows also that

planes, trains and automobiles are entirely unsuitable venues for performance appraisals).

4. Layout - Room layout and seating are important elements to prepare also - don't simply

accept whatever layout happens to exist in a borrowed or hired room - layout has a huge

influence on atmosphere and mood - irrespective of content, the atmosphere and mood

must be relaxed and informal - remove barriers - don't sit in the boss's chair with the other

person positioned humbly on the other side of the desk; you must create a relaxed

situation, preferably at a meeting table or in easy chairs - sit at an angle to each other, 90

degrees ideally - avoid face to face, it's confrontational.

5. Introduction - Relax the appraisee - open with a positive statement, smile, be warm and

friendly - the appraisee may well be terrified; it's your responsibility to create a calm and

non-threatening atmosphere. Set the scene - simply explain what will happen - encourage

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 a discussion and as much input as possible from the appraisee - tell them it's their

meeting not yours. Confirm the timings, especially finishing time. If helpful and

appropriate begin with some general discussion about how things have been going, but

avoid getting into specifics, which are covered next (and you can say so). Ask if there are

any additional points to cover and note them down so as to include them when

appropriate.

6. Review and measure - Review the activities, tasks, objectives and achievements one by

one, keeping to distinct separate items one by one - avoid going off on tangents or vague

unspecific views. If you've done your preparation correctly you will have an order to

follow. If something off-subject comes up then note it down and say you'll return to it

later (and ensure you do). Concentrate on hard facts and figures, solid evidence - avoid

conjecture, anecdotal or non-specific opinions, especially about the appraisee. Being

objective is one of the greatest challenges for the appraiser - as with interviewing, resist

judging the appraisee in your own image, according to your own style and approach -

facts and figures are the acid test and provide a good neutral basis for the discussion, free

of bias and personal views. For each item agree a measure of competence or achievement

as relevant, and according to whatever measure or scoring system is built into the

appraisal system. This might be simply a yes or no, or it might be a percentage or a mark

out of ten, or an A, B, C. Reliable review and measurement requires reliable data - if you

don't have the reliable data you can't review and you might as well re-arrange the

appraisal meeting. If a point of dispute arises, you must get the facts straightened out

before making an important decision or judgment, and if necessary defer to a later date.

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7. Agree an action plan - An overall plan should be agreed with the appraisee, which

should take account of the job responsibilities, the appraisee's career aspirations, the

departmental and whole organization's priorities, and the reviewed strengths and

weaknesses. The plan can be staged if necessary with short, medium and long term

aspects, but importantly it must be agreed and realistic.

8. Agree specific objectives - These are the specific actions and targets that together form

the action plan. As with any delegated task or agreed objective these must adhere to the

SMARTER rules - specific, measurable, agreed, realistic, time-bound, enjoyable,

recorded. If not, don't bother. The objectives can be anything that will benefit the

individual, and that the person is happy to commit to. When helping people to develop,

you are not restricted to job-related objectives, although typically most objectives will be.

9. Agree necessary support - This is the support required for the appraise to achieve the

objectives, and can include training of various sorts (external courses and seminars,

internal courses, coaching, mentoring, secondment, shadowing, distance-learning,

reading, watching videos, attending meetings and workshops, workbooks, manuals and

guides; anything relevant and helpful that will help the person develop towards the

standard and agreed task. Be careful to avoid committing to training expenditure before

suitable approval, permission or availability has been confirmed - if necessary discuss

likely training requirements with the relevant authority before the appraisal to check.

10. Invite any other points or questions - Make sure you capture any other concerns.

11. Close positively - Thank the appraisee for their contribution to the meeting and their

effort through the year, and commit to helping in any way you can.

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 12. Record main points, agreed actions and follow-up - Swiftly follow-up the meeting

with all necessary copies and confirmations, and ensure documents are filed and copied

to relevant departments.

PERFORMANCE APPRAISAL FORM TEMPLATE

This performance appraisal template has been specially developed to adapt for your own

situation. For many situations the example will serve perfectly well without amending.

