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PERFORMANCE APPRAISAL SYSTEM

WITH SPECIAL REFERENCE TO

HEAVY ENGINEERING CORPORATION’S Ltd.

RANCHI

A PROJECT REPORT

Submitted by

ANJANA HORO

In partial fulfillment for the award of the degree

Of

POST GRADUATE DIPLOMAIn

PERSONNEL MANAGEMENT

XAVIER INSTITUTE OF SOCIAL SERVICE, RANCHI

MAY 2009

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ACKNOWLEDGEMENT

This project is an outcome of the support, encouragement and precious guidance

provided by our research guide, Professor Kr. Mohit Spring.

I am also very thankful to Mr. Venugopal, Director, Personnel, HEC Ltd Ranchi,

for allowing me to undertake this project in the organization and extending all

necessary help and guidance.

This project is also an outcome of the colossal support and help provided by a

number of people at Heavy Engineering Corporation Limited. On the outset I

would like to thank Mr. N. Jha (headquarters), Mr. H. K. Gupta (HMBP), Mr. D.

Dubey (FFP), Mr. Krishna (HMTP), for their co-operation and guidance.

It is not possible to list all those who gave their time so graciously, but I owe aspecial debt of gratitude to a number of people, and I thank them herewith for their

kind and considerable assistance.

Anjana Horo

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ABSTRACT

An organization’s goal can be achieved only when people put in their best efforts.

To ascertain whether an employee has shown his or her best performance on a

given job, the organization has its own tools and techniques such as its

Performance Appraisal System. It is a powerful tool to calibrate, refine and reward

the performance of the employee. It helps to analyze his achievements and

evaluate his contribution towards the achievements of the overall organizational

goals.

By focusing the attention on performance, performance appraisal goes to the heart

of personnel management and reflects the management’s interest in the progress of

the employees. But, how to ascertain whether the Performance Appraisal System

prevailing in the organization is effective and appropriate for the performance

appraisals of the employees or not? So, the project is an attempt to analyze the

effectiveness of the Performance Appraisal System what would be a better idea

than finding out the effectiveness of the Performance Appraisal System through

the employees’ views itself? So, the objective of the survey is to measure the

effectiveness of the prevailing Performance Appraisal system of the organization

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by considering the views of the employee itself who are the main participants in

the appraisal system.

LIST OF TABLES

SL. NO. DISCRIPTION PAGE NO.

1. Multiple Purpose of Performance Assessment 14

2. Process of Performance Appraisal 19

3. Criteria Based on Scores for the Standard of the Organization 31

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LIST OF FIGURES

SL.No

DESCRIPTIONPAGE

NO

1.Is performance Appraisal System of the organization capable of assessing all theactivities performed by employees? 32

2. Is Performance Appraisal System an Opportunity for employees to know whatmanagement expects from them? 33

3.Responses for the fairness of the Performance Appraisal system.

34

4.Response for whether managers are given adequate training in doing theappraisals. 35

5.Does the appraisal system ensures proper checks and balances to controldishonest or vindicate bosses? 36

6.

Responses for whether Key Result Areas for managers are decided by their

immediate supervisors or not. 37

7.Responses for the statement No-7.

38


39


40


41

11.Respondents’ views about whether the performance Appraisal system coversworkers also or not. 42

12. Responses for the Statement no-12. 43

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13.Response for the Statement No-13.

44

14.Does the Performance Appraisal system has the scope for assessment of job-related competencies as well as personality dimensions? 45

15.Is Self-appraisal a part of the Performance Appraisal system or not.

46

SL.NO.

DESCRIPTION PAGENO.

16.Respondents’ views regarding the Statement No. 16.

47

17. Responses for the Statement No.17. 48

18.

PA system of the organization is linked to career development.

49

19.The PA system of the organization assesses employee’s potential for performinghigher level jobs. 50

20.Training needs are identified by our PA system.

51

21.Professional input in the development of PA system.

52

22.Use of 360 Degree Appraisal System in the organization.

53

23.Absence of employees’ grievances against PA system.

54

24.Review and modification of PA system.

55

25.Freedom of managers to discuss about PA system and provide suggestions.

56

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TABLE OF CONTENTS

CHAPTER NO. TITLE PAGE NO.

1. PERFORMANCE APPRAISAL 9

1.1Introduction 10

1.2 What is Performance Appraisal?

11

1.3 Objectives of Performance Appraisal 13

1.4 Limitations of Performance Appraisal 15

1.5 Types of Performance Appraisal 16

1.6 Process of Performance Appraisal 19

1.7 Objectives of the Survey 22

1.8 Research Methodology 23

2. HEAVY ENGINEERING CORPORATION LIMITED 25

4.1 Introduction to H.E.C. Ltd. 26

4.2 The Making of Dreams 26

4.3 Particulars of the Organization 27

3. DATA ANALYSIS 30

4. CONCLUSION & SUGGESTIONS 57

6.1 Result of the Survey 58

6.2 Suggestions from the Employees 59

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6.3 General Suggestions 60

5. BIBLIOGRAPHY 61

ANNEXURE:

The Questionnaire

CHAPTER 1

PERFORMANCE APPRAISAL

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1.1 INTRODUCTION

An organization is a group of people who are trying to achieve a common goal. The common

goal is achieved by collective effort of all employees who work in any organization across

various locations. When a large number of people work together there should be a method to

assess their contribution for the organization. How to ascertain whether an employee has shown

his or her best performance on a given job? The answer is performance appraisal. Therefore,

organizations use performance appraisal systems for scientifically assessing the performance of

each employee and identifying their potential for development. A performance appraisal system

has the following stakeholders:

1. The organization

2. Employees

3. HRD department

From organizational point of view, a performance appraisal system has three objectives, namely,

performance appraisal, performance monitoring and development of a culture of high

performance. The HRD department is concerned with the development and implementation of

performance appraisal system in an organization. Employees are concerned with receiving

feedback about their contribution to the organization. They are directly involved in the

implementation of performance appraisal by receiving and giving feedback about performance.

Performance appraisal system is a powerful tool to calibrate, refine and reward the performance

of the employee. It helps to analyze his achievements and evaluate his contribution towards the

achievements of the overall organizational goals. By focusing the attention on performance,

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performance appraisal goes to the heart of personnel management and reflects the management’s

interest in the progress of the employees.

The most significant reasons of using Performance appraisal are:• Making payroll and compensation decisions – 80%

• Training and development needs – 71%

• Identifying the gaps in desired and actual performance and its cause – 76%

• Deciding future goals and course of action – 42%

• Promotions, demotions and transfers – 49%

• Other purposes – 6% ( job analysis, providing superior support, assistance and

counseling)

1.2 WHAT IS PERFORMANCE APPRAISAL

Come appraisal time and one of the most debated aspects of completing the fair-and square

appraisal revolves around what is 'measured' and what is 'achieved'. And the fable of the Bees

and the Bee Keepers is a very popular paradigm that often gets quoted at such times. It goes

thus:

The Story: Once upon a time there were two beekeepers that each had a beehive. The

beekeepers worked for a company called Bees, Inc. The customers’ demand for the product was

increasing. So Bees, Inc. assigned each beekeeper a goal for increased honey production. The

beekeepers had different strategies to meet their goals and to improve the performance of their

hives. The first beekeeper established a bee performance management approach that measured

the number of flowers each bee visited. At considerable cost to the beekeeper, an extensive

measurement system was created to count the flowers each bee visited and each bee was given

feedback at mid-season on his individual performance and created special awards for the bees

who visited the most number of flowers. However, the bees were never told about the hive's goal

to produce more honey so that the company could increase honey sales. The second beekeeper

also established a bee performance management approach but this approach communicated to

each bee the goal of the hive for increased honey production. The beekeeper and his bees

measured two aspects of their performance, the amount of nectar each bee brought back to the

hive and the amount of honey the hive produced. The performance of each bee and the hive's

overall performance were charted and posted on the hive's bulletin board for all the bees to see.

