Performance Appraisal at the Corporate Level

7/29/2019 Performance Appraisal at the Corporate Level

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M.P.BIRLA INSTITUTE.OF MANAGEMENT 1

A DISSERTATION PROJECT

On

A STUDY ON PERFORMANCE APPRAISAL

SYSTEM IN A CORPORATE LEVEL

Submitted in partial fulfillment of the requirement for MBA

Degree of Bangalore University

BY

ASSER NASHIKAKURegister Number

04XQCM6008

Under the guidance of

Prof. NANDINI VYDYANATHAN

M.P.Birla Institute of Management

Associate Bharatiya Vidya Bhavan

Bangalore-560001

2004-2006


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DECLARATION

I hereby declare that the report titled A STUDY

ON PERFORMANCE APPRAISAL SYSTEM IN A

CORPORATE LEVEL is prepared under theguidance of PROF. NANDINI VYDYANATHAN in

partial fulfillment of MBA degree of Bangalore

University, and is my original work.

This project does not form a part of any

report submitted for degree or diploma of Bangalore

University or any other university.

PLACE: BANGALORE

DATE: ASSER NASHIKAKU


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PRINCIPALS CERTIFICATE

This is to certify that MR.ASSER NASHIKAKU,

bearing registrationNo:04XQCM6008 has done a

project and has prepared a report A STUDY ONPERFORMANCE APPRAISAL SYSTEM IN A

CORPORATE LEVEL under the guidance ofPROF.NANDINI VYDYANATHAN, M. P. Birla Institute

of Management, Bangalore. This has not formed a

basis for the award of any degree/diploma for any

other university.

PLACE: BANGALORE DR.NAGESH.S.MALLAVALLIDATE PRINCIPAL MPBIM,BANGALORE


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GUIDES CERTIFICATE

I hereby declare that the research work

embodied in this dissertation entitled A STUDY ON

PERFORMANCE APPRAISAL SYSTEM IN A

CORPORATE LEVEL Has been undertaken and

completed by MR.ASSER NASHIKAKU under my

guidance and supervision.

I also certify that he has fulfilled all the

requirements under the covenant governing the

submission of dissertation to the Bangalore

University for the award of MBA Degree.

PLACE: BANGALORE PROF.NANDINI VYDYANATHAN

DATE: MPBIM, BANGALORE


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ACKNOWLEDGEMENT

I wish to record my deep sense of gratitude andprofound thanks to our faculty Guide PROF.NANDINI

VYDYANATHAN, for her invaluable guidance throughout the

course of this project for providing me with the necessary

facts and data relevant tothis study and who have been aconstant source of encouragement for me and have been

instrumental in bringing about the successful completion of

this project.

I am thankful to all the members of the staff of

M.P.BIRLA.INSTITUTE OF MANAGEMENT for their help and

suggestions in conducting this study successfully.

PLACE: BANGALORE ASSER NASHIKAKUDATE:


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ABSTRACT

Performance appraisal should be a two way approach, both from the supervisor andsubordinate. The study presents a review of the performance appraisal process in

relation to performance and feedback at Hewlett Packard. The purpose of PA is to help

the employee perform better, accomplish more and be motivated to work towards

making an organization more effective.

The performance appraisal is the evaluation of on employee job performance in order

to determine the degree to which the employee is performing effectively. Performance

appraisal should be designed to show more precisely how well workers are doing their

jobs.

The Performance Appraisal System needs to be very transparent and helpful both to the

employees and to the organization. The need is to get a feedback from appraisers and

appraisee working in the organization, about the current state of the PAS. Only after

analyzing the current state of PAS, the human resource managers can go to the next

step of improvements in PAS. A survey is therefore required.

The type of research chosen is quantitative in nature. The research is undertaken to

ascertain the views / opinions of the Raters and Ratees working with the company and

to suggest appropriate modifications about the existing PAS Structured questionnaire

has been prepared and discussed personally with the respondents.

The sample size will be restricted to 100 employees and 20 employers chosen by

applying stratified random method.

Findings of the research are:


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1. The employees are aware of the present Performance appraisal System followed

in the company. This is evident from the responses collected from the raters as

well as the ratees. 85% of the ratees agreed.

2. Raters spend considerable amount of time in giving the rate a feedback about

the performance.

3. The general awareness about the traits / attributes is good. 70% of the

employees also felt that the traits / attributes are sufficient.

4. Respondents feel that the training program strongly helps in enhancing job

knowledge and individual skill.

5. The ratees have a good knowledge about who their respective Reporting and the

Reviewing officers are of the respondents knew the rating office.

The researcher would like to recommend the following:

1) The performance appraisal should begin by concentrating on what employees

have done well.

2) The Reporting officer must focus on employees key effective areas where he

should show results.

3) The Reporting / Reviewing officer must establish objectives in terms of an

employees performance (Both short term and long term) which in a way will

after the total organizational plan.


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INTRODUCTION

IT INDUSTRY

Over the last decade, India has developed into a major and credible information

technology (IT) outsourcing centre. In India, the software boom started somewhere in

the late 1990s. Most of the Indian software companies at that moment offered only

limited software services such as the banking and the engineering software.

Information Technology (IT) knowledge based industry, has the tremendous potential

of becoming an engine of accelerated economic growth, productivity improvement for

all sectors of the economy and means of efficient governance.

The IT software and service industry has been categorized into three broad sectors:

Software Product and Technology Services. IT Services and IT Enabled Services

It enhances access to information, protects consumers, provides access to government

services, makes skill formation and training more effective, improves delivery health

services and promotes transparency. It provides tremendous employment potential and

linkages between government and the people both at the rural and urban level.

Investment in knowledge based industries will determine the level of the countrys

dominant position in the world economy in the next two decades.

The IT sector is one of the fastest growing segments of Indian Industry, growing fromRs.13,200 million in1992-93 to Rs.80,884 million in 2001-02. Sixty percent (Rs.48,134

million in 2001-02) is accounted for by software and the remaining 40 percent

(Rs.32,570 million) by hardware. IT is an area where the country has a competitive


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edge and can establish global dominance. Advancements in IT have a profound impact

on the economy and the quality of human life.