Obviously you'll need to create a bit of space for the answers to the questions. Here is a

performance appraisal form in MSWord format. These forms are based on the template below.

360-degree feedback form template- This template allows a mixture of key skills comprising

one, two, three, four, and up to six elements. The number of elements per key skill/capability

varies of course, so if necessary adjust the size of the boxes in the first column accordingly to

accommodate more or less elements.

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Insert your own Feedback Form headings and instructions: Appraisee Name, Date,
Feedback Respondent Name, position (if applicable) plus local instructions and guidelines
for completion, etc.

Keyskill/Capabil Skill/Capabili Question

Feedback Question Feedback Score
ity area ty element Number

1
2
3
4
5
6
7
8
9
10
11
12
13
14

Table-1

The process of designing the feedback document (essentially a questionnaire) is to build it from

the role's key skill areas: break these down into elements, and measure each via carefully worded

questions, which the respondents answer and thereby grade the performance, ie., give feedback

in respect of the person in question.

The question as to anonymity of respondents is up to you. A grown-up organization with grown-

up people should be able to cope with, and derive more benefit from, operating the process

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transparently - but you need to decide this. Some people are happier giving feedback

anonymously. And some people are not able to deal particularly well with criticism from a

named person.

CRITICAL ASPECT OF PERFORMANCE APPRAISAL

• Conflicting Intra-Individual Goals

• Conflicting Individual and Organizational Goals

• Managers often resist (passively or actively)

• May have limited contact with subordinate; may be poor at giving feedback

• Subordinates poor at receiving feedback

• Managers often view it as wasted paperwork, especially if nothing comes of their efforts

• Interfere with their "coaching" function they prefer

• Managers fear the emotions that can be unleashed; may fear not being able to defend

ratings

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MAKE PERFORMANCE APPRAISAL RELEVANT

Performance appraisal programs can be made considerably more effective if management will fit

practice to purpose when setting goals and selecting appraisal techniques to achieve them. It

presents a catalog of the strengths and weaknesses of nine of these techniques; then it shows how

they can be used singly and in combination with different performance appraisal objectives. It

maintains that if management will undertake this matching effort, many familiar pitfalls of

appraisal programs can be avoided.

These frequently voiced goals of performance appraisal programs underscore the

importance of such programs to any ongoing business organization:

• Help or prod supervisors to observe their subordinates more closely and to do a better

coaching job.

• Motivate employees by providing feedback on how they are doing.

• Provide back-up data for management decisions concerning merit increases, transfers,

dismissals, and so on.

• Improve organization development by identifying people with promotion potential and

pin-pointing development needs.

• Establish a research and reference base for personnel decisions.

It has been estimated that over three fourths of U.S. companies now have performance appraisal

programs. In actual practice, however, formal performance appraisal programs have often

yielded unsatisfactory and disappointing results, as the growing body of critical literature attests.

Some critics even suggest that abandon performance appraisal as a lost hope, and they point to

scores of problems and pitfalls as evidence.

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But considering the potential of appraisal programs, the issue should not be whether to scrap

them; rather, it should be how to make them better. One reason for failures is that companies

often select indiscriminately from the wide battery of available performance appraisal techniques

without really thinking about which particular technique is best suited to a particular appraisal

objective.

REASONS WHICH FAIL PERFORMANCE APPRAISAL

• Uncouple Evaluation and Development: Many appraisal systems inadvertently force

the mixing of the roles of judge and helper. The open problem-solving dialogue required

for building a relationship and developing subordinates should be scheduled at a different

time than the meeting in which the supervisor informs the subordinate about his/her

overall evaluation and its implications for important rewards.

• Choose Appropriate Performance Data: The behavior rating scale, the critical-incident

methods, and various MBO techniques usefully guide the appraisal discussion toward

reviewing specific task behaviors or accomplishments -- feedback which is both less

threatening and more helpful to the person who wants to improve performance. A

comprehensive performance management system might include MBO and behavioral

ratings--which are, respectively, a means of managing the what and how of employee

task-related behaviors.