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The beekeeper created a few awards for the bees that gathered the most nectar. But he also

established a hive incentive program that rewarded each bee in the hive based on the hive's

overall honey production the more honey produced, the more recognition each bee would

receive. At the end of the season, the beekeepers evaluated their approaches. The first

beekeeper’s hive had increased the number of flowers visited, but the amount of honey produced

by the hive had dropped. The Queen Bee reported that since the bees were busy trying to visit

more number of flowers, they limited the amount of nectar they would carry so they could fly

faster. Also, since only the top performers would be recognized, the bees felt they were

competing against each other for awards. As a result, they would not share valuable information

with each other that could have helped improve the performance of all the bees (like the location

of the flower filled fields). As the beekeeper gave the awards to individual bees, unhappy

buzzing was heard in the background. After all these, one of the high performing bees told the

beekeeper that if he had known that the real goal was to make more honey, he would have

worked totally differently. The second beekeeper, however, had very different results. Because

each bee in his hive was focused on the hive's goal of producing more honey. These Bees had

aimed at gathering more nectar in order to produce more honey than ever before. The bees

worked together to determine the highest nectar yielding flowers and to create quicker processes

for depositing the nectar they had gathered. They worked together to help increase the amount of

nectar gathered by the poorer performers. Tile Queen Bee of this hive reported that the poor

performers either improved their performance or transferred to hive No.1, because the hive had

reached its goal. The beekeeper rewarded each bee his portion of the hive incentive. The keeper

was also surprised to hear a loud, happy buzz and a jubilant flapping of wings as he rewarded the

individual high performing bees with special recognition.

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1.3 OBJECTIVES OF PERFORMANCE APPRAISAL

Data relating to performance assessment of employees are recorded, stored and used for several

purposes.

The main purposes of employee assessment are:

1. To effect promotions based on competence and performance.

2. To confirm the services of probationary employees upon their completing the probationary

period satisfactorily.

3. To assess the training and development needs of employees.

4. To decide upon a pay raise where (as in the unorganized sector) regular pay scales have not

been fixed.

5. To let the employees know where they stand insofar as their performance is concerned and to

assist them with constructive criticism and guidance for the purpose of their development. To

judge the gap between the actual and the desired performance.

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6. To improve communication. Performance appraisal provides a format for dialogue between

the superior and the subordinate, and improves understanding of personal goals and concerns.

This can also have the effect of increasing the trust between the rater and the ratee. Bridge the

communication gap between employee and administrator. Helps to strengthen the relationship

and communication between superior – subordinates and management – employees.

7. To reduce the grievances of the employees.

8. Finally, performance appraisal can be used to determine whether HR programmes such a

selection, training, and transfers have been effective or not. Broadly, performance appraisal

serves four objectives-

i. Developmental uses,

ii. Administrative uses/decisions,

iii. Organizational maintenance/objectives, and

iv. Documentation purposes

Multiple purposes of the performance assessment can be illustrated as in the table-1 given below.

Multiple Purposes of Performance Assessment

General Applications Specific PurposeDevelopmental Uses Identification of individual needs

Performance feedback

Determining transfers and job assignments

Identification of individual strengths ad

development needsAdministrative Uses/Decisions Salary

Promotion

Retention or termination

Recognition of individual performance

Lay-offsIdentification of poor performers

Organizational Maintenance/ Objectives HR planning

Determining organization training needs

Evaluation of organizational goal

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achievement

Information for goal identification

Evaluation of HR systems

Reinforcement of organizational

development needs

Documentation Criteria for validation researchDocumentation for HR decisions

Helping to meet legal requirements

Table 1 : Multiple Purpose of Performance Assessment

1.4 LIMITATIONS OF PERFORMANCE APPRAISAL SYSTEM

The problem with subjective measure is the rating which is not verifiable by others and has the

opportunity for bias. The rate biases include: (a) halo effect (b) the error of central tendency, (c)

the leniency and strictness biases (d) personal prejudice, and (e) the recent performance effect

(a) Halo Effect: It is the tendency of the raters to depend excessively on the rating of one trait or behavioral consideration in rating all others traits or behavioral considerations. One way of

minimizing the halo effect is appraising all the employees by one trait before going to rate on the

basis of another trait.

(b) The error of Central Tendency: Some raters follow play safe policy in rating by rating all

the employees around the middle point of the rating scale and they avoid rating the people at

both the extremes of the scale. They follow play safe policy because of answerability to

management or lack of knowledge about the job and person he is rating or least interest in his

job.

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(c) The Leniency and Strictness: The leniency bias crops when some raters have a tendency to

be liberal in their rating by assigning higher rates consistently. Such ratings do not serve any

purpose. Equally damaging one is assigning consistently low rates.

(d) Personal Prejudice: If the rater dislikes any employee or any group, he may rate them at thelower end, which may distort the rating purpose and affect the career of these employees.

(e) The Recent performance Effect: The raters generally remember the recent actions, of the

employee at the time of rating and rate on the basis of these recent actions favorable or

unfavorable than on the whole activities.

Other factors that are considered as problems are

•

Failure of the superiors in conducting performance appraisal and post performanceappraisal interview.

• Less reliability and validity of the performance appraisal techniques.

• Negative ratings affect interpersonal relations and industrial relations system.

• Influence of external environmental factors and uncontrollable internal factors.

• Feedback and post appraisal interview may have a setback on production.

• Management emphasizes on punishment rather than development of an employee in

performance appraisal.

• Some ratings particularly about the potential appraisal are purely based on guess work.

• Relationship between appraisal rates and performances after promotions was not

significant.

• Superiors lack that tact of offering the suggestions constructively to subordinates.

• Supervisors were often confused due to too many objectives of performance appraisal

1.5 TYPES OF PERFORMANCE APPRAISALS

There are a number of methods of performance appraisal. No single method can be considered

ideal in all circumstances. The methods of performance appraisal can be broadly classified intotwo categories: traditional and modern methods.

Traditional methods are the relatively older methods of performance appraisal. These methods

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are based on studying the personal qualities of the employees. These may include knowledge,

initiative, loyalty, leadership and judgment.

The Traditional Methods:

Unstructured method: In this method, the appraisal process does not follow any specific

structure. It is based on the description of the employee by the superior. The unstructured nature

of this method makes this extremely subjective.

Straight ranking method: In this method, the superior is asked to rate all the employees doing a

specific job from best to the poorest based on a specific criterion. While it is easy to select the

best and the worst employee, selection of employees who are mediocre is difficult. This model

also suffers from subjectivity.

Paired comparison method: The paired comparison method involves comparing each employee

with every other employee in the group. Based on the comparison a ranking system is developed.

This ranking system is considered more reliable as it is based on a systematic method of

comparison and evaluation.

Man-to-man analysis: In this method, the performance of the employee is based on certain

factors that are selected. The factors can include initiative, leadership etc. A scale is developed

for each factor and each individual is evaluated according to the scale. However, there is

considerable difficulty in developing a scale.

