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WEIR-BDK VALVES HUBLI
DECLARATION
I hereby declare that this project work entitled as, “Study of
Performance Appraisal System and its Effectiveness” in WEIR-BDK VALVES, Hubli,
is my work, carried out under the guidance of Mrs. Kalpana Rao, Mr.R.Murli and my
faculty guide Prof Shweta M.
This report is neither full nor in part has ever been submitted
for award of any partial fulfillment of any other degree of either this university or any
other university.
Um e Habiba Patel
KLES’s INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH HUBLI
WEIR-BDK VALVES HUBLI
ACKNOWLEDGEMENTS
Preparing a project of this nature is an arduous task and I was fortunate enough to get
support from a large number of people to whom I shall always remain grateful. It is proud
privilege for me to acknowledge with deep sense of gratitude, my indebtedness to my
reverted faculty guide Prof.Shweta.M for her valuable guidance, profound advice and
persistent encouragement that has lead to successful completion of my project.
My sincere thanks are given to each of WEIR-BDK VALVES members for their
participation in my efforts, through the time I have learnt from them and appreciated the
opportunity they have afforded me in undergoing my project. I am particularly thankful to
Mrs.Kalpana Rao for her unfailing patience and guidance during the research and preparation
of this report.
Submitted by
Um e Habiba Patel
KLES’s INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH HUBLI
WEIR-BDK VALVES HUBLI
INDEX
A) Executive Summary
i. Introduction Of The Project
ii. Objectives
iii. Methodology
iv. Analysis
v. Conclusion
B) Industry Profile
C) An Overview Of Performance Appraisal System
i.Definition And Meaning Of Performance Appraisal System
ii.Performance Appraisal System and performance management system
iii.Types Of Performance Appraisal System
D) An Overview Of The Project
i. Objectives
ii. Methodology
iii. Analysis
iv. Suggestions
v. Conclusion
E) Bibliography
F) Annexure
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WEIR-BDK VALVES HUBLI
EXECUTIVE SUMMARY
i) INTODUCTION OF THE PROJECT
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WEIR-BDK VALVES HUBLI
The whole study is divided into two parts. Out of which first part contains the
organization study and second part contains area undertaken for the study.
The project was undertaken by to gain practical aspects of the working of an
organization as a whole. This project report has been executed entitling at Weir-BDK Valves
Hubli.
The main objective of the project is “To study the performance appraisal system
and its effectiveness”.
The project study is all about performance appraisal system followed in the
organization. The project is mainly concentrated on finding the effectiveness of performance
appraisal system followed in the organization. The collection of required information is done
through personal interview, with the help of questionnaire and secondary data that was
available in the company.
Need for the study:
Different industrial organization will have different types of performance appraisal
system. In the strategic management the aims of the performance are based on manufacturing
process of the industry and the type of industrial organization.
The aims differ based on the performance norms decided by the top management.
Before the acquisition of the organization by WEIR India was a public undertaking. Thus the
aims and intentions of performance appraisal differ compared to private sector organization.
Hence, the aim of the project is to know performance appraisal system and its process
practiced before acquisition and to suggest changes if any, so that it would be helpful for
WEIR-BDK Valves to carry forward with the performance appraisal system.
ii) OBJECTIVES OF THE STUDY
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WEIR-BDK VALVES HUBLI
a) To study the existing performance appraisal system followed in the
organization.
b) To study the outcome/ result of the performance appraisal system that is
practiced by the organization
c) To study the effectiveness of performance appraisal system with respect to
the employees of the company.
d) To suggest changes and improvements in the performance appraisal system if
required.
Scope and benefit of the study:
The project will help to evaluate the effectiveness of employee’s performance
appraisal system followed by the organization.
This study will help to collect the opinion of the employees about the
performance appraisal system of the organization.
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WEIR-BDK VALVES HUBLI
Limitations of the study:
During my internship study with the WEIR-BDK Valves the difficulties I observed
was during the sample survey.
There was difficulty in finding out the employees who knew about the
performance appraisal system.
Thus I categorized my survey into two parts i.e., questionnaire and the
interview.
Questionnaire was circulated to the white collar employees and interaction and
interview was done with the blue collar employees.
The response of the respondents may not be accurate thinking that the
management might misuse the data.
iii) METHODOLOGY
Type of research:
This is descriptive research method.
Sample size:
A sample size of 100 respondents was selected to undertake the study
50- Blue collar
50- White collar
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WEIR-BDK VALVES HUBLI
Source of data collected:
Primary data:
Primary data was collected by interacting with the organization employees, various
departmental managers and through questionnaire.
Questionnaire was prepared and explained to the respondents so as to access them in
giving prompt and unbiased response.
Secondary data:
The secondary data was collected with the help of organization manuals and from the
records of individual employees.
Sampling Method:
Non- probability convenience sampling method was used
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WEIR-BDK VALVES HUBLI
iv) FINDINGS(through questionnaire)
Performance is not reviewed frequently.
Performance review takes place only once that is after completion of the probation
period of every individual employee.
94% of the employee’s opinion was that the performance appraisal is conducted
only after completion of the probation period.
This may not give realistic assessment of performance evaluation.
