Project Report

ON

Performance Appraisal
IN

System for Commercial Vehicles

(Submitted in partial fulfillment of requirement of degree of Bachelors of Business Administration (Computer Aided Management)) G.G.S.I.P.Universtity DELHI

Submitted to: Ms.Gunjun

Submitted by: Sachin Chachra 3rd Year ROLLNO:1431211906

DAV Institute of Management

Faridabad.

ACKNOWLEDGEMENTS

First and foremost, I extend my deepest thanks to my mentor and guide Ms. Ritu Arora for giving me this opportunity to work in such a prestigious organization as well as for giving me a wonderful project. Without his constant guidance and feedback, I would have never been able to complete the project in the fashion, I did.

I thank Ms. Mridul Maheshwari, whose consistent support and cooperation showed the way towards the successful completion of the project His views, advices and directions have been invaluable during the course of this project.

I thank Ms.Gunjun, (Project Guide ) for their support and encouragement. The acknowledgement would really be incomplete if I dont thank those numerous HR executives of the company whose priceless inputs and direction have paved the way for the successful completion of the project.

SACHIN CHACHRA

TABLE OF CONTENTS Company Profile

Company Profile.5

Objective of study...17 Introduction Management appraisal .19 Terms related to performance appraisal ....20 P. A. Process .....21 P.A Format..22 Techniques of P.A ..23 Tradition problems with appraisal.24 Significance of the problem ..38 Review of literature .39 Focus of project..41

Research Methodology44 Data Analysis ...48 Recommendations & Suggestions..58

Limitations..63 Questionnaire..65

Bibliography...68

COMPANY PROF ILE

Company profile
The Barbarian Company is a family- owned business with headquarters in Munich, founded in 1905
Knorr-Bremse was founded in 1905 in Berlin by inventor Georg Knorr. The initial basis for the companys commercial success was provided by an agreement with the Prussian State Railways to supply single-chamber express braking systems offering considerably enhanced safety performance compared with traditional systems. In the early twentieth century, train guards still had to operate the brakes by hand, from so-called "brake vans". The first pneumatic brakes were of a basic design, but before long, indirect automatic systems using a control valve were developed. The second main area of activity for Knorr-Bremse emerged in 1922, when company moved into pneumatic braking systems for commercial road vehicles. Knorr-Bremse was the first European company to develop a new kind of pneumatic system that applied the brakes simultaneously to all four wheels of a truck as well as its trailer. The resultant reduction in braking distances made a significant contribution to improving road safety. Detailed below are some of the milestones in 100 years of company history. As the world's leading manufacturer of braking systems for rail and commercial vehicles, Knorr- Bremse has been pioneering development, production and marketing of modern braking systems for a variety of applications for 100 years, making an important contribution to improved safety on the railways and the roads. The company also produces door systems for rail vehicles and torsion dampers.

In 2003 the Group's workforce of over 11,000 achieved world-wide sales of EUR 2.2 billion. The key to our market success is our local presence and high flexibility - the result of decentralized, transparent corporate structures, internationally cocoordinated development and manufacturing operations, and a global service network. As a forward-looking company we rely on the innovative skills and commitment of our workforce to retain our lead in the development of state-of-the-art technologies for rail and commercial road vehicles. In 2005 the Group's workforce of over 12,100 achieved world-wide sales of EUR 2.7 billion. The key to our market success is our local presence and high flexibility - the result of decentralized, transparent corporate structures, internationally cocoordinated development and manufacturing operations, and a global service network. As a forward-looking company we rely on the innovative skills and commitment of our workforce to retain our lead in the development of state-of-the-art technologies for rail and commercial road vehicles.

Board Of Director
Executive Board of Knorr-Bremse AG
Heinz Hermann Thiele Chairman Jan Peter Nonnenkamp

Jens Theuerkorn Dr. Dieter Wilhelm

Supervisory Board of Knorr-Bremse AG

Dr. Hans-Peter Binder Berg Chairman Retd. Member of the Board of Management of Deutsche Bank AG, Munich Branch Dr.-Ing. h.c. Wilfried Lochte Gro Schwlper 2nd Deputy Chairman Retd. Chairman of MAN

Peter Ratschnig* Freising 1st Deputy Chairman Chairman of the General and Group Works Councils Klaus Gegenfurtner* Aidenbach Toolmaker

Nutzfahrzeuge AG and retd. Member of the Board of Management of MAN AG Dr. Eduard Gerum* Rosenheim Vice President R&D Brake Systems

Arno Hager* Berlin Representative of the IG Metall Trade Union, Berlin Office

Worldwide help for victim of disaster Knorr-Bremse Global Care e.V. has taken on the task of financing local, direct and concrete relief projects in the respective crisis areas with donations. The measures shall be suitable to give the concerned persons again the possibility to independently earn their living in order to support their families. The most important criterion resides in "Helping people to help themselves". Our relief projects will be investments to promote the economic independence of the concerned people in the future.

Product

Expertise and passion - combined with 100 years of experience with braking systems - these are the ingredients in the Knorr-Bremse success story. As the preferred supplier of manufacturers and operators of rail vehicles throughout the world, we not only produce complete braking systems for all types of rail vehicles but also door systems, toilets, air-conditioning, couplings and windscreen wipers.

