SUMMER TRAINING REPORT

ON

EFFECTIVENESS OF PERFORMANCE APPRAISAL SYSTEM IN ESCORTS AGRIPOWERTRAC LTD, FARIDABAD

SUBMITTED IN THE PARTIAL FULFILLMENT OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION (20112012).

Submitted To:
Mrs.Manisha Dudeja Project Incharge Department of B.B.A. S.D.. College Panipat

Submitted By:
RAMPAL B.B.A. III Year S.D. College Panipat

S.D.(P.G) COLLEGE, PANIPAT INDEX

Sr. No. Chapter -1

Particulars INTRODUCTION OF THE TOPIC

Man power planning Objectives of HRM Scope of HRM Role of HRM Managerial function of HRM Team Effectiveness Objectives of the study

Chapter-2

COMPANY PROFILE
History of Insurance
Insurance sector in India Important Milestone History of ICICI Insurance Different Plans of ICICI

Vision and mission Research methodology

Methods of data collection Primary data Secondary data

Chapter-3

ANALYSIS AND INTERPRETATION Surveys of customers Limitations of the study CONCLUSIONS AND RECOMMENDATION Annexure Bibliography

Chapter-4

ACKNOWLEDGEMENT

This project report prepared by me is a result of the joint effort of several helping hands of the Personnel Department of Escorts Ltd., Farmtrac Division, Faridabad. The knowledge of our theoretical studies is absolutely incomplete without its proper implementation and application in the diversified corporate world of today. I have been really opportunistic to be a part of the Escort Group during my summer training, which is one of the leading business houses in todays scenario. An undertaking of study like this is never an outcome of efforts put in by a single person, rather it bears imprint of number of persons who directly or indirectly helped me in completing the study. At the outset I would like to extend my sincere gratitude to Mr. K. S. Yadav, (Head of Personnel Department, Farmtrac Division) for providing the opportunity to carry out the research & for providing guidance during the preparation of the report whenever needed. I would like to thank Mr. VINOD CHOUDHARY Personnel Manager-I.R. for providing the basic knowledge on personnel management, project topic & the methodology to be used for preparing the report. I am also thankful to Mr. S.P Tyagi, (HR Manager), for sharing his knowledge. Last but not the least, I am thankful to the MRS. MANISHA DUDEJA lecturer who has provided me the necessary guidance and shared her experiences without which it was not possible for me to complete this project. I am once again, thankful to members of ESCORTS Group for their co-operation.

(RAMPAL)

PREFACE
The study conducted in Farmtrac division of Escorts was aimed at finding out the effectiveness of performance appraisal system and to give suggestions to improve the system. For the purpose of collection of the information the mode of communication of survey adopted was the collection of primary data through questionnaire with personal interview of the junior managers. I have measured the effectiveness of performance appraisal system on the basis of certain aspects. These are: How regularly appraisal is done. Is appraisal system has the scope for communicating top management objectives. Is appraisal system also helpful in explaining what is expected from the employee? Is appraisal system focuses on individual development for better results. To what extent appraiser helps appraisee to plan performance in advance. Are appraisal system helps employees to plan their performance well in advance? Is counseling helps in communicating the support needed by the employees from their superiors. True feedback is there or not. And if it is there then whether it helps in getting insights into employees weaknesses and strengths. Whether management is serious for the appraisal outcomes and follow-up with the training needs identifies during performance appraisal.

CHAPTER-1

INTRODUCTION TO THE ESCORTS LIMITED (FARMTRAC)

THE ESCORTS SYMBOL

The Escorts symbol means more than a seen by the eye. It has been prepared with certain objective in mind and is symbolic in more then one way. The philosophy behind Escorts and the E in the Escorts is Enterprise. The Hexagon is a symbol of productivity, precision when interposed as a nut. It symbolizes a craftsmanship, and mending productivity. The sprains superimposed on the Hexagon represent the workers and the people of the Escorts. This forms the letter E the first of Escorts a company even on the more changing unveiling the future.

ESCORTS AGRI MACHINERY GROUP

The Vision
We shall strive to be the Numero Uno in the Indian tractor industry and top five tractor manufacturers in the world. We shall continuously strive to meet the ever rising expectations of our valued customers at the lowest internal cost.

We shall aim to offer the farming community a range of innovative products and services, which shall enable them to improve their productivity and competitiveness. We shall achieve a turnover of RS. 20 Billion And profit of RS. 2 Billion By the year 2000. Transcending national boundaries, we shall strive to attain exports of one tenth of our total tractor production by the year 2000.

MISSION

We will achieve leadership in market share & profitability in the domestic tractor market by the year 2004-2005 and shall be the world's largest supplier of sub 100 HP tractors. We shall proactively contribute to the prosperity of the rural economy by defining a larger role for ourselves in the Food and Agriculture sector.

COMPANY PROFILE
ESCORTS LIMITED are the holding company of Escorts groups. Post restructuring, Agri Machinery or tractors has become the focus area of operations. Other businesses like I.T., construction equipment are controlled through subsidiaries and joint ventures.