36% of the employee’s opinion was that there is no performance appraisal
conducted in the organization, because they were not aware of the concept of
performance appraisal system.
94% of the employees stated that it is necessary to conduct performance appraisal
system.
From the study it was found that 38% of the employees received reward in the
form of salary increment, 40% of the employees received reward in the form of
bonus payment and 22% of the employees received reward in the form of
promotions.
Majority of the employees i.e., 90% felt that the present performance appraisal
system is ineffective.
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WEIR-BDK VALVES HUBLI
FINDINGS (through interview)
1) From the study it is clear that the employee's performance have been evaluated
only once i.e., after their probation period.
2) Having evaluated the performance the employee is either provided with 2
increments, 3 increments or 4 increments.
3) Monetary increment in CTC and promotions are also provided to the
employees.
4) But the 16%, 30% and 17% of the employees' performance hasn't been
evaluated since 1 year, 2 years and more than 2 years respectively.
5) There are 8% of the employees whose performance hasn't been evaluated at all
since the date of their joining.
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v) SUGGESTIONS
Periodicity of the performance appraisal system must be increased to
quarterly for a realistic assessment of the performance.
Along with performance punctuality, experience, creativity, loyalty must
also be considered while promoting an employee.
Performance appraisal format should be reliable, accurate and measurable.
Performance appraisal reports must use SWOT techniques and provide
scope for further career development in the organization.
The superiors who evaluate the performance must provide feedback to the
employees to improve performance.
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CONCLUSION:
This study helped me to understand the performance appraisal system and the
effectiveness of it in an organization.
In order for the employees to develop and learn they need to know what they need
to change, where (specifically) they have fallen short, and what they need to do.
If a manager assigns a 1 (unsatisfactory) on a scale of 5, it does not convey much
information to an employee. It just says the manager is dissatisfied with
something. In order to make it meaningful and promote growth, far more
information must be added to the appraisal process and the related information
should be transparently shared with the employee.
Most employees resist being classified at the low end of the scale. Employees who
are low rated are more likely to resist the evaluation of the superior and argue,
claiming that personal bias was involved in the ratings.
Thus from the study I think that the present system does not achieve the end
objective in an effective manner. Hence needs an improvement.
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WEIR-BDK VALVES HUBLI
INDUSTRY PROFILE
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INTRODUCTION
Keeping pace with the global growth, the BDK group was found in 1978 by Shri.
Bharat Khimji. The group has been guiding on a heritage of initiative & innovation, offering
along with its 8 associate companies – a wide spectrum of industrial valves designed for the
needs of chemical & petrochemical industries worldwide. For more than 3 decades, BDK
valves & other products have enjoyed sustained & have lasting reputation in both domestic &
global markets.
Weir group plc, UK through its Indian group company Weir India Private
Limited having its registration office at 219, Ansal chambers-2, Bhikaji Cama place, New
Delhi-110066 completed acquisition 0f Valve Business of ‘BDK Engineering Industries
limited at Hubli, Karnataka with effect from 11th October 2010. The unit at Hubli has been
renamed as “WEIR BDK VAKLVES- A UNIT OF WEIR INDIA PRIVATE LIMITED”.
With acquisition of weir BDK Valves- a unit of Weir in Indian Private Limited” At
Hubli (‘WEIR BDK’), the Weir group has now three units in India, with two units already
operating from Bangalore, India.
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WEIR-BDK VALVES HUBLI
MANUFACTURING EXCELLENCE
Weir BDK pioneers in designs and manufacturing of
Gate valves
Globe valves
Check valves
Ball valves
PFA lined valves
Diaphragm valves
Butter fly valves
Plug valves
Knife gate valves
WEIR BDK caters to major sectors like
Nuclear/thermal power plants
Oil gas
Steel & metallurgical plants
Refineries and petrochemicals
Pulp, paper & fibre industries
Chemical
Pharmaceuticals
Process and Sugar
Water treatment plants
Fertilizers and agrochemicals
Sewage & effluent treatment plants
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WEIR-BDK VALVES HUBLI
EXPORTS
WEIR BDK exports its products to various countries in the world like
Australia
Newzealand
Malaysia
Thailand
Singapore
Japan
Taiwan
Philippines
Indonesia
United kingdom
Denmark
Germany
France
Spain
Austria
South Africa
Kenya
Middle east
USA
Canada
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COMPANY PROFILE
Name of unit/ company : WEIR BDK VALVES –a unit of weir India private limited
Constitution : private limited company
Sales head quarters : 47/48, gokul road, hubli-580030 (Karnataka state)
Telephones : (0836) 4248444/2333930
Fax : (0836) 4248484/2330799
E-mail : [email protected]
Registered office : 219, Ansal chambers-II, BHIKAJI CAMA PLACE NEW DELHI-
110066
Telephone : (011) 26162543
Fax : (011) 460322296
Factory location : 47/48, GOKUL ROAD, HUBLI-580 030 (KARNATAKA STATE)
Telephone : (0836) 4248444/2333930
Fax : (0836) 4248484/2330799
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NATURE OF THE BUSINESS
BDK is engaged in manufacturing the valves & supplying them to the different required industries
like chemical, processes, refineries, petrochemicals, fertilizer, pharmaceuticals, oil exploration,
thermal and nuclear plants, food and beverages, effluent treatment and sewerage, water treatment,
cooling plants, mining and water supply. Therefore they are into B2B i.e. business to business. The
company is operating through its different branches which work in getting the indent from the clients.
