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A Project Report

Performance Appraisal
National Fertilizer Nangal

Submitted To:

Submitted By:

Mr Shubhamkar Mitra

Karamjit Singh

(HRD Manager)


NFL, Naya Nangal


Contents: Preface
Executive summary

Introduction of Company
Introduction of Project
Objectives of study
Scope of study
Limitation of study
Research methodology
Conceptual framework
Recommendation and conclusion




Practical training is important suffixes to theoretical knowledge. Classroom lectures gives

us the fundamental concept of management One cannot rely on theoretical knowledge to
success today farces business environment.
Classroom lectures must be correlated with practical training to make the training
Practical Training play an important role one's skills in employees regarding satisfaction,
regarding the leave packages, regarding the job ,regarding the salary given to the
employees , work practical pay scale, promotion and all any other facilities.
To successfully analysis the reliability of the situation, I have taken up the project. I wish
these going through this , will not find it reliable but will find useful information from it.



Sometimes words fall short to show gratitude, the same happened with me during this
project. The immense help and support received from National Fertilizer Nangal Limited
overwhelmed me during the project.
I am extremely grateful to the entire team of National Fertilizer Nangal and also Mr.
Shubhamkar Mitra HRD Manager of National Fertilizer Nangal who have shared their
expertise and knowledge with me and without whom the completion of this project would
have been virtually impossible.
This present study is the result of continuous support and guidance of the eminent faculty
member of my institute. I am internally and intellectually indebted to my guide Mr.
Ashutosh Verma (faculty Management dept.) who helped me to draw out the pearls from
the ocean of thoughts over the subject and always encouraged me to enhance my
knowledge by providing me the guidance about the selective material which I should
At the end I also thank my senior and colleague for their helping behavior without whom
it would be difficult to complete this work successfully. I would give special thanks to my
parents for their proper guidance and moral support.



I hereby Declare the project work entitled "Performance Appraisal" to the National
Fertilizer Nangal. It is a record of original work completed by me, all the information in
the project is the result of my hard work and it has not published anywhere earlier.


Introduction of NFL
Company profile
National Fertilizers Limited (NFL)was registered on 23rd August 1974 with an
authorized capital of 500 corer. NFL set up two fertilizers plan in Bathinda (Pb)and
Panipat (Haryana), NFL has Fertilizers sector over the years.
Company has expended into multi unit company with four manufacturing units with
various technology . Three of these units are strategically located in the consumption are
as of Punjab and Haryana and the company has an installed capacity of 35.49 lack MT of
Nitrogenous fertilizers.
The plants at Nangal Bhatinda and Panipat are based on partial oxidatiary of fuel oil,
/high, petroleum stock and Matching Urea capacity of 1550 per day at Bhatinda and
Panipat are 1450 MT per day Urea at Nangal while the rust being covert to industrial
products as per demand .
The NFL is the second largest producer of urea in the country with a total share of 15.5%
and largest urea producer amongst public sector urea producing company
NFL has an authorized capital of Rs.1000 crore and a paid up capital of Rs.490.58 crore
out of which government of India held 89.71% share and 10.29% shares are held by
financial institutions.
NFL is engaged in producing and marketing neem coated other allied urea bio-fertilizers
(solid and liquid) and industrial products like Ammonia Nitric Acid, Ammonium Nitrate ,
Sodium Nitrate.
The company is equally sensitive and committed towards corporate social responsibility.



The study is learning the process of performance appraisal in National Fertilizer

The employees of National Fertilizer Nangal are fully satisfied with their job. My main
reason to select this topic was to observe how people work in the organization, the
process or method by which individuals performance were analyses.
Performance appraisal is a formal, structured system of measuring and evaluating an
employees job, related behaviors and outcomes to discover How and why the employee
is presently performing on the job and how the employee can perform more effectively in
the future so that thee employee, organization, and society all benefit.



1- The objective of report is to study the plan promotions, salary revisions,

promotions, empowerment, training and development, and also demotions and
terminations in National Fertilizer Nangal.

2- To identify the source of performance appraisal in National Fertilizer Nangal.

3- To identify the strength and weakness inside the employee in National Fertilizer

4- To provide training or reward according the appraisal.

5- To study the performance appraisal methodology adopted by National Fertilizer




The strength of any organization is its people if people are attended to properly by
recognizing their talents, developing their capabilities and utilizing them appropriately,
organizing are likely to be dynamic and grow fast. Ultimately the variety of tasks in any
organization has to be accomplished by the people. Some of them may have capabilities
to do certain task better than other tasks, and some of them may not have capability to do
the task assigned to them. In any case of the important process goals of dynamic
organization is to assure that its people are capable of doing the variety of tasks
associated with their role/ position.
My interest is totally in H.R. and the above study would brighten my career in H.R.
By this study I got an experience about how the organization works, attitude of people
working there also it got a chance to differentiate between practical and theoretical work.

