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A PROJECT REPORT
ON
STUDY OF PERFORMANCE APPRAISAL SYSTEM
AT VODAFONE
BY MOHD. NASEEM CHAUDHRY
(2011-HRM-10) DEPARTMENT OF SOCIAL WORK,
JAMIA MILLIA ISLAMIA NEW DELHI,
SUBMITED TO- MS.SUMBUL TAHIR
DEPARTMENT OF SOCIAL WORK, JAMIA MILLIA ISLAMIA NEW DELHI,
2
DECLARATION
This is to certify that present thesis titled “Study of Performance Appraisal
System at Vodafone” is based on original research and has not been submitted in
part or whole for any diploma or degree of any university. The works of other
authors, wherever they have been made use of in this study, have been duly
acknowledged at relevant places.
( MOHD NASEEM CHAUDHRY )
3
ACKNOWLEDGEMENT One of the most pleasant aspects of writing an acknowledgement is the opportunity to thank all those who have contributed to it. Unfortunately, the list of expression of gratitude- no matter how extensive – is always incomplete and inadequate. This acknowledgement is no exception. First of all, I wish to express my sincere gratitude to Faculty guide MS. SUMBUL TAHIR, for giving me opportunity to do research under her profound guidance. Because of her inspiring guidance, motivation, positive criticism, continuous encouragement and untiring supervision this work could be brought to its present shape. , I would like to express my deep gratitude to Vodafone India. Vodafone Essar Telecom Limited, Mohan Nagar, Delhi for giving me this valuable opportunity to work on a project of the company. I am grateful to Mr.GP. SHARMA , Head ( HR Dept.) for giving me permission to do this project in his department.
I would like to thank all of them who in one way or the other have helped me.
( MOHD NASEEM CHAUDHRY)
4
PREFACE
This project will accomplish to understand how the people interact
with technology savy products and if they are ready for doing all the
trading through net. The project also helps in understanding the trend
of the scripts of the particular sector in different market condition.
To maintain and cope up with the growing competition from the
various online trading providers, Vodafone needs to find potential
clients, also the new investors and satisfy there needs.
The Broad objective of the project is to equipped the trainees with all
the quality which is essential to face any circumstances which can arise
while providing
All these steps help me to understand how to cope up with different
types of people and there diversified need and satisfaction level.
5
CONTENTS
Chapter 1: Introduction
Chapter 2: Objective and Methodology of the Study
Chapter 3: Organization Profile
Chapter 4: Performance Appraisal- Theoretical Review
Chapter 5: Performance Appraisal System in
Vodafone.
Chapter 6: Analysis and Interpretation of Data
Chapter 7: Conclusion and Suggestions
Annexure
6
CHAPTER 1
INTRODUCTION
7
CHAPTER 1
TITLE OF THE PROJECT:
Study of Performance Appraisal System
and Its
Effectiveness in an Organization
INTRODUCTION
The history of performance appraisal is quite brief.
Its roots in the early 20th century can be traced to Taylor's
pioneering Time and Motion studies. But this is not very helpful,
for the same may be said about almost everything in the field of
modern human resources management.
As a distinct and formal management procedure used in the
evaluation of work performance, appraisal really dates from the
time of the Second World War -not more than 60 years ago.
Yet in a broader sense, the practice of appraisal is a very ancient
art. In the scale of things historical, it might well lay claim to
being the world's second oldest profession!
There is, says Dulewicz (1989), "... a basic human tendency to
make judgements about those one is working with, as well as about
8
oneself." Appraisal, it seems, is both inevitable and universal. In
the absence of a carefully structured system of appraisal, people
will tend to judge the work performance of others, including
subordinates, naturally, informally and arbitrarily.
The human inclination to judge can create serious motivational,
ethical and legal problems in the workplace. Without a structured
appraisal system, there is little chance of ensuring that the
judgements made will be lawful, fair, defensible and accurate.
Performance appraisal systems began as simple methods of
income justification. That is, appraisal was used to decide
whether or not the salary or wage of an individual employee was
justified.
The process was firmly linked to material outcomes. If an
employee's performance was found to be less than ideal, a cut in
pay would follow. On the other hand, if their performance was
better than the supervisor expected, a pay rise was in order.