VISION: To be the most admired company in the production of valves industry.
MISSION: To design, To manufacture, To market, Quality products at competitive prices to the
entire satisfaction of the customer & attain market leadership through continual improvement.
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WEIR-BDK VALVES HUBLI
PRODUCTS:
Diaphragm Valve Butterfly Valve Gate Valve Globe Valve
Check Valve Ball Valves Plug Valve
Pumps:
Process Pumps
BDK – NS slurry Pumps
Multi – stage Pumps
Automatic self cleaning Filters.
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WEIR-BDK VALVES HUBLI
AREA OF OPERATION
BDK is operating at the international level. There are many clients inside & outside
India for BDK valves. As the quality of the product is superior so there is good demand. The
company has the following associate companies & overseas customers.
COMPETITORS: -
There are many players in Valve industry; BDK has maintaining its position in the
competitive market through various strategies. The following are the competitors for the
company.
1. AUDCO valves
2. KSB valves
3. MVL Hubli
4. Fouress Bangalore
5. L&T Mumbai
1. Nilton
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AWARDS & ACHIEVEMENTS (CERTIFICATION):
Certification is an integral and an ongoing process at BDK, besides being approved
for all government compliances they are also approved by most consulting and contracting
companies.
They are ISO, API, CE, EMS, OHSAS & CRN approved.
American Petroleum Institute Certification
CE Certification - TUV Certification Body for Pressure Equipment of RWTUV
Systems GmbH.
ISO Certificate - TUV Certification Body for QM Systems off RWTUV Systems
GmbH
ISO-14001:2004 Certificate - TUV Certification Body for Environmental
Management System.
BS-OHSAS 18001:2007 Certificate - TUV Certification Body for Occupational
Health and Safety.
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WORK FLOW MODEL: -
Procedure:
1. The company will make an offer suitable for the customer.
2. A purchase indent or letter is sent to the company by the customer & a copy is sent to
the sales co-ordination department.
3. This department will send back an enquiry or request to BDK which sends a purchase
order & offer to the head of the sales co-ordination.
4. Sales co-ordination will prepare the contract review. The objective of the review is to
prepare an order assurance after understanding the customers’ requirements
thoroughly & ascertaining the capability of BDK.
5. Six copies of the work order prepared are sent to planning department, marketing
department, zonal office, customer, master file & to the engineering file.
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WEIR-BDK VALVES HUBLI
6. Quality assurance plan is prepared by the sales co-ordination department & sent
production planning & control assurance department & customer if applicable.
7. Status of the product is given to the customer, an inspection by the customer is been
arranged if the customer needs to have look at the product manufactured.
DEPARTMENTS: -
1. Accounts Department:
The dept plays vital role by providing and maintaining details of every financial activities
of the company.
Objectives:
To provide accurate and complete systematic information of financial activities.
To maintain all the books of accounts and financial documents.
To prepare periodic financial statements of the company like profit & loss account, trial
balance & balance sheet pertaining to the company.
Functions:
Preparation of daily cash & bank book.
Receipt & payments.
Maintenance of sales & purchase register
Preparation of sales tax returns.
Preparations of central excise duty returns & income tax returns.
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WEIR-BDK deals with the following banks:
Syndicate bank located in Hubli for domestic transactions.
Canara bank located in Hubli for export transactions.
ICICI bank.
2. Design & Development:
Functions:
1. Design and development of new products, existence of existing proven range and
standard existing product with some additional feature as per customer requirement.
2. Preparation, release, revision and control of manufacturing drawing, sales drawing,
materials list, general assembly drawing and technical signification and directions.
3. Assisting department for their requirement of fixture, gauges & other tooling when
requested.
4. Disposal of design concession margin non conformity review committee.
5. Maintenance & updating of national, international standards.
6. Attending customer complaints, technical discussion with customer whenever referred
to.
7. Co-ordination with other department for development activities.
8. To continuously improve the quality of the products.
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Responsibilities:
1. To design reliable products to meet customer’s specification through design review
design verification and design validation.
2. Issue of drawings and technical’s specification for facilitating procurement,
processing and verification for conformance of products to specified requirements.
3. To perform and control design changes.
4. Non conformance review, disposition, corrective & preventive.
5. To maintain quality documents & records.
6. To identify training needs and to plan & organize for the same.
3. Training Department:
This department is headed is meant to provide training to the personnel performing
activity effecting quality. This department is maintained by the officials of the
personal department.
Procedure:
1. The HOD identifies the annual training needs of the personnel in their
department, which unless provided will affect the quality of work.
2. Personnel performing special process are trained & given certificates on the
basis of appropriate education, training & experience required.
The training needs which are identified are communicated to the HOD training so that
he can prepare for the annual training programme and co-ordinate for providing
training either internally or externally. Unscheduled programmes are conducted as &
when required according to the needs.
