project report on pa 2

Project

onA STUDY OF PERFORMANCE APPRAISAL IN NATIONAL

FERTILIZERS LTD.

SUBMITTED TO SUBMITTED BY

MRS. RATNEET KAUR JASPREET KAUR

PROFESSIOR MBA 2ND YEAR

ROLL NO - 2

MALWA COLLEGE

PUNJABI UNIVERSITY , PATIALA

ACKNOWLEDMENT

This project would not have been prepared without the contribution of some

of the individuals whose guidance has been valuable in completing the project.

First and for most I would like to express my sincere gratitude to

Mrs. Ratneet Kaur (my guide throughout the project), from MALWA COLLEGE

BATHINDA,affilatied PUNJABI UNIVERSITY PATIALA , whose effort to guide me

throughout the project, right from the identification of the project topic to the

conclusion .

Last but not the least I would like to thank almighty God, my

parents and my friends who helped me gather these data and have sat with

me for hours discussing about the project.

DECLARATION

I, JASPREET KAUR of MBA 2nd year Roll No.2 hereby declare that this

project report titled “A Study Of PERFORMANCE APPRAISAL in NFL” has been

prepared by me in partial fulfillment of the award of Master of Business

Administration under Punjabi University.

I future declare that this project report has not been submitted earlier in

any other university or institution for award of any degree or diploma.

Jaspreet kaur

CERTIFICATE

This is to certify that Ms jaspreet kaur a student of MBA 2nd year, Roll

No.2 batch 2014-2016,has successfully completed her project entitled “A

STUDY OF PERFORMANCE APPRAISAL IN NATIONAL FERTILIZERS “under my

guidance

Date_/_/2015 Signature of the project guide

INDEX

Serial no.

Topics Page no.

1 Introduction of NFL 6-8

2 Plants of NFL 9-11

3 Products of NFL 12-17

4 Marketing area of operations 18

5 Production, sales and financial performance

19-21

6 Neem coated area 22

7 Balance sheet 23

8 Corporative objectives 24-25

9 Silent features of company 26

10 Introduction of NFL, Nangal 27-32

11 Introduction of HRM of NFL 33-35

13 Performance appraisal management 36-39

14 Annual performance policy of NFL 40-41

15 Methodology 42-44

16 Date Analysis & Interpretation 45-63

17 Limitations 64

18 Conclusion 65

21 Bibliography 66

22 Questionnaire 67-68

CHAPTER-1

INTRODUCTION TO THE COMPANY

INTRODUCTION OF NFL

NFL was incorporated on 23rd August 1974 with two manufacturing Units at Bathinda and

Panipat. Subsequently, on the reorganization of Fertilizer group of Companies in 1978, the

Nangal Unit of Fertilizer Corporation of India came under the NFL fold. The Company

expanded its installed capacity in 1988 by installing and commissioning of its Vijaipur gas

based Plant in Madhya Pradesh.

The Vijaipur Plant was a landmark achievement in project management in India. The plant

was completed well within time and approved project cost. In recognition of this

achievement, the project was awarded the First Prize on Excellence in Project Management

by Govt. of India. Subsequently the Vijaipur plant doubled its capacity to 14.52 lakh MTs by

commissioning Vijaipur Expansion Unit i.e. Vijaipur-II in 1997. The annual capacity was

subsequently re-rated w.e.f. 1.4.2000 from 7.26 lakh MT of Urea to 8.64 lakh MT for

Vijaipur-I & Vijaipur-II Plants each.

Three of the Units Three of the Units are strategically located in the high consumption areas

of Punjab and Haryana. The Company has an installed capacity of 32.31 lakh MT of Urea.

The company produced 33.30 lakh tones of Urea and recorded an annual sales turnover of

Rs.5091 crores during 2009-10.

NFL, a profitable public sector undertaking operates under the administrative control of

Department of Fertilizers in the Ministry of Chemicals & Fertilizers. The Company is

consistently making profits and registered a profit (PBT) of Rs.260 crores for the year 2009-

10.The Company’s strength lies in its sizeable presence, skilled manpower, Marketing and

strong distribution network nationwide.

Aiming towards further growth, NFL is already in the process of revamping its three fuel oil

based plants for change over its feedstock from FO/LSHS to NG/R-LNG and Capacity

Augmentation of Urea at Vijaipur Unit. Towards reduction of Green House Gases, Company

has already initiated action for various CDM (Clean development Mechanism) Projects so as

to earn revenue in terms of carbon credits.

NFL in collaboration with M/s KRIBHCO & RCF has formed a joint venture company (JVC)

named as Uravarak Videsh Limited (UVL) to explore investment opportunities abroad and

within country in Nitrogenous, Phosphatic & Potassic sectors and to render consultancy

services for setting up Projects in India & Abroad. A brown field gas based Urea plant at

Barauni in Bihar has been entrusted to the above Joint venture Company.