Grading method: In this method, the performance of the employee are determined in advance

and defined as categories. The categories can be Grade ’A’ for an outstanding performance,

Grade ‘B’ for an excellent performance, ‘C’ can be for average and ‘D’ for poor etc.

Checklist method: In this method a checklist consisting of objective statement is prepared such

as:-

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1. Is the worker regular at work?

2. Does the employee command respect among his subordinates?

3. Is the employee helpful to his peers?

Questions such as these are used in rating. The superior has to say ‘yes’ or ‘no’ to each question.

The difficulty in this method lies in constructing such a checklist.

Free essay methods: This method involves writing an essay by the superior on the employees’

performance. It is an open ended process and suffers from subjectivity. Some bosses may not be

good in essay writing and may not be serious in their essays. Comparing two individuals on the

basis of the essays on them is also not easy.

Critical incidents method: This method uses critical incidents such as accidents, major lapses on

the part of the employee to rate his performance.

Field review method: In this method a Human resources specialist conducts the appraisal by

asking a series of questions about the employee to the superior. After the session is over the

specialist makes notes based on his interaction with his superiors. These notes are approved by

the specialist and are placed in the employee’s file.

Confidential report: This method involves preparation of a confidential report by the superior on

the employee’s performance. The disadvantage of this method is the obvious subjectivity and

secrecy which results in low credibility of this method.

The Modern Methods:

Modern methods were devised to improve upon the traditional methods. Modern methods

attempt to remove the shortcomings of the old methods such as subjectivity, bias etc. Some of

the modern methods are:

BARS (Behaviorally anchored rating scales): In this system scales are devised based on aspects

of the employees’ behavior. The superior is asked to rate the performance of the employees on

the basis of these scales.

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MBO: MBO stands for management by objectives. MBO appraisals are based on predetermined

objectives which are decided and agreed upon by the superior and the employee. It is a process

of goal setting and feedback. This process introduces greater objectivity in the evaluation

process. The employee is aware of what is expected of him and is able to focus attention towards

the goals.

Psychological appraisals: These appraisals involve assessment of the intellectual abilities,

emotional stability, reason and analytical skills, sociability etc. These methods can be useful

when taking decisions about placement of employees, development and training.

360 degree feedback:

This method enables the employee to receive feedback from his superior, his peers and his

subordinates. This feedback provides information about the skills and behavior of an individual.

The information is based on assessment from different angles and is more objective.

1.6 PROCESS OF PERFORMANCE APPRAISAL

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Table 2 : Process of Performance Appraisal.

1. ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the standards

which will be used to as the base to compare the actual performance of the employees.

This step requires setting the criteria to judge the performance of the employees as

successful or unsuccessful and the degrees of their contribution to the organizational

goals and objectives. The standards set should be clear, easily understandable and in

measurable terms. In case the performance of the employee cannot be measured, great

care should be taken to describe the standards.

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2. COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the standards to all the

employees of the organization. The employees should be informed and the standards should be

clearly explained to them. This will help them to understand their roles and to know what

exactly is expected from them. The standards should also be communicated to the appraisers or

the evaluators and if required, the standards can also be modified at this stage itself according to

the relevant feedback from the employees or the evaluators.

3. MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the

specified period of time. It is a continuous process which involves monitoring the

performance throughout the year. This stage requires the careful selection of the

appropriate techniques of measurement, taking care that personal bias does not affect

the outcome of the process and providing assistance rather than interfering in an

employees work.

4. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard performance.

The comparison tells the deviations in the performance of the employees from the

standards set. The result can show the actual performance being more than the

desired performance or, the actual performance being less than the desired

performance depicting a negative deviation in the organizational performance. It

includes recalling, evaluating and analysis of data related to the employees’

performance.

5. DISCUSSING RESULTS

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The result of the appraisal is communicated and discussed with the employees on

one-to-one basis. The focus of this discussion is on communication and listening. The

results, the problems and the possible solutions are discussed with the aim of problem

solving and reaching consensus. The feedback should be given with a positive

attitude as this can have an effect on the employees’ future performance. The purpose

of the meeting should be to solve the problems faced and motivate the employees to

perform better.

6. DECISION MAKING

The last step of the process is to take decisions which can be taken either to improve

the performance of the employees, take the required corrective actions, or the related

HR decisions like rewards, promotions, demotions, transfers etc.

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1.7 OBJECTIVES OF THE SURVEY

Since the focus of the performance appraisal is measuring and improving the actual performance

of the employee and also the future potential of the employee it is very important for the

appraisal System to be fair and efficient and well organized.

Performance Appraisal System achieves its objective when it is fully capable of assessing the

performance of the employees fairly and efficiently and fulfills all its purposes. Since H.E.C is

leaving no stone unturned to regain its state of prosperity, the performance of the employees

matters a lot at this stage, and it is the Appraisal System that plays an important role in managing

the performance of the employees. It is a powerful tool to calibrate, refine and reward the

performance of the employee. It helps to analyze his achievements and evaluate his contribution

towards the achievements of the overall organizational goals. So, it is very important to take care

of the efficiency of the Appraisal System so that it can achieve its objective.

If the standard of the appraisal system is high it will efficiently assess the performance of the

employees. So, the basic objective of the study is to find out the standard of the Performance

Appraisal System prevailing in the organization.

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1.8 RESEARCH METHODOLOGY

“Research inculcates scientific and inductive thinking and it promotes the development of logical

habits in any organization.”The research study is conducted in order to know the employee’s

awareness and perception level regarding the prevailing Performance Management System.

STUDY DESIGN: Descriptive research design.

SAMPLING PLAN:

Sample Size = 80 Employees, which is twenty percent of the population.

Setting (Sample Area) = Heavy Engineering Corporation Limited, Ranchi.

Duration of study = Two (2) Months.

SAMPLING TECHNIQUES: The sampling technique adopted is Stratified random

sampling.

SAMPLE SELECTION: Inclusion Criteria- only managerial level employee and Directly

Recruited Officers will be included.

Exclusion level- workers in the plants and employees in non managerial level will be excluded.

DATA COLLECTION PROCEDURE:

On the basis of the following two types, the research will be carried out:-

1. Primary Data

2. Secondary Data

1. Primary Data:-

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a) Questionnaire Method : The main instrument for the collection of primary data is the

Questionnaire Method. The questionnaires are prepared for Directly Recruited Officers

(DROs) which will mainly contain questions on the following dimensions:-

• Measures of performance

• Feedback

• Employees’ attitude towards performance appraisal system prevailing in H.E.C.

Ltd.

b) Informal discussion: Informal discussions are carried out with DROs across various

levels in the organization to know the prevailing system, awareness level and also to

know their viewpoints or suggestions on the Performance Appraisal System.

2. Secondary Data:-Secondary data is collected by reviewing different literatures like books, articles, magazines,

journals, etc and also through different websites.

DATA ANALYSIS PROCEDURE:

Analysis will be illustrated through:-

• Bar graphs,

• Histograms

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CHARTER 2

HEAVY ENGINEERING CORPORATIONLIMITED

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2.1 INTRODUCTION TO H.E.C. Ltd.

Heavy Engineering Corporation Ltd. (HEC),Ranchi was incorporated in December, 1958 with

the primary objective of achieving self sufficiency and self-reliance in the field of design and

manufacture of equipment and machinery for the Iron and Steel Industry and other core sector

industries like, Mining, Metallurgy etc.