The ITES sector in India has emerged as a key engine of growth for the Indian ITIndustry and the technology led services industry. This sector has grown from Rs.2 400

million in 1999 2000 to Rs.4,100 million in 2000 2001, providing employment to

70,000 people.

The major users of IT services are the government, financial services and banking,

manufacturing and retail and distribution. New areas likely to emerge are

communication, healthcare and utilities, as these will increasingly be deregulated.

However, IT services essentially require high quality man power, state of the art,

skills, world-class telecom and IT knowledge based environment.

Status of IT Software Industry in India and Global

The Indian IT software and service industry has emerged as one of the fastestgrowing sectors in the Indian economy, with a growth rate exceeding 50 percent

in export and 40 percent in the total IT industry over the last five years.

Software Product and Technology Services provide a high growth opportunityfor the Indian Software Industry.

Indian companies have a market potential of software product development,such as enterprise software (e-business solution, ERP, e-corporate governance),

consumer software (personal productivity tools) and embedded software.

Indian companies have developed a number of highly acclaimed and popularpackages, such as HR management and business accounting by TCS, banking

automation packages by Infosys, ERP tools by RANCO etc.


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The total global software and IT services market is estimated to be about $ 1.2trillion of which Indias share is 2 percent. The Indian software industry is

under threat from emerging competitors.

US technology firms are rapidly shifting back office functions to India. Foreignfirms are eagerly waiting to set up centers to process financial claims, payroll

data, and building customer support desk.

The overall success of the IT industry in India has shown spill over effects to other

industries in the country. The Indian economy has grown at an average rate of 6.0% a

year during the last five years (11). In India, the success of software industry can be

attributed to the excellent team work between the Government and the industry.

Government of India, considering the performance of the Indian software industry, has

extended all support, including fiscal benefits, availability of high speed data

communications and infrastructure and has ensured almost red tape free system.

1.1 Problem Statement

This project aims to study the performance appraisal system (by considering

certain important dimensions) followed by Hewlett Packard.

The study aims to highlight the significance of such performance appraisal

system in the corporate context. Thus the study tries to establish the link between

performance appraisal system and organizational effectiveness.

1.2 Background of the study

There is a need for companies to look much more closely at their performance

management and appraisal systems, since many are not only useless, but can actually

harm productivity and the relationships between employees and mangers. Some of the

most innovative work in developing new approaches to performance management is

being done these days by organizations in the public sector.


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1.3 Justification and Significance

Performance appraisal system is an important part of any organization. If forms

the backbone for assessing the employees performance. Since it is done on various

dimensions, becomes the core principle in any organization. Therefore a study of thesame is extremely important in todays organizational context.

1.4 Research Objectives

1. To study performance appraisal system in Hewlett Packard.

2. To highlight the significance of performance appraisal system in the Hewlett

Packard and establish the link between performance appraisal system and

organizational effectiveness.

1.5 Hypothesis

H0 performance appraisal system is not important in any organizational

context.

H1performance appraisal system is extremely important in any organizational

context.

1.6 Theoretical frame work

Human Resource Management is a management function that helps managers to

Recruit, Select, Train and Develop members for an organization. HRM is

concerned with the peoples dimension in organizations.

HRM is a series of integrated decisions that form the employment relationship;

their quality contributes to the ability of the organizations and the employees to

achieve their objective. HRM is concerned with the people dimension in

management. Since every organization is made up of people, acquiring theirservices, developing their skills, motivating them to higher levels of

performance and ensuring that they continue to maintain their commitment to

the organizational objectives. This is true, regardless of the type of organization

government, business, education, health, recreation or social action.


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Thus, HRM refers to set of programmes; functions and activities designed and

carried out in order to maximize both employee as well as organizational

effectiveness.

Performance Appraisal and its importance

Introduction

An organizations goals can be achieved only when people put in their best efforts.

How to ascertain whether an employee has shown his or her best Performance on a

given job? The answer is Performance appraisal. Employee assessment is one of the

fundamental jobs of HRM, but not an easy one though.

Appraising the performance of individuals, groups and organizations is a common

practice of all societies. While in some instances these appraisal processes are

structured and formally sanctioned, in other instances they are an informal and integral

part of daily activities. In social interactions, performance is conducted in a systematic

and planned manner to achieve widespread popularity in recent years.

In simple terms, performance appraisal may be understood as the assessment of an

individuals performance being measured against such factors as job knowledge,

quality and quantity of output, initiative, leadership abilities, supervision,

dependability, co-operation, judgement, versatility, health and the like. Assessment

should not be confined to past performance alone. Potentials of the employee for future

performance must also be assessed.

A formal definition of performance appraisal is:

It is the systematic evaluation of the individual with respect to his/her Performance

on the job and his/her potential for development


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A more comprehensive definition is:

Performance appraisal is a formal, structured system of measuring and

evaluating an employees job related behaviours and outcomes to discover how

and why the employee is presently performing on the job and how the employee

can perform more effectively in the future so that the employee, organization and

society all benefit

The second definition includes employees behaviour as part of the assessment.

Behaviour can be active or passive - do something or do nothing. Either way, behaviour

affects job results.

The other terms used for performance appraisal are:

Performance Rating Employee assessment Employee Performance Review Personnel Appraisal Performance Evaluation Employee Evaluation Merit Rating

In a formal sense, employee assessment is as old as mankind.


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Some of the important features of performance appraisal are:

Performance appraisals the systematic description of an employees job relevantstrengths and weaknesses.

The basic purpose is to find out how well the employees are performing the joband establish a plan of improvement.

Appraisals are arranged periodically according to a definite plan. Performance appraisal is not job evaluation. It refers to how well some one is

doing the assigned job.

Performance appraisal is a continuous process if every large scale organization.