The customer is the central focus of all our activities - and sales and service centers in 22 different countries around the globe mean we are always available when needed. Whatever you require, we offer an expert, one-stop, locally based service ranging from initial advice to skilled maintenance and repair services. Foremost in our minds is the competitiveness of our customers' and business partners' rail vehicles - with tailor-made solutions guaranteeing maximum safety, comfort and economy.

Quality
Brake systems from Knorr-Bremse play a crucial role in vehicle safety, and stringent quality standards are applied throughout all development, production and delivery processes. But our responsibility continues even after the customer has taken delivery: we offer qualityfocused training and service throughout a products entire life. To be able to offer such levels of quality we have to ensure complete control of all core business processes, together with associated management and support functions, and subject these to continuous improvement.

Rail vehicle manufacturers and operators all have their own distinctive profiles - profiles as unique as the external overhaul, maintenance, and repair needs of their vehicles. Through railservices, Knorr-Bremse offers the ideal customized service package for every conceivable requirement - for freight cars, streetcars, metros or commuter rail networks, locomotives or high-speed trains. Performance, quality, and proximity are the cornerstones of a service offering that - in this form - is unique in the European marketplace

Performance
The railservices portfolio offers exactly what rail vehicle manufacturers and operators want: value-for-money solutions tailored to their specific needs - from repairs of brake cylinders to complete overhauls of complex braking systems. And the focus is always on getting the vehicles back on the track as fast as possible - without compromising on quality.

Quality
Locomotives and freight or passenger cars should be out and about - not standing in the workshop. The uncompromising high quality offered by railservices ensures maximum availability of rail vehicles in the passenger and freight sectors alike.

Proximity
Regardless of the size and scope of their operations, rail vehicle manufacturers and operators all appreciate a service partner with a local presence. The railservices portfolio is available right where the customer needs it: close at hand.

Platform screen doors

New platform doors for enhanced safety.
Platform screen doors are closed glass constructions in underground stations that form a barrier between the platform edge and the track that protects passengers from the moving train and effectively eradicates the danger of anyone falling on to the rails by accident. They

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also reduce the air turbulence as the train enters or leaves the station by isolating the platform from the tunnel. This makes it possible to heat or air-condition the waiting area much more economically than before. Platform screen doors make underground stations safer, cleaner, quieter and therefore more attractive for the travelling public. Advantages

- improved passenger safety - passenger management - effective environmental control - enhanced comfort - attractive platform environment

Windscreen wipers
All clear ahead

Designed for the specific requirements of rail vehicles, Knorr-Bremse pneumatic or electrical windscreen wiper and washer systems guarantee a clear view ahead at all times. Clear view for all We can supply systems for every kind of rail vehicle - from trams and metros to locomotives or high-speed trains. Products range from compact systems to one, two or three-arm wipers. And, of course, all of them are exclusively equipped with components tried and tested by

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Knorr-Bremse.

Functions (optional): - variable wiper speed - various settings for interval wiping - simultaneous wash/wipe mode - optional automatic on/off using rain sensors

Train safety
Better safe than sorry

Whether you are carrying passengers or transporting dangerous goods by rail, safety is paramount. Knorr-Bremse supplies two types of derailment detectors that enhance the active safety of rail vehicles: an electronic and a pneumatic system, both suitable for installation in a wide variety of vehicle types.

Applications - long-distance passenger cars - metros and urban railways - multiple units

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HVAC Breathingfreely

Whatever the climate, whatever part of the world you are in, air conditioning, ventilation and heating systems from MERAK have been offering flexible solutions for high-speed trains, coaches, urban and underground trains for almost forty years. And from the very outset, environmental protection has been a priority in all manufacturing, maintenance and disposal processes.

Main product - heating and air-conditioning systems - static converters for fluorescent lighting - electronic systems
--protection from compression waves --charge protection units --alternative starter compressors

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Furtherinformation We will be pleased to answer any questions you may have about particular systems or areas of application. MERAK e-mailmerak@merak-sa.com

www.merak-sa.com/

Quality
Knorr-Bremse systems are of crucial importance for vehicle safety and therefore have to meet the most stringent quality requirements. This applies to more than just the development, production and delivery process - our responsibility continues even after delivery. We offer quality-focused training and service throughout the entire life of our products. .

Expertise
A combination of decades of experience of braking technology and the companys global development activities has enabled Knorr-Bremse to gather a vast quantity of specialist expertise and innovative capacity. All our development projects draw on our combined skills in three main areas of technology mechanical and electronic engineering and pneumatics. State-of-the-art development tools, simulations and rigorous testing ensure that the name Knorr-Bremse remains synonymous with extremely rugged systems offering safe and reliable braking even under the harshest conditions.

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Innovative products such as the ESP electronic stability program, pneumatic disc brakes and compressors equipped with energy-saving devices set new standards in brake technology.

Services
We offer more As well as supplying innovative products, Knorr-Bremse offers a comprehensive support program throughout their operating life that includes product training, diagnostic and repair tools and a comprehensive spare part supply network.

