INTRODUCTION: Performance appraisal is one of the most important processes in human resourcemanagement.

Organizations rate their employees abilities to perform throughthis process and assess their worth for organizational rewards. Variousresearchers have noted at different points of time that many employees are notsatisfied with their performance appraisal system. Rudrabasavaraj (1977) foundthat only one of the 12 organizations that were investigated in that particular study, seemed to be satisfied with the appraisal system. Bolar (1978)states,Most managers and supervisors have at some time or other questionedthe basis or relevance of employee evaluation practices or performance appraisal [and] the difficulties, the doubts and the lack of credibility about the various systems appear to have increased.

Employee differ in their abilities and their aptitudes. There is always somedifference between the quality and quantity of the same work on the same job being done by two different employee. Performance appraisalsof Employeesare necessary to understand each employees abilities, competencies andrelative merit and worth for the organization. Performance appraisal rates theemployees in terms of their performance.

Employee assessment is one of the fundamental jobs of HRM. An organisations goals can be achieved only when employee put in their best efforts. How to ascertain whether an employee has shown his or her best performance on a given job? The answer is PERFORMANCE APPRAISAL.

3 In simple terms, performance appraisal may be understood as the assessment of an individual's performance in a systematic way, the performance beingmeasured against such factors as job knowledge, quality and quantity of output,initiative, leadership abilities, supervision, dependability, co-operation, judgement, versatility, health, and the like. Assessment should not be confinedto past performance alone. Potentials of the employee for future performancemust also be assessed.It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development. :RESEARCH METODOLOGY: This study was carried out as an exercise to understand the requirements of performance appraisal as perceived by organizations. It was attempted to collectdata from different types of organizations so as to give a sufficient representativeindication of the requirements of performance appraisal system. Industry wereelicited about performance appraisal, bias and treatment, desired improvements tothe system. All the questions were open ended, leaving executives free toexpress their perceptions and views. Organizations were selected based on size,type, nature of business. Care is taken to cover a different kind of industries.Research always starts with a question or a problem. Its purpose is to question through the application of the scientific method. It is asystematic and intensive study directed towards a more complete knowledge of the subject studied.

4 :Collection of data: After the research methodology, the next step is together the requisite data. Thereare two types of data collection method primary data and secondary data.In our live project, we decided primary data collection method because our studynature does not permit to apply observational method. In survey approach we hadselected a questionnaire method for taking a customer view because it is feasiblefromthepointof viewof our subject& surveypurpose. I conducted50sampleof survey in our project and I have collected the data of employee of Navi Mumbai.andfor secondarydata i collected fromwebsite ,referring articles andbye text book.

Importance of Performance Appraisal: Performance appraisals are necessary. It may be informal or formal,documented or undocumented, scheduled or unscheduled .Due to performance appraisal employee will earn consistent promotions, obtainattendant salary increases and lead a successful organization goes upevery time you conduct a thorough performance-boosting employeeevaluation.Specifically, performance appraisal helps an organization gaincompetitive edge in the following ways: Fig: How Performance Appraisal can contribute to Firm's Competitive Advantage

5 1 Improving Performance: An effective appraisal system can contribute to competitiveadvantage by improving employee job performance in two ways-bydirecting employee behaviour towards organizational goals, and bymonitoring that behaviour to ensure that the goals are met. 2 Making Correct Decisions: Appraisal is a critical input in making decisions on such issues as payraise, promotion, transfer, training, discharges and completion of probationary periods. Right decision on each of these can contribute tocompetitive strength of an organization. If promotion, for example, ismade on performance, the promote feels motivated to enhance his or her performance. 3 Ensuring Legal Compliance: Promotions made on factors other than performance might land up afirm in a legal battle, thus diverting its focus on non-productive areas .Organizations can minimize costly performance-related litigation byusing appraisal systems that give fair and accurate ratings. 4 Minimizing Job Dissatisfaction and Turnover: Employees tend to become emotional and frustrated if they perceive thatthe ratings they get are unfair and inaccurate. Such employees find thatthe efforts they had put in became futile and obviously get de-motivated.Dissatisfaction in the job sets in and one of the outcomes of jobdissatisfaction is increased turnover. Fair and accurate appraisal results inhigh motivation and increased Job satisfaction. An organization havingsatisfied and motivated employees will have an edge over its competitors. 6

