Impact of Performance Appraisal on Development of Employees New Dabur

7/29/2019 Impact of Performance Appraisal on Development of Employees New Dabur

1/114

ABES INSTITUTE OF BUSINESS MANAGEMENT Page 1

AResearch Report

ON

IMPACT OF PERFORMANCE APPRAISAL ON THE

DEVELOPMENT OF EMPLOYEESSPECIAL REFERENCE TO DABUR INDIA LTD.

SUBMITTED FOR THE PARTIAL FULFILLMENT OF

MASTER IN BUSINESS ADMINISTRATION

SUBMITTED TO:- SUBMITTED BY:-

Prof.Sarika Malhotra SARITA RANIRoll no-0961070042ABES-IBMMBA(2009-2011)

ABES INSTITUTE OF BUSINESS MANAGEMENT,GHAZIABAD


2/114


CHEPTER ORGANIZATION

1. ABSTRACT 4

2. ACKNOWLEDGEMENT 7

3. DECLARATION 9

4. EXECUTIVE SUMMARY 11-12

5. INTRODUCTION

5.1 Topic overview 14 - 47

5.2 Importance of the study 48 - 495.3 Scope of the study 50

5.4 Objective of the study 51

6. COMPANY PRFOFILE 53-68

7. REVIEW OF LITRATURE 70-74

8. RESEARCH METHODOLOGY 76-81

9. DATA ANALYSIS AND INTERPRETATION 83-98

10. CONCLUSION AND SUGGESTIONS 102-107

11. LIMITATIONS OF STUDY 108

12. REFERENCES AND BIBLIOGRAPHY 110

13. ANNEXURE 112


3/114


ABSTRACT


4/114


Abstract

This project report is about the measurement of performance of the employees and

providing them appropriate opportunities to develop their career. In this project

report I have done a study of performance appraisal procedure and its impact on

both the employee and employer. Performance appraisal also helps in building

industrial relations

It signals to managers and employees what is really important; it fixes

accountability for behaviour and results; and it helps to improve performance. This

project will explain the knowledge about the process of performance appraisal. It

can be used as a means of assessing potential for promotion, assisting people to

perform better and indicating future training needs.

This project will explain the knowledge about the performance appraisal process. It

can be used as a means of assessing potential for promotion, assisting people to

perform better and indicating future training needs.

This project will help in studying the purpose of performance appraisal.

Performance appraisal is a management program, not just an HR department

responsibility. It can help in development of scientific basis for reward allocation,

wage fixation, incentives. It serves as a mechanism for communication between

superiors and subordinates.


5/114


ACKNOWLEDGEMENT


6/114


ACKNOWLEDGEMENT

My sincere thanks to faculty supervisor Prof. SARIKA MALHOTRA under

whose able guidance and kind cooperation I was able to complete the project work

titled IMPACT OF PERFORMANCE APPRAISAL ON DEVELOPMENT

OF THE EMPLOYEES and its Effectiveness in an Organization.

All those employees of Dabur India Ltd deserve special thanks for their

cooperation and help in the collection of necessary and relevant material for this

work.

Also, I do thanks to my friends for their effort and helps.

SEvery effort has been made to enhance the quality of work. However, I owe the

sole responsibility of the shortcoming, if any, in the study.

I take the opportunity to express my gratitude to all of them who in some or other

way helped me to accomplish this project in DABUR INDIA LTD.No amount of

written expressions is sufficient to show my deepest sense of gratitude to them.


7/114


DECLARATION


8/114


DECLARATION

This is to certify that project titled PROCESS OF PERFORMANCE

APPRAISAL is done by me, as a partial fulfillment for the degree of

Master of Business Administration for DABUR INDIA LTD under

guidance of Prof.Sarika Malhotra.

No part of this report is submitted elsewhere

Name:- SARITA RANI

Place:-


9/114


EXECUTIVE

SUMMARY


10/114


EXECUTIVE SUMMARY

Today, in every organization measurement of performance appraisal is

an important activity. It is an important part of an organization.

Performance appraisal planning is a vital ingredient for the success of

the organization in the long run. There are certain ways that are to be

followed by every organization, which ensures that it has right number

and kind of people, at the right place and right time, so that

organization can achieve its planned objective.

Performance appraisal is an objective of HR department. Providing

training, counseling, promotion, transfer and career planning is also a

responsibility of HR department. Each objective needs special

attention and proper planning and implementation.

Performance appraisal plays a vital role in development of employees

by providing them feedback about their performance. Performance

appraisal provides a feedback to employees so that they can get

information about their performance and can improve it, if it is

required.

Employees have got an opportunity to expand their skills and talent

that they have through performance appraisal. Performance appraisal

gives them a chance to grow up in the organization by providing them

training and counseling.


11/114


So it can be said that performance appraisal makes an impact on

employees. it may be both positive and negative.

This project is been prepared to put a light on IMPACT OF

PERFORMANCE APPRAISAL ON EMPLOYEES. This project

includes Meaning and Definition of performance appraisal, Need and

Purpose of performance appraisal and Evaluation of performance

appraisal Process and its impacts on employees.


12/114


INTRODUCTION


13/114


INTRODUCTION

In this research report a study has been done on performance appraisal.

Performance appraisal is a method of evaluating the behavior of employees in the

work spot. It includes both the quantitative and qualitative aspect of job.

Performance appraisal is a systematic appraisal of employees personality

traits performance on the job and is designed to determine his or her

contribution and relative worth to the firm. SHUBIN

It is a systematic evaluation of the individual with respect to his or herperformance on the job and his or her potential for development. This project also

gives me an opportunity to study the concept Human Resource as a whole and itsfunction rather than emphasizing on any particular area. The history of

performance appraisal is quite brief.

THE PURPOSE OF PERFORMANCE APPRAISAL:-

In general the appraisal systems serve a twofold purpose:

1. To improve the work performance of employees by helping them realize and

use their full potential in carrying out their firms mission.

2. To provide information to employees and managers foruse in making, work

related decisions.

More specifically appraisals serve the following purposes:-


14/114


a) Appraisals provide feedback to employees and help the management identify

the areas where development efforts are needed to bridge the gaps thereby

serving as vehicles forpersonal and career development.

b) It helps management spot individuals who have specific skills so that their

promotions/transfer is in line with organizational requirements.

c) Appraisal serves as a key input for administering a formal organization

reward and punishment system.

d) The performance system can be used as a criterion against which selection

devices and development programs are validated.

Duration of Appraisal System

The time constraints enables the employee to show or project his/her

capabilities in term of performance as per the duration allowed.