Kisan Urea NFL’s popular brand is sold over a large marketing territory spanning the length

and breadth of the country. The Company also manufactures and markets Bio-fertilizers and a

wide range of industrial products which include Methanol, Sodium Nitrate, Sodium Nitrite,

Nitric Acid, Sulphur, Liquid Oxygen, Liquid CO2, Liquid Nitrogen etc. The Company has

also developed Neem coated Urea which on demonstration has shown improved results in

terms of increase in yield by 4-5% and environment friendly. Accordingly Company has been

manufacturing and selling Neem Coated Urea from its manufacturing plants since 2002-03

The Company is further focusing its thrust to widen the marketing operations of Neem coated

Urea. The company has also taken initiative to make available other agro inputs under single

window like quality seeds, Insecticides and Bio-pesticides by collaboration with other

reputed organizations. R&D trials are under way for testing the efficacy of Bio-pesticides,

elemental Sulphur, in collaboration with Agriculture Institutes.

NFL over the years has developed a team of dedicated professionals in the areas of

production, maintenance, project management, safety and environment control. These

professionals are sought after in the Industry both in India & abroad for their Specialized

Services.

NFL is known in the industry for its work culture, value added human resources, Quality

Management, Safety, Environment, Concern for Ecology and its

commitment to social upliftment and to ensure their compliance, All NFL plants are certified

and being maintained under ISO-9001 (2000), ISO-14001 & OSHAS-18001 by conforming

to International Quality, Environmental & Occupational Safety & Hazards standards. With

the certification of Corporate Office/Marketing operations under ISO-9001: 2000, NFL has

become the first Fertilizer Company in the country to have its total business covered under

ISO-9001 Certification.

Urea is an essential commodity under the Essential Commodities Act, 1955. The Department

of Fertilizers (DoF) plans and monitors production, import and distribution of fertilizers and

manage the subsidy for indigenous and imported fertilizers in the country. In this regard, DoF

has set up an on line web based Fertilizers Monitoring System (FMS). Presently Fertilizer

companies are allowed to market 50% of their total Urea produce out side EC allocation.

The Department of Public Enterprises, Govt. of India in order to improve accountability and

giving higher autonomy to Public Sector Undertakings, introduced the concept of MoU from

early nineties NFL enters into a Memorandum of Understanding (MoU) with the Government

for each year under which the Government undertakes to assist NFL with regard to

availability of inputs, obtaining ECA allocations commensurate with the availability of

fertilizers from NFL plants etc. NFL on its part undertakes to adhere to its production and

movement plans, achieve its ECA allocation and provide regular feedback to the

Administrative department. NFL signed first MoU with Department of Fertilizers (DoF) for

the year 1991-92. The company has been awarded Excellent rating for the fiscal year 2008-

09, which is 9th excellent rating in a row.

NFL, a Schedule A and Mini Ratna Company, is the second largest producer of Nitrogenous

Fertilizers in the Country with 15.8% share in domestic production of Urea achieved in the

country during 2009-10.

NFL National Fertilizers Ltd.

RCF Rashtriya Chemicals fertilizers ltd.

IFFCO Indian farmers Fertilizers Co-Operative Ltd.

KRIBHCO Krishak Bharati Co–Op. Ltd.

GNVFC Gujarat Narmada Valley Fertilizers Company Ltd.

IGFCC Info Gulf fertilizers & Chemicals Ltd.

CFCL Chambal fertilizers & chemical Ltd.

TCL Tata Chemical Ltd.

OCF Oswal Chemical and Fertilizer Ltd.

Plants of NFL

The company has its units in various places like Nangal, Panipat Bathinda & Vijaipur. The

Government of India has approved the Implementation of Vijaipur Expansion project with an outlay

of 987 Crores. Three of the Units are strategically located in the high consumption areas of Punjab.

Company’s strength lies in its sizeable presence, professional marketing and strong distribution

network nationwide.

Vijaipur Plant

National Fertilizers Limited,

Vijaipur, Distt. Guna,

Madhya Pradesh-473111.

Email : [email protected]

Fax : 07544 - 273089, 273109

Tel. : 91- 7544 - 273101 273090

Panipat Plant


Gohana Road,

Panipat,

Haryana-132106.


Fax : 0180- 2652515

Tel. : 0180- 2652481 to 485, & 0180- 2655570

Bathinda Plant


Sibian Road,

Bathinda,

Punjab-151003.


Fax : 0164- 2270463; 0164- 2271270

Tel. : 0164- 270220/2271200

Nangal Expansion Plant


Naya Nangal,

Distt. Ropar,

Punjab-140126.