Little consideration, if any, was given to the developmental
possibilities of appraisal. If was felt that a cut in pay, or a rise,
should provide the only required impetus for an employee to
either improve or continue to perform well.
Sometimes this basic system succeeded in getting the results that
were intended; but more often than not, it failed.
9
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.
10
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.
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.
11
Controversy, Controversy
Few issues in management stir up more controversy than
performance appraisal.
There are many reputable sources -researchers, management
commentators, psychometricians -who have expressed doubts
about the validity and reliability of the performance appraisal
process. Some have even suggested that the process is so
inherently flawed that it may be impossible to perfect it (see
Derven, 1990, for example). At the other extreme, there are many
strong advocates of performance appraisal. Some view it as
potentially "... the most crucial aspect of organizational life"
(Lawrie, 1990).
Between these two extremes lie various schools of belief. While
all endorse the use of performance appraisal, there are many
different opinions on how and when to apply it,
There are those, for instance, who believe that performance
appraisal has many important employee development uses, but
scorn any attempt to link the process to reward outcomes -such as
pay rises and promotions. This group believes that the linkage to
reward outcomes reduces or eliminates the developmental value
of appraisals. Rather than an opportunity for constructive review
and encouragement, the reward- linked process is perceived as
12
judgmental, punitive and harrowing. For example, how many
people would gladly admit their work problems if, at the same
time, they knew that their next pay rise or a much-wanted
promotion was riding on an appraisal result? Very likely, in that
situation, many people would deny or downplay their
weaknesses.
Nor is the desire to distort or deny the truth confined to the
person being appraised. Many appraisers feel uncomfortable with
the combined role of judge and executioner.
Such reluctance is not difficult to understand. Appraisers often
know their appraisees well, and are typically in a direct
subordinate-supervisor relationship. They work together on a
daily basis and may, at times, mix socially. Suggesting that a
subordinate needs to brush up on certain work 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
13
organizations must have a process by which rewards -which are
not an unlimited resource -may be openly and fairly distributed to
those most deserving on the basis of merit, effort and results.
There is a critical need for remunerative justice in organizations.
Performance appraisal -whatever its practical flaws -is the only
process available to help achieve fair, decent and consistent
reward outcomes. It has also been claimed that appraisees
themselves are inclined to believe that appraisal results should be
linked directly to reward outcomes -and are suspicious and
disappointed when told this is not the case. Rather than feeling
relieved; appraisees may suspect that they are not being told the
whole truth, or that the appraisal process is a sham and waste of
time.
The Link to Rewards
Recent research (Bannister & Balkin, 1990) has reported that
appraisees seem to have greater acceptance of the appraisal
process, and feel more satisfied with it, when the process is
directly linked to rewards. Such findings are a serious challenge
to those who feel that appraisal results and reward outcomes must
be strictly isolated from each other. There is also a group who
argues that the evaluation of employees for reward purposes, and
14
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 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.
15
Three different approaches exist for doing appraisals. Employees
can be appraised against
1. Absolute
standards
2. Relative
standards
3. Objectives
16
PERFORMANCE MANAGEMENT
Since organisations exits to achieve goals, the degree of success
that individual employees have in reaching their individual goals
is important in determining organisation effectiveness.
Performance system is fundamentally, a feed back process, which
require 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 who are not meeting
performance standards and a loss of commitment by employees, in
sum, the myth that the employee know what. they are doing
without adequate feedback from management can be an expensive
fantasy.
17
THE APPRAISAL PROCESS
1. Establishing Performance Standard
2. Communicate Performance expectations to employees
3. Measure actual performance
4. Compare actual performance with standards
5. Discussion with the employees and identification
development programs to bridge the gap.
6. Initiate action
18
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 for use
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
for personal " and career development.
b) It helps management spot individuals who have specific
skills so that their promotions/transfer are in line with
organizational requirements.
c) Appraisal serve as a key input for administering a formal
organisation reward and punishment system.
d) The performance system can be used as a criterion against
which selection devices and development programs are
validated.
19
REQUIREMENT OF THE PERFORMANCE MANAGEMENT
SYSTEM.
Reliability: The foremost requirement of a sound system is
reliability. In this contact it refers to consistency of judgement.
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
judgement are valid as well.