5 Strategy and Behaviour: An organization needs a strategy consistent with the behaviour of itsemployees if it were to realize its goals. Organizational life is thatemployee engage themselves in behaviours that they perceive will berewarded. As employees want to be rewarded, they tend to occupythemselves more with those activities on which the organization emphasizes. For example, if the focus is on cost control, employees willseek to control cost and thus be recongnised and rewarded. If the focus ison rewarding productivity, employees will strive for productivity. The performance appraisal becomes not only a means of knowing if theemployees' behaviour, but also a way of bringing to the fore any negativeconsequence of the strategy- behaviour fit .For example, a single point productivity focus may include potential negative consequences such asdecreased quality and co-operations. Thus, the performance appraisalsystem is an important organizational mechanism to elicit feedback on theconsistency of the strategy-behaviour link. 6 Organizational Strategy and Performance Appraisal The performance appraisal system serves many organizationalobjectives and goals. Besides encouraging high level of performance, theevaluation system is useful in identifying employees with potential,rewarding performance equitably. And determining employees' needs for development. These are all the activities that should support theorganizations strategic orientation. Although these activities are clearlyinstrumental in achieving corporate plans and long-term growth, typicalappraisal systems in most organizations have been focused on short-termgoals.Whatever the category, a performance appraisal system has strategicimportance to a firm in three ways:1. Feedback mechanism,2. Consistency between organizational strategy and job behaviour,3. Consistency between organizational values and job behaviour. 7

E ffective purpose / Objective of performanceappraisal includes following elements: 1. Career Development

This provides an opportunity for discussion of career objectives, and creationof a strategy designed to maximize career potential.

To provide an opportunity for career counseling

To help in succession planning.

To assess training needs

To plan for career development

To assess and develop individual abilities

To provide an objective basis on which to base decisions about training and promotion 2. Feedback

As well, feedback is encouraged in both directions: as such, employees areencouraged to prepare ratings of their supervisors.

To provide constructive feedback to the individual regarding how their performance is seen.

This provides a structured format for the discussion of performance issues

on a regular basis.

Feedback either reinforces performance strengths, or provides the opportunityto discuss resolution of performance deficiencies. 3 . Administrative Uses of Performance appraisal

Salary

Promotion

Retention/termination

Recognition of performance

Layoffs

Identification of poor performers. 4. Performance History

This provides a performance history which is not dependent upon humanmemory, and which may be useful in the full range of personnel decisions,including compensation decisionmaking. 8

To review past and present performance, identifying strengths andweaknesses. 5. Organizational Goals

To clarify, for the individual, organizational expectations

To set objectives for the next period

This provides an opportunity to view ones performance in the context of broader organizational goals.

To assess future promotion prospects and potential. 6. Job Standards This provides an opportunity for clearer articulation and definition of performance expectations. 7. Documentation use of Performance appraisal

Documentation for HR decisions

Helping to meet legal requirements 9

C ontents Of Performance Appraisal Generally the content to be appraised is determined on the basis of jobanalysis. The content to be appraised may vary with the purpose of appraisal and level of employees.For officers the content should be: y Regularity of attendance y Ability to work with others y Leadership styles y Initiative y Technical skill y Ability to grasp new things y Creative skills y Honesty and Sincerity y Capability of assuming responsibility y

Judgment skill y Q uality of suggestions offered for improvement.

Process Of Performance Appraisal: 1. ESTABLISHING PERFORMANCE STANDARDS The first step in the process of performance appraisal is the settingup of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judgethe performance of the employees as successful or unsuccessful and thedegrees of their contribution to the organizational goals and objectives. Thestandards set should be clear, easily understandable and in measurable terms.In case the performance of the employee cannot be measured, great careshould be taken to describe the standards. 2. COMMUNICATING THE STANDARDS Once set, it is the responsibility of the management to communicatethe standards to all the employees of the organization.The employees should be informed and the standards should be clearlyexplained to the. This will help them to understand their roles and to knowwhat exactly is expected from them. The standards should also becommunicated to the appraisers or the evaluators and if required, the standards 10 can also be modified at this stage itself according to the relevant feedback fromthe employees or the evaluators. 3 . MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the Performance appraisal process ismeasuring the actual performance of the employees that is the work done bythe employees during the specified period of time. It is a continuous processwhich involves monitoring the performance throughout the year. This stagerequires the careful selection of the appropriate techniques of measurement,taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. 11 4. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of theemployees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being lessthan the desired performance depicting a negative deviation in theorganizational performance. It includes recalling, evaluating and analysis of data related to the employees performance. 5. DISCUSSING RESULTS The result of the appraisal is communicated and discussed with theemployees on one-to-one basis. The focus of this discussion is oncommunication and listening. The results, the problems and the possiblesolutions are discussed with the aim of problem solving and reachingconsensus. The feedback should be given with a positive attitude as this canhave an effect on the employees future performance. The purpose of themeeting should be to solve the problems faced and motivate the employees to perform better. 6. DECISION MAKING The last step of the process is to take decisions which can be takeneither to improve the performance of the employees, take the requiredcorrective actions, or the related HR decisions like rewards, promotions,demotions, transfers etc.