In Dabur India Limited, the performance appraisal system is carried

out annually.

Dabur India Limited provides the annual feedback to its employees and

thus, in term brings out the highlights of the self assessment programme.

This enables the better communication between the management and

employees and thus, helps in promoting the business future.


15/114


WHO SHOULD EVALUATE PERFORMANCE?

The most fundamental requirement for any rater is that he or she has an adequate

opportunity to observe the rates job performance over a reasonable period of time.

This suggests several possible raters.

The immediate supervisor: Generally appraisal is done by this person. He is

probably the most familiar with the individual's performance and in most jobs

has had the best opportunity to observe actual job performance. Further more, the

immediate supervisor is probably best able to relate the individual's performing

to department and organizational objectives.

In some jobs such as outside sales, law enforcement and teaching, the immediate

supervisor may observe a subordinate's actual job performance rarely (and

indirectly thru written reports). Here judgment of peers play important role.

However, there is a danger of potential bias.

Subordinates: Appraisal by subordinates can be useful input to the immediate

development. Subordinates know first hand the extent to which the supervisor

actually delegates, how well he communicates, the type of leadership he has and

the extent to which he or she plans and orgasms.


16/114


Self appraisal: On one hand it improves the rate's motivation and moral, on the

other it tends to

be more lenient, less variable and biased. The evidence on the accuracy of self

assessment is fairly complex.

In industry it is seen that feed back/ input is taken from various sources -Peers,

subordinates, superiors etc. Some companies have gone step ahead in taking

feedback from the customers and integrating it into the performance management

process.

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!


17/114


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.


18/114


Sometimes this basic system succeeded in getting the results that were intended;

but more often than not, it failed.

For example, early motivational researchers were aware that different people with

roughly equal work abilities could be paid the same amount of money and yet

have quite different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important,

yes; but they were not the only element that had an impact on employee

performance. It was found that other issues, such as morale and self-esteem, could

also have a major influence.

As a result, the traditional emphasis on reward outcomes was progressively

rejected. In the 1950s in the United States, the potential usefulness of appraisal as

tool for motivation and development was gradually recognized. The general model

of performance appraisal, as it is known today, began from that time.

Modern Appraisal

Performance appraisal may be defined as a structured formal interaction between a

subordinate and supervisor, that usually takes the form of a periodic interview

(annual or 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.


19/114


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.)

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

justification of rewards and penalties is a very uncertain and contentious matter.

Controversy, Controversy

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

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 (see Derven, 1990, for

example). At the other extreme, there are many strong advocates of performance


20/114


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.


21/114


Such reluctance is not difficult to understand. Appraisers often know their

appraises 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. 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 are the only process available to help

achieve fair, decent and consistent reward outcomes. It has also been claimed that

appraises 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; appraises may suspect that they are not


22/114


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

time.

The Link to Rewards

Recent research (Bannister & Balkin, 1990) has reported that appraises 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.

There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocation. Decision as to who gets salary

increase, promotion, and other rewards are determined by their performance


23/114


evaluation. Second, these appraisals can be used for identifying areas where

development efforts are needed. The performance appraisal is a major tool for

identifying deficiencies in individuals. Finally it can be used as a criterion against

which selection devices and development programs are validated. As a key input

into management's reward and punishment decision, performance appraisals can

motivate or de-motivate employees.

Three different approaches exist for doing appraisals. Employees can be appraised

against

1) Absolute Standards

2) Relative Standards

3) Objective

PERFORMANCE MANAGEMENT

Since organizations exits to achieve goals, the degree of success that individual

employees have in reaching their individual goals is important in determining

organization effectiveness.

Performance system is fundamentally, a feed back process, which requires

sustained commitment. The cost of failure to provide such feedback may result in a

loss of key professional employees, the continued poor performance of employees


24/114


who are not meeting performance standards and a loss of commitment by

employees, in sum, the myth that the employees know what they are doing without

adequate feedback from management can be an expensive fantasy.

PERFORMANCE APPRAISAL (Theoretical view):-

Since organization exist to achieve goals, the degree of success that individual

employees have in reaching their individuals goals is important in determining

organizational effectiveness. The assessment of how successful employees have

been at meeting their individual goals, therefore, becomes a critical part of HRM.

This leads us to the topic of performance appraisal.

There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocations. Decisions as to whom

get salary increases, promotions, and other rewards are determined by their

performance evaluation.

Second, these appraisals can be used for identifying areas where

development efforts are needed. Management needs to spot those

individuals who have specific skill or knowledge deficiencies. The

performance appraisal is a major tool for identifying these deficiencies.


25/114


Finally the performance appraisal can be used as a criterion against which

selection devices and development programs are validated.

It is one thing to say, for example, that our selection process is successful

in differentiating satisfactory performers from unsatisfactory performers.


26/114


PERFOEMANCE APPRAISAL PROCESS:- Process

of performance appraisal is given below:-

Fig:-PERFOEMANCE APPRAISAL PROCESS


27/114


The appraisal process begins with the establishment of performance

standards. These should have evolved out of job analysis and the job

description discussed under human resource planning. These performance

standards should also be clear and objective enough to be understood and

measured. Too often, these standards are articulated in some such phrase as

"a full day's work" or "a good job". Communication only takes place when

the transference has taken place and has been received and understood by

the subordinate. Therefore feedback is necessary from the subordinate to

the manager. Satisfactory feedback censures that the information

communicated by the manager has been received and understood in the

way it was intended.

The third step in the appraisal in the measurement of performance. To determine

what actual performance is, it is necessary to acquire information about it. We

should be concerned with how we measure and what we measure.

What we measure is probably more critical to the evaluation process than how we

measure, since the selection of the wrong criteria can result in serious

dysfunctional consequences. And what we measure determines, to a great extent,

what people in the organization will attempt to excel at.


28/114


One of the most challenging tasks facing managers is to present an accurate

appraisal to the subordinate and then have the subordinate accept the appraisal in

a constructive manner. Appraising performance touches on one of the most

emotionally charged activities the assessment of another individual's

contribution

and ability. The impression that subordinates receive about their assessment has a

strong impact on their self-esteem and, very important, on their subsequent

performance.

The final step in the appraisal is the initiation of corrective action when

necessary. Corrective action can, be of two types. One is immediate and deals

predominantly with symptoms. The other is basic and delves into causes.

Immediate corrective action often described as "putting out fires," whereas basic

corrective action gets to the source of deviation and seeks to adjust the difference

permanently.