20
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 organisations do not put much effort into
garnering the front end support and participation of those who
will use the appraisal system. Ultimately it is management's
responsibility to define as clearly as possible the type and level
of job behaviour 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 organisations. Such a method does not
exist. In tommorrow's 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.
21
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 suggest 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
performings to department and organisationalobjectives.
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 judgement 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 orgamses.
22
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.
23
APPROACHES TO PERFORMANCE MANAGEMENT
The traditional approach: The one dimensional model
The Job Define what results Performance contact
have to e achieved
Define a set of key
objectives against the
accountabilities
Accountabilities i.e,
Output
Review performance
against the key
objectives
In this model job expectations are defined in terms of what results
have to be achieved. This model doesn't have a long term focus
and can't be used for employee development and career path
planning,
24
A satisfactory performance implies doing a job effectively and
efficiently, with a minimum degree of employee -created
disruptions. Employees are performing well when they are
productive. Yet productivity itself implies both concern for
effectiveness and efficiency. Effectiveness refers to goal
accomplishment. Efficiency evaluates the ratio of inputs consumed
to outputs achieved. The greater the output for a given input, the
more efficient the employees. Similarly, if output is a given,
consumed to get that output results in greater efficiency.
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 who gets 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. Finally, the performance appraisal can be used as a
criterion against which selection devices and development
programs are validated.
25
Chapter 2
OBJECTIVE AND
METHODOLOGY OF THE
STUDY
26
Chapter 2
OBJECTIVE AND METHODOLOGY OF THE
STUDY
1. Objective of the study
This project aims at studying the system of performance appraisal
and its effectiveness in an organisation. 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 broad objectives of the study includes:
• To know the present system of performance appraisal
• To know the extent of effectiveness of the appraisal system
• To identify and know the area for improvement system
2. Sample of the study
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
VODAFONE falling under supervisor and the level above.
27
The study covered a sample of 100 employee belonging to
supervisory level and above.
3. Methodology of the project
The project work has been carried out in three stages, a structured
questionnaire with objective and question was communicated
tested and finalise. During the second stage, the questionnaire
was administered to the employees at Vodafone. by contacting
them. The work relating to data entry compilation, data analysis
and report writing constituted the third stage. Interview index was
also used at some places to get information on the project subject.
The details of the methodology adopted are presented below:
The Questionnaire
Keeping in view the objective of the study, questionnaire was
designed and tested on few employees. After getting the proper
response and sanction from the concerned department the
questionnaire was finalised.
Response to Questionnaire
In all 96 questionnaire were given to employees falling in the
28
category of supervisors and above. Out of which 48 could be
collected back duly completed. The researcher individually
contacted the employees to get response on the questionnaire.
Data entry and analysis
It has been an uphill task to enter the enormous data received
through the questionnaire which consisted nearly 20 questions.
Resgonse to the descriptive questions though very few but was
valuable for the purpose of study. Hence these were further
structured in time with the system adopted for compilation and
data analysis.
Limitations
Many employees gave guarded answers to some crucial questions.
Some of them did not fill the questionnaire due to lack of time
Response could not be collected from the total sample selected.
Some of the questionnaire could not be completed due to reasons
other than time factor. The confidentiality of the system created
some problem in getting information.
29
Chapter 3
ORGANISATION
PROFILE
30
Chapter 3
ORGANISATION PROFILE
.
Vodafone over the years
As Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc. Then
known Racal Telecom Limited, approximately 20% of the company's capital was
offered to the public in October 1988. It was fully demerged from Racal Electronics
Plc and became an independent company in September 1991, at which time it
changed its name to Vodafone Group Plc.
Following its merger with Air Touch Communications, Inc. (‘Air Touch’), we
changed our name to Vodafone Air Touch Plc on 29 June 1999 and, following
approval by the shareholders in General Meeting, reverted to our former name,
Vodafone Group Plc, on 28 July 2000.