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Regional offices

Munich (Germany) Berlin (Germany) Switzerland Modling (Austria) United kingdom France Italy Spain Sweden Hungary Poland NY (USA) MD (USA) Canada Brazil South Africa Faridabad (Haryana- India) Tokyo (Japan) South Korea

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Hong Kong ( China)

OBJECTIVES

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Objectives of the project

To understand the performance management system at the organization. To analyze problem in the exiting performance management system. 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 design performance appraisal forms for three main levels viz i.) ii.) iii.) Workmen (Factory Staff) Supervisory Managerial ( Executive)

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INRODUCTION

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The

history of performance appraisal is quite brief. Its roots in the early 20th

century can be traced to Taylors pioneering Time and motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War- not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the worlds second oldest profession! There is, a basic human tendency to make judgments about those one is working with, as well as oneself. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is title chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal system began as simple method 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 employees performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their

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performance was better that the supervisor excepted, 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. 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.

MODERN APPRAISAL

Performance appraisal may be define as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi- annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

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In many organizations- but not all- appraisal results are used, either directly or indirectly, to the help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get majority of available merit pay increases, bonuses and promotions. By the same token, appraisal results are used to identify the poorer performers who may required some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay.

TERMS RELATED TO PERFORMANCE APPRAISAL

PERFORMANCE APPRAISAL :- the regular (usual annual ) process where an employees performance for the year is assessed by manager and/or employee. It is only one part of the performance management.

PERFOMANCE MANAGEMENT: - The larger process of defining what employees should be doing, ongoing communication during the year, linking of individual performance to the organization needs, and the evaluating of appraising of performance. RANKING SCALE:- A way of evaluating staff by comparing them to each other, so that there is a best, a second best and so on. This is REAL SERIOUS TROUBLE, and almost always destructive. STANDARDS OF PERFORMANCE:- Mutually agreed upon criteria used to describe how WELL an employee must perform, written to reduce subjective judgment

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PERFORMANCE APPRAISAL PROCESS

Performance Information

Evaluation performance Areas

Supervisor Reviews Appraisal

HR Reviews Appraisal

Appraisals/ Documents to HR

Presentation of Appraisal Time lines/ objectives Established Evaluation Time lines/ goals

Termination

Follow up Meeting objectives 23

Continued Monitoring

Defined by schneier and Beatty as, .the process of identifying, measuring and development human performance in organizations, performance appraisal tries to: Give feedback to employees to improve subsequent performance. Identify employee-training needs. Document criteria used to allocate organizational rewards. Form a basis for personal decisions- salary (merit) increases, disciplinary actions, etc. Provide the opportunity for organizational diagnosis and development. Facilitate communication between employee and administrator. Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.

APPRAISAL FORMATS Many different formats and procedures have tried to meet these multiple objectives. For each of these purposes, someone in the organization must make some decisions about the kinds of characteristics of people or their performance to be evaluated and about the manner in which the evaluation will be done, by whom, and

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how well. There are relatively few special rules or special principals applicable only to the special purposes.

Regardless of the types of format used, the following criteria are recommended as important components of an effective performance appraisal.

Examples of outstanding performance; Identification of areas needing improvement; Discussion of goals and objectives for upcoming year; Opportunity for the employee to furnish information on achievements and performance; Appraisal of participation in programs such as diversity initiatives, Employee safety, performance appraisal of subordinates, affirmative action, departmental, mission, etc. Feedback from training and professional development opportunities for upcoming year;

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The most

commonly used appraisal techniques includes:

Essay appraisal. Graphic rating scale. Field review. Forced- choice rating. Critical incident appraisal. Management- by- objectives approach. Work- standards approach. Ranking methods. Assessment centers.

Each of these has its own combination of strengths and weaknesses, and none is able to achieve all the purposes for which management institutes performance appraisal system. Nor is any one technique able to evade all of the pitfalls. The best anyone can hope to do is to match an appropriate appraisal method to a particular performance appraisal goal.

Essay Appraisal

In the essay method approach, the appraiser prepares a written statement about the employee being appraised.

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The statement usually concentrates on describing specific strength and weaknesses in the job performance. It also suggests courses of action to remedy the identified problem Areas. The statement may be written and edited by the appraiser alone, or it be composed in collaboration with the appraiser needs.

Graphic rating scale

This technique may not yield the depth of an essay appraisal but it is more consistent and reliable typically, a graphic scale assesses a person on the quality and quantity of his work (is he outstanding above average, or unsatisfactory) and on a variety of other factor that vary with the job but usually include personal traits like reliability and cooperation. It may also include specific performance items like oral and written communication.

The graphic scales have come under frequent attack, but remain the most widely used rating method. In a classic comparison between the old- fashioned graphic scales and the much more sophisticated forced- choice technique, the former proved to be fully as valid as the best of the forced-choice forms, and better than most of them. It is also cheaper to develop and more acceptable to raters than the forced- choice form. For many purposes there is no need to use anything more complicated than a graphic scale supplemented by a few essay questions.

Field Review

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When there is reason to suspect rater bias, when some raters appear to be using higher standards than others, or when comparability of ratings is essential, essay or graphic ratings are often combined with a systematic review process. The field review is one of one of several techniques for doing this. A member of the

personnel or central administrative staff meets with small groups of raters from each supervisory unit and goes over each employees rating with them to (a) identify areas of inter-rater disagreement, (b) help the group arrive at a consensus, and (c) determine that each rater convinces the standards similarly. This group- judgment technique tends to be more fair and more valid than individual ratings and permits the central staff to develop an awareness of the varying degrees of leniency or severity as well as bias- exhibited by raters in different departments. On the negative side, the process is very time consuming.