Immediate action corrects something right now and gets things back on track.


29/114


IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEES

Effects of Performance Appraisal on Employee Attitudes

In previous pages, several types and techniques of performance appraisals were

mentioned, as well as attitudes an employee can have. This chapter focuses on

presenting how appraising performance may influence employee attitudes and

behavior.

Archer North suggests that mere individual recognition, that is to say appraising

performance, can lead to higher job satisfaction and reduced absenteeism and

turnover rates. In fact, there is evidence that human beings will even prefer

negative recognition in preference to no recognition at all.

In traditional appraisal process, the manager, commonly annually, rates the

performance of a reporting staff member using some technique listed above. Most

of the time, the appraisal reflects the most recent events; that is a big

disadvantage.If a manager doesnt talk to staff during the year, and he saves up

everything they mess up, the employee actually rated may feel very uncomfortable

when faced a list of all mistakes he had made during the year.

Recently, a method of 360-degree feedback was developed. It is a process in

which you evaluate yourself on a set of criteria, your manager evaluates you, as do

your peers and direct reports. You receive a gap analysis between how you


30/114


perceive yourself and how others perceive you. Effective 360-degree feedback

processes also include coaching sessions and development planning. Before, it

was only used to evaluate executives, but now, participants are individuals at all

levels of organizations.

Effects of performance appraisal on employee attitudes

Right decision on what performance appraisal technique to use is essential for the

rest of the process.

For motivating employees by providing them feedback on how they are doing, the

MBO or work-standards approach seem to be good choices. If they involve real

participation, it is most likely to lead to an inner commitment to improved

performance.

MBO method of performance appraisal may, on the one side, overcome some of

the problems that arise when assuming that the employee traits needed for job

success can be reliably identified and measured. Instead of assuming traits, MBO

method focuses on actual outcomes. These methods of performance appraisal can

give employees a satisfying sense of autonomy and achievement. However, they

can also lead to unrealistic expectations about what can and cannot be reasonably

accomplished. It has been shown in numerous studies (e.g. Locke, et al.) that

goal-setting is an important element in employee motivation. Goals can stimulate


31/114


employee effort, focus attention, increase persistence, and encourage employees to

find new and better ways to work.

From a Total quality management (TQM) perspective, traditional performance

appraisal can possibly hurt quality and teamwork, because it can make employees

compete against one another. Solution might be rating teams rather than

individuals.

To show effects of performance appraisal on employee attitudes, a study by Gabris

and Mitchell, made in an organization with a quarterly performance appraisal

system, which focused on Matthew effect, will be used. Matthew effect is said to

occur where employees tend to keep receiving the same appraisal results, year in

and year out. That is, their appraisal results tend to become self-fulfilling: if they

have done well, they will continue to do well; if they have done poorly, they will

continue to do poorly. They explored an extent of frustration rising from biased

performance appraisal. The workforce was divided into two groups: those who

had been given high appraisal results consistently, and those who had low results

consistently. When the groups were asked if the appraisal system was fair and

equitable, 63 per cent of the high performers agreed, compared to only 5 per cent

of the lower performers. The groups were asked if their supervisors listened to

them. Of the high performers, 69 per cent said yes, while among the low

performers, 95 per cent said no. Finally, when asked if their supervisors were


32/114


supportive, nearly half of the high performers agreed that they were, while none of

the low performers agreed.

It is a cardinal principle of performance appraisal that employees should have the

chance to improve their appraisal resultsespecially if their past results have not

been so good. It is a very serious flaw in the process of appraisal if this principle is

denied in practice.

Heathfield says that employee whose performance is under review often becomes

defensive. Whenever his performance is rated as less than the best, or less than

the level at which he personally perceives his contribution, the manager is viewed

as punitive. Disagreement about contribution and performance ratings can create a

conflict ridden situation that festers for months.

Oberg warns, negative feedback from performance appraisal not only fails to

motivate the typical employee, but also can cause him to perform worse. Only

those employees who have a high degree of self-esteem appear to be stimulated by

criticism to improve their performance. [5] According to study by Baron,

destructive criticism, which is vague, ill-informed, unfair or harshly presented

will lead to problems such as anger, resentment, tension and workplace conflict, as

well as increased resistance to improvement, denial of problems, and poorer

performance.


33/114


Mentioned implications should be dealt with big attention. It may be suggested that

an appraiser should delineate performance appraisal process to a person appraised

not as an opportunity to criticize him, but primarily as a way for explaining what

could be done better and how could he (and thus the whole company) perform

better in future.

Bannister notes, it is important that the appraiser be well-informed and credible. If

it is so, employees are more likely to view the appraisal process as accurate and

fair. They also express more acceptances of the appraisers feedback and a greater

willingness to change.

Bacal recommends that when talking to an employee about a problem, one should

phrase his comments in terms of preventing the problem from recurring, by using

the inappropriate performance as a jumping off point, explaining why it is

problematic, and then quickly moving on to preventing re-occurrence. This moves

the focus from blame to improvement. He also suggests a cooperative, dialogue

approach for managers. This approach puts the manager and employee on the same

side, and working towards the same goals is getting better and better. Employee

may feel noticed, more self-confident, proud that he or she is working with the

boss, and thus may be motivated to perform even better. Mere fact of talking with

his supervisor might be very important.


34/114


Research studies show that employees are likely to feel more satisfied with their

appraisal result if they have the chance to talk freely and discuss their performance.

It is also more likely that such employees will be better able to meet future

performance goals.

Barrie and Sow claim there must be standards of comparison. People need to know

how well they are doing at their jobs and where they could improve. It is important

to keep in mind that appraisals do not equate to criticism. It may be necessary to

explain the importance of completing tasks within timelines or changing the

technique of doing a task. Unfortunately, many performance appraisals only

frustrate the employee by adding more tasks to what appears to be an already

overloaded agenda.

A person appraising performance should be aware of feedback-seekers. It is a

situation described by Larson, when usually a poor performing employee seeks

feedback from his supervisor (future appraiser, actually) in inappropriate moments,

when he is not ready or able to give accurate or frank assessment. If that is the

case, a supervisor would often provide a few encouraging words of support. The

problem arises in appraisal time. The supervisor will find that the employee recalls


35/114


every casual word of praise ever spoken. This is a very difficult situation for a

supervisor, because he either lied when giving the praise, or least, misled the

employee in thinking that his performance was acceptable. Supervisor might feel

caught in a trap and may actually upgrade the results of performance appraisal.

This situation is rather simple to avoid by a managerhe should always tell

feedback-seeker that he doesnt have time and ask him or her to see him in the

office later.