Key milestones in the development of Vodafone can be found in the following
sections, organized by year:
2007
Vodafone agrees to acquire Tele2 Italia SpA and Tele2 Telecommunication Services
SLU from Tele2 AB Group. (October)
Vodafone announces completion of the acquisition of Hutch Essar from Hutchison
Telecommunications International Limited. (May)
31
Safaricom, Vodafone’s partner in Kenya announces the launch of M-PESA, an
innovative new mobile payment solution that enables customers to complete simple
financial transactions by mobile phone. (February)
Vodafone agrees to buy a controlling interest in Hutchison Essar Limited, a leading
operator in the fast growing Indian mobile market, (February)
Vodafone announces agreements with both Microsoft and Yahoo! to bring seamless
Instant Messaging (IM) services to the mobile which can be accessed from both the
PC and mobile handsets. (February)
Vodafone signs a series of ground-breaking agreements which will lead to the
mobilizing of the internet. You Tube agrees to offer Vodafone customers specially
rendered You Tube pages on their mobile phones. With Google, Vodafone announces
its intention to develop a location-based version of Google Maps for. With eBay,
Vodafone announces it is to offer the new eBay mobile service to customers, With
MySpace.com Vodafone announces an exclusive partnership to offer Vodafone
customers a My Space experience via their mobile phones. (February).
Vodafone reaches 200 million customers (January)
2006
Sale of 25% stake in Switzerland's Swiss COM (December)
Sale of 25% stake in Belgium's Proximus. (August)
The number of Vodafone lives! Customers with 3G reached 10 million in March
2006.
We acquired Telsim Mobil Telekomunikasyon Hostetler (Turkey) in May 2006.
Launch of mobile TV capability and Vodafone Radio DJ, which offers a personalized,
interactive radio service streamed to 3G phones and PCs.
3G broadband through HSDPA launched offering faster than 3G speeds.
Japan business sold to Softbank.
‘Make the most of now’ global marketing campaign launched.
32
Sir John Bond succeeds Lord MacLaurin as Chairman.
2005
We completed the acquisition of MobiFon S.A. (Romania) and Oscar Mobile a.c.
(Czech Republic) (May).
Launch of Vodafone Simply, a new easy-to-use service for customers who want to
use voice and text services with minimum complexity (May).
Introduction of Vodafone Passport, a voice roaming price plan that provides
customers with greater price clarity when using mobile voice services abroad (May).
2004
We launched our first 3G service in Europe with Vodafone Mobile Connect 3G/GPRS
data card.
We have 14 Partner Networks with new agreements in Cyprus, Hong Kong and
Luxembourg.
Vodafone live! with 3G launched in 13 markets (November).
2003
At the GSM Association Awards Ceremony in Cannes, France, we won the mobile
industry's most prestigious awards in two categories, Best Consumer Wireless
Application or Service and Best Television or Broadcast Commercial for its global
consumer service, Vodafone live! Our premium handset for Vodafone live!, the Sharp
GX10, won the Best Wireless Handset Award for the Sharp Corporation.
Vodafone live! attracts 1 million customers in its first six months.
Verizon Wireless and Vodafone co-operate on laptop e-mail, internet and corporate
applications access for the US and Europe.
Arums Sarin succeeds Sir Christopher Gent as Chief Executive.
2002
We trial our global mobile payment system in the UK, Italy and Germany. The trial
enables customers to purchase physical and digital goods using their mobile phone.
33
We launch the first commercial European GPRS roaming service. Customers are able
to seamlessly access services such as corporate e-mail, intranet and personalized
information on their mobile phones, laptops or PDAs over GPRS.
The Vodafone Group Foundation is launched, with plans to contribute £20 million to
community programmers, guided by the Group Social Investment Policy.
In October, we announce the launch of Vodafone live!, a new consumer proposition,
and Mobile Office, a new business proposition. In November, Vodafone Remote
Access is launched as part of Mobile Office. The service gives business customers an
easy way to connect to their corporate LAN to access e-mail, calendar and other
business specific applications whilst on the move.
2001
We acquire Ireland's leading mobile communications company, Eircell.
Vodafone and China Mobile (Hong Kong) ltd (CHMK) sign a 'strategic alliance
agreement'.
The Group completes the acquisition of a 25% stake in Swisscom Mobile.
We introduce instant messaging to our networks, a faster and more efficient way to
communicate using text messages via SMS or WAP.
First global communications campaign launched in August. The campaign features
TV, cinema, print, online and outdoor media, each version asking the question, 'How
are you?'.
First Vodafone Partner Agreement with TDC Mobil A/S, Denmark's leading mobile
operator. The agreement is the first of its kind in the mobile industry and means
Vodafone and TDC Mobil will cooperate in developing, marketing and advertising
international roaming products and services to international travellers and corporate
customers.