• Separate Evaluations of Performance and Potential: Current performance, as

measured by the attainment of results, is not necessarily correlated with potential for

promotion. Separation of assessments of performance and potential mitigates against the

superior's averaging his/her unconscious assessment of these qualities and increases the

likelihood of a constructive, non-defensive dialogue.

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• Recognize Individual Differences in System Design: Persons differ in their needs for

performance evaluation and development, e.g., persons high in "nAch" may require more

frequent performance feedback. Within permissible bounds, appraisal policies should

permit managers to use different methods depending on the particular employee being

appraised.

• Upward Appraisal: One way to mitigate the inhibitions of the superior-subordinate

power imbalance is to ask subordinates to appraise their supervisor; this allows

influencing their environment, and may increases motivation to enter the appraisal

process openly; provides the supervisor an opportunity to "model" the non-defensive

behavior essential to a real dialogue.

• Self-Appraisal: Experiences with self-appraisal suggests that it often results in lower

ratings than the supervisor would have given. hence, the inclusion of self-appraisal before

their the coaching or evaluation interview is likely to result in a more realistic rating and

a greater acceptance of the final rating by both ratee and rater.

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TYPES OF RESEARCH

There are the following types of research, which are as follows.

1. Descriptive vs. Analytical: Descriptive research includes surveys and fact-finding

enquiries of different kinds. The majors’ purpose of descriptive research is description

the set of affairs it exists at present. In analytical research, on the other hand, the research

has to use facts or information already available, and analyze these to use fact or

information already available, and analyze these to make a critical evaluation of material.

2. Applied vs. Fundamental: Research can either be applied research or fundamental

research. Applied research aims at finding a solution for an immediate problem facing a

society or and industrial / Business origination, Whereas Fundamental research is mainly

concern with generalization and with the formulation of a theory.

3. Quantitative vs. Qualitative: Quantitative research is based on the measurement of

quantity or amount. It is applicable to phenomena that can be expressed in terms of

quantity. Qualitative research, on the other hand is concerned with Qualitative

phenomenon, that is, phenomenon relating to or involving quality or kind.

4. Conceptual vs. Empirical: Conceptual research is that related some abstract idea or

theory. It is generally used by philosophers and thinkers to develop new concepts or to

reinterpret existing ones.

On the other hand, Empirical research realizes on experience or observation alone, often without

due regard for system and theory. It is a data based research.

RESEARCH DESIGN

“A research design is the arrangement of conditions for collection and analyses of data in a

manner that aims to combined relevance to the research purpose with economy in procedure”. In

72
fact, the research design is the conceptual structure within which research is conducted; it is

constitute the blue print for the collection, measurement and analyses of data.

DATA SOURCES

The task of data collection begins after a research problem has been defined and research

design/plan chalked out. While deciding about the method of data collection to be used for study,

the researcher should keep in mind two types of data.

1. Primary data

2. Secondary data

1. Primary data: These data are collected afresh & for the first time and thus happen to be

original in character.

2. Secondary data: These data are already collected by someone else and which have already

been passed through the statistical process. The researcher would have to decide which sort of

data he would be using for his study and accordingly he will have to select one or other method

of data collection.

Collection of Primary data

We collect primary data during the course of doing experiments in an experimental research but

in case we do research of the descriptive nature and perform surveys, whether sample survey or

census surveys, then we can obtain primary datas either through observation or through personal

interviews. This in other words means that there are several other methods of collecting data,

particularly in surveys & descriptive researches. Important ones are:

1. Observation method

2. Interview method

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 3. Through questionnaire

4. Through schedules

5. Other methods

Collection of secondary data

Secondary data means data that are already available i.e.; they refer to data, which have already

been collected and analyzed by someone else. When the researcher utilizes secondary data, then

he has to look into various sources from where he can obtain them. In this case he is certainly not

confronted with the problems that are usually associated with the collection of original data.

Secondary data may either be published data or unpublished data. Usually published data are

available in:

• Various publications of central, state and local governments

• Various publications of foreign governments or of international bodies and their

subsidiary organizations

• Technical and trade journals

• Books, magazines and newspapers etc

• Reports and publication of various associations connected with business and industry,

banks, stock exchanges etc.