A recent trendintroducing electronic monitoring systems (and performance

appraisal software), should not be left unnoticed. Even though the whole system

goes further than mere appraising performance; it deserves mention in this work.

Despite its negative effects on employees, it is used more than ever before.

Managers fail to realize that electronic monitoring is not able to replace the role of

supervisor. It is likely to increase worker stress and decrease employee job

satisfaction. Although this may lead to increased productivity, this is frequently

accompanied by a decrease in quality and customer service. Study among

monitored employees showed a rise in cases of extreme anxiety, severe fatigue or

exhaustion, a loss of feeling in the finger/writs, shoulder soreness and depression.

The stress associated with electronic monitoring in these cases clearly has real

world effects. The stress that employees experience may cost employers more on

medical bills in the long run.


36/114


Discussions about link of performance appraisal to remuneration

Among those, who do not reject performance appraisal, a big discussion is lead

over whether a performance appraisal (and its results) should or should not be

linked to remuneration.

Main argument against linking appraisal results from reward decisions is the belief

that a close link could create a threatening and potentially punitive system. Another

argument, provided by Archer North, says that the linkage to reward outcomes

reduces or eliminates the developmental value of appraisals. 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.

A fact that should not be overlooked is that many appraisers feel uncomfortable

when they are in a role of judge. It may end up in a problem, when raters and

ratees know each other well, maybe even mix socially. In that situation, if a

appraiser has to give an appraisal result that has the direct effect of negating a

promotion or even salary decrease, it may result in resentment and serious morale

damage, leading to workplace disruption, soured relationships and productivity

declines.


37/114


On the other side, there are advocates for that appraisal results should be linked to

remuneration. They argue that an organization needs a system to distribute rewards

fairly. According to them, performance appraisal 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.Recent research by Bannister and Balkin 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.

Conclusion

Performance appraisal systems are not, as many critics say, useless and evil. When

paying attention to careful PAS planning and proper techniques used, performance

appraisal might be perceived not only as an irreplaceable tool for recognizing and

rewarding good performance and correcting poor performance, but mainly as a

way how to maintain long-term development within an organization.

During a research carried out when preparing this work, an author found a big

variety of views on performance appraisal and all of its aspects. Often, opinions

were completely opposed. That gives evidence, that, in contrast to other

management topics, performance appraisal as whole is very hard to do right,


38/114


since there are not many right solutions that would have no opponents.

There are several things, however, that should be kept in mind when preparing and

doing performance appraisal. Appropriate technique should be always used;

performance appraisal should be done as a running on daily basis, rather than

annual reports. Human Resources department and appraisers should consider

performance appraisal mainly as a means for development and motivation, not

only a guideline for remuneration and promotion / demotion.

He also found that there is a link between performance appraisal and employee

attitudes and behaviors. In previous pages, several examples of effects of

performance appraisal on attitudes are said.

In articles, an author noticed global efforts to make changes in approaches to

performance appraisal towards developmental and motivational uses.

FACTORS AFFECTING PERFORMANCE OF EMPLOYEES:-

1. Documentation

The performance-appraisal process requires documentation of expectations

and performance. Documented references during appraisals include the


39/114


employee's job description, her last performance appraisal, interim

appraisals and disciplinary documents. A work plan, based on the previous

completed performance appraisal, may be used to detail expectations and a

time line for accomplishment. The work plan often details all aspects of

employee performance, including mastery of specific skills or

behaviors and improvement of unsatisfactory performance areas.

2. Duties and Responsibilities

A performance appraisal lists and measures the performance of critical job

duties and responsibilities as detailed in the job description. The appraisal

may rate the overall performance, improvement since the last appraisal, the

quality and quantity of work performed, and areas needing improvement.

The appraisal might measure the employee's organizational skills, his ability

to read and interpret policy, and procedures and the timeliness of work

completion.

3. Attendance

An appraisal reviews the employee's use of leave and adherence to the daily

work schedule. The performance appraisal evaluates how well the employee

manages and uses leave, including whether she follows leave policies such

as advance leave scheduling and calling in at appropriate times.


40/114


Documentation of leaving early, arriving late, misuse of breaks and lunch

periods and other violations are evaluated.

4. Attitude and Behavior

The performance appraisal evaluates aspects of the employee's attitude and

behavior and how they affect job performance. Areas rated might include

communication, cooperation and flexibility. Appraisal questions might ask

how well an employee takes criticism and direction or the degree to which

he is helpful, shows initiative and is dependable. Supervisors may be asked

to rate the employee on how well he gets along with co-workers.

5. Professional Development

Management usually bases evaluation of professional development on plans

agreed upon during the previous performance appraisal. Personal

development includes training, such as improvement in computeruse or

proficiency in specific software. The appraisal might evaluate whether the

employee has actively sought to improve her knowledge and skills through

taking courses and workshops offered by the employer.

PERFORMANCE APPRAISAL SYSTEM IN DABUR INDIA LTD.

In Dabur India Limited they have the system of performance appraisal of

their employees. The main objective of this performance appraisal system is to
http://www.ehow.com/computers/http://www.ehow.com/computers/


41/114


evaluate the performance, promote their employees and to arrange for their

various training programmes if they require for enhancing their skills in their

respective areas and in contribution enhancement.

Employees are evaluated by how well they accomplish a specific set of

objectives that have been determined to be critical in the successful completion

of their job. This approach is frequently referred to as management by

objectives. Management by objectives is a process that converts organizational

objectives into individual objectives. It can be thought of as consisting of four

steps: goal setting, action planning, self- control, and periodic reviews. In goal

setting, the organization's overall objectives are used as guidelines from which

departmental and individual objectives are set. In action planning, the means are

determined for achieving the ends established in goal setting. That is, realistic

plans are developed to attain the objectives. Self-control refers to the systematic

monitoring and measuring of performance. Finally, with periodic progress

reviews, corrective action is initiated when behavior deviates from the standards

established in the goal-setting phase. Dabur uses very constructive performance

appraisal process while evaluating its employees.

Its evaluation is based on quantitative wise and objective wise.

Company set goals to its employee by properly reporting with its employees and


42/114


then evaluating them up to what extent it has been achieved and if there is failure

in reaching the target what are the causes or reasons behind it.

Every evaluator has his or her own value system which acts as a standard against

which appraisals are made. Relative to the true or actual performance an

individual exhibits, some evaluator mark high and others low. The former is

referred to as positive leniency error and the latter as negative leniency error.