HISTORICAL BACKGROUND
Escorts came into being with a vision and a mission. A vision that led two brothers YUDI NANDA and HARI NANDA to branch out from their familys prospering transport business and institute ventures that were to become the foundation of ESCORTS Ltd. Escorts agents limited was born at Lahore on 17th Oct, 1944 with YUDI NANDA as managing director and HARI NANDA as the chairman. After that owning to the opportunities lying in the Indian villages Escorts (Agricultural Machines) Ltd., was launched in 1948 with YUDI NANDA as the director. Tragically, he died in an accident in 1952. Then Escorts Agents Ltd. And Escorts (Agricultural Machines) Ltd. Was merged in 1953 to create a single entity Escorts Agents Pvt. Ltd. The companys incorporation in its present name, Escorts Ltd. was effected on 18th January 1960. Having initially started with a franchise for vesting house domestic appliances, Escorts has come a long way in manufacturing and marketing a large range of products. It has pioneered farm mechanization in India through import and distribution of agricultural tractors. The manufacturing operations commenced in 1954, and since then the following range of products have been introduced in the country:1954: Piston rings and Cylinder liners 1960: Pistons 1961: Assembly of tractors 1962: Motorcycles and railway couplers

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1963: Automotive shock absorbers 1965: Agricultural tractors under Escorts brand name 1969: Agricultural tractors under Ford brand name 1971: Industrial and construction equipment 1979: Excavator loaders 1981: 100cc motorcycles 1985: Electronic PABXs 1991: Harvester combines 1992: VSAT Satellite Communication System 1993: Mobile communications 1995: Fork lift trucks 1996: Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC Tractor.

The single word completely described the character philosophy and success of the company, which grew from a small beginning to one of the ever-changing dimensions. For five decades Escorts has been in the core sectors like Agriculture, Transportation, Construction & Resources for Engineering change through optimum product performance. Today Company is running with nearly 10,000 employees, 19 modern manufacturing plants and a turnover exceeding Rs. 400 crores. The Escorts group ranks among Indias leading Engineering Conglomerates. From its inception Escorts has firmly believed that success inspiring on being close to the customer thus every corporate endeavor addresses it to end used, adjusting to ever changing markets. At every step of the way, Escorts had inducted the latest technology by forming alliances with the worlds most advanced Engineering and Electronic companies, constantly adopting their technology according to Indias need and situation.

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To make sure the finished product delivers on its promise the company had created an extra-ordinary distribution and service network that stays with the customer. Escorts came into its own with a far reaching vision for the future to stay over close to the customers with products made in India to international standards. The source of Escorts consistent growth is commitment and contribution to the core needs of the country. Escorts have firmly believed that success depends on being close to the customers. As early as in 1944 while others were concentrating on selling their goods. Escorts sought to Escorts its merchandise right up to the customers doorstep. This meant staying close to the customer, understanding their needs, giving them a product that met these needs ensuring that it worked smoothly thereafter. Today with Mr. Rajan Nanda as a Chairman and Mr. Anil Nanda as a ViceChairman the ideals have not changed. Thus, every corporate endeavor addresses to the end users and the ever-changing market, substantial man-hours are being devoted to planning a new range with the objective of consistently offering greater value to the customer. In every area we touch our task has always remained one of engineering change Rajan Nanda. In every step, Escorts has induced the latest technology to make products that are not merely better but those meet international standard. For Escorts, these are two benchmarks of industrial achievements, the distinct, undisputed edge of technology and the internationalization of business.

In five decades Escorts has grown to become one of the top industrial conglomerates in the country.

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FIVE DECADES OF ENGINEERING CHANGE THE DECADE OF CREATION: 1944-1954

The launch of Escorts Agents Pvt. In Lahore and setting it all up again in Delhi after the countrys partition. The beginning of an industry legend, with a tractor franchise, followed by Indias first institute of farm mechanization and the companys first industrial venture, Goetze (India) Ltd., at Patiala, in equity collaboration with Goetze of Germany.

THE DECADE OF AUTOMATION: 1955-1964

Escorts goes public. A full-fledged manufacturing orientation takes roots with the commencement of Escorts own brand of tractors and next major field of operation: motorcycles. The company joins hands with Mahle to produce Indias most advanced pistons.

THE DECADE OF CONSOLIDATION: 1965-1974

The foundation of the Ford-Escorts alliance for Indias finest tractors, soon to make the group the largest selling tractor manufacturing. Escorts Employees Ancillaries Ltd., a unique venture in industrial democracy, comes into being. Escorts receives FICCI Award for outstanding contribution to Indian agriculture. The company crossed national boundaries with its first export of 400 tractors to Afghanistan, won in a global tender. A triumph of Escorts quality and competitiveness, this was perhaps the worlds largest ever commercial airlift of its kind.

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THE DECADE OF DIVERSIFICATION: 1975-1984

One with Knorr Bremse follows an epoch-making alliance with JBC for Indias first Excavator-loaders for railway breaks. With the Yamaha collaboration, Escorts become the countrys largest motorcycle manufacturer. Acknowledged leadership in automotive ancillaries- Mahle pistons and Goetze rings.

THE DECADE OF GLOBALISATION: 1985-1995

Escorts enters into joint venture with buy back arrangement with Class (Harvester Combines) and Herion (Hydraulic valves) providing an entry to world markets. A tie-up with Faun, powers the company to supremacy in hydraulic mobile cranes. Escorts fights an epic battle against a corporate raid, the ultimate victory providing the unshakable confidence of the companys small shareholders countrywide. Escorts Heart Institute commissioned, hailed as among Asias most advanced. Escorts turnover crosses Rs. 15 billion. In the sunrise telecom sector, alliances with JS telecom, a Bosch company, and Hughes Network systems, world leaders in VSAT networks.