Need for Performance Appraisal

Provide information about the performance ranks basing on which decisionregarding salary fixation, confirmation, promotion, transfer and demotion are

taken.

Provide feedback information about the level of achievement and behaviour ofsubordinate. This information helps to review the performance of the

subordinate, rectifying performance deficiencies and to set new standards of

work, if necessary.

Provide information which helps to counsel the subordinate. Provide information to diagnose deficiency in employee regarding skill,

knowledge, performance appraisal determine training and developmental needs

and to prescribe the means for employee growth provides information for

correcting placement.

To prevent grievances and in disciplinary activities.


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Objectives of Performance Appraisal

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

several purposes. The main purposes of employee assessments are:

To effect promotions based on competence and performance.

To confirm the services of probationary employees upon their completing theprobationary period satisfactorily.

To assess the training and developmental needs of employees.

To decide upon a pay raise where (as in the unorganized sector) regular payscales have not been fixed.

To let the employees know where they stand in so far as their performance isconcerned and to assist them with constructive criticism and guidance for the

purpose of their development.

To improve communication. Performance appraisal provides a format fordialogue between the Superior and the subordinate and improves understanding

of personal goals and concerns.

Finally, performance appraisal can be used to determine whether HRprogrammes such as selection, training and transfers have been effective or not.

Broadly, performance appraisal serves four objectives.

1. Developmental Uses

Identification of Individuals Need


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Performance Feedback Determining Transfers and Job Assignment Identification of Individual Strengths.

2. Administrative Uses / Decisions

Salary Promotion Retention or Termination Recognition of Individual Performance Lay-Offs Identification of Poor Performance

3. Organizational Maintenance / Objectives

HR Planning Determining organization training needs Information for goal identification Evaluation of HR System Reinforcement of organizational development needs

4. Documentation Purpose

Criteria for Validation Research Documentation for HR Decisions Helping to meet requirements


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Appraisal Process

The following diagram outlines the performance appraisal process. Each step in the

process is crucial and is arranged logically.

Objectives of

Performance

Establish Job

Expectations

Design and Appraisal

Programme

Appraise

Performance

Performance

Interview

Use Appraisal data for Appropriate purposes


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Objectives of Appraisal

Objectives of appraisal, as stated above, include effecting promotions and transfers,assessing training needs, awarding pay increases and the like. The emphasis on all these

is to correct the problems. These objectives are appropriate as long as the approach in

appraisal is individual. Appraisal, in future would assume systems orientation. In

systems approach, the objectives of appraisal stretch beyond the traditional ones.

Establish Job Expectations

The second step in the appraisal process is to establish job expectations. This includes

informing the employee what is expected of him or her on the job.

Design Appraisal Programme

Designing an appraisal programme poses several questions, which need answers. They

are:

Formal Versus Informal Appraisal Whose Performance is to be assessed? Who are the raters? What problems are encountered? How to solve the problems? What should be evaluated? When to evaluate? What methods of appraisal are to be used?

Formal versus Informal Appraisal

Formal Appraisals usually occur at specified time periods once or twice a year. Formal

appraisals are most often required by the organization for the purpose of employee

evaluation.


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Informal Performance Appraisal can occur whenever the supervisor feels the needs for

communication.

Many organizations encourage a mixture of both formal and informal appraisals. Theformal appraisal is most often used as primary evaluation. However, the informal

appraisal is very helpful for more performance feedback. Informal appraisals should not

take place of formal performance evaluation.

Whose Performance should be rated?

To the question as to whose performance should be rated, the answer is Obvious

employees. When we say employees, is it individuals or teams? Specifically, the rate

may be defined as the individual, work group, division or organization. It is also

possible to define the ratee at multiple levels. For example, under some conditions, it

may be desirable to appraise Performance both at the work group level for merit pay

increases and at the individual level to assess training needs.

Who are raters?

Raters can be immediate supervisors, specialists from the HR department, department,

subordinates, peers, committees, clients, self appraisals or a combination of several.

Problems of rating

Performance appraisals are subject to a wide variety of in accuracies and biases referred

to as rating errors. These errors occur in the raters observations, judgement and

information processing and can seriously affect assessment results. The most common

rating errors are

Leniency or Severity

Central Tendency Halo Effect Rater Effect Primacy and Recency Effects Perceptual Set


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Performance Dimension Behaviour Spill Over Effect Status Effect

Solving Raters Problems

The best way to over come these problems is to providing training to the raters. From a

practical point of view, several factors, including the extent to which pay is related to

performance ratings, union pressure, turn over rates, time constraints and the need to

justify ratings may be more important than training, influencing the ratings that raters

actually give.

This means that improving rating systems involves not just training the raters but

rectifying outside factors such as union pressure. And it means that a rater training, to

be effective, should also address real life problems such as the fact that union

representatives will try to influence supervisors to rate everyone high.

Training helps to improve the appraisal system by overcoming distortion that occurs

due to the raters errors such as halo, leniency, central tendency and bias. Training of

raters must help strengthen the factors that tend to improve accuracy of ratings and

weaken those that lower the accuracy of the performance measurement.

One of the steps in designing an appraisal programme is to determine the evaluation

criteria. It is obvious that the criteria should be related to the job.

The six criteria for assessing performance are:

Quality Quantity Timeliness Cost effectiveness


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Need for supervision Interpersonal impact

These criteria relate to past performance and behaviour of an employee. The first fourquality, quantity, timeliness and cost effectiveness are objective in nature. The last two

need for supervision and interpersonal impact are subjective. Objective measures are

quantifiable and are therefore highly useful in measuring the performance of an

employee. But performance of employees should not always be evaluated against

quantifiable measures. Subjective measures are dependent upon human judgement.

They are prone to different kind of errors stated earlier such as leniency or severity,

central tendency, halo and the like. To be useful, subjective measures must be based on

a careful analysis of the behaviour viewed as necessary and important for effective job

performance.