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Responsibility of HOD Training Department:
1. To organize training for identified participants pertaining to common topics.
2. Maintenance of quality documents and records.
4. Time Office
This department is headed is by Shri. Murali
Personnel mean the relation between management and workers. Personnel department
is also known as “TIME OFFICE”
Time Office Department:
It is a branch of personnel departments (HRD). Time office is a key to personnel
office. Time office performers the basic function of the personnel department. It maintains
the arrival and departure time of all the staff members. The person who looks after the
records of the records of the time office is timekeeper. The company issues an attendance
card (punch card) to every worker before going to the work place; the worker gets the
attendance card signed in the office. The workers are also required to sign the attendance
register to avoid the misrepresentation or escaping tricks of workers while going out of the
department. Workers are required to insert their punch card in the factory. The time office
sends these records to the personnel department. These records will help in wage fixation,
salary fixation, salary fixation, granting of leave and allowances to workers.
Attendance: This department records the time (i.e. the time of workers in and out of the
company) through punch card system right at the entrance by the time officer.
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WEIR-BDK VALVES HUBLI
5. Material & Stores Department:
Objectives:
1. To plan and procure materials and services confronting to specified requirements
through continual improvements.
2. Store & preserve materials till they are issued for use.
In purchase department purchasing activity is carried on which is made after the
order is accepted by the planning department. It maintains the bill of the materials list
to know requirement of raw materials. According to technical specifications of the
companies selected vendors.
Types of vendors:
1. Casting vendors
2. Bought vendors.
Company procures 32 types of raw materials from 100 suppliers. Who are evaluated
& selected to their performance & product quality.
Suppliers supply the materials according to the given delivery date.
6. Production, Planning and Control Department:
The department is concerned with the planning for the production process. It
plans what is to be produced, what are the requirements to be fulfilled for the process
of production. And also controls the production process.
Objectives:
1. To plan & meet the production targets as per the customer specifications.
2. Plan for the manpower & equipment.
3. To organize the layout of machine shops & assemblies for effective operations.
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WEIR-BDK VALVES HUBLI
Contract review is prepared as per the client’s product catalogue & the
engineers plan. According to the contract details the production of the product is
carried out at the end of each month.
7. Sales co-ordination department:
This department helps in collecting orders from the customers through agents,
dealers & salesmen. This department also attends to the complaints & suggestions
given by the customers. It has 10 zonal offices throughout India known as BDK
marketing services Pvt. Ltd.
The associated manufacturing concerns of WEIR- BDK in Hubli are:
1. Zenith Machines & tools Pvt.Ltd.
2. TP Pumps & Valves Pvt.Ltd.
3. S L Flow Control
4. Valves Pvt Ltd
5. Perfect Actuators & Control Pvt Ltd
Procedure:
1. The company will make an offer suitable for the customer.
2. A purchase indent or letter is sent to the company by the customer & a copy
is sent to the sales co-ordination department.
3. This department will send back an enquiry or request to BDK which sends a
purchase order & offer to the head of the sales co-ordination.
KLES’s INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH HUBLI
WEIR-BDK VALVES HUBLI
4. Sales co-ordination will prepare the contract review. The objective of the
review is to prepare an order assurance after understanding the customers’
requirements thoroughly & ascertaining the capability of BDK.
5. Six copies of the work order prepared are sent to planning department,
marketing department, zonal office, customer, master file & to the
engineering file.
6. Quality assurance plan is prepared by the sales co-ordination department &
sent production planning & control assurance department & customer if
applicable.
7. Status of the product is given to the customer, an inspection by the customer
is been arranged if the customer needs to have look at the product
manufactured.
8. In case of any missing of details a forwarding letter is sent to BDK & a copy
of the letter to the customer.
8. Quality Assurance Department:
Objectives:
1. To maintain consisting & correct appraisal of quality of the product at all the stages of
manufacturing till the product is dispatched such that the required product quality is
achieved, maintained & improved.
2. To develop necessary competence in the department for meeting specific quality
requirements.
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Responsibilities:
1. To draw quality plans or inspection plans.
2. Inspection of incoming & in process production.
3. Final product inspection & testing.
4. Identification & traceability of products.
5. Inspection & test status.
6. Calibration & control of inspection, measuring & test equipment to maintain
identification & traceability for the same.
7. To plan for inspection & test resources.
8. Non conformance review, disposition, corrective and preventive action.
9. Maintenance of quality documents & records.
10. To identify training needs & to plan & organize wherever required.
11. To fix & remove API monogram is required.
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WEIR-BDK VALVES HUBLI
SWOT ANALYSIS
Strengths:
BDK provides quality at affordable prices prompt delivery and the unflinching
commitment to excel.
BDK is large scale supplier of valves & pumps.
The group’s product has been enjoying a sustained presence in the national *
international markets in the chemical & process industries.
BDK follows standard system for all their activities.
In the market the company is recognized by their quality.
This is ISO standardized company.
Weakness:
Due to lack of suppliers they are unable to provide proper accessories.
Cost of maintenance standard is more.
Opportunities:
They have many competitive manufacturers in the market.