• Reports prepared by research scholars, universities, economists etc

• Public records and statistics, historical documents

Our project is based on secondary data also which we have collected from various sources-

• Websites

• Journals

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In this research project, secondary data were used. Magazines, journals, were consulted to fetch

the information about Venture Capital in India. Research project is also based on the information

collected from various websites and e-links

In my study I used the descriptive v/s analytical research and my sample size is 50.

I use the primary & secondary data in this report.

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 FINDING ANALYSIS

Question 1: Are you satisfied by the performance appraisal process of your organization?

HYPOTHESIS
Ho-There is no significant difference between the satisfaction level of employees in the B.P.S.L
before & after the performance appraisal process.
H1-There is significant difference between the satisfaction level of employees in the B.P.S.L
before & after the performance appraisal process.

Sr. No. Grade %of Person

A Yes 40
B No. 60

Table-2

60
50
40
30 YES
20 NO
10
0
YES NO

Figure-2

INTERPRETATION: From the study it is found that 35% of the total employers are not
satisfied with the technique used by the company for measured the performance of employees.
Out of remaining 20 employers, 15 are satisfied and 5 don’t have any idea of these techniques
and they are answerless.
Since the value of Z calculated (10.88) is greater than Zα =1.64,so
Null hypothesis cannot be accepted. Hence we can say that there is significant difference
between the satisfaction level of employees in the B.P.S.L before & after the performance
appraisal process.

Question 2: After the measurement of the performance appraisal did you provide any promotion

or salary increment?

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 SL.No. Grade %of

Person
A Yes 60
B No. 40

Table-3

60

50

40

30 YES
NO
20

10

0
YES NO

Figure-3

INTERPRETATION:

After the calculation of results 30% of the employers feel that after the performance appraisal

there is higher chances of promotion & salary increment. It show that the performances appraisal

is beneficial for the employees and 20 of employer gave a negative response.

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Question 3: Did you face any biasness during the appraisal process ?

SL.No. Grade %of Person

A Never 15
B Almost none 5
C Many times 50
D Sometimes 30

Table-4

50
45
40
35
30 NEVER
25
ALMOST NONE
20
15 MANY TIMES
10 SOMETIMES
5
0
NEVER MANY
TIMES

Figure-4

INTERPRETATION:

After analysis of data 25 of the employer believe that the biasness is seen while doing the

appraisal while 15% of employers fell that there is some biasness during the appraisal. 3% of

agrees that there is no problem of biasness.

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Question 4: Do you conduct any training programmed for improving the efficiency of the

Employees?

SL.No. Grade %of Person

A Yes 80
B NO 20

Table-5

80
70
60
50
40 YES
30 NO
20
10
0
YES NO

Figure-5

INTERPRETATION: From the study it is found that 40% of total employer said that they

conduct training programmed for improving the efficiency of the employees which is positive

sign. It shows that organization is concerned about the education &knowledge of its employees

in order increasing their efficiency.

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Question 5:Does the performance appraisal always show the real working position of the

employees in the organization .

SL.No. Grade %of Person

A To some extent 30
B To Great Extent 60
C No 10

Table-6

60
50
40
30 To some extent
20 To great extent
10 NO
0
To To NO
some great
extent extent

Figure-6

INTERPRETATION:

After the analysis of data it is found that performance appraisal always shows the real working

position of the employees. It means that performance appraisal is helpful in knowing the real

working position of the employees.

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Question 6:Which of the following personal traits are the basis of performance?

SL.No. Grade %of Person

A Timeliness 8
B Initiative 50
C Communication 32
D All of above 10

Table-7

50

40

30 Timeliness
Initiative
20 Communication
All of above
10

0
Timeliness All of above

Figure-7

INTERPRETATION: From the study it is found that initiative is one of the personal traits for

performance appraisal. As 25% of the employees believe whereas 16% say communication are

the basis of performances appraisal.