THE DECADE AHEAD: 1996The Mission is Globalization and the emphasis will be on core sector investments. Escorts is going in for a global network and for mega projects in the 21st century.

ESCORTS: RESTRUCTURING

Escorts Limited is all set to meet the future by drawing on its 50-year equity gained from its inherent strengths, a strong presence in the Core Sector providing complementary product lines and a vast marketing network; combining them with Indias intrinsic cost advantages to become a global source point for high value engineering products.

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In order to meet the challenge of the future and to leave an indelible mark on industrial scenario, Escorts has restructured the group along 4 business lines, each headed by an independent CEO. The business groups are as follows:-

1) Agri Machinery Group 2) Construction Equipments 3) Automotive Ancillaries 4) Financial Services

ESCORTS THE GROUP INFRASTRUCTURE

The flagship of the Escorts group is Escorts Ltd. in the words of Mr. Rajan Nanda. Chairman Escorts Limited., in the last 50 years Escorts has been more than merely one of Indias largest Engineering Companies. It has been a prime mover on the industrial front; at every stage introducing products and technologies that helped take the country forward in key areas. Today as the nation engages in its most momentous economic transformation ever, we are once again adapting ourselves towards being catalysts for qualitative growth by Engineering Change with a global perspective.

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The group infrastructure comprises: 23 main associates/subsidiary companies 12 manufacturing locations A full-fledged R&D facility Nearly 10,000 employees 24 regional marketing offices Nearly 500 ancillaries forming the vendor base 4 financial services companies Asias best training institute of Farm Mechanization with 100 acre demonstration farm. EDDAL Escorts Dealer Development Association providing management and financial support to dealers.

THE ESCORTS GROUP

THE FLAGSHIP COMPANY Escorts Limited OPERATING DIVISIONS o Agri machinery division o Engineering division

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o International business division SUBSIDARY COMPANIES o Escorts construction equipment Ltd. (Cranes, excavators, truck loaders) o Esconet services o Escorts Automotives (Investment) o Escosoft technologies o Escortal tele communication ltd. o Cellnext solutions o Automatrix India o Escorts heart institute & research center o Escorts hospital & research center Medical care (erstwhile division of Escorts lived off 100% subsidy ASSOCIATE COMPANIES o India Ltd. GOETZE (India) Ltd. o GOETZE TP (India) Ltd. o GOETZE (India) assets management Ltd. o Escorts securities ltd. o Escorts Mahle Ltd. o Escorts Employees Ancillaries Ltd. o Escorts Finance Ltd. o IFS India Escorts o Hughes Escorts communication ltd. o Carraro (India) ltd.

ESCORTS GROUP CORE BUSINESSES

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BUSINESS GROUPS Agri-Machnary Construction equipment

PRODUCTS Tractors Earth moving Machines Vibratory Rollers

Automotives

Material Handling Equipments Pistons, Piston Rings Aluminum Cylinders Shock Absorbers Carburetors Magnetos

Railways

Clutches Air Brakes Couplers Electro-Pneumatic Brakes

Telecom

Shock Absorbers Cellular Telephone services VSAT Services (satellite communication system) Automobile Financing Consumer Finance Mutual Funds

Financial Services

Manufacturing Facilities

Fixed Deposits Machining Painting

Product Units(Pus)

Assembly Engine PU Transmission PU Rear Axle PU

Departments

Assembly/tractor PU Personnel & HRD Finance Manufacturing Engineering 18

 Plant Engineering & Machine Maintenance Information Systems

THE BIRTH OF FARMTRAC

The Escorts Tractors Ltd, (ETL) came in existence as a separate company in 1969, after a collaboration of Escorts Ltd. with R.J.Hampson, executive vice president, Ford Motor Company, USA and Mr. H.P.Nanda, President ETL. The company entered to a capital market with a public-cum-right issue of partly convertible debentures of 40.89 crores.

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The Escorts group initiated the business reconstruction exercises in order to strengthen its business in the face of reemerging challenges. New Holland the international partner too was looking for ways to independently pursue its business goals in this country. This lead to an amiable agreement between escorts and Ford Motors to end their joint venture association. Escorts acquired the entire equity stack of its international partner whereby the company is now the subsidiary of Escorts Ltd. This acquisition has taken its logical conclusion on 1st April 1996 with the emergence of Farmtrac division, which produces Farmtrac tractors with Escorts Ltd. This led to the emergence of Escorts Agri-Machinery Group. The parting of ways with New Holland also meant saying goodbye to Ford, a brand name that has stood the company in excellent stead over two decades and half. The brand name has also been changed from Ford to Farmtrac and the name of the Md. models Ford 3600, 3610 and 3620 has been changed to Farmtac 50 and Farmtrac 60.