When evaluators are positively lenient in their appraisal, an individual's

performance becomes over- stated; that is, rated higher than it actually should.

Similarly, a negative leniency error understates performance, giving the

individual a lower appraisal. As such there is no scope of error as far as the Dabur

Company is concerned, but sometimes over estimation of target brings about a

description in the evaluating criteria. Thus, though chances are less, positive

leniency errors have been stated to be committed.

Outcome of Performance Appraisal

As far as Dabur Company is concerned, there are four outcomes possible:

a) Outstanding -If the performance evaluated by the management turns out to

be outstanding. If the employee performs in such a way as to collect 3

consecutive outstanding performances into his/her credit) he / she get

promoted.


43/114


b) Excellent -If the performance evaluated by the management turns out to be

excellent. If the employee performs in such a way as to collect 3 consecutive

excellent performances into his/her credit, he/she gets promoted.

c) Good -If the performance evaluated by the management turns out to be

good. The management sends the employee to the training programme to

improve his/.her skill to perform form.

d) Below average -If the performance evaluated by the management turns out

to be below average. And, if the employee collects 3 below average to

his/her credit, then he/she dismissed

Duration of Appraisal System

The time constraints enables the employee to show or project his/her capabilities

in term of performance as per the duration allowed. In Dabur India Limited, the

performance appraisal system is carried out annually.

Feedback

The company provides the annual feedback to its employees and thus, in term

brings out the highlights of the self assessment programme. This enables the better

communication between the management and employees and thus, helps in

promoting the business future.


44/114


Response

There are mixed responses from the feedback by the employees. It has helped

some of the employees in motivating themselves while those who felt bad were

thoroughly communicated and all the confusion and failure part were discussed

with employees.

THE PURPOSE OF APPRAISING PERFORMANCE

In general the appraisal systems serve a two fold purpose:

1. To improve the work performance of employees by helping them realize and

use their full potential in carrying out their firms mission.

2. To provide information to employees and managers foruse in making, work

related decisions.

More specifically appraisals serve the following purposes.

a) Appraisals provide feedback to employees and help the management identify

the areas where development efforts are needed to bridge the gaps thereby

serving as vehicles forpersonal and career development.

b) It helps management spot individuals who have specific skills so that their

promotions/transfer is in line with organizational requirements.


45/114


c) Appraisal serves as a key input for administering a formal organization

reward and punishment system.

d) The performance system can be used as a criterion against which selection

devices and development programs are validated.

REQUIREMENT OF THE PERFORMANCE MANAGEMENT

Reliability: The foremost requirement of a sound system is reliability. In this

contact it refers to consistency of judgment. For any given employee, appraisals

made by raters working independently of one another should agree closely. But

raters with different perspective (e.g. supervisors, peers, subordinates) may see

the same individuals job performance very differently. To provide reliable data,

each rater must have an adequate opportunity to observe what the employee has

done and the condition under which he or she has done it. By making appraisal

system relevant, sensitive and reliable we assume the resulting judgments are

valid as well.

Acceptability: In practice, acceptability is the most important requirement of all,

for it is true that human resources program must have the support of those who

will use them. Unfortunately, many organizations do not put much effort into

garnering the front end support and participation of those who will use the


46/114


appraisal system. Ultimately it is management's responsibility to define as clearly

as possible the type and level of job behaviors desired of employees.

It is important to enlist the active support and cooperation of subordinates by

making explicit what aspects of job performance they will be evaluated on.

Practicality: This implies that appraisal instruments are easy for managers and

employees to understand and to use.

For years, personnel specialists have searched for the 'Perfect; appraisal method

as if it were some kind of miraculous cure for many pitfalls that plague

organizations. Such a method does not exist. In tomorrows world of work far

more emphasis needs to be placed on process issues. Factors such as timing and

frequency are no less important. In sum performance appraisal is a dialogue

involving people and data. Both technical and human issues are involved.

Neither can be overemphasized at the expense of the other.



feedback from the customers and integrating it into the performance management

process.


47/114


IMPORTANCE OF THE STUDY

The most fundamental requirement for any rater is that he or she has an adequate

opportunity to observe the rates job performance over a reasonable period of time.

This suggests several possible raters.

1. It provides immediate supervision which is probably best able to relate the

individual's performance with the department and organization.

2. It provides best opportunity to observe actual job performance.

3. It provides information to employees about their performance.

4. It provides information about motivation level of employees. i.e if

employees are less motivated, it can be increased by performance appraisal.

5. Employees can get a chance of promotion and transfer.

6. It provides training and counseling to employees.

7. It provides a feedback of performance to employees so that they can

improve their performance accordingly.

8. It provides a performance standards to employees so that they become

aware of the organizational goal.


48/114


9. Appraisal by subordinates can be useful input to the immediate

development. Subordinates know first hand the extent to which the

supervisor actually delegates, how well he communicates, the type of

leadership he has and the extent to which he or she plans and orgasms.

10.Self appraisal: On one hand it improves the rate's motivation and moral, on

the other it tends to be more lenient, less variable and biased. The evidence

on the accuracy of self assessment is fairly complex.



feedback from the customers and integrating it into the PMS.


49/114


SCOPE OF STUDY

The study of the following makes the company aware of the field, where it is lagging which

helps them in conducting proper performance appraisal programmes for their employees. It also

helps to understand the employees, the atmosphere and the workplace and help the company to

check the existing schemes are providing to the employees. Performance appraisal process must

necessarily fulfill the require manpower to increase production.

"Together we create the enterprises of tomorrow"

"To provide world-class solutions and services to enable our customers to serve their customers

better"


50/114


OBJECTIVE OF STUDY

This project aims at studying the system of performance appraisal and its

effectiveness in an organization. Performance appraisal is the most significant and

indispensable tool for the management as it provide useful information for decision

making in area of promotion and compensation reviews.

Thus a broad objective of the study includes:

To know the impact of performance appraisal on motivation and morale of

the employees, whether it is increased or not?

To find out the benefits of performance appraisal to employees and

challenging situations faced by employees.


51/114


COMPANY

PROFILE


52/114


ABOUT THE ORGANISATION:-

.

History


53/114


The story of Dabur goes back to 1884, to a young doctor armed with a degree in

medicine and a burning desire to serve mankind. This young man, Dr. S. K.

Burman, laid the foundations of what is today known as Dabur India Limited.