We make the word's first 3G roaming call (between Spain and Japan).
2000
On 4 February, terms are agreed with the Supervisory Board of Mannesmann by
34
which Mannesmann would become a part of the Vodafone community. The
transaction almost doubles the size of the Vodafone Group.
The agreement to acquire Mannesmann AG receives European Commission clearance
on 12 April 2000.
Verizon Wireless is launched in May, the combination of Vodafone AirTouch's and
Bell Atlantic's US cellular, PCS and paging assets.
Vodafone Essar is a cellular operator in India that covers16 telecom circles in India
.the name of the company ,the marketing brand used is simply Vodafone .its offers
both prepaid postpaid GSM cellular phone coverage through out India and is
especially strong in the metros. Vodafone Essar provides 2G services based on
900Mhz and 1800Mhz digital GSM technology ,offering voices and data services in
16 of the countries 23 license .the company is often praised for its aware winning
advertisement which all follow a clean ,minimalist look .Sep 19 2007;Vodafone the
world leading international mobile communication company has fully arrived in India
.Vodafone Essar announced today that the Vodafone brand will be launched in India
from 21st sep onward .The popular and endearing brand ,Hutch will be transitioned to
Vodafone across India .this marked a significant chapter in the evolution of Vodafone
as a dynamic and ever growing brand .Vodafone the world leading mobile tel Essar in
may 2007 &company was formally renamed Vodafone Essar in July 2007 .Asim
Ghosh , Managing Director of Vodafone. Vodafone group ‘s communication
company completed the acquisition of Hutch Arun Sarin is visiting in India even as
the British operator bid for a majority stake in India mobile services operator
Hutchison Essar has run into tough competition
Vodafone Essar is owned by Vodafone 67%Essar group 33%.on 11feb 2007
Vodafone agreed to acquired the controlling interest of 67% held by CheungKong
holding in hutch Essar for US$11.1 billion, piping Reliance communication, Hinduga
group and Essar group, which is the owner of the remaining 33%.the whole company
was valued at U S D 18.8 billion .the transaction closed on 8 may 2007
In December 2006 Hutch Essar re launched the “Hutch” brand nation wide
,consolidating its services under a single identity .the companioned into agreement
with NTT Do Co Mo to launch i-mode mobile internet service in India during 2007
35
.the company used to be named Hutchison Essar ,reflecting the of its previous owner
,Hutchison .the brand was marketed as Hutch .after getting the necessary government
approvals with regard to the acquisition of a majority by the Vodafone group .The
company was rebranded as Vodafone Essar.
Vodafone have both Prepaid& Postpaid &have a15.36 million subscribers and
17.04% market. share in India and operator 16 circle
36
Chapter 4
PERFORMANCE
APPRAISAL
37
Chapter 4
PERFORMANCE APPRAISAL
Since organisation 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.
PURPOSE
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 who gets salary jncreases, 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 appraisals is a
major tool for identifying these deficiencies.
38
• 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.
39
HE APPRAISAL PROCESS
Established performance standard
Communicate performance expectations to employee
Measure actual performance
Compare actual performance with standards
Discuss the appraisal with the employees.
If necessary, initiate the corrective action
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,
40
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. 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.
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.
41
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.
42
Chapter 5
PERFORMANCE
APPRAISAL SYSTEM IN
VODAFONE
43
Chapter 5
PERFORMANCE APPRAISAL SYSTEM IN
VODAFONE
In Vodafone they have the system of performance appraisal of
their employees. The main objective of this performance
appraisal system is to 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 organization~l 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 planing, the means are
determined for achieving the ends established in goal setting.
That is, realistic plans are developed to attain the objectives.
44
Self-control refers to the systematic monitoring and measuring
of performance. Finally, with periodic progress reviews,
corrective action is initiated when behaviour deviates from the
standards established in the goal-setting phase. Vodafone uses
very constructive performance appraisal process while
evaluating its employees. Its evaluation is based on
quantitativewise and objectivewise.
Company set goals to its employee by properly reporting with its
employees and then evaluating them upto 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 Vodafone company is
concerned, but sometimes over estimation of target brings
about a description in the evaluating criteria. Thus, though
45
chances are less, positive leniency errors have been stated to be
committed.