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To conduct a research scientific method must be followed. The universe of study at

NationalFertilizer Nangal. is basically very large in which it is difficult to collect
information from all the employees. So, the sampling method has been followed for this
study. The analysis is based on primary and secondary data collected for this purpose.
Sources of data:
The data collected for the project work are from two sources that is primary and
secondary sources.
Primary Data:
For this research I have followed the structure personnel interviews after deciding
to carry out a survey research by performance appraisal sample from other
companys. The opinion of other companys was collected using appropriate
questionnaire. This observation was brought about with the help of attention.

Secondary Data:
The secondary data were collected from the internet, Ashwathapa H.R book & the
manual published by the company.

Method of analysis:

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A performance appraisal or performance evaluation is a systematic and periodic

process that assesses an individual employees job performance and productivity in
relation to certain pre-established criteria and organizational objectives. Other aspects of
individual employees are considered as well, such as organizational citizenship behavior,
accomplishments, potential for future improvement, strengths and weaknesses, etc. To
collect performance appraisal data, there are three main methods: objective production,
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personnel, and judgmental evaluation. Judgmental evaluations are the most commonly
used with a large variety of evaluation methods. A performance appraisal is typically
conducted annually. The interview could function as providing feedback to employees,
counseling and developing employees, and conveying and discussing compensation, job
status, or disciplinary decisions. Performance appraisal is often included in performance
management systems. Performance management systems are employed to manage and
align" all of an organization's resources in order to achieve highest possible performance.
How performance is managed in an organization determines to a large extent the success
or failure of the organization. Therefore, improving performance appraisal for everyone
should be among the highest priorities of contemporary organizations.
Some applications of performance appraisal are performance improvement, promotions,
termination, test validation, and more. While there are many potential benefits of
performance appraisal, there are also some potential drawbacks. For example,
performance appraisal can help facilitate management-employee communication;
however, performance appraisal may result in legal issues if not executed appropriately as
many employees tend to be unsatisfied with the performance appraisal process.
Performance appraisal is created in and determined as useful in the United States are not
necessarily able to be transferable cross-culturally.

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How is Performance managed?

Good performance by the employees creates a culture of excellence, which benefits the
organization in the long run. The activity includes evaluation of jobs and people both,
managing gender bias, career planning, and devising methods of employee satisfaction
etc. The efforts are to make to generate the individuals aspirations with the objectives of
the organization. Organization has to clear the way of career advancements for talented
and hardworking people. Fear of any kind from the minds of the employees should be
removed so that they give best to their organization. Allow free flow of information.
Communication network should be designed in such a way no one should be allowed to
become a hurdle. This enables the managers to take correct decisions and that too

Why Performance Appraisal?????

Todays working climate demands a great deal of commitment and effort from
employees, who in turn naturally expect a great deal more from their employers.
Performance appraisal is designed to maximize effectiveness by bringing participation to
more individual level in that it provides a forum for consultation about standards of work,
potential, aspirations and concerns. It is an opportunity for employees to have
significantly greater influence upon the quality of their working lives. In these times of
emphasis on quality, there is a natural equation: better quality goods and services from
employees who enjoy better quality goods and services from their employers.
Performance appraisal must be seen as an intrinsic part of a managers responsibility and
not an unwelcome and time-consuming addition to them. It is about improving
performance and ultimate effectiveness. Performance appraisal is a systematic means of
ensuring that managers and their staff meet regularly to discuss post and present
performance issues and to agree what future is appropriate on both sides. This meeting
should be based on clear and mutual understanding of the job in question and the
standards and outcomes, which are a part of it. In normal circumstances, employees
should be appraised by their immediate managers on one to one basis. Often the
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distinction between performance and appraising is not made. Assessment concerns itself
only with the past and the present. The staff is being appraised when they are encouraged
to look ahead to improve effectiveness, utilize strengths, redress weaknesses and examine
how potentials and aspirations should match up. It should also be understood that pushing
a previously prepared report across and desk cursorily inviting comments, and expecting
it to be neatly signed by the employee is not appraisal - this is merely a form filling
exercise which achieves little in terms of giving staff any positive guidance and