Fax : 0187-220541

Tel. : 0187-220543

ISO CERTIFICATIONS

mailto:[email protected]




NFL is known in the industry for its work culture, value added human resources, safety,

environment, concern for ecology and its commitment to social upliftment. All NFL plants have been

certified for ISO-9002 for conforming to international quality standards and international

environmental standard i.e. ISO-14001. With the certification of Corporate Office/Marketing

operations under ISO-9001 : 2000, NFL has become the first Fertilizer Company in the country to

have its total business covered under ISO-9001 Certification.

PRODUCTS OF NFL

NEEM-COATED UREA

National Fertilizers Limited (NFL) is the first fertilizer manufacturer in the country which has

developed Neem- Coated Urea, which on demonstration has improved the crop yield by 4-5%. N.F.L.

has made strides in developing a process for manufacture of Neem-Coated Urea on commercial

scale. The company is focusing its thrust to widen the marketing operations of Neem-Coated Urea.

NFL has made efforts to harness unique properties of Neem is regulating release of Nitrogen to crops

when mixed into soil and making available to farmers a more efficient Nitrogenous fertilizers in the

form of its Neem-coated Urea primarily based upon research work conducted by scientists of Indian

Agriculture Research Institute, New Delhi.

After carrying out extensive laboratory as well as field studies. NFL has found out that Neem-

Coated urea produced with a thin film of Neem oil-water emulsion of specified concentration has

resulted in enhanced shelf life. Reducing caking of material during storage and increased nitrogen

availability to corps at the time of their growth and hence significantly contributing towards better

crops yield. It has further been reported that the process developed by NFL in producing Neem-

Coated Urea involves marginally higher cost.

BIO-FERTILIZERS

NFL manufactures and markets three types of Bio-Fertilizers, Rhizobium, Phosphate

Solubilishing Bacteria (PSB ) and Azetobactor. Starting with a mere 23 MT production in 1995-96, the

production has risen to 173 Mts in 2002-03. The Company presently markets its bio-fertilizers in

Madhya Pradesh, Maharashtra, Orissa, Rajasthan & Punjab.

Bio-fertilizers are used to supplement chemical fertilizers as also to maintain soil fertility; besides the

following:-

1. Bio-Fertilizers are Supplement to Chemical Fertilizers.

2. Bio-Fertilizers are cheap and can reduce the cost of cultivation.

3. Fix Biological Nitrogen in the soil, which is readily available to the plant.

4. Increase crop yield by 4-5% on an average.

5. Improve soil properties and sustain soil fertility.

6. Provides plant nutrient at low cost and useful for the consecutive crops.

Kisan Urea is a highly concentrated, solid, nitrogenous fertilizer, containing

46.0%. It is completely soluble in water hence Nitrogen is easily available to

crops. It contains Nitrogen in amider form which changes to ammoniac

forms and is retrieved by soil colloids for longer duration. Urea is available

in granular form and can be applied by drill and broadcasting.

Kisan Urea is ideally suitable for all types of crops and for foliar spray which instantly removes

nitrogen deficiency. Kisan Urea also has a strong and long lasting effect on crop resulting in bumper

crops Carbonic acid present in Kisan Urea helps in absorption of other nutrients like phosphate and

Potash by roots of crop.

MARKETING AREA OF OPERATIONS

The complete farmer satisfaction through best services is the drawing force of NFL’s

marketing, strategy. The Company has expanded its programmed from improving the crop

productivity at farm level to the over all development of the farming community.

To provide to the farmers high quality products in the right time, NFL has an extensive and

integrated marketing network.

The Company provides comprehensive capsules of various fertilizer promotion activities,

which include agronomical programmers, use of extension media, publicity and farmer

development programmes.

CORPORATE OBJECTIVES

NFL is an instrument of society. It has to service the needs of the people within the scope of its basic

objectives. To achieve this NFL must:

1. Select capable people and improve their knowledge and skills on organized basis.

2. Motivate and enthuse the employees to achieve higher productivity with team spirit

3. Lay down integrated objectives, define individual's goals and maintain an atmosphere

conductive to achievement of these goals.

The Corporate Objectives of NFL are:

BASIC CORPORATE OBJECTIVES

In terms of Memorandum of Association, NFL was set up to manufacture and market

chemical fertilizers, other chemicals and by-products as well as to provide the allied services.

In order to achieve and maintain a leading position in the production and marketing of

fertilizers, the following Micro Objectives have been identified: -

MICRO OBJECTIVES

1. Productivity

To achieve the best possible levels of production and economy in the use inputs while

ensuring safety and proper maintenance of the plant and machinery and pollution control.

More specially

a. To strive to raise capacity utilization

b. To improve upon consumption norms consistently.

2. Research & Development

To carry out R&D activities for

a. Increasing plant availability

b. Saving use of energy in different norms

c. Better recovery of saleable by-products

d. Process improvement /development

e. Increasing efficiency utilization on a sustained basis in the application of chemical fertilizers

in combination with other agricultural inputs.