Forced- choice rating

Like the field review, this technique was developed to reduce bias and establish objective standards of comparison between individuals, but it does not involve the intervention of a third party. Although there are many variations of this method, the most common one asks raters to choose from among groups of statements those which best fit the individual being rated and those which least fit him. The statements are then weighted or scored, very much the way a psychological test is scored. People with high scores are, by definition, the better employees; those with low score are poorer ones. Since the rater does not know what the scoring weights for each statement are, in theory at least, he cannot play favorites. He simply

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describes his and someone in the personal department applies the scoring weights to determine who gets the rating.

The rationale behind this technique is difficult to fault. It is same rationale used in developing selection test batteries. In practices, however, the forced-choice

method tends to irritate raters, who feel they are not being trusted. They want to say openly how they rate someone and not be second- guessed or tricked into making honest appraisals.

A few clever raters have even found ways to beat the system. When they want to give average employee Harry Smith a high rating, they simply describe the best employee they know. If the best employee is Elliott Jones, they describe Jones on Smiths forced-choice from. Thus, Smith gets a good rating and hopefully a raise. An additional drawback is the difficulty and cost of developing forms. Consequently, the technique is usually limited to middle and lower management levels where the jobs are sufficiently similar to make standard or common form feasible. Finally, forced-choice forms tend to be of little value- and probably have a negative effect- when used in performance appraisal interviews.

Critical incident appraisal

The critical incident technique looks like a Natural to some people for performance review interviews, because it gives a supervisor actual, factual incidents ti discuss

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with an employee. Supervisors are asked to keep a record, a little black book, on each employee and to record actual incidents of positive or negative behavior. Instead of arguing over traits, the discussion deals with actual behavior.

There are, however, several drawbacks to this approach. It requires that supervisor jot down incidents on a daily or, at the very least, a weekly basis. This can

become a chore. Furthermore, the critical incident rating technique need not, but may, cause a supervisor to delay feedback to employees. And it is hardly desirable to wait six months or a year to confront an employee with a misdeed or mistake. Finally, the supervisor sets the standards. If they seem unfair to a subordinate, might he not more motivated if he at least has some say in setting, or at least agreeing to, the standards against which he is judged?

Management by Objectives (Results Method)

The use of management objectives was first widely advocated in the 1950s by the noted management theorist Peter Drucker.

MBO (Management by objectives) method of performance appraisal are results- oriented. That is, they seek to measure employee performance by examining the extent to which predetermined work objectives have met.

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Usually the objectives are established jointly by the supervisor and subordinate. once an objective is agreed, the employee is usually expected to self- audit; that is to identify the skill needed to achieve the objective.

Typically they do not rely on others to locate and specify their strengths and weaknesses. They are expected to monitor their own development and progress.

Advantages

Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job performance. Employees are judged according to real outcomes, and not on their potential for success, or on someones subjective opinion of their of their abilities.

The guiding principle of the MBO approach is that direct results can be observed, whereas the traits and attributes of employees (which may or may not contribute to performance) must be guessed at or inferred.

MBO advocates claim that the performance of employees cannot be broken up into so many consitituent parts- as one might take apart an engine to study it. But put all the parts together and the performancemay be directly observed and measured.

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Disadvantages

MBO methods of performance appraisal can give employees a satifying sense of autonomy and achievement. But on the downside, they can lead to unrealistic expectations about what can and cannot be reasonalbly accomlished.

Supervisors and subordinates must have very good reality checking skill to use MBO appraisal methods. They will need these skills during the initial stage of

objective setting, and for the purposes of self-auditing and self monitoring.

Unfortunately, reasearch studies have shown repeatedly that human beings tend to lack the skills needed to do their own reality checking. Nor are these skills easily conveyed by training. Reality itself is an intensely personal experience, prone to all forms of perceptual bias.

One of the strenghts of the MBO method is the clarity of purpose that flows from from a set of well-articulated objectives. But this can be a source of weaknessalso. It has become very appearent that the modern organisation must be flexible to

survive. Objectives, by their very nature, tend to impose certain rigidity.

Work- Standards Approach

Instead of asking employees to set their own performance goals, many organizations set measured daily work standards. In short the work standards

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technique establishes work and staffing targets aimed at improving productivity. When realistically used, it can make possible an objective and accurate appraisal of the work of employees and supervisors.

To be effective, the the stadards must be visible and fair. Hence a good deal of time is spent observing employees on the job, simplifying and improving the job where possible, and attenmpting to arrive at realistic output standards.

It is not clear, in case, that work satndards have been integrated with an organisations performance appraisal programme. However, since the workstandards program provides each employee with a more or less complete set of his job duties, it would seem only natural that supervisors will eventally relate performance appraisal and interveiw comments to these duties. The use of work standards should make performance interveiws less threating than use of personal, more subjective standrads alone.

The most serious drawback appears to be problem of comparability. If people are evaluated on different standards, how can the ratings be brought together for comparision purposes when decision have to be made on promotions or on salary incraeses? For these purposes some from of ranking is necessary.

Ranking Methods

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The rating scale method offers a high degree of structure for appraisals. Each employee traits or characteristic is rated on a scale that usually has several points ranging from poor to excellent (or some similar arrangement).