Outcome of Performance Appraisal
As far as Vodafone 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 performance into his/her credit) he / she gets
promoted.
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 performance 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
46
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 Vodafone, the performance appraisal system is carried
out annually.
47
Feedback
The company provides the annual feedback to its employees and
thus, in term bring out the highlights of the self assessment
programme. This enables the better communicaiton between the
management and employees ad thus, helps in promoting the
business future.
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.
48
Chapter 6
ANALYSIS AND
INTERPRETATION OF
DATA
49
Chapter 6
ANALYSIS AND INTERPRETATION OF DATA
After collecting the data on "Performance Appraisal System" data
was Analyzed and interpreted. The various topics covered for
analysis and interpretation of data are: )
1. Promotions
A promotion may be defined as an upward advancement of an
employee in an organisation to another job, which commands
better pay/wages, better status / prestige and higher opportunities
/ challenges and responsibility, a better working environment,
hours of work and facilities etc.
Promoters have a salutary effect on the satisfaction of the
promoted person's need for esteem, belonging and security. They
also afford an opportunity for greater self-actualizing action
through more varied and challenging assignments. The promotion
policies differ from an organisation to another.
The guidelines for departmental promotion in are same for male
and female employees. The period of experience required for
filling a higher post departmentally varies from 3-5 years. 5 years
experience for promotion to managerial staff and 3 years
50
experience for promotion to Junior Management staff is needed.
The other area of promotion apart from seniority are merit and
fitness. Though these guidelines are not in a written format the
supervisor and manager get it at the time of appraisal from the
personnel department.
51
As per the guidelines from the personnel department employees
are to be promoted accordingly. However there is confusion
among the employee as these guidelines are not being explained
time to time, many are not aware of the existing promotion policy
in the organisation.
Respondents were asked whether the promotion is well defined in
the organisation. The responses are given below:
N=96
Response Number Percentage
Yes 16 16.66
No 52 54.16
Can't say 28 29.16
From the above table, it can be seen that 30% agree that promotion
is well defined in the organisation. However 54% were not able to
say it as there is lack of information about the promotion policy.
Every employee need to be communicated about the existing
promotion policy.
16
52
28
0
10
20
30
40
50
60
Yes No Can't Say
Series1
52
Respondent were also asked to suggest any change in the policy.
The responses were as given below:
Response Number Percentage
Merit not recognized 20 20.83
Does not define career plan 26 16.66
Not integrated with business 0 0
Heterogeneity within policy for 56 58.83
different position
Majority suggested for no change in the policy. It seems they are
satisfied with the current policy.
53
Aligning goal
Respondent were asked about the present system, does it help in
aligning individual goal with those of the organisation. The
responses were as given below:
Response Number Percentage
Yes 44 45.83
No 12 12.5
Can't say 36 37.5
No response 4 4.16
Here the response from the supervisor were 45.83% for the factor
that it help in aligning their goal with those of organisation.
44
12
36
4
05
1015202530354045
Yes No Can't Say Noresponse
Series1
54
Career Progress
Career progress is something which is continuous, with the input
from organisation in term of training, feedback and counselling.
In today's changing scenario this has to be followed in every
organisation so that an individual make progress in the career
adding value to himself and the organisation. Respondent were
asked about the current system helping in their career progress.
Career advancement is the most motivating factor when employee
aspire for the advancement of his career and for better
opportunities to use his/her talents. From the organisation's point
of view, it is necessary to develop in manager. Some expectations
of opportunities for the future in order to keep their motivation
high. Career planning means helping the employee plan his career
in terms of his capabilities with the context or organisational
needs. Individual, after becoming aware of some of his/her
capabilities and career and development opportunities chooses to
develop himself/herself in a direction that improves his/her
chances of being able to handle new responsibilities. It is also the
responsibility of the employer to help him/her to identify the
career opportunity, make choices and develop his/her career and
provide opportunities for career planning and succession planning
55
Question asked was as follows:
Are the issues like career planning and succession planning a part
of companys policy
The responses to the above were as given below:
Response Number Percentage
Yes 16 16.66
No 44 45.83
Cant say 36 37.5
Here only 46% of the respondent gave response that it does not
while 38% gave response that there is no career development plan
at all.