3. Profitability

To manage the assets, men and material in most effective and efficient manner ensuring

a. Reasonable return on investment commensurate with the principles laid down by the

Government from time to time

b. Generation of increasing internal resources.

4. Marketing and Consumer Services

a. To provide to the farmers high quality products in right time and in adequate quantities and

with a package of modern agricultural practices, at the same time maintaining reputation for

fair business practices.

b. To further intensify promotional efforts for increased use of fertilizers and to maximize

distribution of Company's products within the areas covered by the Company consistent

with government policy.

5. Organization

To develop and maintain an organizational environment for encouraging individual and group

initiative, innovation and productivity and also sustain fair deal and human approach.

6. Growth

a. To achieve reasonable and consistent growth in the business of manufacture and marketing

of fertilizers and chemicals compatible with needs of the market.

b. To work out diversification/expansion schemes to increase profitability of the company and

meet the changing needs of customers.

7. Obligations to Society

a. To conduct the business of NFL in accordance with ethical and legal standards and to

undertake socio-economic activities, consistent with Government polices, in order to

generate good environment, which the company operates.

b. To promote development of ancillary industries.

SALIENT FEATURES OF THE COMPANY

The company has an excellent track record and high profits, with highly motivated and

dedicated workers and officers – no industrial relation problem.

N.F.L. was given the “Mini Ratna Category-I” by the Govt. of India in 1998 based on the

company’s overall performance during the preceding years.

The company was ranked 27th in terms of sales according to Business India Super 100 in

1998.

N.F.L. has been selected by a panel of judges for Economic Times-Harvard Business School

Association of India corporate Performance Award for 1994, among 213 Public Sector

Companies in the country.

International Greenland Society, Hyderabad awarded NFL “Best Environment & Ecological

Implementation Award” for the year 1995-96.

Recently NFL has been “A RANK” in Public Sector Undertaking because of its constant good

performance.

National Fertilizers Limited, Ranbaxy Laboratories Limited and Indo Rama Synthetics Limited

have secured the National Safety Awards for the year 2001-02.

NFL is the first company in Pubic Sector having the certification of ISO-9002, ISO-9001 and

ISO-14001.

NFL has linked agreement on 26th February, 2009 with Gas Authority of India Ltd. For

transportation & supply of Natural Gas to NFL’s Panipat, Bathinda and Nangal Plants.

Nangal Unit of NFL has received “ICWAI” National Award for Excellence in Cost Management

2008” from Institute of Cost and Works Accountants of India in appreciation of the efforts in

Cost management.

With the re-organization fertilizers co-operation of India with effect from 1 st April 1978. The

Nangal Unit becomes a constituent unit of the National Fertilizers Limited, which has already two

units under it, located at Bathinda (PUNJAB) & Panipat (HARYANA). 4 th plant of National Fertilizers

Limited, at Vijaipur (M.P.) was commissioned in 1987.

MISSION STATEMENT

To produce targeted quantity of fertilizer efficiency and economically by optimum utilization

of resources with due regard to safety and production control.

JOURNEY TOWARDS EXCELLENCE

The Nangal unit of NFL acted as paragon of excellence in the field of development of

Fertilizer industry in India after being commissioned in 1961. The luxuriant growth of NFL Nangal

Unit beings with the commissioning of first fuel oil based Fertilizer plant in India with rated capacity

of 900 MTPD Ammonia and 1450 MTPD Urea. A unique synthesis of technologies from M/S SHELL,

M/S LURGI (Germany) & M/S TECHNIMONT (Italy) give Nangal Unit an edge over the contemporary

technologies. The adoption of versatile technologies and desire for related diversification led to the

manufacture of various industrial products and byproducts like Nitric Acid, Ammonium Nitrate,

Liquid Nitrogen, Liquid Oxygen, Industrial gases etc.

FUTURE EXPANSION

To meet the challenges of the ensuing millennium, the goal of achieving a group turnover of

Rs. 10,000/- corers from diverse business and a net profit of Rs. 1200 crores has been projected. NFL

has revamped its urea plant at Nangal for raising the annual with installed capacity from 330000

MTPA to 478500 MTMTPA per annum with the additional Capital Cost of Rs. 167 crores. Significant

feature of this project would be towards optimum utilization of Ammonia available within plants

besides enhancement in Product Quality & Environment improvement. As Revamp of Nangal Urea

Plant has already started and planes are in the pipeline to revamp, replace the existing fuel oil based

plants with change in feedback to LNG. To retain the loyalty of the customers and to add value to

their brand, NFL has been planned to setup single window outlets for the farmers to carry out one

stop shopping for total input to the farmer .

INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Human resource management (HRM or simply HR) is a function in organizations designed to maximize employee performance in service of their employer’s strategic objectives. HR is primarily concerned with how people are managed within organizations, focusing on policies and systems. HR departments and units in organizations are typically responsible for a number of activities.