The traits assessed on theses scales include employee attributes such as cooperation, communications ability, initiative punctuality and technical (work skill) competence. The nature and scope of the traits selected for inclusion is limited only by the imagination of the scales designer, or by the organizations need to know.

The one major provision in selecting traits is that they should be in some way relevant to appraisees job.

Assessment Centers
in any placement decision and even more so in promotion decision, some prediction of future performance is necessary. How can this kind of prediction be made most validly and most fairly? One widely used rule of thump is that what a man has done is the best predictor of what he will do in the future. But suppose you are picking a man to be a supervisor and this person has never held supervisory responsibility? Or suppose you are selecting a man for a job from among a group of candidate, none of whom has done the job or one like it? In these situations, many

organizations use assessment centers to prediction future performance more accurately.

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Typically, individuals from different departments are brought together to spend two or three days working on individual and group assignments similar to the observerssometimes derived by paired comparison or alternation ranking- leads to an orderof- merit ranking for each participant. Less structured, subjective judgments are also made.

3600-degree performance Appraisal

Boss Self Tea m

Peer

Client

3600 Feedback is a proven method of helping individual their performance through the eyes of their working colleagues. The individual first complete a self- assessment, rating themselves over a serious of specific behaviors. They select a number of working colleagues and categorize as e.g. Manager, Colleagues, and Team Member. Each selected person then assesses

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the individual for their current performance under the same series of behaviors using a simple rating scale mechanism. The feedback is then summarized and collected for the individual as a series of reports. Each report is deigned to emphasize a different aspect of the feedback e.g. strengths, Development Areas, opinion differences. Once the individual has received the report they are in a position to identify which behaviors are seen as in need of improvement and to choose appropriate development actions. 360 feedback is often used as a support aid for management development training. Managers can use the 360 report to focus on areas of the course which have been highlighted by colleagues. 360 feedback is also highly effective as a self development tool as it provides managers with key information which they would otherwise find hard to obtain.

Some common pitfalls

Obstacles to the success of formal performance appraisal programs:

Performance appraisal programs demand too much from supervisors. Formal performance appraisals obviously require at least periodic supervisor observation of subordinates performance. However, the typical first- line supervisor can hardly know, in a very adequate way, just what each of 20, 30, or more subordinates is doing.

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Standards and ratings tent to vary widely and, often, unfairly. Some raters are tough, others are lenient. Some departments have highly competent people; others have less competent people. Consequently, employee subject to less competition or lenient ratings can receive higher appraisals than equally competent or superior associates.

Personal values and bias can replace organizational standards..

Because of lack of communication, employees may not know how they are rated. No performance appraisal system can be very effective for management decisions, until the people being appraised know what is expected of them and by what criteria they are being judged.

in many cases, the validity of ratings is reduced by supervisory resistance to making the rating. Rather than confront their less effective subordinates with negative ratings, negative feedback in appraisal interviews, and below- average salary increases, supervisors often take more comfortable way out and give average or above- average ratings to inferior performers. Performance appraisal ratings can boomerang when communicated to employees. Negative feedback not only fails to motivate the typical employee, but also can cause him to perform worse. Only those employees who have a high degree of self- esteem appear to be stimulated by criticism to improve their performance.

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Performance appraisal interviews tend to emphasize the superior position of the supervisor by placing him in the role of judge, thus countering his equally important role of teacher and coach. This is particularly damaging in organizations that are attempting to maintain a more participative organizational climate.

Traditional problems with appraisals Halo Effect:- One trait of the individual affects the others bias. Graphic forms are susceptible to this problem. Central Tendency:- Supervisors tend to play it safe and rate everyone generally so that they do not get questioned about their judgment. Leniency/ Strictness:- Some supervisors constantly under or over rate their staff.

Making performance appraisal relevant

Performance appraisal programs can be considerably more effective if management will fit practice to purpose when setting goals and selecting appraisal techniques to achieve them. Then he shows how they can be used singly and in cobination with different performance appraisal objectives. He maintains that if management will

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undertake this matching effort, many familiar pitfalls of appraisal programs can be avoided.

These frequently voiced goals of performance appraisal programs underscore the importance of much programs to such programs to any observe their subordinates more closely and to do a better coaching job. Motivate employee by providing feedback on how they are doing. Provide back-up data for management decisions concerning merit increases, transfers, dismissals, and so on.

Improve organization development by identifying people with promotion potential and pin- pointing development needs. Establish a research and reference base for personnel decisions.

It has been estimated that over three fourths of U.S. companies now have performance appraisal programs. Appraisal programs. In actual practice, however, formal performance appraisal programs have often yielded

unsatisfactory and disappointing results, as the growing body of critical literature attests. Some critics even suggest that we abandon performance appraisal as a lost hope, and they point to scores of problems and pitfalls are evidence. But considering the potential of appraisal programs, the issue should not be whether to scrap them; rather, it should be how to make them better. One reason for failures is that companies often select indiscriminately from the wide battery of

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available performance appraisal techniques without really thinking about which particular technique is best suited to a particular appraisal objective.