They have an opportunity to increase their supply to no. of industries.
There is no restriction for movement of products in the world due to globalization
There are many foreign countries still to be covered.
Company has an opportunity to diversify its business to FMCG market due to its
experience
Threats:
Their main raw material is casting & foundries for which they have to heavily depend
on outsiders which may affect their yield during recession.
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AN OVERVIEW OF THE PERFORMANCE
APPRAISAL SYSTEM
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i) Introduction to Performance Appraisal
Once the employee has been selected, trained and motivated, he is then appraised for his
performance. Performance Appraisal is the step where the Management finds out how
effective it has been at hiring and placing employees. If any problems are identified, steps are
taken to communicate with the employee and remedy them.
“Performance Appraisal is a process of evaluating an employee’s performance in terms
of its requirements”.
Performance Appraisal can also be defined as the process of evaluating the performance
and qualifications of the employees in terms of the requirements of the job for which he
is employed, for purposes of administration including placement, selection for
promotions, providing financial rewards and other actions which require differential
treatment among the members of a group as distinguished from actions affecting all
members equally.
Importance and Purpose
Performance Appraisal has been considered as the most significant an indispensable tool for
an organization, for an organization, for the information it provides is highly useful in making
decisions regarding various personnel aspects such as promotion and merit increases.
Performance measures also link information gathering and decision making processes which
provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting,
selection, training and compensation. Accurate information plays a vital role in the
organization as a whole. They help in finding out the weaknesses in the primary areas.
Formal Performance Appraisal plans are designed to meet three needs, one of the
organization and the other two of the individual namely:
They provide systematic judgments to back up salary increases, transfers, demotions
or terminations.
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They are the means of telling a subordinate how he is doing and suggesting needed
changes in his behavior, attitudes, skills or job knowledge. They let him know where
he stands with the Boss.
Superior uses them as a base for coaching and counseling the individual.
On the basis of merit rating or appraisal procedures, the main objectives of
Employee Appraisal are:
To enable an organization to maintain an inventory of the number and quality of all
managers and to identify and meet their training needs and aspirations.
To determine increment rewards and to provide reliable index for promotions and
transfers to positions of greater responsibility.
To suggest ways of improving the employee’s performance when he is not found to
be up to the mark during the review period.
To identify training and development needs and to evaluate effectiveness of training
and development programmes.
To plan career development, human resource planning based potentials.
There are four key elements in the appraisal system:
1. Set objectives - Decide what the Team Leader wants from the employees and agree these
objectives with them.
2. Manage performance - Give employees the tools, resources and training they need to
perform well.
3. Carry out the appraisal - monitor and assess the employees' performance, discuss those
assessments with them and agree on future objectives.
4. Provide rewards/remedies - Consider pay awards and/or promotion based on the
appraisal and decide how to tackle poor performance.
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PERFORMANCE APPRAISAL AND PERFORMANCE
MANAGEMENT
It is sometimes assumed that performance appraisal is the same thing as performance
management. But there are significant differences. Performance appraisal can be defined as
the formal assessment and rating of individuals by their managers at, usually, an annual
review meeting. In contrast performance management is a continuous and much wider, more
comprehensive and more natural process of management that clarifies mutual expectations,
emphasizes the support role of managers who are expected to act as coaches rather than
judges and focuses on the future.
Performance appraisal has been discredited because too often it has been operated as a
top-down and largely bureaucratic system owned by the HR department rather than by line
managers. It was often backward looking, concentrating on what had gone wrong, rather than
looking forward to future development needs. Performance appraisal schemes existed in
isolation. There was little or no link between them and the needs of the business. Line
managers have frequently rejected performance appraisal schemes as being time consuming
and irrelevant. Employees have resented the superficial nature with which appraisals have
been conducted by managers who lack the skills required, tend to be biased and are simply
going through the motions.
Performance appraisal compared with performance management
Performance appraisal Performance management
Top-down assessment Joint process through dialogue
Annual appraisal meeting Continuous review with one or more
formal reviews
Use of ratings Ratings less common
Monolithic system Flexible process
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Focus on quantified objectives Focus on values and behaviors as well as
Objectives
Often linked to pay Less likely to be a direct link to pay
Bureaucratic – complex paperwork Documentation kept to a minimum
Owned by the HR department Owned by line managers
TRADITIONAL METHODS OF APPRAISAL
Some of the traditional methods of appraisal are explained below:
1. Ranking
In this, the superior ranks his/her subordinates in order of their merit, from best to
worst.
- It is done in a competitive group.
- It is done by placing the appraisee on numerical scales i.e. 1st, 2nd, 3rd etc. in the
total group.
- Ranking of an appraisee on his job performance/traits against that of another
member.
2. Person-to-Person/Paired Comparison
Under this method the appraiser compares each employee with every other employee,
one at a time.
- Certain key performance areas/traits are developed. E.g.: Leadership, Creativity,
Initiative etc.
- A scale for each factor is designed.
- A scale of people is also created for each factor.
- Each Appraisee is compared to every other person on the scale.
- Certain scores for each factor are awarded to the appraisee.
