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Almost every organization in one way or the other goes through a periodical ritual, formally or Informally known as performance appraisal. Performance appraisal has been called as many things. The Performance appraisal has been called a tool of management, a control process an activity and a critical element in human resource allocation. Uses for performance appraisal have created equal employment opportunities, considerations, promotions, transfers and salaries increases. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession. A basic human tendency to make judgments about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed.


For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time.

Since the beginning of industrial revolution and setting up personal departments to cater the various needs of the organizational, the personal practices of the organization have undergone various changes. Significant changes in our society brought about by technological advancement, social alliterations, economic and political influence have further affected the personal or human resource management scenario. To cope with these changes it is essential for organization to have right kind of men at right time on the job. A proper and systematic performance appraisal system in any organization is essential as it is an add-up in creating and maintaining satisfactory level of performance by employees in their jobs. It highlights needs and opportunities for growth and development of the person. It helps in taking decision regarding promotions, transfers, and pay increase. It is means for knowing if employee behaviour is consistent with overall strategic focus. The system focuses on improving performance through continuous and ongoing feedback and guidance from reporting officer. It addresses the growth and career development of employees through identification of strengths and weakness of employees, which leads to better utilization and development of talents. This system also serves the purpose of better superior-subordinate relationship based on trust and mutuality.

The most important aspect of performance appraisal system is that it is an integrated system where both vertical and horizontal integration is well addressed. Thus performance appraisal has tremendous impact on organizational effectiveness as it addresses the competency and capability of the people in the organization.


In this dissertation work an attempt has been made to study the existing Performance Appraisal system in OHPC. The main objectives of the present study are stated below: To critically asses the appropriateness of the existing appraisal system and to examine the strengths and weakness in it. To access the relative contribution of the appraisal system in the accomplishment of the organizational goal. To highlight the perception about the issue relating to appraisal procedure, such as criteria for appraisal, system for rating, need for self appraisal, appraisal feedback and counseling. To examine the necessities for changes in the existing pattern of performance appraisal. To recommend the necessary changes /modification for making the appraisal system more objective as well as effective for fulfillment of organizational goal. To find out the reasons of success or failure of performance appraisal system in OHPC.


Organization is a social world in miniature. The association of various persons, workers, supervisors and management creates relationships. One of the most important roles of a manager or a supervisor is to motivate, encourage, build, reinforce and modify behaviors of the subordinates. As concerned, the scope of the study covers the performance appraisal system followed in OHPC. This study includes the executives and non-executives of HR department of OHPC. I, during my study have collected information about the origin and the history of OHPC. I hav also studied various aspects of HR administration of OHPC.


It refers to the methods adopted to reach at a conclusion. a) Data Collection Primary Sources The data collected by directly observing employees and asking questions are called primary data. For the collection of primary data various questionnaires were prepared depending on the category of personnel involved, which were to be filled by the respondents. For administering the questionnaires the researcher was to visit OHPC corporate office, Bhubaneswar. Secondary Sources Secondary data was collected from published and non-published sources. Published sources included magazines, bullets, pamphlets, etc. Non-published sources included official files and records, booklets, quarterly reports, annual reports, journals and the records of the companies were also used. Also unpublished project reports of previous year were used to understand the meaning of the study properly. b) Selection of respondents Only one type of questionnaire was prepared for the completion of the study. As this study carried in HRD department of OHPC, the respondents were the executives. They were asked about the nature of the current performance appraisal system in their organization, their perception about the performance appraisal system of OHPC and its effectiveness. c)Method of Sampling For collection of primary data random sampling and survey method was used. Employees of various departments are contacted randomly as and where available. The sample consists of 20 respondents from HRD department of OHPC, Bhubaneswar. d)Data processing and analysis The data were processed and analyzed manually. The opinions of the respondents were ascertained by the preparation of tables to compare and study the relationships between variables.



The first chapter includes the introductory part and the importance, objective of the study, scope, methodology, and limitation of the study. The second chapter deals with conceptual analysis of performance appraisal system and literature review. The third chapter gives pictures of the organization, its historical background, manpower, position, organizational structures and departments. The fourth chapter deals with the performance appraisal system at OHPC. The fifth chapter deals with the analysis and interpretation of data collected about the appraisal system in OHPC. The final chapter deals with the concluding part, which deals with the summary of the whole research work and suggestions to make the system more efficient and effective.


1. A major constraint of this study is time factor.4 weeks is a very small span of time to know about the performance appraisal system of an organization thoroughly. 2. Un-willingness on the part of the executives was also a major part in collecting information. Collecting information from the respondents against attitude and lack of support from the executives of HRD wing of OHPC. 3. Hesitating attitude and lack of support from the executives of HRD wing of OHPC. 4. As most of the executives of the company did not have enough time to have a satisfactory and result oriented discussion with the researchers so as to make his/her study more meaningful. 5. Lastly, certain information was not made available to the researcher on the ground that they were confidential. Despite all these limitation the efforts are made to collect the necessary data and responses to make the study more reliable and scientific.