Timing of Evaluation

How often should an employee be assessed? The general trend is to evaluate once in

three months, or six months, or once in a year. 70% of the organizations conduct

performance appraisal once a year, according to a survey conducted in 1997 by Arthur

Anderson. Newly hired employees are rated more frequently than the older ones.

Frequent assessment is better than phased evaluation. Feedback in the latter is delayed

and the advantage of timely remedial measures by the employee is lost. Further

evaluation gives constant feedback to the ratee, thus enabling him/her to improve

performance if there is any deficiency. The performance of trainees and probationers

should be evaluated at the end of respective programmes.


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Methods of Appraisals

The last to be addressed in the process of designing an appraisal programme is to

determine method(s) of evaluation. Numerous methods have been devised to measure

the quantity and quality of employees job performance. Each of the methods discussed

could be effective for some purposes, for some organizations. None should be

dismissed or accepted as appropriate except as they relate to particular type of

employees. Broadly all approaches can be classified into

Past oriented methods and Future oriented methods

Each group has several techniques. Some of them are explained in the following

section.

Part Oriented Methods

1. Graphic Rating Scale

The term used to define the oldest and most widely used performance appraisal

method. The evaluators are given a graph and asked to rate the employees on each of

the characteristics. The number of characteristics can vary from one to one hundred.

The rating can be a matrix of boxes for the evaluator to check off or a bar graph where

the evaluator checks off a location relative to the evaluators rating.

2. Check Lists

The term used to define a set of adjectives or descriptive statements. If the raterbelieves the employee possessed a trait listed, the rater checks the item; if not, the rater

leaves the item bank. Rating score from the checklist equals the number of checks.

3. Weighed Check Lists


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The term used to described a performance appraisal method where supervisors

or personnel specialists familiar with the jobs being evaluated prepared a large list of

descriptive statements about effective and ineffective behaviour on jobs.

4. Forced Choice Method

This appraisal method has been developed to prevent evaluators from rating

employees to high. Using this method, the evaluator has to select from a set of

descriptive statements, statements that apply to the employee. The statements are

weighted and summed to at, effectiveness index.

5. Forced Distribution

The term used to describe an appraisal system similar to grading on a curve.

The evaluators are asked to rate employees in some fixed distribution of categories.

One way to do this is to type the name of each employee on a card and ask the

evaluators to sort the cards into piles corresponding to rating.

6. Critical Incident Technique

The term used to describe a method of performance appraisal that makes lists of

statements of very effective and very ineffective behaviour for employees. The lists are

combined into categories, which vary with the job. Once the categories are developed

and statements of effective and ineffective behaviour provided, the evaluator prepares a

log for each employee. During the evaluation period, the evaluator records examples of

critical behaviours in each of the categories, and the log is used to evaluate theemployee at the end of the evaluation period.

7. Behavioral Anchored Rating Scales


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The term used to describe a performance rating that focuses on specific

behaviours or sets as indicators of effective or ineffective performance, rather than on

broadly stated adjectives such as average, above average, or below average. Other

variations are:

Behavioral observation scales. Behavioral Expectations Scales Numerically anchored rating scales

8. Ranking

The term ranking has been used to describe an alternative method of

performance appraisal where the supervisor has been asked to order his or her

employees in terms of performance from highest to lowest.

9.1 Paired Comparison

The term used to describe an appraisal method for ranking employees. First, the

names of the employees to be evaluated are placed on separate sheets in a pre-

determined order, so that each person is compared with all other employees to be

evaluated. The evaluator then checks the person he or she feels has been the better of

the two on the criterion for each comparison. Typically the criterion is the employees

over all ability to do the present job. The number of times a person is preferred is

tallied, and the tally developed is an index of the number of preference compared to the

number being evaluated.

10. Narrative or Essay Evaluation

This appraisal method asks the evaluator to describe strengths and weaknesses

of an employees behaviour. Some companies still use this method exclusively,

whereas in others, the method has been combined with the graphic rating scale.

Future Oriented Methods

1. Management by Objectives


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The management by objectives performance appraisal method has the

supervisor and employee get together to set objectives in quantifiable terms. The

appraisal method is worked to eliminate communication problems by the establishment

of regular meetings, emphasizing results and by being an ongoing process where new

objectives have been established and old objectives are modified as necessary in light

of changed conditions.

2. Psychological Appraisals

Psychologists are used for evaluations; they assess an individuals future

potential and not past performance. The appraisal normally consists of in depth

interview psychological tests, discussions with supervisors and a review of other

evaluations. The psychologists then writes an evaluation of the employees intellectual,

emotional, motivational and other related characteristics that suggest individual

potential and may predict future performance.

3. Performance Interview

Performance Interview is another step in the appraisal process. Once the

appraisal has been made of employees, the raters should discuss and review the

performance with the ratees, so that they will receive feedback about where they stand

in the eyes of the superiors. Feedback is necessary to effect improvement in

performance, especially when it is adequate.

Specifically Performance Interview has three goals

To change behaviour of employees whose performance does not meetorganizational requirements or their own personal goals.

To maintain the behaviour of employees who perform in an acceptable mannerand

To recognize superior performance behaviour so that they will be continued.

Use of Appraisal Data


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The final step in the evaluation process is the use of evaluation data. The HR

department must use the data and information generated through performance

evaluation. In one way or the other, data and information outputs of a performance

appraisal programme can critically influence employer employee reward

opportunities.

Specifically the data and information will be useful in the following areas of HRM.

Remuneration administration Validation of selection programmes. Employee training and development programmes Promotion, transfer and lay-off decision Grievance and discipline programmes HR Planning


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1. Hewlett Packard A brief company profile

HP is founded in 1939 and its first product is the resistance capacitance audio

oscillator (HP 200A), an electronic instrument used to test sound equipment. Over the

next decade, test and measurement products from HP win excellent acceptance among

engineers and scientists.

Corporate Objectives

Customer loyalty

To provide products, services and solutions of the highest quality and deliver more

value to customer that earns their respect and loyalty.