From those humble beginnings, the company has grown into India's leading

manufacturer of consumer healthcare, personal care and food products. This

phenomenal progress has seen many milestones, some of which are mentioned

below:

\ Dr. S K Burman

1884 -Dr. S K Burman lays the foundation of what is today known as

Dabur India Limited. Starting from a small shop in Calcutta, he began a

direct mailing system to send his medicines to even the smallest of

villages in Bengal. The brand name Dabur is derived from the words 'Da'

forDaktaror doctor and 'bur' from Burman.

1896 -As the demand for Dabur products grows Dr. Burman feels the


54/114


need for mass production of some of his medicines. He sets up a small

manufacturing plant at Garhia near Calcutta.

Early 1900s -The next generation of Burmans take a conscious decision

to enter the Ayurvedic medicines market, as they believe that it is only

through Ayurveda that the healthcare needs of poor Indians can be met.

Amit Burman

1919 -The search for processes to suit mass production of Ayurvedic

medicines without compromising on basic Ayurvedic principles leads to

the setting up of the first Research & Development laboratory at Dabur.

This initiates a painstaking study of Ayurvedic medicines as mentioned

in age-old scriptures, their manufacturing processes and how to utilize

modern equipment to manufacture these medicines without reducing the

efficacy of these drugs.

1928 -A manufacturing facility for Ayurvedic Medicines is set up at

Narendrapur and Daburgram. Dabur expands its distribution network to


55/114


Bihar and the northeast.

1936 -Dabur India (Dr. S K Burman) Pvt. Ltd. is incorporated.

1940 -Dabur diversifies into personal care products with the launch of its

Dabur Amla Hair Oil. This perfumed heavy hair oil catches the

imagination of the common man and film stars alike and becomes the

largest hair oil brand in India.

1949 -Dabur Chyawanprash is launched in a tin pack and becomes the

first branded Chyawanprash of India.

1956 -Dabur buys its first computer. Accounts and stock keeping are one

of first operations to be computerized.

1970 -Dabur expands its personal care portfolio by adding oral care

products. Dabur Lal Dant Manjan is launched and captures the Indian

rural market.

1972 -Dabur shifts base to Delhi from Calcutta. Starts production from a

hired manufacturing facility at Faridabad.

1978 -Dabur launches the Hajmola tablet. This is the first time that a

classical Ayurvedic medicine is branded -from Shudhabardhak bati to


56/114


Hajmola tablet.

1979 -The Dabur Research Foundation (DRF), an independent company,

is set up to spearhead Dabur's multi-faceted research.

1979 Commercial production starts at Sahibabad. This is one of the

largest and most modern production facilities for Ayurvedic medicines in

India at this time.

1984 -The Dabur brand turns 100 but is young ~enough to experiment

with new offerings in the market.

1986 -Dabur becomes a public limited company through reverse merger

with Vidogum Limited, and is re-christened Dabur India Limited.

1989 -Hajmola Candy is launched and captures the imagination of

children and establishes a large market share.

1992 -Dabur enters into a joint venture with Agrolimen of Spain for

manufacturing and marketing confectionery items such as bubble gums

in India.

1993 -Dabur sets up the oncology formulation plant at Baddi, Himachal

Pradesh.


57/114


1994 -Dabur India Limited comes out with its first public issue. The

Rs.10 share is issued at a premium of Rs.85 per share. The issue is

oversubscribed 21 times.

1994 -Dabur reorganizes its business with sales and marketing operations

being divided into 3 separate divisions.

1994 -Dabur enters the oncology (anti-cancer) market with the launch of

Intaxel (Paclitaxel). Dabur becomes only the second company in the

world to launch this product. The Dabur Research Foundation develops

the unique eco-friendly process of extracting the drug from the leaves of

the Asian Yew tree.

1995 -Dabur enters into a joint venture with Osem of Israel for food and

Bongrain of France for cheese and other dairy products.

1996 -Dabur launches Real Fruit Juice which heralds the company's entry

into the processed foods market.

1997 -The Foods division is created, comprising of Real Fruit Juice and

Hommade cooking pastes to form the core of this division's product

portfolio.

1997 -Project STARS (Strive To Achieve Record Successes) is initiated


58/114


by the company to achieve accelerated growth in the coming years. The

scope of this project is strategic, structural and operational changes to

enable efficiencies and improve growth rates.

1998 -The Burman family hands over the reins of the company to

professionals. Mr. Ninu Khanna joins Dabur as the Chief Executive

Officer. ..

1999-2000 -Dabur achieves the Rs.IOOO crore turnover mark

What is that life worth which cannot bring comfort to others", these words of

Dr. S K Burman have inspired generations of Dabur. Keeping r" these golden

words in mind, Sandesh or the Sustainable Development Society was set up to

carry out welfare activities aimed at improving the

a quality of life of the rural people in its area of operation. This society is

given complete financial and managerial support by Dabur India Limited.


59/114


PRODUCTS AND SERVICES

A vast array of products touching the lives of almost every individual, from an

infant to a grand old man, from poor to rich; that's how the Dabur's range of health

personal care and food products could be best explained. Today Dabur trust has

traveled beyond the boundaries of India and is available in more than 50 countries

worldwide. These values for money products have made Dabur a household name

Healthcare is one of the biggest and oldest divisions of Dabur with a wide range of

OTC healthcare products. It comprises of:

Ayurvedic Health Tonics

Chyawanprash

The leader in the chyawanprash market in India, Dabur Chyawanprash is one of

the most well known Ayurvedic products in India and abroad. An effective

herbal immune modulator, Dabur Chyawanprash has the essential goodness 'of

amla and over 50 other herbs. Dabur has conducted several clinical trials on this

product, which confirm its efficacy as a unique product that strengthens the

body from within.


60/114


Digestives

Hajmola Tablets

Hajmola Tablets are the first classical Ayurvedic products to be branded and

positioned as fun-filled product with medicinal properties. It finds mention in

Ayurvedic scriptures as Kshudhavardhak Bati, and was branded as Hajmola, a

name derived from Hajma which means digestion in Urdu. It is available in

regular and tamarind flavor.

Hajmola Candy

To cash in on the brand equity enjoyed by Hajmola, Dabur launched Hajmola

Candy in 1989. Since then, the company has added Mango and tamarind flavors

besides the regular one.

Pudin Hara

One of the oldest products in Dabur portfolio, Pudin Hara is available in liquid as

well as capsule form. It has a special combination of mint oils and cures gastric

problems without any side effects.

The company has added effervescent powder with goodness of Mint for gas and

acidity and named it Pudin Hara G.


61/114


Hingoli

Asafoetida or Hing is mentioned in Ayurveda as an effective aid in digestion, and

is used a lot in Indian cooking. Dabur's Hingoli has all the goodness of asafoetida

and other herbs.