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3. Grading
- Certain categories of traits/performance criteria, which are worth of appraising, are
established. E.g. cooperativeness, self-expression, dependability, job knowledge
etc.
- The actual performance (Key performance area) of an employee is then compared
to the predetermined grade definitions.
- Appraisee is allotted with the grade, which describes his performance in the best
possible manner.
- Any grade that is selected should be well defined.
4. Graphic Scales
- A printed form, one for each person to be rated is used.
- The factors included in the form are Employee characteristics such as leadership,
cooperativeness, enthusiasm, loyalty etc. or Employee contribution which
includes quantity and quality of work, specific goals achieved, regularity of
attendance, responsibility assumed etc.
- The traits can be evaluated on continuous scale – the appraiser places a mark along
a continuum (range).
- The best method to use is the “multiple” type of scale wherein one has to “tick
off” the box, which suits the description of an appraisee’s performance.
- Certain types of graphs are prepared based on these derived ratings.
5. Checklist
- A series of questions are presented concerning an appraisee’s behavior.
- The appraiser has to reply to the questions in either negative or positive tone-
(Yes/No).
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- The value of each question may be weighted i.e. one can have predetermined scale
and scoring to those questions.
6. Essay
- A blank form is given to the appraiser.
- The form contains main heading such as employees’ characteristics, attitudes, job
knowledge, potential etc.
- The appraiser is asked to put in words his impressions about the employee.
- It contains factual and concrete knowledge.
- It gives specific information about the employee.
7. Confidential Reporting
- It is the most traditional way of appraising employee’s performance. The basic
assumption here is that since the superior is in direct contact he knows his
subordinates better than any other and hence his appraisal would be more
appropriate.
- The superior writes a paragraph or so about his subordinate’s strengths,
weaknesses, intelligence, attitude to work, attendance, conduct and character,
work efficiency, etc.
8. Critical Incident Method
- Initially a set of noteworthy (good or bad) on-the-job behaviors is prepared. This is
usually in the form of incidents.
- These incidents are given to a group of experts who assign scale values depending
upon the degree of desirability for the job.
- This checklist is used by superiors for evaluating the employees.
- This method helps in identifying the key areas where the employees are weak or
strong.
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- It emphasizes rating on objective evidence and helps in counseling.
9. Forced Choice Technique
- In forced choice system the appraiser is forced to choose one from among a group
of 4 statements that best fits the individual being rated and one which least fits
him.
- Each statement is given a value or a score.
- The evaluator does not know the score value of statements; hence he cannot show
any favor towards the appraisee.
- The method of arranging the traits involves a long process from getting the
description of “good” or “bad” employees to establishing their validity and
reliability.
10. Behaviorally Anchored Rating Scales (BARS)
- Behaviorally Anchored Rating Scales (BARS) are anchored with descriptive
alternative behaviors.
- For every given category of behavior or performance, statements are ordered in an
ascending or descending order of excellence.
- Although these scales represent job-relevant dimensions of performance, they still
pose problems in determining which actually, observed behaviors match with
specifically anchored performance scales.
- Despite this difficulty, BARS are a significant improvement, since they require
less inference on the appraiser’s part as against traditional rating approaches.
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NEW FRONTIERS TO PERFORMANCE APPRAISAL
In recent years the system of performance appraisal is becoming more and more transparent
wherein the employee, who is being appraised, is involved in the process. The objectives or
targets are set with mutual understanding between the appraisee and his immediate superior.
The feedback regarding his performance is given to the appraisee with areas of improvement
by disclosing his strengths and weakness and the opportunities available. I will take you into
details of these new frontiers to Performance Appraisal viz:
I. Management by Objectives (MBO)
II. Balanced Scorecard
III. 360º Feedback
I. MANAGEMENT BY OBJECTIVES
1. Management by Objectives is basically a process whereby the superior and the
subordinate managers of an enterprise jointly identify its common goals, define
each individual’s major areas of responsibility in terms of the results expected of
him and use these measures as guides for operating the unit and assessing the
contribution of each of its members. Management by Objectives is primarily to
change the behavior and attitude towards getting an activity or assignment
completed in a manner that it is beneficial for the organization. Management by
objectives is a result-oriented process, wherein emphasis is on results and goals
rather than a prescribed method. A number of companies have had significant
success in broadening individual responsibility and involvement in work planning
at the lowest organizational levels.
2. The concept rests on a philosophy of management that emphasizes integration
between external control (by managers) and self-control (by subordinates). It can
apply to any manager or individual no matter what level or function, and to any
organization, regardless of size.
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For instance, the number of quality articles to be churned out in a week at a
publishing house is, let’s say, five. This is the goal of the organization. This goal
has to be set in coordination with the writers. The emphasis here again would be
on accomplishing this task flawlessly over the week rather than the setting of a
method to accomplish the same. You are giving them a free hand to decide as to
how they want to work in order to accomplish target. This gives the employee
both responsibilities as well as authority to do a job. The employees are now
responsible for its success or failure and it is their baby. It is a VERY SMART
MANAGEMENT TOOL where the employee is involved in the decision making
process.