A TRADITION OF TRUST
Economy range 27 - 35 HP The very first range of tractors introduced by Escorts range of tractors has a tradition of service and trust behind them. They are farmer year round dependable friends. MODELS Escorts 325 Escorts 335

THE SUPER DIESEL SAVER

Value range 30- 47HP The Powertrac range of tractor is designed to give spectacular diesel economy. They act as ambrosia during there trying times of rising diesel costs. MODELS

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Escorts 430 powertrac- 30 HP Escorts 435 powertrac- 35 HP Escorts 440 powertrac- 40 HP Escorts 450 powertrac- 47 HP

THE WORLD CHAMPIONS

Premium range 30- 75HP Exported to the most advanced markets in the world, they are sophisticated machines designed for the world demanding requirements of the progressive farmers. This range is accepted very well in abroad. The farmtrac range is the ultimate icon in the tractor technology with the advanced features for scientific farming and other applications. MODELS Farmtrac30- 30HP Farmtrac35- 35HP Farmtrac45- 42HP Farmtrac50- 45HP Farmtrac60- 50HP Farmtrac70- 60HP Farmtrac80- 75H

FARMTRAC DIVISION A PROFILE

1) MANPOWER MANAGERS SUPERVISORS TEAM MEMBERS 2) PRODUCTION CAPACITY 120 Tractors per day : : : : 1659 162 156 1341

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3)

CURRENT PRODUCT RANGE

FT 30 FT 35 FT 45 FT 50 FT 55 FT 60 FT 70 FT 80

4)

TURNOVER Rs. 400 CRORES

5)

EXPORTS EXPORTED TO USA, TURKEY TRACTORS EXPORTED IN 2001-02: PLANNED FOR 2002-03 :

6)

ISO 9000 CERTIFIED ISO 9001 CERTIFIED

THE PLANT
The plant is equivalent with the following units: Engine Productive Unit (EPU) Transmission Productive Unit (TPU) Rear Axle Productive Unit (RAPU) Tractor Productive Unit (TPU) Paint Shop

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Now transmission productive unit and rear axle productive unit have been merged and now it is one productive unit known as transmission and rear axle productive unit.

The plant is equipped with the following facilities:MACHINE SHOP: EPU, RAPU AND TPU have separate machine shops equipped with several purpose machine (SPM) as well as Computerized Numerically Controlled (CNC machine).

The different components machine in these shops with their respective sections are listed below:
Cylinder Head, Cylinder Block and Connecting Rod. Case Transmission. Center Housing & Trumpet Housing. Tool Room. Turning, CNC, Gear Cutting, Grinding & Heat Treatment.

In heat treatment shop following facilities are available:

Gas Carbonizing, Hardening & Tempering Induction Hardening

Following facilities are available in the various productive units:

Transmission assembly Rear axle assembly Engine assembly and testing Tractor assembly and testing

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QUALITY POLICY
We shall strive to continuously Improve to meet the ever rising Expectations of our customers At the lowest cost. Each one of us must fulfill the Need of our customers, both Internal and external, with the Highest degree of commitment, Thereby creating a quality Organization geared to ensure Total customer satisfaction and The sustained health and Prosperity of our business.

QUALITY OBJECTIVES
Escorts Limited AMG Plant-II Quality Objectives are derived for the quality policy and are intended to provide quality direction to employees in the day to day operation of the plant. The quality objectives are applicable to AMG Plant-II is approved by Plant Head. The approved quality objectives are below: 24

 Escorts Limited- AMG Plant Quality Objectives are derived from the Quality policy and are intended to provide Quality Director to Employees in the day to day operations of the company. We will attempt to give our Customers the best value for their money by supplying products to match customer specifications/needs. We will attempt full customer satisfaction by monitoring customer perceptions and brand image of our product through market surveys and periodic direct customer contact in the market place. We will pursue continuing improvement in Product Quality and Productivity by suitable indicators to measure the trends of improvement resulting from our efforts. We will strive to ensure full commitment and conformance to the Escorts Limited AMG Plant-II Quality Management System in all areas of work and take prompt corrective action on any problem that may occur. We will work together as a team across departments and organizational levels using Task Forces to develop a common focus and greater effectiveness in solving problems. Specific Corporate and Departmental Objectives for a particular year will be derived from the above used to monitor and control company operations.

Best value for money, customer satisfaction, continued improvement in product quality, productivity conformance to quality management system in each area of work, prompt corrective action and team building are the major focus areas of quality objective of AMG Plant-II.

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PERFORMANCE MEASUREMENT
Yearly quality objectives business objectives for Plant-II are finalized on yearly basis to achieve the Corporate Business Objective and ensure continual improvement in Quality Management System. Plant objectives are further sub divided for each PU/Department and key result area are identified for measurement of performance for each process. PU/Department Head Monitors the performance and reviews the actual performance as compared to the objective. Finalizes corrective/preventive action plan to achieve laid down objective on monthly basis for continual improvement.

MANAGEMENT REVIEW
FEEDBACK OF Department review is forwarded to MR as input to management review. Formal management review covering all aspects of review input & output. Agenda in line with ISO 9001:2000 takes place once in six months frequency. The frequency may be increased or decreased based on the level of effective implementation. Head of AMG Plant-II or PU Head authorized by him in his absence conducts Management Review to ensure continued suitability, adequacy and effectiveness of the Quality Management System. All the PU Heads, Departmental Head of Manufacturing Operations of AMG or their nominated representatives attend the Management Review.

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ISO 9001
The international organizational organization for standardization (ISO) is a specialized international agency for standardization, presently comprising the national standard bodies of 91 countries including India. The objective of ISO is to promote development of standardization with a view to facilitate international exchange of goods, services and also develop a cooperation in the sphere of intellectual scientific, technological and economic activities.

The Escorts Tractors Ltd. enjoys a formidable reputation in the market solely because of its unrivaled quality. It is because of the companys entirely uncompromising commitment to quality improvement and maintenance that in the course of the year it became the first tractor company in the country to receive the highly coveted and prestigious ISO-9001 certification under the revised rules of 1994.