Childcare Products

Dabur Lal Tail

The largest baby massage oil in India, it has the goodness of herbs which helps in

strengthening the bones of infants.

Dabur Janma Ghutti

This Ayurvedic preparation helps in strengthening the digestive system of new

borns.

Women Care Products

Efarelle Comfort

An herbal medicine in self gel capsule form to help overcome abdominal pain

during PMS. A combination of natural oils, this formulation gives immediate relief

from pain without any side effects.

The largest division in terms of sales, the Family Products Division of Dabur has in


62/114


its portfolio hair care and skin care products, oral care and select foods like honey.

Hair & Skin Care

Dabur is the leader in hair care products in India, and has covered almost all the

categories of hair oils.

Dabur Amla Hair Oil -As a brand has made its mark beyond India and is a leading

hair oil brand in Middle East and Africa. A perfumed heavy hair oil, it is Dabur's

largest brand.

Dabur Special Hair Oil -It is light hair oil that combines the natural hair care

properties of lemon and hibiscus.

Vatika -The fastest growing hair oil brand of India, Vatika has single handedly

created an altogether new category of herbal enriched natural oils. The Vatika

range also includes an herbal shampoo, which has made its mark in the very first

year of its launch in the competitive shampoo market of India.

The company has recently launched Vatika Anti -Dandruff Shampoo having herbal

ingredients to fight the problem of Dandruff

Gulabari -Rose water derived from best of Indian roses makes the skin supple and

glowing.


63/114


Oral Care

Dabur Lal Dant Manjan -It is the second largest tooth powder brand of India

and the largest in colored tooth power category. This herbal tooth powder is

very popular in rural parts of India.

Binaca Toothbrushes -After having acquired this dormant brand a few years

back, Dabur launched toothbrushes under this umbrella. There are plans to

launch other oral care products under the Binaca brand.

Dabur Honey

When repositioned in 1993, it totally changed the perception of Indian

consumer. Honey, which was mainly used for its medicinal properties in India,

is today competing for space on breakfast table.

Ayurvedic Specialties is a range of over 350 Ayurvedic Medicines both. Classical

Ayurvedic drugs and proprietary Ayurvedic medicines developed by Dabur's own

research and development. Dabur has products for all the 16~ categories as defined

in the Ayurveda. Some of the leading products in this category are:

Asav Arishtas -These are medicated decoctions with self-generated alcohol

content. Dabur has a range of over 30 Asav Arishtas. Some of the well-known ones

include Dashmularishta, Drakshasava, Lohasava, Parthadyarishta and


64/114


Ashokarishta.

Chumas -These are finely ground medicinal powders used to treat a variety of

ailments ranging from digestive problems to cough and fever.

Ras Rasayans -Preparations containing mineral drugs as main ingredients are

called Ras Rasayans. Dabur has a range of more than 50 Ras Rasayans which are

used by Ayurvedic practitioners in the cure of host of ailments.

Medicated Oils -The oils boiled along with certain prescribed drugs are known as

medicated oils. These oils retain the curative properties of herbs and are used for

injunction and massage. Launched over two years back, the Dabur Foods range

includes juices under the brand name Real and cooking pastes under the brand

name Hommade. To give a better focus this division has been carved out as a

subsidiary company of Dabur India Limited.

Dabur Foods Limited -Dabur Foods Limited, a 100% subsidiary of Dabur India

Limited, is spearheading Dabur's foray into food processing industry. The

company, set up in April 1999, is marketing a range of fruit juices under the brand

name Real, Hommade Cooking Paste and Sauces and Lemoneez lemon juice.

Dabur was the first company in India to introduce fruit juices in packaged form

without any artificial additive. Real is today the market leader in this category with

more than 50% market share. Hommade cooking paste is the only national brand in


65/114


this category. Lemoneez is the only product in its category available in unique drop

and trickle pack and uniquely Pharmaceuticals

Branded Pharmaceuticals -It includes a range of natural ethical products like

New Livfit, Honitus, Ulgel etc. and a range of contrast media and gynecological.

Oncology -This wide and formidable range includes brands such as Intaxel,

Docetaxel and Topotecan, all of which were manufactured for the first time in

India by Dabur. Little wonder then, that Dabur is the undisputed market leader in

this category in India and has plans to establish it as a generic oncology player in

select global markets.

Bulk Drugs and Chemicals -This range consists primarily of bulks in the

oncology category.

Joint Ventures

Dabon International Limited -Dabur has also collaborated with Bongrain of

France for the manufacture and marketing pf specialty cheese and other dairy

products. This joint venture company has already made its presence felt in the

Indian cheese market through the launch of processed cheese under the brand

name LeBon, and a specialty cheese under the brand name Delicieux.


66/114


Subsidiaries

Dabur has six subsidiary units, which come under the umbrella of the Dabur

India organization. These are:

Dabur Foods Limited -Dabur Foods Limited, a 100% subsidiary of Dabur India

Limited, is spearheading Dabur's foray into food processing industry. The

company, set up in April 1999, is marketing a range of fruit juices under the

brand name Real, Hommade Cooking Paste and Sauces and Lemoneez lemon

juice. Dabur was the first company in India to introduce fruit juices in packaged

form without any artificial additive. Real is today the market leader in this

category with more than 50% market share. Hommade cooking paste is the only

national brand in this category. Lemoneez is the only product in its category

available in unique drop and trickle pack and uniquely shaped tabletop pack.

Dabur Nepal Private Limited -Dabur Nepal was the first manufacturing base

overseas for Dabur group. The company is today the leading exporter of Nepal

and the third largest and most modern manufacturing base for Dabur. Dabur

Nepal is today involved in promoting cultivation of herbs and apiculture

activities in Nepal. The company has set up state of the art greenhouse at Banepa

for developing saplings for 20 medicinal plants. Dabur Nepal has also set up an

Apiculture centre for promoting bee-keeping activity in Nepal and developing


67/114


queen bees and bee colonies for exports.

Dabur Egypt Limited -Dabur Egypt is groups gateway to Africa. This

manufacturing base set up a couple of years back to cater to the demands of

Middle East and African market is producing Hair Care, Skin Care Products and

Foods.

Dabur Oncology PIc. -Set up recently in UK, this subsidiary of Dabur India

Limited will be manufacturing anti-cancer formulations for European market.

The company is in the process of setting up manufacturing base near London and

is expected to start operation from year 2001.