Profit

To achieve sufficient profit to finance the company growth, create value to

shareholders and provide the resource needed to achieves corporate objectives.

Market Leadership

To grow by continually providing useful and significant products and services and

solutions to markets and expand into new areas that build on competencies,

technologies and customer interest.

Growth

To view change in markets as an opportunity to grow to use profits and the ability to

develop and produce innovative products, services, and solutions that satisfy emerging

customer needs.

Employee commitment

To help the employees share the company is success that they make possible to provide

people with employment opportunities based on performance.


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Leadership Capabilities:

To develop at every level employees who are accountable for achieving business results

and exemplifying the corporate value.

Global citizenship:

Good citizenship is good business, societal responsibility by being an economic

intellectual and social asset to each country and community in which we do business.

Vision and Strategy:

HP believes diversity as a key driver to success. Putting all our differences to work

across the world is continuous journey fueled by personal leadership from everyone in

the company. HP aspiration is that the behaviors and actions that support diversity and

inclusion a conscious part of how its business is throughout the world. Diversity and

inclusion are an intrinsic part of HP nature and key to fulfilling our vision for HP; to be

a winning e- company with a shining soul.

Products:

Servers Storage Software Networking Printing & Multi Function Desktops and Workstations Notebooks and Table PCs Monitors and Projections Fax, Copiers and Scanners


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3.1 Purpose of the Review of Literature

The purpose of literature review is to identify the problem statement, understand thesecondary data that has been gathered in the field of study and make new findings on

the problem statement.

1. Author : Barr, 1993

Website : performanceappraisal1101/litreview.htm

Purpose : To highlight the importance of recognizing and maintaining

strong relationship between training and performance evaluation

Both the supervisor and employee should recognize that a strong relationship

exists between training and performance evaluation. 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.


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In some cases, the plan might involve additional training. The supervisor should keep

in contact with the employee to assure the training experiences are producing desired

impact.

3.2 Methodology

The study is done using survey method to find importance of strong relationship

between training and performance evaluation.

3.3 Conclusions

The supervisor should keep in contact with the employee to ensure that the training

experiences are producing the desired impact.

2. Author : London, 2003

Website : performanceappraisal1101/litreview.htm

Purpose : To study the importance of understanding the nature of the job

for a supervisor

Once the supervisor understands the nature of the job and the sources of

information, the information needs to be collected in a systematic way, provided

as feedback and integrated into the organizations performance management

process for use in making compensation, job placement and training decisions

and assignments.

The model discussed is an example of a performance appraisal system that can

be applied to top level, middle level and lower level employees. Employees

feel that they are taken seriously as individuals and that the supervisor is truly

concerned about their needs and goals.


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Methodology

The study is done using survey method to find how important it is to a supervisor in

understanding the nature of the job.

Conclusions

The model discussed is an example of a performance appraisal system that can be

applied to top level, middle level and lower level employees.

4.4 Benefits to a researcher from review:

The literature gives an insight into the importance of the performance appraisalsystem in an organization.

It has helped me to formulate the problem statement. It has helped me to formulate the objectives of the study. It has also served as a secondary data.


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4.1 Hypothesis

H0 Performance Appraisal System is not important in any organizational

context.

H1

Performance Appraisal System is extremely important in anyorganizational context.

4.2 Type of Research

The research is primarily quantitative in nature. The study is based on data

collected through structure questionnaire from the respondents and interviews

conducted with the respondents.

4.3 Sampling Technique

The research technique used is Stratified Random Method.

4.4 Type of DataData is the fact of an event. Data is the base for every research work. The data is

mainly classified into two groups.

1) Primary Data

Thrust has been on collection of primary data. Structured questionnaire

has been used and discussed personally with the respondents to get their

responses.

2) Secondary Data

Books, Journals, websites etc. have been consulted for obtaining related

information and also for cross checking of primary data.


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4.5 Research Techniques

Structured Questionnaire

Personal InterviewsStatistical Tools Tables / Chart.

4.6 Population 200

4.7 Sample Size 120

Employees (Ratees) - 100

Employers (Raters) - 20

4.8 Sampling Profile

Educated

Earning Good Income

Good Lifestyle

4.9 Scope and Limitations of the Research

The study is constrained only to performance appraisal system. Analysis of primary data is done on the assumption that the answers

given by the respondents are true and correct.

Time and Resource Constraints.


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Questionnaire 1

(To the Ratees)

Q1. Are you aware of performance appraisal system followed in your Company?

Table No.1 Showing the response towards the Awareness of the Performance

Appraisal System

Particulars No. of Respondents % of Respondents

Yes 85 85

No 15 15

Graph No.1 showing the response towards the Awareness of the Performance

Appraisal System

No. of Respondents

85%

15%

Yes

No

Source: Field Investigation

Inference:

The company follows a strict policy about the appraisal


40/75


Q2. In the performance appraisal system self appraisal forms a part. Do you think

it is relevant?

Table No.2

showing the response about the Validity of Self Appraisal

Particulars No. of Respondents

Yes 80

No 20

Graph No.2 showing Response towards Importance of Self Appraisal

80%

20%

Yes

No


Inference:

The self appraisal is relevant as part of Performance Appraisal.


41/75


Q3. Are you aware of the different / attributes according to which you are rated?

Table No.3 showing the response about the Knowledge of Traits / Attributes

Particulars No. of Respondents

Yes 70

No 30

Graph No.3 showing Response towards Awareness about different traits

70%

30%

Yes

No


Inference:

The management effectively informs the appraisee about the traits contained in the

appraisal formats.


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Q4. The performance appraisal system helps in

Table No.4 showing the response of Performance Appraisal according to the

Employees perspective

ParticularsNo. of

Respondents

Promotions 60

Salary 32

Retention / Termination 10

Recognition of Individual Performance 49

Identification of Poor Performers 25

Graph No.4 showing Response towards Application of Performance Appraisal

60

3210

49

25

Promotions

Salary

Retention, Termination

Recognition of Individual

Performance

Identification of Poor

Performers


Inference:

The Performance appraisal influences promotions and also aids in recognition of

individual performances.