Core strength of H.E.C. Ltd. can be expressed as: One-stop-shop for :

• Mining Equipments

• Steel Plant Equipments

• EM Equipment

• Railway Products

• Defense Products

2.2 THE MAKING OF DREAM

In 1955, during a state visit to USSR, Jawaharlal Nehru, the first Prime Minister of India,

toured the Ural Engineering Works in Sverdlovsk. The Prime Minister was very impressed

and called it a “Plant of Plants”. He said that his newly free country badly needed such

plants, thereby stressing the special role of heavy engineering works which can provide

equipments for all the basic industries and add to the country’s economic development.

The then Soviet Union, the world leader in this field at that time and had the most advanced

processes for the production of lead, zinc and copper, was ready to assist India. They readily

delivered the equipments India needed and also sent specialists to train Indian Personnel.

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Thus the construction of the plant at Ranchi started in 1961 and completed in 1968. The

design was produced by GIPROTYAZHMASH, the leading state design institute of the

USSR. Soviet engineering and other industries supplied 27000 tons of the latest engineering

equipments and 18000 tons of steel structural elements and other necessary materials for the

plant at Ranchi. As preplanned, Soviet products accounted for 97 per cent of the industrial

installed at the Heavy Machine Building Plant, one of the manufacturing units of Heavy

Engineering Corporation Limited at Ranchi.

To ensure the efficiency in the operations in the plants, the Soviet Union assisted in training

of Indian engineers, technicians and skilled workers. Czechoslovakia assisted in the

construction of a Foundry and Forge plant and also a Heavy Machine Tool Plant at Ranchi.

These plants along with the Heavy Machine Building Plant became a part of the Heavy

Engineering Corporation, forming a big engineering complex which made a major

contribution to the development of India’s heavy industries.

Thus the basis of heavy industry was laid with the establishment of Heavy Engineering

Corporation plant producing machines to produce machines.

2.3 PARTICULARS OF THE ORGANIZATION

HEC Ltd. a Public Sector Undertaking, under Ministry of Heavy Industry, Government of

India, was incorporated on 31.12.1958 under the Companies Act, 1956. The company

started production in the year 1964. It was visualized at that time that one steel plant of one

million ton capacity will be added every year in India, which however, did not materialize.

Consequently the demand for steel making machinery was never as high as it was expected.

Hence HEC diversified its area of operation in other core sectors like mining, railways,

defence etc. Currently, the company is engaged in the manufacture and supply of capital

equipment, machine tools and spares needed for the core sector industries namely; steel,

coal, cement, power, defence, aluminum, ship building and railways etc.

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➢ VISION

To be a major Heavy Engineering Company in India providing quality products and

services to the Steel, Mining, Coal, Railways and other Strategic Sectors.

➢ MISSION

• To acquire and maintain leading position as suppliers of quality equipment, spares,

systems & services for the Steel, Mining, Coal, Railways and other Strategic

Sectors.

• To make the Revival Plan sustainable

• To expand business into allied areas and other priority sectors of the economy.

➢ OBJECTIVES

1. GROWTH

To attain substantial jump in production and bring about sustained growth to attain

production level of Rs.3000 crores by 2011-12.

2. PROFITABILITY

To provide reasonable & adequate return on capital employed, primarily through

improvement in operational efficiency, capacity utilization & productivity, in order togenerate adequate internal resources to finance the company’s growth.

3. HUMAN RESOURCE PLANNING & DEVELOPMENT

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

perceive his role and responsibilities and participate in and contribute to the growth

and success of the company. To continuously invest in human resources and be alive

to their needs, hopes and aspirations.

4. CUSTOMER SATISFACTION

To build a high degree of customer confidence by providing increased value for his

money through improved product quality, delivery, performance and customer

service.

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5. MODERNISATION

To upgrade and modernize plants and equipment with the aim of increasing

availability of machines/equipment and removing bottlenecks.

6. TECHNOLOGY

To achieve technological excellence in operation by development of indigenous

technology and efficient absorption and adaptation of imported technologies to suit

business needs and priorities with a view to providing a competitive advantage to the

company.

➢ THE HEAD OFFICE AND THREE PLANTS OF THE COMPANY:

Situated in Ranchi, the capital of the newly formed state Jharkhand.

➢ OFFICES OF THE COMPANY: In New Delhi and Kolkata.

➢ THE CAPITAL BASE OF THE COMPANY:

The authorized capital of the company is Rs. 500 crores and the paid up capital is

Rs.453.24 crores.

➢ EXISTING PLANT FACILITIES, PRODUCTS AND PAST COLLABORATIONS:• More than 7000 acres of land had been conveyed to the company at the time of its

incorporation by Govt. of Bihar for its use. The company has built plants,

administrative office and township on this land.

• The company was set up with the capability to manufacture steel plant equipment

that can enhance the steel producing capacity by one million tons per annum. The

company has three manufacturing units and one project and consultancy division viz.

(i) Foundry Forge Plant (FFP)

• Set up in Collaboration with erstwhile CSSR (M/s SKODA)

• Manufactures Heavy Castings & Forgings

• Rolls for Hot & Cold Rolling Mills for Steel Plants

(ii) Heavy Machine Building Plant (HMBP)

• Set up in Collaboration with erstwhile USSR

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• Design & Manufactures Equipment and Spares for different Sectors.

(iii) Heavy Machine Tool Plant (HMTP)

• Set up in Collaboration with erstwhile CSSR (M/s SKODA)•

Design & Manufactures CNC & Conventional machine tools in Medium &Heavier ranges.• Manufactures Special purpose Railway Machine Tools.

• Takes up RECONDITIONING of old machine tools.

(iv) Project Division (TKP)

• Execution from Concept to Commissioning.

CHAPTER 3

DATA ANALYSIS

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3.1 DATA ANALYSIS

For the responses against each statement in the part-I of the questionnaire there is a pointallotted as per rating:

VERY TRUE - 4

MOSTLY TRUE - 3

PARTLY TRUE - 2

NOT AT ALL TRUE - 1

Since the sample size is 80, therefore,

The highest score for each statement can be calculated as: - 80*4=320

Since in part-I of each questionnaire there are 25 statements therefore,

Total score will be: - 320*25=8000

Therefore, we can find out where the organization stands on the basis of the

following criteria: -

SCORES REMARKS

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1) 76%-100%The Performance Appraisal System of

your organization is of very high standard.

2) 50%-75%

The Performance Appraisal System of

your organization is just mediocre in terms

of standard.

3) 25%- 49%

The Performance Appraisal System of

your organization is ad hoc and primitive

in terms of standard.

Table 3 : Criteria based on scores for the standard of the Organization

STATEMENT No. 1- The Performance Appraisal (PA) system of our organization is capable of

assessing all the activities performed by employees.

The response received for this statement is displayed by the chart. Out of 80 respondents 27 of

them think that the PA system of the organization is capable of assessing all the activities

performed by them. 29 of the respondents think it is mostly true and 23 of the responses are for

partly true and 1 of the employee thinks that it is not at all true.

Figure 1.Is performance Appraisa l System of the organization capable of assessing all the activities

performed by employees?

So, according to the figure-1. We can calculate the score as:

27*4 = 108

29*3 = 87

23*2 = 46

01*1 = 01

TOTAL = 242

Where 4,3,2,1, are the points for the responses and 27,29,23,01, are the number of responses to

the statement. Therefore for this statement score is 242 out of 320.