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Question 7:Do you think that working environment affects the performance of employees.?

SL.No. Grade %of Person

A To. Great extent 70
B To some extent 20
C No 10

Table-8

70
60
50
40
30 To great extent
20 To some extent
10 No
0
To To No
great some
extent extent

Figure-8

INTERPRETATION: After analyzing the data it found that 40% of the total employers feel the

working environment affect the performance of employees. It proverbs that for every

organization the working environment should be healthy and the employees must be facilitated

with all the necessities.

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Question 8:Which of the following method are used by HR Manager to conduct performance

appraisal ?

SL.No. Grade %of Person

A Merit rating 30
B Ranking Method 60
C Paired comparison 5
D Check list method 5

Table-9

60
50 Merit rating
40
Ranking Method
30
20 Paired comparison
10
Check list method
0
Merit rating Paired
comparison

Figure-9

INTERPRETATION: From the above graph it is found that mostly ranking method is applied

by the HR manger to conduct the performance appraisal but is some cases HR manager used the

merit rating method also.

83
Question 9: In your opinion which factor should be next considered while appraising the

performance?

SL.No. Grade %of Person

A Administrative ability 20
B Technical ability 10
C Job efficiency 40
D Communication ability 10
E All above 20

Table-10

20 Administrative
ability
15
Technical ability

10
Job efficiency
5
Communication
ability
0
Administrative Communication All above
ability ability

Figure-10

INTERPRETATION: From the above graph it is found that all the factors including

administrative ability, technical ability, job efficiency, communication ability are considered

while the performance.

84
Question 10: Do you revise the techniques/methods time, which are used in performance

appraisal?

SL.No. Grade %of Person

A Yes 70
B No 30

Table-11

70

60

50

40
YES
30 NO
20

10

0
YES NO

Figure-11

INTERPRETATION: After the calculation of results it is found that 35% of the employers are

satisfied that the techniques methods that are revise time to time which is used for performances

appraisal. It means the organization pays attention toward the technique, which is used for the

measurement of performance for time to time.

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Question 11: Which of the following are relevant for promotion decision?

SL.No. Grade %of Person

A Potential 30
B Current Performance 50

Appraisal
C Grading system 20

Table-12

50

40 Potential

30

20 Current
Performance
10 Appraisal
0 Grading system
Potential

Figure-12

INTERPRETATION: After analysis of the data it is found that 25 employers are believe that the

current performance appraisal is relevant for promotion decision. It means the employers are

taking the promotion decision according to the current performance of the employees.

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Question 12:Which of the following is a key results area?

SL.No. Grade %of Person

A Behavior & Attendance 15
B Productivity 75
C Attitude 10

Table-13

80
70
60
50 Behaviour &
40 Attendance
30 Productivity
20
10
Attitude
0
Behaviour Attitude
&
Attendance

Figure-13

INTERPRETATION:

From the above productivity is the key result area in the organization it shows that productivity

plays an important role their organization.

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Question 13:During performance appraisal if it is realized that the employees needs have a

training session, does the organization arrange for them?

SL.No. Grade %of Person

A Yes 80
B No 20

Table-14

80
70
60
50
40 YES
30 NO
20
10
0
YES NO

Figure-14

INTERPRETATION: From the study it is found that 40% employers are satisfied that the

organization arrange training programmed if it is realized that the employees need to have a

training session. It means the organization pays attention to wares the training session of the

employees.

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Question 14: Is there any warning process in case if an employee is not performing well in an

organization ?

SL.No. Grade %of Person

A Yes 90
B No 10

Table-15

90
80
70
60
50
YES
40
NO
30
20
10
0
YES NO

Figure-15

INTERPRETATION: After analysis the data it is found that all of the employers are

believed that the organization give warning to employees if the employees are not performing

well in an organization.

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 FINDINGS

The most important segment any research study is its findings. There far the study that was

made, have certain finding which are discussed below.

• Employers are not completely satisfied as their response during research is negative

regarding incentives.

• Findings reveals that employers are totally satisfied with the promotion & salary

increment which are provided by employers after the measurement of there performance

appraisal and they also agree that the performance appraisal always shows the real

working position of the employees in the organization.