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

Following are the various functions of Human Resource Management that are essential for the effective functioning of the organization:

1. Recruitment

2. Selection

3. Induction

4. Performance Appraisal

5. Training & Development

WHAT IS “PERFORMANCE APPRAISAL”?Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.

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

It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management's interest in the progress of the employees.

People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Therefore, performance management and performance appraisal is necessary to understand each employee's abilities, competencies and relative merit and worth for the organization.

Performance appraisal rates the employees in terms of their performance.

Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees.

OBJECTIVES OF PERFORMANCE APPRAISAL

TO REVIEW THE PERFORMANCE OF THE EMPLOYEES OVER A GIVEN PERIOD OF TIME.

TO JUDGE THE GAP BETWEEN THE ACTUAL AND THE DESIRED PERFORMANCE.

TO HELP THE MANAGEMENT IN EXERCISING ORGANIZATIONAL CONTROL.

TO DIAGNOSE THE STRENGTHS AND WEAKNESSES OF THE INDIVIDUALS SO AS TO IDENTIFY THE TRAINING AND DEVELOPMENT NEEDS OF THE FUTURE.

TO PROVIDE FEEDBACK TO THE EMPLOYEES REGARDING THEIR PAST PERFORMANCE. PROVIDE INFORMATION TO ASSIST IN THE OTHER PERSONAL DECISIONS IN THE ORGANIZATION.

PROVIDE CLARITY OF THE EXPECTATIONS AND RESPONSIBILITIES OF THE FUNCTIONS TO BE PERFORMED BY THE EMPLOYEES.

TO JUDGE THE EFFECTIVENESS OF THE OTHER HUMAN RESOURCE FUNCTIONS OF THE ORGANIZATION SUCH AS RECRUITMENT, SELECTION, TRAINING AND DEVELOPMENT.

TO REDUCE THE GRIEVANCES OF THE EMPLOYEES

CHARACTERISTICS

1. Performance Appraisal is a process.

2. It is the systematic examination of the strengths and weakness of an employee in terms of his job.

3. It is scientific and objective study. Formal procedures are used in the study.

4. It is an ongoing and continuous process wherein the evaluations are arranged periodically according to a definite plan.

5. The main purpose of Performance Appraisal is to secure information necessary for making objective and correct decision an employee.

PROCESS

The process of performance appraisal:

1. Establishing performance standards

2. Communicating the Standards

3. Measuring Performance

4. Comparing the actual with the standards

5. Discussing the appraisal

6. Taking Corrective Action

LIMITATIONS

1. Errors in Rating

2. Lack of reliability

3. Negative approach

4. Multiple objectives

5. Lack of knowledge

METHODS OF PERFORMANCE APPRAISAL

Performance actually can be appraised by a wide variety of methods and techniques.

The most commonly used performance appraisal methods can be distinguished into three major categories: comparative appraisals, behavioural appraisals, and output-based appraisals.

1) Comparative Appraisals Managers directly compare the performance of their subordinates against one another in comparative appraisals. For example, a data entry operator's performance would be compared with that of other data-entry operators by the computing supervisor. Comparative techniques include ranking, paired comparisons, and forced distribution.

Ranking: In this method, the supervisor lists all subordinates in order, from the highest to the lowest in performance. Rankings such as this are appropriate only in small companies. As the number of employees increases, it becomes gradually more difficult to discern differences in their performance.

Paired Comparisons: The paired comparison method involves comparing each employee to every other employee in the rating group, one at a time, to determine better. A rank order is obtained by counting the number of times each individual is selected as being the better of a pair.

Forced Distribution: In forced distribution, the supervisor must assign only a certain proportion of his/her subordinates to each of several categories on each evaluative factor. A common forced distribution scale is divided into five categories. A fixed

percentage of all subordinates in the group fall within each of these categories. Typically, the distribution follows a normal distribution

2) Behavioural Appraisals In contrast with comparative appraisals, behavioural appraisals allow supervisors to evaluate each person's performance independent of other employees but relative to important job-related behaviours, which when exhibited can lead to job success.

Graphic Rating Scale: The graphic rating scale allows the rater to mark an employee's job performance on a five-point or seven-point scale. This method identifies certain subjective character traits, such as 'pleasant personality', 'initiative' or 'creativity' to be used as basic job performance criteria. Because of its simplicity, the graphic rating scale is the most frequently used performance appraisal method

Critical Incidents: In the critical incident method, the manager keeps a written record of the highly favourable and unfavourable actions in an employee's performance. When something happens [a 'critical incident' involving a particular employee] the manager writes it down.

Thus, a list of critical incidents is kept during the entire rating period for each employee. The critical incident method can be used with other methods to document the reasons why an employee was rated in a certain way

Essays: The essay (free-form) appraisal method requires the manager to write a short essay describing each employee's performance during the rating period. The rater usually is given a few general headings under which to categorize comments. The intent is to allow the rater more flexibility than other methods do. As a result, the method is often combined with other methods.