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STATEMENT No. 2- The PA system provides an opportunity for each appraisee to know

what the management really expects from him. Responses for this statement can be very

clearly depicted from the chart shown in Figure-2. Out of 80 respondents 5 respondents

disagreed on the statement, 21 of them partly agreed on the statement and, 25 of them think it is

mostly true and 29 of the respondents think it is very true that the PA system allows the

employees to have the knowledge of what the management wants them to do.

Figure 2 : Is Performance Appraisal System an Opportunity for employees to know what

management expects from them?

Thus the calibrated score for this statement is 238 out of 320. Maximum of the respondents

think that it is mostly true that the PA system of the organization gives an opportunity to the

employees to know what the management expects from them. It is very important for an

employee to know what management actually expects from them in performance, for this the

management should provide regular feedback regarding their performance as to where they are

lacking and in which area they are performing well. The employees should also be aware of theorganizational goal so that they can direct their endeavor and persistent efforts towards the

organizational goal.

STATEMENT No.3- The PA system is quite fair and objective.

Performance Appraisal system must be fair in order to measure the performance of the

employees effectively. Through the survey report it was found that the PA system in the

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organization is fair and objective for 27 of the respondents out of 80, which is only 33.75% of

the sample size. Whereas 7 of the respondents think that the Performance Appraisal system is not

at all fair and objective, which means 8.75% of 80 respondents have this view regarding the

appraisal system. 24 of the respondents think it is mostly true and 22 of the respondents think it

is partly true. The responses for the given statement can be seen in figure-3 given below.

Figure 3 : Responses for the fairness of the Performance Appraisal system.

Even though 8.75% of the respondents voted against this statement the calibrated score for the

responses for this statement is 253 or 79.06%, which shows that the Performance Appraisal

system is quite fair and objective. But the organization should also take care of that 8.75% of the

respondents to make the performance Appraisal system perfect and efficient.

STATEMENT No. 4- Managers are given adequate training in doing the appraisals.

It is very important that the superiors who are doing appraisals must be adequately trained in

order to judge the employees’ performance. According to the responses obtained by the

respondents as shown in figure-4, it is seen that out of 80 respondents, 21 thinks that it is very

true that the managers are given adequate training in doing their appraisals.29 of the respondents

which forms the majority think that it is mostly true that the managers are adequately trained for this purpose. There are 23 respondents out of 80 who think that this statement is partly true,

which means that they are not satisfied about the efficiency by which managers handle their

appraisals. 7 respondents out of 80 think that managers are not given adequate training for doing

their appraisals.

Figure 4 : Response for whether managers are given adequate training in doing the appraisals.

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Therefore according to the responses as shown in figure-4 the calibrated score for this statement

is 224 out of 320. Which means the score is 70%, this shows that managers scored quite well for

this statement.

STATEMENT No.5- The PA system ensures proper checks and balances to control

dishonest prejudices or vindicate bosses (if any).

As seen in the figure-5 majority of the respondents, i.e. 28 or 35% of the respondents think that

the above statement is partly true. 8 respondents or 10% of the respondents think that has a

negative view regarding this statement as they voted for ‘Not at All True’ response. 23.75% or

19 of the respondents think that the statement is very true whereas 31.25% or 25 of the

respondents think that the given statement is mostly true.

Figure 5 : Does the appraisal system ensures proper checks and balances to contr ol dishonest orvindicate bosses ?

Therefore after calibrating the score for the given statement the score are 215 out of 320, i.e.,

67.19%. This shows that the organization needs to improve in this so as to gain the confidence

of the employees in this matter, and this will also motivate employees to perform even better.

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STATEMENT No.6- KRA (Key Result Areas) for managers is decided by his immediate

superior in consultation with the manager at the beginning of the year.

Figure-6 displays the responses of the employees for this statement. Most of the respondents

i.e., 32 out of 80 respondents think it is mostly true that KRAs for managers are decided by their

immediate superiors in consultations with the managers at the beginning of the year. 31.25% or

25 of the employees think that the statement is very true. 23.75% or 19 of the employees out of

80 think that the above statement is partly true whereas 5% or 4 out of 80 employees believe that

the above statement is not at all true.

Figure 6 : Responses for whether Key Result Areas for managers are decided by their immediatesupervisors or not.

Thus, based on the responses for this statement the score achieved is 238 out of 320 which

comes to 74.37%. The organization seems to follow effective measures in order to set KRSs and

KPAs for the employees according to the score achieved by the responses. The organization

conducts formal discussions held individually/ (functional) group-wise/ shop-wise/ section-wise

to set the KPAs and dates of completion of the respective targets etc. before arriving at KPAs/

KRAs. The target setting should certainly be done through a process of mutual consultations and

discussions. This itself may become an educative process in terms of understanding each other.

Consultation with the employee is very important as it makes tasks and targets clear to the

employees and it also helps to take into consideration employees’ difficulties and capabilities.

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STATEMENT No.7-Appraisals for managers are done against certain key Result Areas

(KRAs).

As displayed in figure-7, majority of the respondents i.e., 33 out of 80 thinks it is very true that

the appraisals for managers are done against certain Key Result Areas. 24 of them thinks that the

given statement is mostly true and 23 out of 80 respondents think that the given statement is

partly true.

Figure 7 : Responses for the statement No-7 .

The above statement, on the basis of responses scored 250 out of 320, which is 78.12%.

The organization seems good in setting KRAs and in doing the appraisals based on it. The

targets set should deal with the tasks expected to be accomplished by appraise under each

KPA /KRA during the period that will be reviewed later. Such target setting helps the appraise to

be clear of the expectations and also provides an opportunity for him to ask for the assistance

required from his boss in order to accomplish whatever was set for him. Appraisal is done

against certain targets which are measurable; these measurable targets leave no room for

discrepancies in measuring the actual performance of the employees.

STATEMENT No.8- Periodic feedback regarding performance is given to almost all

employees in our organization.

The figure given below shows the responses of the employees for this statement.

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Figure 8 : Responses for the statement No-8.

According to the survey, it was found that 12.5% or 10 out of 80 employees think that it is very

true that periodic feedback regarding performance is given to almost all the employees in the

organization. It seems that a very small number of the respondents think that the statement is

very true, while most of the respondents have the opinion that the given statement is mostly true,

the number of respondents voting for this response came out to be 25 out of 80, which is 31.25%

and 24 respondents or 30% of the respondents have the opinion that the given statement is partly

true. 21 out of 80 respondents or say 26.25% of the respondents have the opinion that the given

statement is not at all true and this shows that large number of respondents believe that periodic

feedback regarding performance is not given to almost all employees in the organization.

Thus the above statement on the basis of the responses scored 184 out of 320, which is equal to

57.5%. This is below average score, giving an idea that the organization lacks in this process of

giving a feedback to their employees regarding their performance. The organization should take

care of this as poor communication keeps employee in dark about what is expected from them. It

is the responsibility of the superiors to communicate the feedback to their subordinates regarding

their performance. Conveying the feedback in constructive way is also important and should be

taken care of as very few superiors have the skill to constructively convey to an employee how

to improve his/her performance. By this feedback process the appraiser should know more and

more about the circumstances under which his appraise is working, the difficulties he is

experiencing and the contribution he is making. The appraisee should also understand by the

feedback given that how he himself is responsible for some achievements and non-achievements.

Thus giving a feedback improves the performance of the employees.

STATEMENT No.9- The objectives of our PA system are clearly known to all our

employees.