43/75


Q5. The performance appraisal system has two pars i.e. Self appraisal followed by

the evaluation of Reporting and Reviewing Officers.

Do you think the evaluation should also be done by

Table No.5 showing the response towards evaluation by

ParticularsNo. of

Respondents% of Respondents

Peers 50 50

Sub-ordinates 25 25

Client or Outsiders 12 12

Not required 13 13

Graph No.5 showing Response towards Evaluation also being done by

0

10

20

30

40

50

60

Peers Sub-

ordinates

Client or

Outsiders

Not required

Responses Given

No.ofRespondents


44/75



Inference:Strong preference to be evaluated by peers.

Q6. Help and guidance provided to you by your reporting / reviewing Officers is

Table No.6 showing the response towards the sufficiency of help and guidance

provided by Reporting / Reviewing Officers

ParticularsNo. of

Respondents

Highly Sufficient 30

Sufficient 55

Insufficient 10

Highly Insufficient 5

Graph No.6 Showing Response towards sufficiency of Help and Guidance

provide by Reporting / Reviewing Officers


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0 10 20 30 40 50 60

Highly Sufficient

Sufficient

Insufficient

Highly Insufficient


Inference:

There is an indication that the management spends considerable time on providing help

and guidance to the employees.


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Q7. The close relationship between your performance appraisal rating and

corresponding monetary reward is

Table No.7

showing the response to the extent of closeness between PerformanceAppraisal rating and the corresponding monetary benefits

ParticularsNo. of


Highly Co-related 42 42

Co-related 41 41

Not related 11 11

Dont know 6 6

Graph No.7 Showing Relation between PA and Pay

42

41

11 6 Highly Co-related

Co-related

Not related

Dont know


Inference: There is a high close relation between performance appraisal and pay.


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Q8. The degree of Mutual Understanding in your work relationships with your

supervisor is

Table No.8

showing the response towards the degree of mutual understanding inwork relationships with the employees superior

ParticularsNo. of

Respondents

Very High 20

Quite High 35

Rather High 25

Rather Low 13

Quite Low 6

Very Low 1

Graph No.8 Showing Response towards Degree of Mutual Understanding

0 10 20 30 40

Very High

Quite High

Rather High

Rather Low

Quite Low

Very Low

ResponseGiven

No. of Respondents



48/75


Inference:

The degree of mutual understanding in work relationships with the employees superior

is high. This implies thatRater Bias

is not prevalent in the company.

Q9. The training needs identified through the performance appraisal

Key:

a: Formulated into a training programme.

b: Not considered for training.

C: Dont know

Table No.9 showing the response towards the Training needs identified through

the Performance Appraisal

ParticularsNo. of


a 60 60

b 23 23

c 17 17

Graph No.9 showing Response towards Training needs Identification


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0

10

20

30

40

50

60

70

a b c

Responses Given

No.ofRespond

ents


Inference:

The management is effective in recognizing the training needs and then incorporating

the needs into an appropriate training programme.

Q10. The Training Programme conducted

Key:

a: Strongly helps in enhancing Job knowledge and individual skill.b: Helps in overcoming the shortcomings identified in an employee.

c: Doesnt help in any way.

Table No.10 showing the response towards the type of the training programme

conducted in the company


a 60 60

b 30 30

c 10 10


50/75


Graph No.10 showing Response towards Effectiveness of Training Programme

0

10

20

30

40

50

60

No. of

Respondent

a b c

Response (Refer Keys)


Inference:

The training program strongly helps in enhancing job knowledge and individual skill.

Q11. How frequently do you think can Performance Appraisal be done?

Table No.11 showing response towards how frequently performance appraisal

can be done.

ParticularsNo. of


1 Year 40 40

6 Months 22 22

3 Months 31 31

Each Month 7 7


51/75


Graph No.11 showing Response towards Frequency in Performance Appraisal

0

5

10

15

20

25

30

35

40

45

1 Year 6 Months 3 Months Each Month

Response Given

No.ofRespondents


Inference:

Many employees prefer annual performance appraisal system.

Q12. What is your overall feeling about the Performance Appraisal System?

Key:

a) Highly relevant in the present economic scenario and provides an opportunity for growth.

b) Not of much value as it does not help in any enhancement in performance.

c) Is of no significance in the present scenario not growth oriented.

d) Highly irrelevant, does not help the individual or the company.

Table No.12 showing the response towards the overall feelings about the

Performance Appraisal System


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Graph No.12 showing Response towards overall feeling of Performance

Appraisal

0

20

40

60

80

No. of

Respondents

A B C D

Response given (Rater keys)


Inference:

The Performance appraisal is highly relevant in the present scenario as well as provides

an opportunity for growth.


A 75 75

B 25 25

C 0 0

D 0 0


53/75


Questionnaire 2

(To the Raters)

Q1. How often your employees performance is appraised?

Table No.1 showing the response towards the conduction of the rate of

Performance Appraisal

ParticularsNo. of


Yearly 20 100

Graph No.1 - showing Response towards rate of Performance Appraisal

0

2

4

6

8

10

12

14

16

18

20

No. of

Respondents

1

Response Given


Inference:

The raters are well aware of the appraisal system followed in the company.


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Q2. Do you think that the level of interpersonal relationships with the appraisers

influence Performance Appraisal Process? If yes, to what extent?

Table No.2

Table showing the response towards the level of interpersonalrelationships with the appraisee

Particulars ExtentNo. of

Respondents

% of

Respondents

YesTo a very large

extent10 50

To certain extent 7 35

No 3 15

Graph No.2 showing Response towards Level of Interpersonal Relationship

affecting the appraisal

0

10

20

30

40

50

No of

Respondee

Yes No

Response Given


Inference: The level of interpersonal relationship influences the rating of the

employees to a certain extent.


55/75


Q3. After the Performance Appraisal and feedback, do the employees get

counseling and training, if needed to improve their performance in future?