Behaviorally Anchored Rating Scales (BARS): BARS utilize critical incidents to focus appraisal on employee behaviours that can be changed. Thus, a BARS system describes examples of 'good' or 'bad' behaviour. These examples are 'anchored', or measured, against a scale of performance levels. An example of BARS that rates a university professor's attitude toward students is sited here. Construction of BARS begins with the identification of important job dimensions. The dimensions are the most important performance factors in an employee's description. Assume the major job dimensions associated with teaching are: course organization, attitude toward students, fair treatment, and competence in subject area.

Short statements, similar to critical incidents, are developed that describe both desirable and undesirable behaviors. Then they are 'retranslated' or assigned to one of the job dimensions.

This task is usually a group project and assignment to a dimension usually requires the agreement of 60% to 70% of the group. The group, consisting of people familiar with the job, then assigns each 'anchor' a number, which represents how 'good' or 'bad' the behaviour is.

When numbered, these anchors are fitted to a scale. The drawbacks are: behaviourally anchored rating scales require extensive time and effort to develop and maintain. Also

separate BARS forms are necessary to accommodate different types of jobs in an organization.

360 Degree Appraisal system: In human resources or industrial psychology, 360-degree feedback, also known as multi-rater feedback, multi source feedback, or multi source assessment, is feedback that comes from members of an employee's immediate work circle.

Most often, 360-degree feedback will include direct feedback from an employee's subordinates, peers, and supervisor(s), as well as a self-evaluation. It can also include, in some cases, feedback from external sources, such as customers and suppliers or other interested stakeholders. It may be contrasted with "upward feedback," where managers are given feedback only by their direct reports, or a "traditional performance appraisal," where the employees are most often reviewed only by their managers.

1) Output-based AppraisalsWhile the methods described above focus on job behaviours or processes, output-based appraisals focus on job products as the primary criteria. The most commonly used method is MBO Management by objectives.

Job Review and Agreement: In the first phase the employee and the supervisor review the job description and the key activities that comprise the employee's job. The idea is to agree on the exact makeup of the employee's job.

Development of Performance Standards: Specific standards of performance must be mutually developed. This phase specifies a satisfactory level of performance that is specific and measurable.

Guided Objective Setting: Objectives are established by the employee in conjunction with, and guided by, the supervisor. Objectives should be realistically attainable and may be different from the set performance standard.

Continuing Performance Discussions: The employee and the supervisor use the objectives as bases for continuing discussions about the employee's performance. Although a formal review session may be scheduled, the employee and the manager do not necessarily wait until the appointed time for performance discussion. Objectives are modified mutually, and progress is discussed during the period.

BENEFITS OF PERFORMANCE APPRAISALS

Measures an employee’s performance. Helps in clarifying, defining, redefining priorities and objectives. Motivates the employee through achievement and feedback. Facilitates assessment and agreement of training needs. Helps in identification of personal strengths and weaknesses. Plays an important role in Personal career and succession planning. Clarifies team roles and facilitates team building. Plays major role in organizational training needs assessment and analysis.

Improves understanding and relationship between the employee and the reporting manager and also helps in resolving confusions and misunderstandings.

Plays an important tool for communicating the organization’s philosophies, values, aims, strategies, priorities, etc among its employees.

Helps in counseling and feedback.

RATING ERRORS IN PERFORMANCE APPRAISAL

Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as 'rating errors'. These errors can seriously affect assessment results. Some of the most common rating errors are: -

Leniency or severity: - Leniency or severity on the part of the rater makes the assessment subjective. Subjective assessment defeats the very purpose of performance appraisal. Ratings are lenient for the following reasons:

a) The rater may feel that anyone under his or her jurisdiction who is rated unfavorably will reflect poorly on his or her own worthiness.

b) He/She may feel that a derogatory rating will be revealed to the rate to detriment the relations between the rater and the ratee.

c) He/She may rate leniently in order to win promotions for the subordinates and therefore, indirectly increase his/her hold over him.

Central tendency: - This occurs when employees are incorrectly rated near the average or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude stems from certain doubts and anxieties, which the raters have been assessing the rates.

Halo error: - A halo error takes place when one aspect of an individual's performance influences the evaluation of the entire performance of the individual. The halo error occurs when an employee who works late constantly might be rated high on productivity and quality of output as well ax on motivation. Similarly, an attractive or popular personality might be given a high overall rating. Rating employees separately on each of the performance measures and encouraging raters to guard against the halo effect are the two ways to reduce the halo effect.

Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or low score are given only to certain individuals or groups based on the rater's attitude towards them and not on actual outcomes or behaviors; sex, age, race and friendship biases are examples of this type of error.