Improving the ability of the job holder;
Identifying obstacles which are restricting performance
Agreeing a plan of action, that will lead to improved performance.
It is widely accepted that the most important factor in organization effectiveness is the
effectiveness of the individuals who make up the organization. If every individual in the
organization becomes more effective, then the organization itself will become more
effective. The task of reviewing situations and improving individual performance must
therefore be a key task for all managers. For appraisal to be effective, which means
producing results for the company, each manager has to develop and apply the skills of
appraisal. These are: 15 | P a g e

1. Setting standards on the performance required, which will contribute to the

achievement of specific objectives.
2. Monitoring performance in a cost effective manner, to ensure that previously agreed
performance standards are actually being achieved on an ongoing basis.
3. Analyzing any differences between the actual performance and the required
performance to establish the real cause of a shortfall rather than assume the fault to be
in the jot holder.
4. Interviewing having a discussion with the jobholder to verify the true cause of a
shortfall, a developing a plan of action, which will provide the performance, required.
Appraisal can then become a way of life, not concerned simply with the regulation of
rewards and the identification of potential, but concerned with improving the
performance of the company. The benefits of appraisal in these terms are immediate and
accrue to the appraising manager, the subordinate manager/employee, and to the
company as a whole

Who Conducts Performance Appraisals

Human Resource Management & Performance Management
Human resource management (HRM) conducts performance management. Performance
management systems consist of the activities and/or processes embraced by an
organization in anticipation of improving employee performance, and therefore,
organizational performance. Consequently, performance management is conducted at the
organizational level and the individual level. At the organizational level, performance
management oversees organizational performance and compares present performance
with organizational performance goals. The achievement of these organizational
performance goals depends on the performance of the individual organizational members.
Therefore, measuring individual employee performance can prove to be a valuable
performance management process for the purposes of HRM and for the organization.
Many researchers would argue that performance appraisal is one of the most important
processes in Human Resource Management.
The performance management process begins with leadership within the organization
creating a performance management policy. Primarily, management governs performance
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by influencing employee performance input (e.g. training programs) and by providing

feedback via output (i.e. performance assessment and appraisal). The ultimate objective
of a performance management process is to align individual performance with
organizational performance. A very common and central process of performance
management systems is performance appraisal. The performance appraisal process should
be able to inform employees about the organization's goals, priorities, and expectations
and how well they are contributing to them.

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When Performance Appraisals are Conducted

Performance appraisals are conducted at least annually, and annual employee

performance reviews appear to be the standard in most American organizations.
However, it has been acknowledged that appraisals conducted more frequently (more
than once a year) may have positive implications for both the organization and
employee. It is suggested that regular performance feedback provided to employees may
quell any unexpected and/or surprising feedback to year-end discussions. In a recent
research study concerning the timeliness of performance appraisal, one of the
respondents even suggested that the performance review should be done formally and
more frequently, perhaps once a month, and recorded twice a year.
Other researchers propose that the purpose of performance appraisal and the frequency of
their feedback are contingent upon the nature of the job and characteristics of the
employee. For example, employees of routine jobs where performance maintenance is the
goal would benefit sufficiently from annual performance appraisal feedback. On the other
hand, employees of more discretionary and non-routine jobs, where goal-setting is
appropriate and there is room for development, would benefit from more frequent
performance appraisal feedback.

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Methods of Collecting Performance Appraisal Data

Traditional Method


This traditional form of appraisal, also known as "Free Form method" involves a
description of the performance of an employee by his superior. The description is an
evaluation of the performance of any individual based on the facts and often includes
examples and evidences to support the information. A major drawback of the method is
the inseparability of the bias of the evaluator.

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This is one of the oldest and simplest techniques of performance appraisal. In this
method, the appraiser ranks the employees from the best to the poorest on the basis of
their overall performance. It is quite useful for a comparative evaluation.
A better technique of comparison than the straight ranking method, this method compares
each employee with all others in the group, one at a time. After all the comparisons on the
basis of the overall comparisons, the employees are given the final rankings.
In this method of Performance appraisal, the evaluator rates the employee on the basis of
critical events and how the employee behaved during those incidents. It includes both
negative and positive points. The drawback of this method is that the supervisor has to
note down the critical incidents and the employee behavior as and when they occur.
In this method, a senior member of the HR department or a training officer discusses and
interviews the supervisors to evaluate and rate their respective subordinates. A major
drawback of this method is that it is a very time consuming method. But this method
helps to reduce the superiors personal bias.
The rater is given a checklist of the descriptions of the behavior of the employees on job.
The checklist contains a list of statements on the basis of which the rater describes the on
the job performance of the employees.
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In this method, an employees quality and quantity of work is assessed in a graphic scale
indicating different degrees of a particular trait. The factors taken into consideration
include both the personal characteristics and characteristics related to the on the job
performance of the employees. For example a trait like Job Knowledge may be judged on
the range of average, above average, outstanding or unsatisfactory.
To eliminate the element of bias from the raters ratings, the evaluator is asked to
distribute the employees in some fixed categories of ratings like on a normal distribution
curve. The rater chooses the appropriate fit for the categories on his own discretion.