Dabur Finance Limited

Dabur has an illustrious Board of Directors who is committed to take the

company onto newer levels of human endeavor in the service of mankind.


68/114


REVIEW OF LITRATURE


69/114


REVIEW OF LITRATURE :-

Performance evaluations have been conducted since the times of Aristotle

(Landy,Zedeck, Cleveland, 1983). The earliest formal employee performance

evaluation program is thought to have originated in the United States military

establishment shortly after the birth of the republic (Lopez, 1968). The

measurement of an employees performance allows for rational administrative

decisions at the individual employee level. It also provides for the raw data for the

evaluation of the effectiveness of such personnel- system components and

processes as recruiting policies, training programs, selection rules, promotional

strategies, and reward allocations (Landy,Zedeck, Cleveland, 1983). In addition, it

provides the foundation for behaviorally based employee counseling. In the

counseling setting, performance information provides the vehicle for increasing

satisfaction, commitment, and motivation of the employee. Performance

measurement allows the organization to tell the employee something about their

rates of growth, their competencies, and their potentials. There is little

disagreement that if well done, performance measurements and feedback can play

a valuable role in effecting the grand compromise between the needs of the

individual and the needs of the organization (Landy, Zedeck, Cleveland, 1983).

A research to improve the effectiveness of Performance

appraisal:-


70/114


According to ACAS (1997), Performance appraisal (PA) is a western management

concept. It regularly records an assessment of an employees performance,

potential and development needs, Functions as an opportunity to take an overall

view of work content, loads and volume, to look back on what has been achieved

during the reporting period, and agrees objectives for the next.

This definition clearly shows that PA offers a chance to assess or judge various

aspects of an employees work performance by checking back how they have

performed in the past and then predicting and developing their future performance.

However, it is difficult to be translated into a different cultural environment, with

the practice of PA in china having brought about a few problems. Easter by smiths

report (1995) shows that Chinese managers often have a different idea about what

PA is than do western managers. This essay will firstly critically analyze the two

problems discovered in the implementation of PA in china; one being its over-

emphasis on the function of measuring reward and punishment for the employee

rather than identifying his or her potential ability in the long run, the other being

the lack of effective feedback in Chinese PA. Followed are two suggestions:

consistency of PA in time, attitude and with organizational culture and the shift of

its emphasis. Finally valuable insight into the future trend of PA in China will be

examined.


71/114


Performance appraisals should focus on three objectives: performance, not

personalities; valid, concrete, relevant issues, rather than subjective emotions and

feelings; reaching agreement on what the employee is going to improve in his

performance and what you are going to do (McKirchy, 1998). Both the supervisor

and employee should recognize that a strong relationship exists between training

and performance evaluation (Barr, 1993). Each employee should be allowed to

participate in periodic sessions to review performance and clarify expectations.

Both the supervisor and the employee should recognize these sessions as

constructive occasions for two-way communication. Sessions should be scheduled

ahead of time in a comfortable setting and should include opportunities for self-

assessment as well as supervisor feedback. These sessions will be particularly

important for new employees who will benefit from early identification of

performance problems. Once these observations have been shared, the supervisor

and employee should develop a mutual understanding about areas for

improvement, problems that need to be corrected, and additional responsibilities

that might be undertaken. When the goals are identified, a plan for their

achievement should be developed. The plan may call for resources or support from

other staff members in order to meet desired outcomes. In some cases, the plan

might involve additional training. The supervisor should keep in contact with the


72/114


employee to assure the training experiences are producing desired impact (Barr,

1993). A portion of the process should be devoted to an examination of potential

opportunities to pursue advancement of acceptance of more complex

responsibilities. The employee development goals should be recognized as

legitimate, and plans should be made to reach the goals through developmental

experiences or education (Barr, 1993). Encouraging development is not only a

supervisor's professional responsibility, but it also motivates an employee to pursue

additional commitments. In addition, the pursuit of these objectives will also

improve the prospect that current employees will be qualified as candidates when

positions become available. This approach not only motivates current performance

but also assists the recruitment of current employees as qualified candidates for

future positions (Barr, 1993). How to arrive? Reasons why need to be done

Benefits of productive performance appraisals. - Employee learns of his or her own

strengths in addition to weaknesses. - New goals and objectives are agreed upon. -

Employee is an active participant in the evaluation process. - The relationship

between supervisor and employees is taken to an adult-to-adult level. - Work teams

may be restructured for maximum efficiency. - Employee renews his or her interest

in being a part of the organization now and in the future. - Training needs are

identified. - Time is devoted to discussing quality of work without regard to money

issues. - Supervisor becomes more comfortable in reviewing the performance of


73/114


employees. - Employees feel that they are taken seriously as individuals and that

the supervisor is truly concerned about their needs and goals. (Randi, Toler, Sachs,

1992)


74/114


RESEARCH

METHODOLOGY


75/114


RESEARCH METHODOLOGY

Research methodology is a way to solve the research problem, systematically. It

includes various steps that are adopted by the researcher in studying his/her

research problem.

As far as this project concern, it has used two types of research:-

1. Analytical research:-The researcher has to use the already available facts or

information and analyze these to make a critical evaluation of the material.

2. Qualitative research:-Qualitative research means study of human behavior i.e.

why people things or do certain things. Qualitative research is especially important

in the behavioral science where the aim is to design or to discover the underlying

motives of human behavior.

In this report study of employees behavior is done. Through this report various

factors are analyzed to motivate employees.

RESEARCH DESIGN:-

Research design is the specification of methods and procedures for acquiring the

information needed. It includes the following features:-

It is a plan that specifies the source and type of information relevant to the research

problem.


76/114


It is strategy that specifies which approach will be used for gathering and analyzing

the data. Research design includes the following things:-

1.Type of Sampling:

Simple sampling has been adopted for this research. Under which we have

considered the sampling which has been done for a specific designated population,

because here a small cluster of professionals has been considered out of the total

universe.

2. Sample Size:

Sample size refers to the number of items to be selected from universe to

constitute a sample. The sample size should be optimum as it should fulfill the

objective of the research. The population covered for the present study consisted

of employee belonging to supervisory and the level above. For the purpose of this

study, survey covered the employee of DABUR, HUL etc in NCR. The sample

size taken is 80.

3. Sample Area:

The sample area refers to the universe to be studied under this research project.

The area denotes the place or the region to be studied and taken into research

consideration. Thus, the sample area chosen for this research project is Indoor

region.


77/114

ABES INSTITUTE OF BUSIN

Documents

Impact of Performance Appraisal on Development of Employees New Dabur