For this statement 25% or 20 out of 80 employees responded that it is very true whereas 26 or

32.5% of the sample size responded that the given statement is mostly true. There are 25 or

31.25% of the respondents who hold the view that the given statement is partly true while 9 out

of 80 respondents believe that the statement is not at all true. The figure-9 given below shows the

chart of the respondents and their responses for this statement.

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The score obtained by the responses for this statement is 217 out of 320 which comes out to be

67.8%. Concluding from the score of the statement we can say that the employees are aware of

the objective of the performance appraisal system to a good extent but still there are number of

employees who are not very clear of the motives of the Performance Appraisal system. If the

employees know the motives and the importance of the Performance Appraisal system, they will

support it and show willingness in taking part in it sincerely. This in turn will result in the

achievement of the objective of the Performance Appraisal system.

STATEMENT No.10-Our PA system helps managers to systematically plan their work and

achieve the target

.


From the figure-10, we can conclude that most of the employees believe that the given statement

is partly true, as majority of the respondents, i.e., 27 or 33.75% out of 80 respondents voted the

statement as partly true. 2 or 2.5% out of 80 respondents believe that this statement is not at all

true, whereas 25out of 80 respondents and 24 out of 80 respondents responded for this statement

as very true and mostly true respectively.The overall score for this statement is 228 out of 320 which came out to be 71.25%.

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STATEMENT No.11- Our PA system covers workers also.

Figure 11 : respondents’ views about whether the performance Appraisal system coversworkers also or not.

From the figure above it can be clearly understood that most of the respondents voted against the

given statement, 24 out of 80 respondents voted that this statement is not at all true whereas 22

of the respondents responded that the statement is very true and 11 of them feels that it is mostly

true. 23 of the respondents think it is partly true.

Thus the statement scored 191 out of 320 or 59.68%, thus in order to raise the standards of the

organization’s performance the organization should take care of the performance of each and

every employee, whether he/she is in managerial position or in a worker’s grade. The

performance appraisal is important in every level according to the suitable methods.

STATEMENT No.12-PA system of our organization is open and appraisal ratings are

communicated to employee

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Figure 12 : Responses for the Statement no-12.

Figure-12 represents the responses of the 80 respondents. 8 out of 80 respondents responded thatthe statement is ‘very true’. 20 of them believe that the statement is ‘mostly true’. There are 22

of the respondents who believe that the statement is ‘partly true’ and maximum i.e., 30 of the

respondents says that the given statement is ‘not at all true’. Here maximum respondents i.e.,

believe that the given statement is ‘not at all true’ and the least number of the respondents are in

favor that the statement is ‘very true’.

Thus the score for this statement came out to be 166 out of 320 i.e., 51.87%.

The score shows that the organization did not fare well in this part as most of the employees

believe that the Performance Appraisal system of the organization is not open and appraisal

ratings are not communicated to the employee. The organization should take care that the

employees are given feedback after their appraisal ratings are done, as the employee must be

aware of his strengths and weaknesses. Awareness of strengths and weaknesses helps the

individual to continue to retain his strengths and also make efforts to develop in weak areas so

that he becomes effective. This also motivates the employees.

STATEMENT No.13- Our PA system is not a method to control, humiliate or harass

employees.

Figure 13 : Response for the Statement No-13.

Figure-13 represents the responses of the employees for the given statement. It is seen that 33

employee out of 80 are in favor of this statement as they believe that the statement is ‘very true’.

There are 28 or 35% out of 80 respondents believe that the statement is ‘mostly true’ and 17 or

21.25% believe that the statement is ‘partly true’. There are only 2 employees i.e., only 2.5% of

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the respondents are against the statement as they responded that the given statement is ‘not at all

true’.

Thus the score for this statement comes out to be 252 out of 320 which 78.75%. This shows that

the organization takes care of their employees to a much great extent in avoiding the use of PA

system as a method of humiliation or harassing their employees. The organization views the

Performance Appraisal system as a format for dialogue between the superior and the

subordinate, which improves understanding of personal goals and concerns. This further helps to

strengthen the relationship and communication between superior – subordinates and

management – employees.

STATEMENT No.14-Our PA system has scope for assessment of job-related competencies

as well as personality dimensions.

Figure 14 : Does the Performance Appraisal system has the scope for assessment of job-related competencies as well as personality dimensions?

Figure-14 shows the responses of 80 employees for the above statement. 25 of the respondents

says that the statement is ‘very true’ and 33 out of 80 respondents feel that the statement is

‘mostly true’ whereas 18 of the believe that it is ‘partly true’. 4 respondents out of 80 voted

against the statement as according to them the given statement is ‘not at all true’.

Thus the score for this statement is 239 out of 320 which comes out to be 74.68%.This shows

that the organization is quite capable in assessing the job-related competencies as well as

personality dimensions of their employees through Performance Appraisal system.

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STATEMENT No. 15- Self-appraisal is a part of our PA system.

Figure 15 : Is Self-appraisal a part of the Performance Appraisal system or not.

Figure-15 displays the responses of the 80 respondents for the given statement. There are 33

respondents out of 80 who think that the given statement is ‘very true’. 25 of them responded

that the statement is ‘mostly true’. Out of 80 respondents 20 believes that the statement is ‘partly

true’ whereas none of the respondents are against the given statement.

Thus the score for the statement based on the responses is 255 out of 320 i.e., 79.68%. Certainly

Self-appraisal is not meant to be a ritualistic form filling exercise. It is a significant initial stepfor performance development. A lot should happen in self-appraisal which may not be reflected

in forms filled by the appaisee. In fact a good self appraisal need not result in good form filling

although it results in increased self awareness through a process of review and reflection on the

part of the appraise. Self-appraisal should be a continuous process. More than his reporting

officer, the employee should take steps to continuously assess his own performance, identify his

strengths and weaknesses and continuously keep a record of efforts made as well as his own

success and failure experiences while performing different functions. He should also analyze the

causes for his successes and failures and prepare his development plans.

STATEMENT No.16-Appraisal interviews are conducted to discuss self appraisal with

superior's appraisal so as to decide the final rating.

Figure 16 : Respondents’ views regarding the Statement No. 16.

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The responses for the above statement are shown in the figure-16, where it is seen that only 6 out

of 80 respondents i.e., 7.5% think that the given statement is ‘very true’. 22 of them think that

the statement is ‘mostly true’ and other 22 of the respondents think that the statement is ‘partly

true’. There are 30 out of 80 respondents, i.e., 37.5% responded that the given statement is ‘not

at all true’ the least number of respondents were in favor of this statement.

Thus the score for this statement is 164 out of 320 which comes out to be 51.25%, this shows

that the appraisal interviews are not conducted to a good extent to discuss self appraisal with

superior’s appraisal so as to decide the final rating. For a perfect appraisal the superiors should

not just be confined to the appraisal forms only. It may happen several times that the forms fail

to give the clear picture of the employee’s performance. Even appraisers normally do not get

time to observe each of their subordinates closely or even conduct an appraisal- interview. Most

often the appraisers tend to form impressions about their subordinates on the basis of one or two

of their failure which may be striking to the appraisers. Sometimes one or two success

experiences may also leave highly positive marks. So it is necessary for an appraiser to judge

their subordinates not just by their appraisal forms or just by some striking failure of success

incidents, instead the appraisers should also conduct appraisal interviews in order to get a much

clearer picture about the employees and their performance.

STATEMENT No.17-Our PA system is linked to rewards such as annual increments.

Figure 17 : Responses for the Statement No.17.

Figure-17 shows the responses for the given statement, here 7 respondents out of 80 responded

that the statement is ‘very true’ whereas 36 out of 80 believe that the statement is ‘not at all true’.