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CHAPTER-2 REVIEW OF LITERATURE

PERFORMANCE APPRAISAL
People differ in their ability and aptitudes. These differences are natural to a grate extent and cannot be eliminated even by giving the same basic education and training to them. There will be some differences in the quality and quantity of work done by different employees even on the same job. Therefore, it is necessary for management to know these differences so that the employees having better abilities may be rewarded and the wrong placements of employee may be rectified through transfers. The individual employee may also like to know the level of his performance

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in comparison to his fellow employees so that he may improve upon it. Thus there is grate need to have suitable performance appraisal system to measure the relative merit of each employee. The basic purpose of performance appraisal is to facilitate orderly determination of an employees worth to the organization of which he is a part. However, a fair determination of the worth of an employee can take place only by appraising numerous factors some of which are highly objective, as for instance, attendance, while others are highly subjective, as for instance, attitude and personality. PERFORMANCE APPRAISAL Performance appraisal means systematic evaluation of the personality and performance of each employee by his supervisor or some other person trained in the techniques of merit rating. Performance appraisal includes all formal procedures used to evaluate personalities and contributions and potentials of group members in a working organization. It is a continuous process to secure information necessary for making correct and objective decisions on employees. Performance appraisal is the systematic evaluation of the individual with respect to his performance on the job and his potential for development. Performance appraisal is concerned with determine the differences among the employees working in the organization.

PURPOSES OF PERFORMANCE APPRAISAL

1) Promotions:- promotion is the most important objective of performance
appraisal. It is to the common interests of both the management and employees to promote employees into positions where they can most effectively utilize their abilities. It is mismanagement to promote employees into positions where

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they cannot perform effectively at the time in question. A properly developed and administered performance appraisal system can aid in determining whether individuals should be considered for promotion or not. The system should rate the individual for the present job and his potentialities for the higher job. A person performing his job well does not necessarily mean that he is fit for promotion.

2) Human resource planning: - Performance appraisal generates significant,

relevant and useful information about the promo ability and potential of employees. This information is used to assess the organizations internal supply of human resources and availability of managerial personnel for succession planning.

3) Recruitment and selection: - Evaluation made in performance appraisal can

be used to find out the particular areas of knowledge, skills and experience which successful performers posses. This information can be used to review effectiveness of recruitment and selection procedures and practices so that right type of candidates can be selected.

4) Training and development: - Performance appraisal helps in identifying

development needs of employees. This information can be used to advise suitable training and development programmes to enable employees to overcome their weaknesses and improve their strengths.

5) Compensation: - Information gathered through performance appraisal

provides inputs for making decisions concerning salary administration, financial incentives, appreciations, additional responsibilities etc. PERFORMANCE APPRAISAL PROCESS Establishing performance standards

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Communicating the standards to employees Evaluating actual performance Comparing actual performance with standards Discussing the appraisal results with the employees Taking corrective action, if necessary

METHODS OF PERFORMANCE APPRAISAL Written essay Critical incidents Checklist Graphic rating scale Behaviorally anchored rating scales (BARS) Group order ranking Individual or straight ranking

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Paired comparison MBO (result oriented appraisal method) Group appraisal of subordinates Peers appraising the colleague Subordinates appraising the boss 360 degree feedback method Assessment centers method

ERRORS IN PERFORMANCE APPRAISAL Leniency or severity error Central tendency Halo effect/error Similarity error Contrast error Shifting standards Influence of recent events

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Tendency to give high rating Length of service bias Personal bias

HOW TO MINIMISE ERRORS Clearly defined performance dimensions and standards Performance appraisal only for providing feedback Combination of methods for appraising performance Continuous feedback Many appraisers rating backed up with examples Appraisal of subordinates on the same performance dimensions Appraiser with ability to appraise Training of appraisers

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PERFORMANCE APPRAISAL IN ESCORTS LIMITED

PREFORMANCE APPRAISAL In todays competitive environment it is essential to harness individual aspiration and potential and gear them suitably to meet business objectives. To make this happen, both you and the organization would like to know how you have been performing and your potential for growth. THE OBJECTIVES OF PERFORMANCE APPRAISAL To be developmental in nature where individuals grow with the organization. To integrate individual performance and contributions to larger organizational goals and needs. To open greater communication between superior and subordinate. To ensure a realistic link between performance, recognition and reward. To provide core data for human resource development / organizational development efforts. To encourage innovativeness through unique contribution. To focus on employee contribution and not on efforts.

APPRAISAL CYCLE The appraisal cycle for DGM and above is 1st June to 30th June. Increments / promotions are effective from 1st July every year. The appraisal cycle for employees in grades M2 to M8 grade become effective from 1 Jan. each year and from M8 to DGM from 1st April. Consequently, the appraisal period in respect of such employees after promotion is of 15 month for the first year i.e. the next review would be on 1st April or 1st July, as the case may be, of the following year.
st

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APPRAISAL OF EMPLOYEES ON DEPUTATION In case the employees are working on deputation in a different company/division of Escorts, the parent company division shall carry out employees appraisal. This is not applicable to employees in the categories of DGM and above and their cases will continue to be processed as usual from the chairman / vice chairmans office as is being done at present. APPRAISAL OF TRAINEES. (All categories) Only trainees who have been regularized (confirmed on or before 30th September) shall be eligible for performance appraisal for that block of appraisal period. Trainees regularized there shall be eligible for confirmation appraisal according to the rules laid there under. CONFIRMATION APPRAISAL Trainees on completion of the training period and employees on completion of probation period shall be appraised for regularization / confirmations. During confirmation / regularization, incumbents are evaluated for:1. Group performance 2. Personal performance 3. Supervision and leadership qualities 4. Developmental needs Employees are covered for superannuating only after confirmation but with effect from their date of joining.