SIGNIFICANCE OF THE PROBLEM

Performance appraisal has described as Americas number one management problem and yet one of the most critical responsibilities of human resources management. Organizations regularly expend scarce resources to train supervisor on how to effectively conduct performance appraisals. Both practitioners and empiricists have generated volumes of literature investigating and or reporting how to, how often, and who should give performance feedback to a worker. Experts and researchers that the have analyzed performance appraisal have suggested two broad uses of appraisal in organizations. Performance appraisals serve as administrative purposes in areas such as reward allocation (salary increases, bonuses), and assignment decision (promotions, transfers, demotions).

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evaluation also contributed to employee development, because it allows the identification of their strengths and weaknesses, provides performance feedback, and facilitates exchanges with supervisors. However, many surveys of both employee and managers indicate dissatisfaction with performance appraisals. Since organizations will most likely continue to make personnel decisions based on performance appraisals, this problem must be reconciled. Hence, the purpose of the study is the determine whether effective communication took place during the appraisal process from both the managerial and employee perspective.

REVIEW OF LITRATURE

Job performance is a fundamentally important construct in organizational practice and research. Performance appraisals also play a central role in most personnel decisions, and are also used as an important source of developmental feedback. The performance appraisal process has been known to leave employees embittered, dejected, and unfit for productive work for many weeks after the rating. They have also been known to elicit negative psychological responses such as resistance, denial, aggression, or discouragement, particularly if the assessment is negative. Evidently, something must be done to address the problems with process.

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Assessment of employees reactions toward their performance appraisal is important for many reasons. These reasons include: a). The notion that reactions represent a criteria of great interest to practitioners and b). The fact reactions have been theoretically linked to determinants of appraisal acceptance and success but have been relatively ignored in research. Many researchers have suggested that appraisal reactions play an important role in the appraisal process because they are vital to the acceptance and use of an appraisal system as well as a contributing factor to the validity of an appraisal. Thus, it seems vital to organizations that researchers continue to address the issue of employee appraisal reactions to help bridge the gap between science and practice in performance appraisal.

With dissatisfaction, and feelings of unfairness in process and inequity in evaluations, any appraisal system will be doomed for failure. If not accepted and supported by its users, an appraisal system will ultimately be unsuccessful. Clearly, there is general consensus among performance appraisal researchers that the assessment of appraisal reactions is important. Satisfaction has been the most frequently measured appraisal reaction. One advantage of using satisfaction, as a measure of individual reactions is that it appears to assess both fairness cognitions and simple affect, thus affording a broader indicator of individuals reaction to appraisal than more specific, cognitively orientated criteria.

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Appraisal satisfaction has been primarily conceptualized in three ways: i.) ii.) iii.) Satisfaction with the appraisal interview or session Satisfaction with the appraisal system Satisfaction with performance ratings.

The study highlighted some of the benefits associated with allowing performance appraisal systems to become more involvement orientated through employee participation in the process. Employee participation was positively related to employee satisfaction with the appraisal session, the appraisal system, perceived utility
of the appraisal, motivation of employees to improve performance, and perceived fairness of the system. There were at least five ways empirically identified including allowing employees to voice their opinions (e.g. value- expressive participation), allowing them to influence the appraisal through voicing their opinions ( instrumental participation), allowing influence the appraisal, and allowing them to participate in goal setting in then appraisal process.

Most notable of these operationalisation of participation was value- expressive participation. The value- expressive explanation suggests that employees perceive the chance for selfexpression as periodically just, regardless of appraisal outcomes. This explanations states that attitudes are affected because the opportunity to voice ones opinions is a desired end in itself. Value- expressive participation was more strongly related to positive reactions than instrumental participation. Appraisal is a communication process and therefore, the quality of communication cannot be neglected regarding satisfaction. Therefore, in this study, we will be looking at satisfaction with the appraisal session in the context of communication.

Focus of the project

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The project has been designed mainly to focus on to understand the performance management system prevailing in the organization and an effort to design a better performance management system for the organization keeping in view the practical aspect of the applicability.

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Research Methodology

What is research?
Research is an active, diligent and systematic process of inquiry in order to discover, interpret or revise facts, events behaviors, or theories or to make practiceal application with the help of such fact6s, laws or theories. The term research is also used to describe the collection of information about a particular subject.

A research design is a specification of methods and procedures for acquiring the information needed. It is overall operation pattern and the framework of the project

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that stipulates what information is to be collected from which source and by what procedure. Supervision in the human services is a role, which usually requires periodic appraisal of employee performance. How that appraisal is conducted in human services agencies in two mid- sized American cities is the subject of this study For present study the research design has been descriptive. It is descriptive because of analysis of exiting performance management system.

Methodology research design Through study of the exiting performance management system in the organization. Study of the levels/ bands in the organization. Study of behavioral skills at various levels in the organization. To study flaws in the exiting performance management system.

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To design performance appraisal forms for three levels of the organization viz 1.) 2.) 3.) Workmen (Factory staff) Supervisory Non supervisory (Executive/ Managerial)

Hypothesis was developed on the basis of methodology adopted as above. Concrete Suggestions/ Recommendations.

Universe & survey population

For the accomplishment of the project the universe and the survey smple both are the organization itself. The universe is the organization in the sense that the project of performance appraisal is designed for the company and so the survey sample is the organization itself.

Data collection

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The data collected for the research is undertaken through primary as well secondary data methods. This can be illustrated in the following way: Primary data The primary data has been collected from the various mediums like: review of exiting performance appraisal system in the organization Telephone survey. Survey data The secondary data has been collected from the mediums like: Information acquiring through Internet. Articles on the relative topics in various books, magazines, newspapers.