Table No.3

Table showing the response about the employees getting counselingand training (if needed) after the performance appraisal and feedback

ParticularsNo. of


Yes 20 100

No 0 0

Table No.3 Showing the response about the employees getting feedback after the

appraisal process.


Inference:

The responses were very good, indicating 100% of respondents agreeing to the fact that

the employees are given counseling and training.


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Q4. Do you normally avoid criticizing the appraisee?

Table No.4 showing the response towards the avoidance of criticism.

ParticularsNo. of


Yes 7 35

No 13 65

Table No.4 showing the response avoidance of criticism

35%

65%


Inference:

The rates give importance not only to the performance appraisal system, but also to

individual employee growth.


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Q5. Which one of the following techniques of evaluation do you use?

Table No.5 Showing the response about the techniques of evaluation used by the

raters

ParticularsNo. of


Graphic rating Scale 3 15

Critical Incident Technique 0 0

Bars 6 30

Paired Comparison 0 0

MBO 8 40

If any other 2 10

Graph No.5 Showing Response towards the technique appraisal system followed

in the Company

0

5

10

15

20

25

30

35

40

No. of

Respondents

Graphic

rating Scale

Bars MBO

Response Given


Inference:

MBO and BARS are preferred techniques of evaluation.


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Q6. Do you encounter the following problems while doing evaluation?

Table No.6 Showing the response towards the problems while doing evaluation

Particulars No. of


A 1 5

B 0 0

C 4 20

D 0 0

E 15 75

F 0 0

Keys:

a) Problems with standards of evaluation

b) Halo Effect

c) Leniency or harshness

d) Central tendency errors

e) Recency of events errors

f) Personal bias (stereo typing)

Graph No.6 Showing Response towards problems while doing evaluation

0

10

2030

40

50

60

70

80

A B C D E F

No. of Respondents

Resp

onse

Given



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Inference:

The raters agree that Recency of events errors does affect the evaluation procedure.

Q7. Do you conduct feedback interviews with your employees soon after the

evaluation?

Table No.7 showing the response towards conducting a feedback interview with

rate soon after the evaluation

Particulars

No. of

Respondents % of Respondents

Yes 16 80

No 4 20

Graph No.7 Showing Response towards conducting a feedback interview soon

after evaluation

80%

20%

Yes

No



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Inference:

Feedback is provided to the employees to improve upon their performance.

Q8. Which one of the following you advocate for evaluation?

Table No.8 showing the response towards the rater advocating a method for

evaluation

Particulars

No. of

Respondents % of Respondents

A 2 10

B 3 15

C 2 10

D 6 30

E 7 35

Keys:

a) Rating by a committee of several supervisors.

b) Rating by the employees peers (co-workers)

c) Rating by employees sub-ordinates.

d) Self-evaluation by the Employees

e) 360 Degree evaluation


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Graph No.8 Showing Advocate for Evaluation

10

15

10

30

35

0

5

10

15

20

25

30

35

A B C D E


Inference:

The rates favor rating by the employees peers (co-workers). A majority of them would

like to adopt 360 degree appraisal.


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LIST OF FINDINGS

1. The employees are aware of the present Performance appraisal System followed

in the company. This is evident from the responses collected from the raters aswell as the ratees. 85% of the rates agreed.

2. Raters spend considerable amount of time in giving the feedback to the ratees

about the performance.

3. 80% of the employees are satisfied with the self appraisal process being

followed in the company.

4. The general awareness about the traits / attributes is good. 70% of the

employees also felt that the traits / attributes are sufficient.

5. 60% of the respondents agree that performance appraisal system helps in

promotions. The first preference is given to promotions.

6. The rates have a good knowledge about who their respective Reporting and the

Reviewing officers are of the respondents knew the rating officers.

7. 85% of the ratees are satisfied with the person who appraises them. This shows

that company has good appraisers.

8. 85% of the respondents agree that the help and guidance provided is sufficient

indicating that the management spends considerable time on providing

employees with help and guidance.

9. The extent of effort from the management in discovering employees potential

for higher responsibility through Performance Appraisal is high.


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10. The employees view the training program conducted to develop managerial

skills as important. From the ratees point, the possibility of an unbiased

assessment is high. This implies that there is no bias during the evaluation.

11. Respondents feel that the training program strongly helps in enhancing job

knowledge and individual skill.

12. 75% of the employees feel that the Performance Appraisal is highly relevant in

the present scenario as well as provides an opportunity for growth.

13. All the raters are agreed on the frequency of the appraisal. It can be concluded

that organizations conduct appraisal system once in a year.

14. Raters feel that the level of inter personal relationship influences the rating of

the employees to a certain extent.

15. Management is responsive in designing a counseling / training program that will

foster the growth of an employees performance.

16. 65% of the raters are of the opinion that criticism is necessary. This shows that

the raters give importance not only to the performance appraisal system, but

also to individual employee growth.

17. 100% of the respondents feel that some rater problems do exist.

18. Feedback is provided to the employees to improve upon their performance.

19. 50% of the raters prefer MBO (management by objectives) as one of the

important techniques of evaluation.


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66/75


Performance appraisal system in the corporate context today seems to be highlysatisfactory. Most of the employees are satisfied with the existing system.

Performance appraisal system is found to be highly significant in the corporate context.

The researcher is able to establish link between Performance Appraisal System and

organizational effectiveness.

Hypothesis testing

H0Performance appraisal system is not important in any organizational context.

H1 Performance appraisal system is extremely important in any Organizational

context.

The level of significance was calculated based on additional calculations. It is found

that

H1 stands ACCEPTED

H0 stands REJECTED


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Recommendation

1. Performance appraisal should start with validation, people need positive feed

back and validation on a regular basis.

2. Used a negotiated performance appraisal, by putting more responsibility to the

worker for the performance appraisal.