3. Management by Objectives is a five-sutra process having following basic steps:
i. Set Organizational Goals:
This envisages that organizational goals and business strategies are expressed
clearly, concisely and accurately. They are periodically reviewed. They
should be challenging enough to motivate the employee. Clear and attainable
goals help channel energies towards desired behavior and let the employee
know the basis on which he will be rewarded. At this time, any appropriate
changes in the organization structure should be made: changes in titles, duties,
relationships, authority, responsibility, span of control and so forth.
ii. Joint Goal Setting:
This step establishes short-term goals, which are performance oriented,
between the management and the employee. The responsibilities are clarified
to the employees through organizational charts and job description. The goals
decided by the employee need to complement the goals of the management.
They also need to be flexible to accommodate new ideas without losing
individual responsibilities. Moreover they should be easily quantifiable. For
example:
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To prepare process and transfer to the office superintended, all account
payable vouchers within three working days from the receipt of the
voucher.
To hold weekly meetings with all employees.
To use program evaluation and review technique (pert) for all new plant
layouts.
iii. Performance Reviews:
This step suggests frequent performance reviews between the manager and the
employees. During the initial stages the meetings be held once a month and
later could be quarterly. For maximum benefit these meetings should be
scheduled for more than once a year.
iv. Set check posts:
Establishment of major check posts to measure progress. This is merely to
check that the employee surges towards his premeditated (planned) goal
without any disruptions. These check levels should be higher in the initial
stages and then gradually reduce. This demands that the manager should be
on constant alert and exercise sound judgment.
v. Feedback:
The employees who receive frequent feedback about their performance are
highly motivated than those who do not. However, one has to ensure that the
feedback is relevant and specific. This helps the employee and the manager
understand where they stand.
II. 360 FEEDBACK
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With the movement in the eighties to find new strengths and productivity through
employee empowerment came the idea of performance appraisals from subordinates,
their superiors, their peers and themselves – “360 º feedbacks.”
AN OVERVIEW OF THE PROJECT
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i) OBJECTIVES OF THE STUDY
To study the existing performance appraisal system followed in the
organization.
To study the outcome/ result of the performance appraisal system that is
practiced by the organization
To study the effectiveness of performance appraisal system with respect to
the employees of the company.
To suggest changes and improvements in the performance appraisal system if
required.
ii) METHODOLOGY
Type of research:
This is descriptive research method.
Sample size:
A sample size of 100 respondents was selected to undertake the study
50- Blue collar
50- White collar
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Source of data collected:
Primary data:
Primary data was collected by interacting with the organization employees, various
departmental managers and through questionnaire.
Questionnaire was prepared and explained to the respondents so as to access them in
giving prompt and unbiased response.
Secondary data:
The secondary data was collected with the help of organization manuals and from the
records of individual employees.
Sampling Method:
Non- probability convenience sampling method was used
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ANALYSIS
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1. Age:
Analysis: From the above diagram it is clear that 30% of the employee’s age lies between 18-25 years, 46% of the employee’s age lies between 25-30 years, 8% of the employee’s age lies between 30-35 years and 16% is above 35 years.
2. Qualification:
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Analysis: The figure above depicts that 30% of the employees are graduates and the remaining 70% are diploma holders.
3. Work Experience:
Analysis: From the above figure we can say that 32% of the employees experience lies between 2-3 years, 36% are working from more than 3 years and 16% of the employees experience lies between 0-1 year and 1- 2 years.
Interpretation: This shows that people are working from long period of time but the performance has not been evaluated frequently, which would affect their efficiency level.
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4. Practice of performance appraisal system
Analysis: It is clear that 94% of the employees have stated that the performance appraisal system is conducted in the organization but 6% of the employees stated that there is no performance appraisal conducted.
Interpretation: This shows that 6% of the employees are not aware of the concept of performance appraisal system.
5. Necessity of performance appraisal system
Analysis: For this parameter the answer of the employees was same as the above one, i.e., 94% of the employees feel that performance appraisal is important and 6% feel that it is not important or not required.
6. Kind of reward received:
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Analysis: Now this figure shows a clear picture of the rewards received by the employees. i.e., 22% received promotion 40% received bonus payment 38% received salary incrementInterpretation: we can easily interpret that rewards are given to all the employees in one or the other form though there is no proper performance appraisal system carried out.
7. Frequency of performance appraisal system
Analysis: From the figure it is clear that 94% of the employees have stated that performance appraisal is conducted after completion of the probation period and only 6% stated that it is conducted yearly.
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Interpretation: This analysis says that employees who have joined before one year have undergone performance appraisal once after completion of their probation period and they think that it is carried out every year.
8. Reason for conducting performance appraisal system in your organization
Analysis: Here 60% of the respondents stated that the reason for performance appraisal system in the organization is to provide increments/ decrements and 40% stated that it is conducted to facilitate promotions, transfer and termination decisions.
9. Satisfaction from the performance appraisal and reward system:
Analysis: From the study it is clear that 86% of the employees are not satisfied and 14% of the employees are satisfied with the reward and performance appraisal system.
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Interpretation: 14% of the employees are not satisfied because they do not get rewards and promotions on the basis of their performance, instead it is just generic method followed.