Primacy and Regency effects: - The rater's rating is heavily influenced either by behavior exhibited by the ratee during his early stage of the review period (primacy) or by the outcomes, or behavior exhibited by the ratee near the end of the review period (regency). For example, if a salesperson captures an important contract/sale just before the completion of the appraisal, the timing of the incident may inflate his or her standing, even though the overall performance of the sales person may not have been encouraging. One way of guarding against such an error is to ask the rater to consider the composite performance of the rate and not to be influenced by one incident or an achievement.

Performance dimension order: - Two or more dimensions on a performance instrument follow each other and both describe or rotate to a similar quality. The rater rates the first dimensions accurately and then rates the second dimension to the first because of the proximity. If the dimensions had been arranged in a significantly different order, the ratings might have been different.

Spillover effect: - This refers lo allowing past performance appraisal rating lo unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating for current period although the demonstrated behavior docs not deserve the rating, good or

ROLES IN THE PERFORMANCE APPRAISAL PROCESS

a) Reporting Manager Provide feedback to the reviewer / HOD on the employees’ behavioral traits

indicated in the PMS Policy Manual Ensures that employee is aware of the normalization / performance appraisal

process Address employee concerns / queries on performance rating, in consultation

with the reviewer

b) Reviewer (Reporting Manager’s Reporting Manager) Discuss with the reporting managers on the behavioral traits of all the

employees for whom he / she is the reviewer Where required, independently assess employees for the said behavioral traits;

such assessments might require collecting data directly from other relevant employees

c) HOD (In some cases, a reviewer may not be a HOD)

Presents the proposed Performance Rating for every employee of his / her function to the Normalization committee.

HOD also plays the role of a normalization committee member Owns the performance rating of every employee in the department

d) HR Head Secretary to the normalization committee Assists HOD’s / Reporting Managers in communicating the performance

rating of all the employees

e) Normalization Committee Decides on the final bell curve for each function in the respective Business

Unit / Circle Reviews the performance ratings proposed by the HOD’s, specifically on the

upward / downward shift in ratings, to ensure an unbiased relative ranking of employees on overall performance, and thus finalize the performance rating of each employee

CHAPTER 4

OBJECTIVES OF RESEARCH

1) To study and throw some light on Performance Appraisal, its meaning,

characteristics and methods.

2) Identification of the technique of performance appraisal followed in Indian Mesh Pvt. Ltd.

To study about the employees attitude towards the present appraisal system.

Review the current appraisal system in order to

1. Enhance productivity

2. Attain global standards

3. Provide suggestions & recommendations from the study conducted.

RESEARCH METHODOLOGY RESEARCH DESIGN:Research Design refers to "framework or plan for a study that guides the collection and analysis of data". A typical research design of a company basically tries to resolve the following issues:

a) Determining Data Collection Designb) Determining Data Methodsc) Determining Data Sourcesd) Determining Primary Data Collection Methodse) Developing Questionnairesf) Determining Sampling Plan

(1) Explorative Research Design:Explorative studies are undertaken with a view to know more about the problem. These studies help in a proper definition of the problem, and development of specific hypothesis is to be tested later by more conclusive research designs. Its basic purpose is to identify factors underlying a problem and to determine which one of them need to be further researched by using rigorous conclusive research designs.

(2) Conclusive Research Design:Conclusive Research Studies are more formal in nature and are conducted with a view to elicit more precise information for the purpose of making marketing decisions.

These studies can be either:a) Descriptive orb) Experimental

Thus, it was mix of both the tools of Research Design that is, Explorative as well as Conclusive.

SAMPLING PLAN: Sample Size = 12 Employees

Sample Area = Indian Mesh Pvt. Ltd. Chandigarh

DATA COLLECTION: Data Sources

(i) Secondary Data through Internet

(ii) Primary Data through Questionnaire(iii) Contact Method(iv) Personal Interaction

DATA PRESENTATION AND ANALYSIS:

1. Pie Diagrams

LIMITATIONS OF THE STUDY

A few limitations and constraints came in way of conducting the present study, under which the researcher had to work are as follows:

Although all attempts were made to make this an objective study, biases on the part of respondents might have resulted in some subjectivity.

Though, no effort w as spared to make the study most accurate and useful, the “sample Size” selected

for the same may not be the true representative of the Company, resulting in biased results.

This being the maiden experience of the researcher of conducting study such as this, the possibility of better results, using deeper statistical techniques in analyzing and interpreting data may not be ruled out.

CHAPTER 5

PERFORMANCE APPRAISAL METHOD FOLLOWED IN INDIANMESH

Indian Mesh Pvt. Ltd. follows the Graphic Rating Scale method to appraise its

employees performance. The graphic rating scale allows the rater to mark an

employee's job performance on a five-point or seven-point scale. This method

identifies certain subjective character traits, such as 'pleasant personality', 'initiative' or

'creativity' to be used as basic job performance criteria. Because of its simplicity, the

graphic rating scale is the most frequently used performance appraisal method

1) Employees Opinion as to the number of times the performance appraisal should be done.