MANAGERIAL PERFORMANCE APPRAISAL PROCESS

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OBJECTIVE: To identify and categorize employees of managerial cadre, in three distinct contributory levels based on performance review against last years KRAs and assessment of competencies.

HOW TO FILL APPRAISAL FORM: The managerial appraisal form consists of the following sections. Section A: Section B: Section C: Review of goals achieved against KRAs Feedback on managerial competencies. Development Needs

Section A: Review of goals achieved against KRAs This section consists of 70 points. In this section appraisee is required to fill details of KRAs, objectives and achievements and assign weightages against each KRA, agreed in the beginning of the review period. Appraiser is required to capture his/her observations and score each KRA. Section B: Feedback on managerial competencies This section consists of 30 points. In this section appraiser is required to give feedback on the listed managerial competencies indicating the performance factor that best describes the appraisee, substantiating it with actual events/behaviour. Section C: Development needs

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In this section the appraiser is required to fill in the strengths/areas of improvements relevant to appraisee in carrying out his current job or higher responsibilities.

REVIEW PROCESS: The review discussion should take place on a one-to-one basis in an uninterrupted manner and it is expected that typically such a meeting would last for about 60 to 120 minutes. This discussion would be based on performance plan documents (KRAs) agreed last year. Sequence of the process would be as described below:Step 1: Appraiser to gather adequate data on the appraisees performance against predefined KRAs. Step2: Appraiser to schedule a meeting for performance review with the appraisee. Step3: Appraiser to give feedback to appraisee based on his observations with emphasis on performance aspects where appraisee can improve. Appraiser should avoid loaded / judgmental terms that may lead to emotional setbacks. Step4: Towards conclusion, the appraiser should complete the form. This would form the summary of discussions that took place between appraisee and appraiser. Step5: The performance against KRAs is to be quantified and scored out of a maximum of 70 points. In addition, the appraiser needs to give score against competencies defined out a maximum of 30 points. Thus each appraisee will have a total score received out a maximum of 100 points. Important

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Since the subject under discussion is highly sensitive, the details of the discussions should remain confidential between the two. Step6: The completed format with total score assigned based on the review may be forwarded to the reviewer for his concurrence. Step7: Reviewer to review appraisals of all managers in his/her area to ensure that a fair process has taken place and no biases have crept into the assessment. Step8: Thereafter, the data is to be collected at DMG / Department level for each area. If the strength is less, appropriate aggregation at Divisional / Functional level may be done. For example, in R&D center, aggregation may be done at a divisional level. All managers have to be ranked from top to bottom on a relative basis to arrive at the final ratings at this level as defined below. Concerned HR manager would help the DGM / MANCOM member in finalizing the ratings. Step9: HR would summarize the data for whole of AMG and present before business head for his concurrence before issuing letters to individuals. PERFOMANCE RATING: The three performance rating categories and expected distribution pattern, as a percentage is as under. Rating Category Cat-1 Cat-2 Cat-3 %age Distribution 20% 70% 10% Description top 20 percentile next 70 percentile bottom 10 percentile

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CHAPTER-3

39

SYNOPSIS

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OBJECTIVES OF THE STUDY

The objectives of doing work on the performance appraisal in the escorts ltd company are as follows: 1. To study the effectiveness of appraisal system in the escorts ltd company. 2. To study the performance appraisal process of Junior Managers in the escorts ltd company. 3. To study, whether the system is helpful for both the employer (to communicate the organizations plans, expectations, etc.) and employees (to express the training & development needs).

4. To study the employees view points on their performance appraisal.

LIMITATIONS OF THE STUDY

With the proper due care this study has been conducted but it consists of some of its limitations also which are as follows:

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1. Sample size was small i.e. 40Junior Managers. 2. The time limit is also one of the major constraints in conducting study. 3. Biases may creep in the information given by the respondents. 4. Main root of this research study was questionnaire & interview, which has its own limitations, for example we cant measure the reliability, enthusiasm dissonance etc.

SCOPE OF THE STUDY

I have chosen the topic PERFORMANCE APPRAISAL in Escorts LTD. Keeping in mind the company nature of work, with a hope that the company is benefited from its findings by modifying its existing performance appraisal rules if felt necessary.

The study has immensely helped in understanding the various steps of the process of performance appraisal as well as the various process of the motivation. I had the privilege to gain practical experience by working in the Escorts Ltd.

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

The research methodology is a way to solve the research problem in a systematic manner. It depends upon the various steps like objectives of the study, how the data is collected, how much is the sample size required and the limitations of the study. Properly conducted study is a valuable tool for the top management in making some decisions. Good study reduces the uncertainty. Effective research methodology leads to good research.