There are 19 out of 80 respondents who think that the statement is ‘mostly true’ and 18 out of 80

respondents think that the statement is ‘partly true’.

Thus the score for this statement comes out to be 157 out of 320 which is equal to 49.06%.

According to the score we can judge that most of the employees think that the PA system is not

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linked to rewards such as annual increments and only few, i.e., 8.75% of the respondents

supported the statement.

STATEMENT No.18-The PA system of our organization is also linked to career

development.

Figure 18 : PA system of the organization is linked to career development.

The responses for the given statement are represented in figure-18. There are 25 respondents

(31.25%) who think that the statement is ‘very true’. 27 out of 80 i.e., 33.75% believe that the

given statement is ‘mostly true’. 25 out of 80 respondents i.e., 31.25% of the respondents

responded that the given statement is ‘partly true’. Only 3 respondents out of 80 responded

against the statement that it is ‘not at all true’,

Thus the statement scored 234 out of 320, which is equal to 73.12%. So, according to the score

we can conclude that the PA system of the organization is linked to career development to a very

great extent.

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STATEMENT No.19-Our PA system assesses our employee's potential for performing

higher level jobs.

Figure 19 : The PA system of the organization assesses employee’s potential for performinghigher level jobs.

The figure-19 shows the responses for the given statement by 80 respondents.

25 respondents (31.25%) voted for the statement. Another 25 respondents think that the

statement is ‘mostly true’. Most of the respondents, i.e., 29 of the respondents think that the

statement is ‘partly true’, whereas only 3 respondents (i.e., 3.75%) have the view that the given

statement is ‘not at all true’.

Thus the score for the statement is 236 out of 320 which is equal to 73.75%. So, according to the

score it is clear that the organization’s PA system is good at assessing their employee’s potential

for performing higher level jobs.

STATEMENT No.20-Training needs are identified by our PA system.

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Figure 20 : Training needs are identified by our PA system.

The figure-20 shows the bar chart representing the various responses by 80 respondents for the

given statement.27 respondents (33.75) of the respondents hold the view that the given statement

is ‘very true’. Other 27 respondents think that the statement is ‘mostly true’. Again there are 27

respondents according to whom the given statement is ‘partly true’ and only 1 out of 80

respondents hold the view that the statement is ‘not at all true’.

So, based on the responses the score for this statement is 244 out of 320 which comes out to be

76.25%. By seeing the score we can judge that the organization’s Performance Appraisal systemis capable enough to identify training needs.

STATEMENT No. 21- Professional input has gone into the development of our PA system.

Figure 21 : Professional input in the development of PA system.

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The figure- 21 displays the responses given by 80 respondents. From the bar chart in figure-21

we can see that 21 respondents (i.e., 26.25%) are having the view that the statement is ‘very

true’. 26 of the respondents have the view that the given statement is ‘mostly true’. There are 31

responses for the statement to be ‘partly true’ whereas only

2 out of 80 (i.e., 2.5%) respondents hold the view that the given statement is ‘not at all true’.

The score for this statement is 226 out 0f 320 which comes out to be 70.62%. So based on the

above score for the statement we can safely say that the organization has taken care of

professional inputs for the development of the Performance Appraisal system.

STATEMENT No.22- 360 Degree appraisal system is used in our organization to assess

strengths and weaknesses of managers.

Figure 22 : Use of 360 Degree Appraisal System in the organization.

The figure-22 represents the responses of 80 respondents for the given statement whether 360

Degree appraisal system is used in the organization to assess the strengths and weaknesses of the

managers. Maximum responses were against the statement. 45 out of 80 respondents (57.25%)

were having the view that the statement is ‘not at all true’. 23 of the respondents (i.e., 28.75%)think that the statement is ‘partly true’. 11 respondents hold the view that the statement is

‘mostly true’. There is only 1 respondent who thinks that the statement is ‘very true’.

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Thus the score for the statement is 128 out of 320 (i.e., 40%). Based on the score we can say that

the organization does not use 360 Degree appraisal system to a good extent or we can say that

the organization does not use 360 Degree appraisal system to assess the strengths and

weaknesses of managers.

STATEMENT No.23-Employees do not have any major grievances against the existing PA

system.

Figure 23 : Absence of employees’ grievances against PA system.

Figure -23 shows the chart regarding the responses of 80 respondents for the statement number -23. There are 22 (i.e., 27.5%) of the respondents who believe that the given statement is ‘very

true’. 30 (i.e., 37.5%) of the respondents think that the statement is ‘mostly true’ and 25 (i.e.,) of

the respondents think that the statement is ‘partly true’. Very few that is only 3 respondents feel

that the statement is ‘not at all true’.

Thus the score for the statement is 231 out of 320, which comes out to be 72.18%. thus

according to the score of the statement we can conclude that most of the employees do not have

any major grievances against the existing PA system but still there are few of them who have

grievances regarding the present appraisal system of the organization.

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STATEMENT No.24-Our PA system is reviewed and modified every 2-3 years.

Figure 24 : Review and modification of PA system.

In the figure-24, we can see the graph representing the responses of 80 respondents regarding thestatement number 24. There are 13 (i.e., 16.25%) of the respondents who thinks that the given

statement is ‘very true’. 18 or 22.5% of the respondents think that given statement is ‘mostly

true’. 30 of the respondents think that the given statement is ‘partly true’ whereas according to

the 19 (i.e., 23.75%) of the respondents the given statement is ‘not at all true’.

Thus the given statement scores 185 out of 320, which is equal to 57.81%. so according to the

scores it seems that most of the employees think that the PA system of the organization is not

reviewed and modified every 2-3 years, and so the organization must take care of regularly

reviewing of the PA system.

STATEMENT No.25-Managers are free to discuss the PA system and give suggestions to

modify it.

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Figure 25 : Freedom of managers to discuss about PA system and provide suggestions.

The responses for the statement number-25 are shown in figure-25. According to the chart

shown in the figure, 4 respondents out of 80 have the view that the given statement is ‘very true’.

21 of them have the view that the statement is ‘mostly true’. 31 out of the 80 respondents believe

that the given statement is ‘partly true’. There are 25 respondents who hold the view that the

given statement is ‘not at all true’.

Thus the score for this statement is 166 out of 320, which is equal to 51.87%. Such a low score

for the statement shows that according to most of the employees, managers are not free to

discuss the PA system and give suggestions to modify it.

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CHAPTER 4

CONCLUSIONS AND SUGGESTIONS

4.1 RESULT OF THE SURVEY

Thus adding up all the scores of the 25 statements given, we get a total score of 5363 out of

8000. This comes out to be 67.03%. Thus on the basis of remarks for the scores as given in

table-1, the remark for this organization will be that the performance appraisal system of the

organization is just mediocre in terms of standard. So the organization needs to take some

effective steps in order to improve the standard of the performance appraisal system in the

organization.

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In order to improve the standard of the performance appraisal system of the organization, it is

very important to hear the complaints and suggestions of the employees regarding the prevailing

appraisal system. When asked from the employees whether they would like the current appraisal

procedure to be reviewed, then in response to this statement majority of the respondents agreed

to change the current appraisal system and the weightage for this response was 56%. There were

34% of the respondents according to whom the current appraisal system should not be reviewed

and 10% of the respondents who could not say whether the appraisal system should be reviewed

or not.