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DATA Analysis

Table No. 1 Is performance appraisal necessary

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 72 28

Yes No TOTAL

36 14 50

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Is performance appraisal necessary: Out of the total respondents 72% believed that performance appraisal is necessary for growth of the company whereas 28% do not believe it.

IS P E R F O R M A N C E A P P R A IS A L N E C E S S A R Y

No 28% Y es No Y es 72%

Table No. 2 Importance of performance appraisal

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 52 16 32

Motivation Competitive feel Distinction

26 8 16

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Importance of performance appraisal: 52% respondents think that performance appraisal is important to motivate an employee, 32% think that performance appraisal helps to distinguish between efficient staff from non-efficient ones.

IM PORTANCE OF PERFORM ANCE APPRAISAL

32% Motivation Com petitive feel 52% 16% Dis tinction

Table No. 4 Form of performance appraisal

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 26 74

Monetary rewards Non monetary

13 37

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Form of performance appraisal: Among all the officials, 74% prefer non monetary rewards like challenging jobs, appreciation whereas 26% prefer monetary rewards like bonus, incentives, etc.

F O R M O F P E R F O R M A N C E A P P R A IS A L

M o n e t a ry re w a rd s 26% 74% N o n m o n e t a ry re w a rd s

Table No. 5 Method for performance appraisal

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 36 40 10 14

Graphic rating scale Ranking method Paired comparison Group appraisal

18 20 5 7

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Method for performance appraisal: 40% respondents prefer ranking method to be adopted, 36% are in favour of graphic rating scale and the least are in favour of group appraisal.

M E T H O D F O R P E R F O R M A N C E A P P R A IS A L

14% 10% 36% G ra p h ic ra t in g s c a le R a n k in g m e t h o d P a ire d c o m p a ris o n m e t h o d G ro u p a p p ra is a l 40%

Table No. 6 Type of performance appraisal

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 18 82

Group appraisal Individual appraisal Type of performance appraisal:

9 41

Among all the respondents 82% prefer individual appraisal in comparison to group appraisal. 53

T Y P E O F P E R F O R M A N C E A P P R A IS A L

18%

G ro u p a p p ra is a l In d ivid u a l a p p ra is a l

82%

Table No.7 Considerations during performance appraisal

CATEGORIES Achievement Leadership Teamwork Presentation skills Customer orientation

NO. OF RESPONDENTS 6 15 11 9 9

TOTAL NO. OF PERCENTAGE 12 30 22 18 18

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Considerations during performance appraisal: 30 % officials consider leadership important for performance appraisal, 22% consider teamwork important and achievement is considered as least important for performance appraisal.

C O N S ID E R AT IO N D U R IN G P E R F O R M AN C E AP P R AIS AL

18%

12% A c hievem ent Leaders hip Team w ork P res entation s k ills Cus tom er orientation 22%

18%

30%

Table No.8 Grades & achievements

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 36 74

Yes No

18 32

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Grades & achievements: 74% respondents do not agree that previous years grades & achievements should be taken into consideration for current years appraisal whereas 36% are in the favour of the same.

G R AD E S & AC H IE V E M E N TS

36% Ye s No 64%

Table No.9 Prime factor to measure performance

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 26 14

Attendance Punctuality

13 7

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Execution of plans Convincing power Prime factor to measure performance:

19 11

38 22

According to 38% execution of plans is the prime factor to measure the performance of officials, 26% says attendance is important whereas only 14% consider punctuality as the prime factor for measuring performance.

P R IM E F A C T O R T O M E A S U R E P E R F O R M A N C E

22%

26% A ttendanc e P unc tuality E x ec ution of plans C onvinc ing power 14%

38%

Table No.10 Major problem during appraisal

CATEGORIES

NO. OF RESPONDENTS

TOTAL NO. OF PERCENTAGE 19 38

Lack of competence 57

Biasness Resistance Major problem during appraisal:

14 17

28 34

The major problem faced during the performance appraisal is lack of competence according to 38%, 34% say it is resistance and 28% consider biasness as the major problem.

M A J O R P R O B L E M D U R IN G P E R F O R M A N C E A P P R A IS A L

34%

38% La c k of c o m peten c e B ia s n e s s R e s is t a n c e

28%

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OBSERVATIONS & SUGGESTIONS

OBSERVATIONS & SUGGESTIONS Yearly performance reviews are critical. Organizations are pressed to find good reasons why they cant dedicate an hour- long meeting once a year to ensure the mutual needs of employee and organization are being met. Performance reviews help supervisors feel more honest in their relationship with their subordinates and feel better about them self in their supervisor roles. Subordinates are assured clear

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understanding of what expected from them their own personnel strengths and area of development and solid sense of their relationship with their supervisors. Avoiding performance issues ultimately decreases morale, decreases credibility of

management, decreases the organizations overall effectiveness and wastes more of managements time to do what isnt being done properly. Conduct the following activities. 1. Design a legally valid performance review process; consider these legal requirements of the performance review process: Patricia king, in her book,

performance planning and appraisal state that the ;law requires that performance appraisal be: Job- related and valid; Based on a through analysis of the job; Standardized for all employees; Not biased against any race, color, sex, religion, or nationality and; Performed by people who have adequate knowledge of the person or job. Be sure to build in the process, a route for recourse if an employee feels he or

She has been dealt with unfairly in an appraisal process, e.g. that the employee can go to his or her supervisors.