16
44
36
0
10
20
30
40
50
Yes No Can't Say
Series1
56
Feedback
Providing feedback playa constructive role. It helps the employee
know his/her weakness and strength. Feedback provides for the
area of improvement.
Respondent were asked about the frequency of feedback based on
their performance. The responses were as given below:
Response Number Percentage
Rarely 24 25
On a few occasion 40 41.66
Sometimes 24 25
Often 8 8.34
Almost always Nil Nil
41 percent responded that feedback is provided though on a few
occasion. The frequency has to increase both from the individual
and organisation point of view to keep the individual motivated
for work in line with the organisational expectation.
57
05
10152025303540
Rarely On a fewoccasion
Sometimes Often Almostalw ay s
Remedial measure
Based on the performance the remedial measures are taken to do
away with weakness if any and build on the strength and add to
the existing capability
58
Response on the remedial measure were as given below:
Response Number Percentage
Job rotation 44 45.83
Sent to training programme 40 41.66
Counselled 12 12.5
Any other Nil Nil
None Nil Nil
Here the response were both for job rotation and training
programme. During the course it was felt that more training input
is to be provided to the employee to overcome the weakness and
improve upon the existing capability of the employee.
05
1015202530354045
Job rotation Sent totraining
program
Counselled Any other None
59
PROMOTION POLICY AND PERFORMANCE APPRAISAL
SYSTEM
Respondent were asked whether the promotion policy is linked
with the performance appraisal system
The responses were as given below:
Response Number Percentage
Yes 54 56.25
No 28 29.15
Cant say 14 14.58
Majority response were that promotion policy is linked with the
performance appraisal system.
54
28
14
0
10
20
30
40
50
60
Yes No Can't Say
Series1
60
SWOT ANALYSIS
STRENGTHS Ø Strong customer oriented and high performance.
Ø Quality products and services and improved product
proposition.
Ø Strategy oriented and better geographic balances.
Ø Better brand image.
WEAKNESS
Ø Paper compilation of the financial reports (stock reports).
Ø Inventory management, and procurement processes.
Ø Lack of feedback.
OPPORTUNITIES
Ø Branch expansion for rapid growth
Ø Increase focus on value creation
Ø Improve shareholders return
Ø Broadening of the demographic base
Ø Tie up with MNC’s
Ø Integrated sales and service approach
THREATS
Ø Competitive products and offers.
Ø Strong competition.
61
Chapter 7
CONCLUSIONS &
SUGGESTIONS
62
Chapter 7
CONCLUSIONS & SUGGESTIONS
Conclusion
The analysis and interpretation of data on study of performance
appraisal and its effectiveness in an organization led to the
following conclusions:
• The promotion rule though defined need to be communicated to
every employee before appraisal process is done and also
justify the promotion as a result of the appraisal. That the
promotion policy followed differs at different position and
category. A uniformity has to be there in the implementation of
promotion policy at all levels
• The process of performance appraisal followed in Vodafone at
the supervisory and above level IS to say not good but of
satisfactory level. The employees do not rate it very good
• The appraisal outcome has to be used frequently for the
purpose of reward on performing well together with the
feedback on the performance. Also when performance goes
down employee has to be given feedback and motivated to do
better.
• The organization at present doesn't lay career planning and
63
career succession plans.
• In Vodafone feedback is being provided to the employee
though on a few occasion.
• Performance appraisal in Vodafone is done on an annual basis.
• More emphasis on training and job rotation as remedial
measures.
• The mechanism of counseling pre-performance and post
performance is not in practice at the organisation in strict term.
During. the course of study suggestion came from the
employee side for the need of counselling.
Suggestions
The study undertaken bring some interesting result.
• Training the Appraisee: It is proposed that appraiser be trained
for clear understanding of the system and its objective and also
counselled to be honest, fair, just, unbiased in appraising the
appralsee.
• Factors/traits of evaluation: It is proposed that appraisee
evaluated on above factors/traits be given suitable remark or
justification for being given different quantitative grade.
• Greater clarity has to be has to there in terms of job
64
responsibility. This is possible when the appraisal is done on
the basis of the description.
• In the organization, performance appraisal is done on an annual
basis which should be done Quaterly to make it more effective.
• Consistency is demanded in the promotional policy. It should
not change every year.
• Monetary difference between two grades should not be large, it
should be motivating in nature.