The organization should also take care whether their performance appraisal system leads to

identify he hidden potential of the employees. Majority of the respondents, i.e., 59% of the

respondents agreed that their performance appraisal system leads to identification of the hidden

potentials of the employees whereas 41% do not agree to this statement.

There are almost 45% of the respondents out of 80 who are not satisfied with the prevailing

performance appraisal system where as only 55% of the respondents said that they are satisfied

with the performance appraisal system prevailing in their organization.

4.2 SUGGESTIONS FROM THE EMPLOYEES

1. Performance appraisal system should be such that it could assess the different traits of

an individual quantitatively. It should be a continuous process throughout the year.

After assessment, individual should be communicated properly about the strengths and

weaknesses of the employee.

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2. Individual traits and training and development reports must be looked into precisely

and to be implemented accordingly.

3. Transparency is the utmost requirement in the Performance Appraisal system.

4. Performance Appraisal should be in the simplest form as employees usually do not

understand every terminology of the same and express reluctance to adopt it.

5. Every employee should have a well defined KRAs depending upon the positions.

6. Proper and adequate instructions in filling the appraisal form should be given to the

employees and even managers should be given adequate training in doing the

appraisal.

7. To some extent Performance Appraisal system is good but there should be a periodic

feedback system, which does not exist at present and the feedback should be

constructive.

8. Concise, short and simplest way of Performance Appraisal system should be

implemented. This will save the time of both the management and the employees.

9. Targets are not independently achieved and hence individual potentials are not

reflected in the present appraisal system.

10. Targets should be set for each employee in quantifiable terms and achievement based

on actual performance should be recorded by a third agency that is competent enough

to understand the role of the employee in realistic terms.

4.3 GENERAL SUGGESTIONS

Since the Appraisal system is recently reviewed still some employees does not have a positive

response to this new Appraisal System. The Successful implementation of new appraisal system

also depends to a great degree on the Personnel and HRD department. The responsibility for

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initiating and monitoring the implementation of new appraisal system is usually given to these

departments.

Effective implementation of these systems depends crucially on these departments as:

i. The managers of these departments should have a thorough understanding of the

new system and should have a high degree of commitment to it. They should

attempt to practice the new system even before they are used by the line

managers.

ii. They should anticipate employees’ resistance and be prepared to break this

resistance through persistent efforts.

iii. While the effectiveness with which these systems are implemented depends on

the line managers and may vary from managers to managers. Personnel and HRDdepartment can be instrumental in helping the managers in effective

implementation.

iv. To some extent the Performance Appraisal system is good but there should be a

periodic feedback system, which does not exist at present in the organization. The

aim of the Performance Appraisal system should not be only to rate an individual

as good, average or poor. The aim of the mapping should be to improve the

performance of individual to achieve organizational goal. This is possible only by

incorporating positive periodic feedback system.

v. Simplest way of performance appraisal should be implemented.

vi. After the implementation of new appraisal system the Personnel and HRD

departments are likely to be the target of critics during the transition period. The

managers of these departments should recognize this and should possess a great

degree of patience. At the same time, they should be open to suggestions and

should be willing to make changes when needed.

BIBLIOGRAPHY

1. T.V.Rao, (1999) “Appraisal and Developing Managerial Performance.”

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2. T V Rao, (2008) “Performance Management and Appraisal System: HR Tools for Global

Competitiveness.”

3. Dinesh K Shrivastava, (2005) “Strategies for Performance Management.”

4. Rao, V.S.P (2005), “Human Resource Management”, Performance and Potential

Appraisal.

5. WEBSITES REFERRED

• www.projectsparadise.com• www.humanresource.about.com• www.citehr.com• www.performance-appraisal.com• www.managementparadise.com• www.manpowerindia.net• http://appraisals.naukrihub.com/

• http://en.wikipedia.org/wiki/Performance_appraisal

ANNEXURE

QUESTIONNAIRE:

57

http://www.projectsparadise.com/

http://www.humanresource.about.com/

http://www.citehr.com/

http://www.performance-appraisal.com/

http://www.managementparadise.com/

http://www.manpowerindia.net/


http://en.wikipedia.org/wiki/Performance_appraisal

http://www.projectsparadise.com/

http://www.humanresource.about.com/

http://www.citehr.com/

http://www.performance-appraisal.com/

http://www.managementparadise.com/

http://www.manpowerindia.net/


http://en.wikipedia.org/wiki/Performance_appraisal

8/8/2019 Hemant Sir


This is to certify that information collected through the question mentioned below would

only be used for research purpose and would not be disclosed to any third party.

Personal details:

Name:

Department:

Please indicate your response by putting a ( ) mark in the appropriate box.

Very true 4Mostly true 3Partly true 2 Not at all true 1

PART-I

STATEMENTSVERYTRUE

4

MOSTLYTRUE

3

PARTLYTRUE

2

NOT ATALL

TRUE1

1. The Performance Appraisal (PA)system of our organization is capableof assessing all the activities performed by employees.

2. The PA system provides an

opportunity for each appraise to knowwhat the management really expectsfrom him.

3. The PA system is quite fair andobjective.

4. Managers are given adequate trainingin doing the appraisal.

5. The PA system ensures proper checksand balances to control dishonest prejudices or vindicate bosses(if any)

6. Appraisals for managers are done

against certain Key Result Areas(KRAs).

7. KRA for each manager is decided byhis immediate superior in consultationwith the manager at the beginning of the year.

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STATEMENTSVERYTRUE

4

MOSTLYTRUE

3

PARTLYTRUE

2

NOTAT ALLTRUE

18. Periodic feedback regarding performance

is given to almost all employees in our organization.

9. The objectives of our PA system areclearly known to all our employees.

10. Our PA system helps managers tosystematically plan their work and achievethe targets.

11. Our PA system covers workers also.

12. PA system of our organization is open andappraisal ratings are communicated toemployees.

13. Our PA system is not a method to

control, humiliate or harass employees.14. Our PA system has scope for assessment

of job-related competencies as well as personality dimensions.

15. Self-appraisal is a part of our PA system.

16. Appraisal interviews are conducted todiscuss self appraisal with superior’sappraisal so as to decide the final rating.

17. Our PA system is linked to rewards suchas annual increments.

18. The PA system of our organization is also

linked to career development.19. Our PA system assesses our employee’s

potential for performing higher level jobs.

20. Training needs are identified by our PAsystem.

21. Professional input has gone into thedevelopment of our PA system.

22. 360 Degree appraisal system is used in our organization to assess strengths andweaknesses of managers.

23. Employees do not have any major grievances against the existing PA system.

24. Our PA system is reviewed and modifiedevery 2-3 years.

25. Managers are free to discuss the PAsystem and given suggestions to modify it.

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PART-II

(i). If given a chance or an opportunity would you like that the current appraisal procedure

should be reviewed?

a) Yes b) No c) Can’t Say

(ii).What according to you should be the appropriate method for conducting performance

appraisal?

a) Rating the employee on number of traits along with the range of performance for each

by the supervisor.

b) For every trait, each subordinate is paired with and compared to every

other Subordinate.

c) Reviewing employees on the basis of identified specific examples of good or poor

performance.

d) Setting specific measurable goals with each employee and periodically reviewing the

progress made.

e) Reviewing performance through case studies, presentations, role playing, etc., for

future performance.

f) Receiving feedback from people whose views are considered helpful and relevant

including the appraise himself.

(iii). Does your Performance Appraisal System leads to identification of hidden potential of the

employees?

a) Yes b) No

SUGGESTIONS AND VIEWS:

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Hemant Sir