• Study reveals that most of employers fell that appraisal create depression in the minds of

employees and employees faces some biasness while doing the appraisal.

• Study reveals that organization is concerned about education & knowledge of its

employees in order to increase their efficiency through conduction the training

programme from time to time.

• The most appropriate and suitable method of the organization for conduction the

performance appraisal is ranking method.

• An appraiser must try to create healthy and productive work environment because the

working environment affects the performance of employees. Finding reveals that

productivity is the key result area of the organization.

• Study reveals that appraiser agree that the employees had required sufficient technical

know-how which adds up to their levels of moral.

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 CONCLUSION

Organizational development, which rests on the strength and support of the human elements, is
catching the imagination of several policy-makers leading to the promulgation of several
techniques and tools in this direction. The emergence of the 360-degree performance appraisal, a
comprehensive mechanism to know the pulse of the organization, has got a lot of implications.
Formal systems for appraising performance are neither worthless nor evil, as some critics have
implied: Nor are they panaceas, as many managers might wish. A formal appraisal system is, at
the very least, a commendable attempt to make visible, and hence improvable, a set of essential
organization activities. Personal judgments about employee performance are inescapable, and
subjective values and fallible human perception are always involved. Formal appraisal systems,
to the degree that they bring these perceptions and values into the open, make it possible for at
least some of the inherent bias and error to be recognized and remedied.
Many organizations that go out shopping for performance appraisals, 360 or other versions, have
already taken a step in the wrong direction. They typically have forgotten to diagnose their real
needs. If your business has a desire for the 360 Appraisal process make sure you ask yourself
"Why?" What is your organization's or management's real need? Don't do it because everyone
else seems to be doing it. Make sure the process and philosophy are appropriate to your
organization and its values.
By improving the probability that good performance will be recognized and rewarded and poor
performance corrected, a sound appraisal system can contribute both to organizational morale
and organizational performance. Moreover, the alternative to a bad appraisal program need not
be no appraisal program at all, as some critics have suggested. It can and ought to be a better
appraisal program. And the first step in that direction is a thoughtful matching of practice to
purpose.

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 RECOMMENDATIONS

The survey conducted reveals some major facts, which should be taker into consideration. Same

of them are discussed below here with:

 The techniques used for the performance appraisal should be such that it some how

helpful in improving the performance of the employees rather that discouraging them.

 The company should provide properly & salary increment after the measurement of

performance appraisal should be free from biasness.

 Organization should be next considered all of the factors like administrative ability,

technical ability, job efficiency, & communication ability while appraising the

performance, employers must try to create healthy and productive work environment,

which affects the performance of employees

 Employers should be concentrating on productivity; it is a key result area of their

organization.

 The performance appraisal should not create points of comparison among employees of

the company

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 LIMITATIONS

The present report is having few limitations which are as fallows:-

• The duration of the survey was limited and it does not cover all the executives of various

departments.

• Few executives try to avoid filling the questionnaire, which create difficulty in the

research.

• The sample size for conduction the questionnaire, which create difficulty in the research.

• The survey has to rely on the answers, which has been provided by the respondents.

There is inconsistency & ambiguity, which create difficulty in respondents. There is

inconsistency & ambiguity, which create difficulty in giving 100% accuracy in results

• It was not possible to discuss various method of performance appraisal, as the employers

were well aware about them.

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 BIBLIOGRAPHY

 Dessler Gary ,” Human Resource Management “ Prentice ,Hall of India Pvt. Ltd. 9th

edition ,2003

 Kothari C.R., “Research Methodology”: Methods & techniques, New delhi Wishwa

Prakashan , 2 Edition (2000):

 Mamoria C.B., Gankar S.V. , “Personnel management “ , Himalaya Publishing House,

22 Edition 2002

BIBLIOGRAPHY:

 www.birlapowersolution.com

 www.birlapower.com

 http://appraisals.naukrihub.com

 http://www.performance-appraisal.com/intro.htm

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