2. Design a standard from for performance appraisals, and include the following Name of the employee, Date the performance from was completed

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Dates specifying the time interval, over which the employee is being evaluated, Performance dimensions (include responsibilities from the job description, any assigned goals from the strategic plan, along with needed skill, such as communications administration etc.) A rating system (e.g. poor, average, good, excellent) Space for commentary for each dimension, a final section for overall commentary, A final section for action plans to address improvements, and lines for signatures of the supervisor and employee. Signature may either specify that the employee aspects the appraisal or has been it, depending on warding on the from.

3. Schedule the first performance review for six months after the employee starts employment. Schedule another six months later, and then every year on the employees anniversary date.

4. Initiate the performance review. Tell the employee that youre imitating a schedule performance review. Remind them of whats involved in the process. Schedule a meeting about two weeks out. 5. Have the employee suggest any update to the job description and provide written input to the appraisal Have them record their input concurrent to the recording theirs.

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Have them record their input on their own sheets (their feedback will be combined on the official from later on in the process). You and the employee can exchange each of your written feedback in the upcoming review meeting. (Note that by now, employees should have received the job descriptions and goals well in advance of the review, i.e year before. The employee should also be familiar with the performance appraisal procedure and from.

6. Record your input to the appraisalappraisal reference the job description and associated formal goal for basis of review. Be sure you are familiar with the job requirements and have sufficient contact with the employee to be making valid judgments Dont comment on the employees race, sex, religion, nationality, or a handicap or veteran status.

Record major accomplishments, exhibited strengths and weaknesses according to the dimensions on the appraisal from, and suggest actions and training or development to improve performance. Use example of behaviors, whereas you can in the appraisal to help avoid counting on hearsay. Always address behaviors, not characteristics of personalities.

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The best way to follow this guideline is to consider what you saw with your eyes. Be sure to address only the behaviors of that employee, rather than behaviors of other employees. 7. Hold the performance appraisal meeting. State the meetings goals of exchanging feedback and coming to action plans, where necessary. In the meeting let the employee speak first and give their input. Respond with your own input. Then discuss areas where you disagree. Attempt to avoid defensiveness; admitting how you feel at the present time, helps a great deal. Discuss behaviors, not personalities. Avoid final terms such as always , never, etc. Encourage participation and be supportive. Come to terms on actions, whe5re possible. Try to end the meeting on a positive note.

8. Update and finalize the performance appraisal form.

Add agreed- to

commentary on to the from. Note that if the employee wants to add attach written input to the final from, he or she should be able to do so. The supervisor signs the from and asks the employee to sign it. The form and its action plans are reviewed every few months, usually during one- on- one meeting with the employee. 9. Notes that if that supervisor has been doing a good job supervising, then nothing should be surprising to the employee during the appraisal. Any performance issue should have been conveyed when they occurred, so nothing should be a surprise in the review meeting.

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64

LIMITATIONS

LIMITATIONS

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 The report had to work under some constraints and limitations, as nobody is interested in disclosing the HR related policies and procedures and when it comes to performance appraisal process it becomes ill at ease.

Respondents may not have been true in answering various questions and may be biased to certain other questions. Some respondents were however not willing to share there views and were reluctant to give any information. Also as the performance appraisal was designed for exiting organization, the sample size was the only organization.

Respondents were also reluctant to answer some questions are they took thm as personal.

But all is well that ends well . In spite of the above limitation I was able to complete the project successfully and it was highly appreciated as a sincere effort of my hard work.

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QUESTIONNAIRE

QUESTIONNAIRE
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1. Is performance appraisal important for growth of the company? Yes No 2. If yes, why is it important? To motivate an employee To create competitive feel To distinguish hardworking staff from non-efficient ones 3. At SSP what is the level of performance appraisal? Satisfactory Good Non-satisfactory 4. Performance appraisal should be given in the form of Monetary rewards Non - monetary rewards 5. Which method should be adopted for performance appraisal? Graphic rating scale Ranking method Paired comparison method Group appraisal 6. Which sort of performance appraisal is better? Group appraisal Individual appraisal 7. Rank the following criteria for consideration during performance appraisal? Achievement Leadership Teamwork

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Presentation skills Customer orientation 8. At SSP the previous years grades & achievements are taken into consideration for a current year appraisal. Are you in favour of the same? Yes No 9. What is the best form to give a performance appraisal? Promotion Bonus Challenging projects Token of appreciation 10. What is the impact of performance appraisal of one official on the other one who has not been given the same? Motivating Competitive Negative feel 11. Which of the following is the prime factor to measure the performance of officials? Attendance Punctuality Execution of plans Convincing power 12. Which is the major problem during a performance appraisal? Lack of competence Biasness Resistance

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Bibliography

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Bibliography
www.hrm.neu.edu/from/paform www.perfomance-appraisal.com www.knorr-bremse.com www.unep.org www.acas.org.uk. www.qualintra.com www.businessballs.com www.tata.com www.indiacars.com Personnel / Human Resource Management, David and Stephen Robinsons Personnel Management, R.S.Dwivedi Human Resource Management, V S P Rao

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