Number of times No. of Employees Percentage (%)

Once a year 8 66.67%

Twice a year 4 33.33%

Total 12 100

67%

33%

Once a yearTwice a year

Awareness among employees regarding the technique of Performance Appraisal being followed at Indianmesh

Awareness No. of Employees Percentage (%)

Yes 12 100%

No 0 0

Total 12 100

yesno

Employees’ opinion as to the present appraisal system

Satisfaction No. of Employees Percentage (%)

Satisfactory 9 75%

Not satisfactory 3 25%

Total 12 100

satisfactorynot satisfactory

Who should do the appraisal?

Options No. of Employees Percentage (%)

Superior 8 66.67%

Self appraisal 4 33.33%

Total 12 100

SuperiorSelf Appraisal

Does appraisal help in polishing the skills and performance?

Response No. of Employees Percentage (%)

Yes 9 75%

No 3 25%

Total 12 100

yes no

2) Does personal bias creeps-in while appraising an employee

Response No. of Employees Percentage (%)

Yes 9 75%

No 3 25%

Total 12 100

yes no

CHAPTER 6

FINDINGS

1) 66.67% of employees feel that performance appraisal should be done once a year and 33.33% employees think that it should be conducted twice a year.

2) 100% employees are aware of the technique of performance appraisal used.

3) 75% of employees are satisfied with the method of performance appraisal used whereas, 25% are unsatisfied.

4) 66.67% of employees feel that performance appraisal should be done by their superiors and 33.33% feel that it should be self appraised.

5) 75% of employees feel that the performance appraisal helps in polishing their skills and 25% does not approve of the same.

6) 75% of employees feel that personal bias creeps-in while appraising an employee and 25 % do not feel.

CHAPTER 7

SUGGESTIONS

After having analyzed the data, it was observed that practically there was no appraisal in the organization. To be an effective tool, it has to be on the continuous basis. This is the thing that has been mentioned time and again in the report, as, in the absence of continuity, it becomes a redundant exercise. Before actually deciding drafting what should be the kind of appraisal the following things should be taken care of:

1. The very concept of performance appraisal should be marketed throughout the organization. Unless this is done, people would not accept it, be it how important to the organization.

2. To market such a concept, it should not start at bottom, instead it should be started by the initiative of the top management. This would help in percolating down the concept to the advantage of all, which includes the top management as well as those below them. This means that the top management has to take a welcoming and positive approach towards the change that is intended to be brought.

3. Further, at the time of confirmation also, the appraisal form should not lead to duplication of any information. Instead, detailed appraisal of the employee’s work must be done – which must incorporates both the work related as well as the other personal attributes that are important for work performance.

4. It should be noted that the appraisal form for each job position should be different as each job has different knowledge and skill requirements. There should not be a common appraisal form for every job position in the organization.

5. The job and role expected from the employees should be decided well in advance and that too with the consensus with them.

6. A neutral panel of people should do the appraisal and to avoid subjectivity to a marked extent, objective methods should be employed having quantifiable data.

7. The time period for conducting the appraisal should be revised, so that the exercise becomes a continuous phenomenon.

8. Transparency into the system should be ensured through the discussion about the employee’s performance with the employee concerned and trying to find out the grey areas so that training can be implemented to improve on that.

Ideally in the present day scenario, appraisal should be done, taking the views of all the concerned parties who have some bearing on the employee. But, since a change in the system is required, it cannot be a drastic one. It ought to be gradual and a change in the mindset of both the employees and the head is required.

CHAPTER 8

LIST OF REFERENCES

BOOKS:

1. Aswathappa, K., Human resource and Personnel management, TATA McGraw- HILL.2. Arun monappa and Saiyadain, Mirza S., Personnel management, TATA McGraw- HILL.3. Flippo, Edwin B., Personnel management, McGRAW-HILL International

Publications.

Websites:

cite HR.com

Wiki.answers.com

CHAPTER 9

QUESTIONNAIRE

Dear respondent,

The questionnaire below has been designed to study the performance appraisal

effectiveness. Kindly fill in the required information which would be used for purely

academic purpose and would help me in completion of my study.

Monica

Malwa College Bathinda

Please tick on the options you feel is correct

1) How frequently should your performance be appraised?

Once a year

Twice a year

2) Are you aware of the technique of performance appraisal used?

Yes

No

3) Are you satisfied with the method of performance appraisal used?

Satisfied

Not satisfied

4) Who should appraise your performance?

Superiors

Self appraisal

5) Do you feel that performance appraisal helps in polishing one’s skills and

performance?

Yes

No

6) Do you feel that personal bias creeps-in while appraising an employee?

Yes No

project report on pa 2

Education