RESEARCH DESIGN
Research design is the arrangement of the condition for collection and analysis of data in the manner that aims to combine relevant to the research purpose with the economy in the procedure. Research design of the study is Exploratory Research Design Exploratory research designs major emphasis is on the discovery of ideas and insights. In this research problem is transformed into one with more precise meaning. Methods of explorative research design -: 1. Depth Interviews 2. case study 3. surveys

Sample Size for the study was 50 employees and managers

COLLECTION OF DATA

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The data collection is mainly of two types: 1) primary data 2) secondary data

Primary Data was collected by conducting

(a) Questionnaire and (b). By conducting personnel interview of the managers

Different methods of collecting primary data

1. Questionnaire Method: A questionnaire is means of elicting the

feeling, beliefs, experience, perception & attitude of sample of the individual. As a data collecting instruments. It could be:a) Structured b) Unstructured

2. Interviews:

Finally, for the purpose of additional information all the

respondents were personally interviewed. In addition, classification and To know about the performance appraisal, the QUESTIONNAIRE, INTERVIEW method has been used. I have prepared a list of questions regarding recruitment process of Escorts Agri Powertrac Ltd., Faridabad and distributed it to the respondents.

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This questionnaire has 17 questions, which are aimed to achieve the objectives of the study. All the questions are close ended with two to five options. For the purpose of analysis, various tables and charts were prepared with numbers and percentages of the employees in different choices. Along with primary data collected through questionnaire-interview, I also have used secondary data, which include theory part from some books and the performance appraisal process in Escorts from its own policies. Sample size for the study was 40 Junior Managers.

Secondary Data was collected from websites, company reports, company manuals
and management books.

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CHAPTER-4

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DATA COLLECTION AND ANALYSIS

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TABLE 1
Awareness of performance appraisal system in employees

AWARE Number of employees aware of performance appraisal system in escorts. 40 100%

NOT AWARE 0 0%

AWARENESS OF APPRAISAL SYSTEM

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YES NO

From above it is clear that all the employees of the escorts ltd. are aware of appraisal system

50

TABLE 2

Appraisal is done by:

HOD 15 52%

Immediate superior 12 43%

Any other 3 5%

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BY WHOM APPRAISAL IS DONE

Thus, we can say that mostly performance appraisal is done by Immidiate superior

HOD IM Any other

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TABLE 3
Objectives of performance appraisal

Objectives of performance appraisal in Co.

Pay hikes 15 30%

Promotion 15 30%

Training needs 11 22%

Any other 9 18%

Objectives of performance appraisal

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PH P ITN AO

PH- Pay Hikes, P- Promotion ITN- Identify training needs, AO- Any Other Therefore it can be concluded that according to employees the main objective of appraisal system is to increase their pay and to increase their promotion.

TABLE 4

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Methods of performance appraisal

Superior Methods performance appraisal escorts. used in of a p p r a i s e s 37 74%

360 degree

MBO

Any other

0 0%

13 26%

0 0%

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Methods of performance appraisal

SA 360 MBO AO

SA- superior appraises, 360- 360 degree, AO- any other Maximum number of employees agrees with the method of superior appraisal.

As a tool for performance appraisal of employees.

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TABLE 5 Understanding of objectives of management & performance appraisal

Clarity about objectives of performance appraisal to employees view of employees towards the scope for communicating top management objectives in appraisal system Provision of opportunity to employees to have a clear understanding of what is expected from them.

SA 19 38% 19 38%

A 26 52% 23 46%

N 3 6% 5 10%

D 1 2% 2 4%

SD 1 2% 1 2%

48%

44%

2%

2%

4%

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Understanding of appraisal objectives

SA A N D SD

Majority of employees agree that the objectives of performance appraisal are clear to them.

Understanding of management objectives

. Maximum number of employees agrees with the fact that Appraisal system has scope for communicating top

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SA A N D SD

management objectives with employees.

Clear understanding of the expectations

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SA

SD

Therefore maximum number of employees strongly agrees that appraisal system provides an opportunity to them to have a clear understanding of what is expected from them.

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TABLE 6 Effectiveness of counseling

SA Counseling provides an opportunity to communicate the support employee need with their superior to perform their job well Counseling provides 38% 19

A 28

N 0

D 1

SD 2

56%

0%

2%

4%

19

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opportunity for discussion between employee & their appraiser expectations, required on the achievements

and the area of improvement

38%

58%

2%

2%

0%

Counseling provides opportunity for communicating the support needed

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SA A N D SD

From above we can conclude that many employees agrees that counseling provides an opportunity to communicate the support employee need with their superior to perform their job well

Counseling provides opportunity for discussion on the expectations, achievements and the area of improvement required

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SA A N D SD

Maximum number of employees agrees that counseling provides opportunity for discussion between them & their appraiser on the expectations, achievements and the area of improvement required

TABLE 7

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Feedback helps to get insight into weaknesses & strengths

SA Appraisal system gives the clear understanding of job & factors affecting employees performance to appraiser & appraisee. Feedback helps employees to get insight into their weakness and strengths. 36% 18 44% 22

A 24

N 3

D 1

SD 0

48%

6%

2%

0%

25 50%

5 10%

1 2%

1 2%

Clear understanding of job

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SA A N D SD

48% of employees agree that appraisal system gives the clear understanding of job & factors affecting their performance to appraiser & appraisee.

Insight into weaknesses & strengths

SA A N D SD

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Maximum number of employees agrees with the fact that feedback helps them to get insight into their weakness and strengths.