Problem Occurs In Performance Appraisal The problems inherent in performance appraisal may belisted thus: 1 Rating biases: Is that rating which is not verifiable by others. The rater biases include : a)Halo: The Halo error occurs when one aspect of the subordinates performance affects the rates evaluation of other performancedimensions. Eg: an employee might be rated high on performance simply because he has a good dress sense and comes to office punctually! b) Horn effect: The rates bias is in the other direction, where one negative 1 2 quality of the employee is being rated harshly. For example, the raterarely smiles, so he cannot get along with employee! c) Leniency: Depending on raters own mental make-up at the time of appraisal, raters may be rated very strictly or very leniently. Appraisersgenerally find evaluating others difficult, especially where negativeratings have to be given.The leniency error can render an appraisalsystem ineffective. d) Central tendency: An alternative to the leniency effect is the centraltendency, which occurs when appraisers rate all employees as average.e) Personal Prejudice : If the rater dislikes any employee or any one group,he may rate them at the lower end , which may distort the rating purposeand affect the career of these employees.2) Supervisors were

often confused due to too many objectives of performance appraisal.3) Management emphasises punishment rather than development of anemployee in performance appraisal.4) Most part of the appraisal based on subjectivity.5) Less reliability and validity of the performance appraisal techniques.6) Absence of inter-rater reliability.7) Some superiors completed appraisal reports within a few minutes. 1 3

H ow To Minimise The Problem Of PerformanceAppraisal

By convening an open meeting with the appraises to discussthe performance of all employees before, during and after performance review discussion.

By encouraging everyone one to comment on each othersachievements and areas requiring improvement.

The appraisal should tell the truth and reality behind thecurtains to this subordinate.

By conducting counselling meetings with the appraisees toappraise them of the reasons for their performance and itsconsequences. 1 4 Objectives Of Hypothesis: y

Hypotheses are tentative, intelligent guesses as to the solution of the problem. y Hypothesis is a specific statement of prediction. It describes in concrete termswhat you expect to happen in the study. y Hypothesis is an assumption about the population of the study. y It delimits the area of research and keeps the researcher on the right track. So, Hypothesis of research is as follows: Null Hypothesis:H o : There can be increase in the number of employee/organization who is satisfied or benefited with appraisal.Alternative Hypothesis:H a : There cannot be increase in the number of employee/organization who is dissatisfied or not benefited with appraisal. 1 5 Q uestionnaire: I am Rekha Gaikwad student of MMS working on a Project, performance appraisal is playimportant role for organization and employee in Navi Mumbai Region. I would be Thankfulto you if you could kindly share some valuable time of yours to give your opinion on mentionsubject.1) Name:2) Gender: male female3) Your Age: Below 25 Bet 25 to 40 Above 404) Work Experience:0 to 5 years Bet 5 to 20 more than 255) Job Profile :

Executive manager M.D. Other 6) company name:7) whether appraisal motivates you to work?Yes No 1 6 8) In what terms they want appraisal & why?increment in salary designation both __________________________________________________________________________ _ ___ 9) Due to appraisal whether organization are benefited?Yes No10) Do u work hard for performance appraisal?Yes No11) due to appraisal are you committed with organization?Yes No12) Does appraisal satisfies you with job?Yes No13) do you like responsibilities which you get from appraisal?Yes No 1 7 14) Dose age play vital role for performance appraisal?Yes No15) Due to appraisal you get growth or opportunity in your job?Yes No16) Does your organization really appraise you on your performance?Yes No17) Their is any partiality or politics during appraisal?Yes NoThank you. 1 8 Ana l nna i 60% 3 0% i Q i

1 0% Motivatied Employee Moti v ti e Par ti ally Moti v a ti e N ot a t All Moti v

a ti e