10.Extent of the issues covered in the performance appraisal system:
Analysis: It can now be analyzed that majority of the issues covered under the performance appraisal system are personality behavioral.
11.Increments received till date:
Analysis: The increments received by the employees are depicted in the figure above, viz: 56.67%- received monetary increment in CTC 28%- received 2 increments 10%- received 3 increments 5%- received 4 increments
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FINDINGS (through interview)
%of employees whose performance is evaluated
%of employees whose performance is not evaluated since the following years
% of employees whose performance is not evaluated at all
Increments provided
Promotions provided
1year 2 years More than 2 years
2 increments - 4%
10% of the employees have been promoted after the performance evaluation.
16% of employees’ performance is not been evaluated since 1 year
30% of employees’ performance is not been evaluated since 2 years
17% of employees’ performance is not been evaluated from more than 2
There are 8% of employees whose performance haven’t been evaluated.
3 increments - 8%
Monetary increment in
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CTC - 54% years
vi) SUGGESTIONS
Periodicity of the performance appraisal system must be increased to
quarterly for a realistic assessment of the performance.
Along with performance punctuality, experience, creativity, loyalty must
also be considered while promoting an employee.
Performance appraisal format should be reliable, accurate and measurable.
Performance appraisal reports must use SWOT techniques and provide
scope for further career development in the organization.
The superiors who evaluate the performance must provide feedback to the
employees to improve performance.
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CONCLUSION:
This study helped me to understand the performance appraisal system and the
effectiveness of it in an organization.
In order for the employees to develop and learn they need to know what they need
to change, where (specifically) they have fallen short, and what they need to do.
If a manager assigns a 1 (unsatisfactory) on a scale of 5, it does not convey much
information to an employee. It just says the manager is dissatisfied with
something. In order to make it meaningful and promote growth, far more
information must be added to the appraisal process and the related information
should be transparently shared with the employee.
Most employees resist being classified at the low end of the scale. Employees who
are low rated are more likely to resist the evaluation of the superior and argue,
claiming that personal bias was involved in the ratings.
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Thus from the study I think that the present system does not achieve the end
objective in an effective manner. Hence needs an improvement.
E) BIBLIOGRAPHY
BOOKS:
Human Resource Management – Subba Rao
Human Resource Management – Ashwatappa
COMPANY DOCUMENTS:
Company profile
Company broachers
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Company prospectus
F) ANNEXURE
PERFORMANCE APPRAISAL SURVEY
Dear Sir/Madam,
I am pleased to introduce myself as Um-e-Habiba Patel student of
KLE’s IMSR College Hubli. As part of our curriculum I have undertaken a study on
“PERFORMANCE APPRAISAL SYSTEM” At your esteemed organization. Kindly spare
your time to fill the following information required. I assure you that the information
provided by you will be kept confidential.
Name: Department:
Designation:
QUESTIONNAIRE
1) What is your age group?
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a) 18-25 b) 25-30 c) 30-35 d) Above 35
2) What is your qualification?
a) Diploma b) Graduate c) Post graduated) Doctorate
3) How long have you been in present job?
a) 0-1 year b) 1-2 years c) 2-3 years d) Above 3 years
4) Is performance appraisal conducted in your organization?a) Yes[ ] b) No [ ]
5) Is it necessary to conduct performance appraisal?a) Yes b) No
6) Which kind of reward did you get from the superior for your performance?a. Salary Increment [ ] b. Appreciation [ ]
c. Promotion [ ] d. Bonus Payment [ ]
7) Are you able to achieve your target set by the Performance Appraisal System?a) Yes [ ] b) No[ ]
8) How frequently performance appraisal is done?a) Yearly b) Half yearly c) Quarterlyd) After completion of the probation period
11) Why do you have Performance Appraisal System in your Organization?
(Please tick as many boxes as appropriate)
a. Retention Strategy [ ] b. Reward Allocation [ ]
c. Identification of Training & Development needs [ ]
d. Provide increments/decrements [ ]
e. Facilities Promotions & Transfers & Termination Decisions [ ] f. Career Planning [ ]
12) Are you satisfied with Performance Appraisal System of this company?a) Yes [ ] b) No[ ]
9) Are you satisfied with reward system of this company?a) Yes [ ]b) No [ ]
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10) To what extent were the following issues covered in the Performance Appraisal System in
your Organization.
a. Your achievement of work objectives b. Your Personality and Behavior
Discussed [ ] Discussed [ ]
Not discussed [ ] Not discussed [ ]
c. Your Training & Development need d. Your career aspirations & Plans
Discussed [ ] Discussed [ ]
Not discussed [ ] Not discussed [ ]
13) After the evaluation of your performance how many increments have you received?a) One increment b) Two increments c) Three incrementsd) More than three increments
THANK YOU
Existing Format
Performance & Potential Appraisal
Name of the employee: Designation:
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To be rated on a 10 point scale
1 2 3 4 5 6 7 8 9 10
Functional excellence
Customer
Focus(Internal/external Integrity
Leadership
Team Work
Potential to handle higher role
Overall PerformancePerformance highlights/ example for demonstrated potential
Strengths
Development/ Training need
Name of the Supervisor : Signature:
Designation :
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