3. An effective negotiation technique, where an employee to be appraised are

asked to bring list to the performance appraisal interview consisting of:-

3.1 Areas where the employee thinks they performs extremely well.3.2 Areas where worked has shown recent improvement.3.3 Areas where the employee feels weak

is recommended.

4. The major objective of PA should be to improve performance and solve

problems rather than promotion and salary increment.

5. Performance appraisal should lead to development activities.


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Significance of Performance Appraisal System in Hewlett Packard

Questionnaire # 1

(To the Ratees)Dear Employee,

I ASSER NASHIKAKU, Student of MBA from MP Birla Institute of Management,

Bangalore would like to ask a few questions as part of my MBA Project. I request you

to kindly answer them honestly and accurately.

I assure you that the information given by you will be kept extremely confidential.

Thanking you in advance for your co-operation.

Employee Details

a) Name

b) Age

c) Total number of years of experience

d) Designation held in the company

For the questions that follow, please tick whichever option you think is applicable.

Q1. Are you aware of Performance Appraisal System followed in your company?

Yes No

Q2. Does the management spend considerable amount of time and attention for the

performance appraisal process?

Considerable time Not much of time Dont know

Q3. In the performance appraisal system self appraisal forms a part. Do you think

it is relevant?

Yes No


70/75


Q4. Are you aware of the different traits / attributes according to which you are

rated?

Yes No

Q5. The traits / attributes contained in the performance appraisal system are

sufficient.

Sufficient, not sufficient, many more traits could be added

Q6. If no what other traits / attributes do you think should be included? Please

specify -

Q7. The performance appraisal system help in

a) Promotions

b) Salary

c) Retention / Termination

d) Recognition of individuals Performance

e) Identification of Poor Performance

Q8. The Performance Appraisal System has two parts i.e. Self Appraisal followed

by the evaluation of Reporting and Reviewing Officers.

Do you think the evaluation should also be done by :

a) Your peersb) Your subordinatesc) Client or outsidersd) Not required

Q9. Are you satisfied with the person who appraises you?

Yes No


71/75


Q10. Is the content of the performance appraisal system relevant?

Yes No

Q11. Help and guidance provided to you by your reporting / reviewing officers isHighly Sufficient Insufficient

Sufficient Highly Insufficient

Q12. The discussion of Performance with that of the Reporting Officer provides you

with a platform, where by you can discuss your ratings without fear / inhibitions.

Strongly Agree Disagree

Agree Strongly Disagree

Q13. The development of new or better managerial qualities and skills through the

training programme, identified through performance appraisal are

Significantly Important Not so Important

Important Not at all

Q14. The close relationship between your performance appraisal rating and

corresponding monetary reward is

Highly co-related Not related

Co-related Dont know

From Questions 15 to 18, Rate as follows

6-Very High 3-Rather Low

5-Quite High 2-Quite Low

4-Rather High 1-Very Low

Q15. The degree of Mutual Understanding in your work relationships with your

supervisor

Q16. Do you think there is no partiality when you are rated


72/75


Q17. The extent of effort in discovering your potential for higher responsibility

through your appraisal is

Q18. The extent of action taken by the company to assist you in fulfilling the

potentials discovered in you isQ19. The training needs identified through the

performance appraisal:

a) Are formulated into a training programmeb) Not considered for trainingc) Dont know

Q20. The training programme conducted

a) Strongly helps in enhancing your job knowledge and individual skill.

b) Helps in overcoming the shortcomings identified in you.

c) Does not help in any way.

Q21. How Frequently do you think can Performance Appraisal be done?

1 Year 3 Months

6 Months Each Month

Q22. What is your overall feeling about the Performance Appraisal System?

a) Highly relevant in the present economic scenario and provides an

opportunity for growth.

b) Not of much value as it does not help in any enhancement in

performance.

c) Is of no significance in the present scenario not growth oriented.

d) Highly relevant, does not help the individual or the company.

Thank You Very Much !!!


73/75


Significance of Performance Appraisal System in Hewlett Packard

Questionnaire # 2

(To the Raters)Dear Rater,

I ASSER NASHIKAKU, Student of MBA from MP Birla Institute of Management,

Bangalore would like to ask a few questions as part of my MBA Project. I request you

to kindly answer them honestly and accurately.

I assure you that the information given by you will be kept extremely confidential.

Thanking you in advance for your co-operation.

Rater D4tails

a) Name

b) Age

c) Total number of years of experience

d) Designation held in the company

Please mention answers in two or three lines in specific

1. How often your employees performance is appraised?

2. Do your employees get self appraised?

3. Do you think that the level of interpersonal relationships with the appraisee

influences Performance Appraisal process? If so, to what extent?

4. After the appraisal do the employees get feedback?

5. After the Performance Appraisal and feedback, do the employees get

counseling and training, if needed to improve their performance in future?


74/75


6. Is Performance appraised by one appraiser or reviewed / appraised by more than

one appraiser?

7. Do you normally avoid criticizing the appraisee?

8. Is importance given to the employees behaviour rather than for his or her

personal characteristics?

9. Do you try to fully understood employees job duties and responsibilities?

10. Does the company set policies from time to time concerning who should

evaluate when and how often?

11. Which one of the following techniques of evaluation do you use?

a) Graphic Rating Scale

b) Critical Incident Technique

c) Behaviorally anchored scale

d) Paired comparison method

e) Management by objectives

f) If any other, please specify

12. Do you encounter the following problems while doing evaluation?

a) Problems with standards of evaluation

b) Halo effect

c) Leniency or harshness

d) Central tendency errors

e) Recency of events errors

f) Personal bias (stereo typing)

13. Do you conduct feedback interviews with your employees soon after the

evaluation?


75/75

14. Are your employees satisfied with your evaluation? If so, to what extent?

15. Which one of the following you advocate for evaluation?

a) Rating by a committee of several supervisors.

b) Rating by the employees peers (co-workers)

c) Rating by employees subordinates.

d) Self-evaluation by the employees

e) 360 Degree Evaluation

Thank You Very Much !!!

Documents

Performance Appraisal at the Corporate Level