• Performance appraisal system should be made more transparent
and rationale.
• Performance feedback: The performance feedback sessions
should be improved which would results in increasing
employee motivation to improve performance. The following
could be incorporated.
• Pin point the problem behaviour and make sure the
employee is aware of it
• Make sure the employee understands the consequences of
the problem behaviour. Get employee's commitment to
change and make sure he cares about the change
• Assistance should be provided to improve poor performance.
65
Make a realistic plan appropriate to the behaviour and set a
time frame for improvement.
• To make sure to review performance time to time
• The other change which has to be incorporated at the
supervisor and the level above are:
• These should be listing down of task undertaken during the
last one year and the result achieved.
• In some areas of performance there should be self appraisal
and more and more counselling so that employee improve
upon weak area and understand what is expected of him/her
at the organization level.
• Based on the above an open appraisal system is suggested.
66
In an open appraisal the employee would come together to set the
targets, to understand the mutual expectations and support to be
provided by the appraiser to the employee for achieving mutually
accepted goals/targets. Through this process of setting targets the
interpersonal relationship between the appraiser and the employee
would improve.
The open appraisal system reduces the whims and fancies of the
appraiser. It promotes result-orientation as it is based on
performance rather than on personality based appraisal.
67
Annexure
a) Questionnaire
b) Bibliography
68
QUESTIONNAIRE
TO STUDY PERFORMANCE APPRAISAL SYSTEM
Q.1. Is the promotional policy well defined in your organization?
a. Yes b. No c. can't say
Q.2. Do you know the objectives of the Performance appraisal system.
If yes kindly specify.
Q.3. How often the performance appraisal form is filled or
Performance Appraisal is done.
a. fortnightly. b. monthly c. six-monthly. d. annually
e. not fixed.
Q.4. On what basis is the performance appraisal done.
a. merit cum seniority b. seniority cum merit. c. merit
only
d. seniority only. e. any other. Pl. specify
Q.5 Who appraises you?
a. appraisal committee. b. your immediate supervisor
c. self-appraisal d. 360 degree appraisal.
e. any other please specify
Q.6. What methods are being used for performance appraisal
a. forced choice distribution method. b. essay method
69
c. ranking method. d. critical incident
method
e. any other, kindly specify
Q.7. In your opinion does it identify the training needs?
a. to a large extent b. to some extent c. cant say d. not at
all
Q.8. Is the promotional policy linked with the performance appraisal
system
a. yes b. no c. can't say
Q.9. Are the issues like career planning and succession planning a part
of company's policy
a. yes b. no c. can't say.
Q.I0 Does the system help you in aligning your goals with those of the
organization.
a. yes b. no c. can't say
Q.11. What role does top management play in the performance
appraisal. kindly comment.
Q.12. Are you a part of the appraisal committee
a. yes b. no
70
Q 13 . Do the employees get the feedback of performance appraisal
a. yes, every time. b. often, but not always.
c. only when required
d. rarely e. never
Q.14 Does the organization provide counseling after the appraisal.
a. always b. often c. rarely d. never. e. can't say.
Q.15. Who does the counseling
a. trained professionals b. untrained counselors. c. can't say
Q.16. What kind of remedial measures are taken.
a. job rotation b. sent to training programmes c.
counseled
d. any other, kindly specify
Q.17. How do you rate the overall assessment of performance appraisal
a. Outstanding b. Very good c. Good d. Satisfactory
e. Poor
71
Q.18. What do you feel are the positives in the performance appraisal
system in your organization, Kindly mention
Q.19 What do you feel are the shortcomings of the performance
appraisal system being followed in your organization, Kindly
mention
Q.20. For how long have you been working in this organisation
Q.21. Suggestion towards improving the performance appraisal system
in your organisation
72
BIBLIOGRAPHY
1) Flippo EdwinB., Personnel management, Edition sixth, Tata Mc
Graw Hills, 1984, p.g. 225-230
2) Gupta, C.B., Human Resource Management, Edition
Fifth(Reprint),Sultan Chand and Sons, New Delhi 2006, P.G. 5.3-
5.10
3) Rao, P. Subba,Essentials of Human Resource Management and
Industrial Relations;Edition Second, Himalaya Publishing House,
New Delhi 2005, p.g.206-210
73
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