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FINDING OF THE STUDY

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Findings of the Study

Finding of the study on the basis of collection and analysis of the data are as follows-: 1) All the employees at junior manager level in the company have the awareness of the performance appraisal system. 2) Most of the employees say that their immediate superior does their appraisal, 60% of the respondents says this. Performance appraisal is done annually in Escorts. In actual MBO method of performance appraisal is used but 70% of the respondents said that their immediate superior does the appraisal. Only 26% of the employees said that the method of performance appraisal in Escorts is MBO. 3) 80% of the employees have the clear understanding of the objectives of the performance appraisal. 80% of the employees were strongly agree/agree with the statement objectives of performance appraisal are clear to you. 4) 30% of the respondents said that the pay hikes (annual increments) is the main objective of performance appraisal. While other 30% respondents said the objective of performance appraisal is promotion. 22% said that the identification of training needs is the main objective. But in actual all of these three and many more the objectives of the appraisal. 5) The immediate superiors do appraisal in Escorts. Assessment centers are also used in Escorts but for promotions only.

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6)

Appraisal system in the company has the grate scope for communicating top management objectives to the employees. 84% of the respondents were strongly agree/agree that appraisal system helps in understanding top management objectives.

7) 90% of the respondents were strongly agree/agree with the statement, which state that appraisal system provides an opportunity for understanding what is expected from the employees.

8) Counseling part of the appraisal system is good enough in Escorts. 94% of the respondents were strongly agree/agree with the statement which states that counseling provides an opportunity to communicate the support needed from superior to perform the job well. 9) Most of the respondents were satisfied with the counseling done by the superiors. They said that counseling facilitates discussion between appraiser and appraisee, by which appraisee come to know about their areas where they need improvements, what is expected from them, what is their job all about and what factors affect their performance. 10) 86% of the respondents were satisfied with the feedback given to them and they also accepted that true feedback helps to get insight into their weaknesses and strengths.

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CHAPTER-5

70

CONCLUSION AND SUGGESTION

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CONCLUSIONS
Based on the analysis, through the observation process, through the questionnaire responses, following in the conclusions of the study: The employees are up to some extent is satisfied with the existing performance appraisal system process. Performance appraisal system in escorts ltd is highlighting employee needs and opportunities for personal growth and development. Promoting understanding between the supervisor and his subordinates. Counseling facilitates discussion between appraiser and appraisee, by which appraisee come to know about their areas where they need improvements, what is expected from them, what is their job all about and what factors affect their performance. It has identified training and development needs and to evaluate effectiveness of training and development programmes. This has encouraged the innovativeness of employees through unique contribution. To conclude we can say that performance appraisal system in Escorts Limited is an effective method. Most of the employees are satisfied with the appraisal process and the criteria of the appraisal. Counseling associated with the appraisal is the most motivating factor for the employees to give their best.

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SUGGESTIONS
The purpose of performance appraisal is to reward the employees, give them recognition, and help them in career growth. o The production managers or the personnel managers should interact more directly with their subordinates and try to know their needs, their problems and help or suggest them to overcome those difficulties. o The feedback process should be made more sound and effective so that the employees could know the areas where their performance is low so that they could make it better in the future. o Special training sessions should be organized besides regular training programmes for low performance areas. o There should be more transparency in awarding marks to the employees. It should be effectively based on the merit and performance of the employees and not on the basis of any personal contacts, blood relation or any affection. o A small committee should be found that will keep a close watch on the whole exercise and make ensure that it should be a fair process.

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ANNEXURE

74

QUESTIONNAIRE
Q.1 Are you aware of the employees appraisal system in Escorts Limited system. a) Yes Q.2 Who does the appraisal? a) HOD c)Any other, specify b) Immediate supervisor b) No

Q3. What are the objectives of performance appraisal in Escorts Limited? a) Pay hikes c) Identify training need b) Promotion d) Any other, specify

Q4. What methods of performance appraisal are used? a) Superior appraises the employee. b) 360 Degree

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c)

MBO

Strongly Agree Q5. Are objectives of performance appraisal clear to all employees Q6.Do you think that appraisal system has scope management objectives employees.? Q7.According to you does appraisal system provides an opportunity to you to have is a clear of understanding what from you. Q8. Is Counseling an affective measure to get a boost from the superiors? to the for communicating top

Agree

neutral

Strongly Disagree

Any other, specify

expected

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Q9.Does opportunity

Counseling for

provides discussion

between you & your appraisal on the area of improvement required?

Q10. Is appraisal system giving the clear understanding of job and factors appraisee? Q11. Does Feedback helps you to get insight into your weaknesses & strengths? affecting your performance to appraiser and

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BIBLIOGRAPHY

GUPTA, C.B., HUMAN RESOURSE MANAGEMENT, SULTAN

CHAND & SONS, NEW DELHI-2006.

ASHWATHAPA, K.-HUMAN RESOURSE & PERSONNEL

MANAGEMENT, TATA MC GRAW HILL CO. LTD,NEW DELHI-2005.

DESSLER ,GARY -HUMAN RESOURSE MANAGEMENT, I0

EDITION, TATA MCGRAW HILL CO. LTD., NEW DELHI.

STEPHEN P. ROBINSON- MANAGING HUMAN

RESOURCES, 4TH EDITION, TATA MC GRAW HILL CO. LTD., NEW DELHI.

OTHER RESOURCES:WEBSITES;-

www.google.com www.escortsgroup.com www.wikipedia.com

MANUALS:-

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 PERSONNEL MANUAL, ESCORTS LIMITED, CORPORATE HR

& IR, FARIDABAD

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