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Modern Method

The concept of Management by Objectives (MBO) was first given by Peter Drucker in
1954. It can be defined as a process whereby the employees and the superiors come
together to identify common goals, the employees set their goals to be achieved, the
standards to be taken as the criteria for measurement of their performance and
contribution and deciding the course of action to be followed.
The essence of MBO is participative goal setting, choosing course of actions and decision
making. An important part of the MBO is the measurement and the comparison of the
employees actual performance with the standards set. Ideally, when employees
themselves have been involved with the goal setting and the choosing the course of action
to be followed by them, they are more likely to fulfill their responsibilities.

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MBO process

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360 degree performance appraisal

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive
appraisal where the feedback about the employees performance comes from all the
sources that come in contact with the employee on his job.
360 degree respondents for an employee can be his/her peers, managers (i.e. superior),
subordinates, team members, customers, suppliers/ vendors Anyone who comes into contact with the employee and can provide valuable insights and
information or feedback regarding the "on-the-job" performance of the employee.
360 degree appraisal has four integral components:
1. Self-appraisal
2. Superiors appraisal
3. Subordinates appraisal
4. Peer appraisal.

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An assessment center typically involves the use of methods like social/informal events,
tests and exercises, assignments being given to a group of employees to assess their
competencies to take higher responsibilities in the future. Generally, employees are given
an assignment similar to the job they would be expected to perform if promoted. The
trained evaluators observe and evaluate employees as they perform the assigned jobs and
are evaluated on job related characteristics.
The major competencies that are judged in assessment centers are interpersonal skills,
intellectual capability, planning and organizing capabilities, motivation, career orientation
etc. assessment centers are also an effective way to determine the training and
development needs of the targeted employees.

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Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which
combines the graphic rating scale and critical incidents method. It consists of
predetermined critical areas of job performance or sets of behavioral statements
describing important job performance qualities as good or bad (for eg. the qualities like
inter personal relationships, adaptability and reliability, job knowledge etc). These
statements are developed from critical incidents.
In this method, an employees actual job behavior is judged against the desired behavior
by recording and comparing the behavior with BARS. Developing and practicing BARS
requires expert knowledge.


Human resources are valuable assets for every organization. Human resource accounting
method tries to find the relative worth of these assets in the terms of money. In this
method the Performance appraisal of the employees is judged in terms of cost and
contribution of the employees. The cost of employees include all the expenses incurred
on them like their compensation, recruitment and selection costs, induction and training
costs etc whereas their contribution includes the total value added (in monetary terms).
The difference between the cost and the contribution will be the performance of the
employees. Ideally, the contribution of the employees should be greater than the cost
incurred on them.

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While making the project in National Fertilizer Nangal. The main limitation that I

faced was the secrecy adopted by the company in providing the information.

Time was the limitation while carrying the project. I had to complete the project

in 30 days thus the project could have been better if more time was provided to me.

The respondents were too busy to provide me proper time that was required by


Due to heavy rainfall I faced somewhat problem during my survey.

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The purpose of a variable plan in National Fertilizer Nangal is to bring focus

towards business performance number.
For appraisal in National Fertilizer Nangal,Chandigarh a SELF-APPRAISAL
form is given to the staff members and they fill it up. And then after according to
their self-observation and through the appraisal form filled by the staff members
rating is given to the members. Accordingly then incentives and promotions are

Personnel are fully satisfied with there performance programs in National

Fertilizer Nangal.
95% employees feel that their jobs are according to there qualification.

Reliance initiative is provided to employees, through which employee feel

themselves as a part of National Fertilizer Nangal and not just an employee.
All senior production officers agree that performance appraisal system helps them
to perform better.

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As we know Performance appraisal is a systematic and objective way of judging the

relative worth or ability of an employee in performing the task. Performance appraisal
helps to identify those who are performing their assigned tasks and those who are not and
the reasons for such performance.

The company should appraise the performance of the workers by giving them
some incentives, which motivate them to work to their fullest capacity and to
motivate them to work more and show good and better results.

For the top management of the company it should offer them holiday package,
appraise performance by recognizing there work in meetings etc. This will help to
raise their moral and they can work better. They dont want financial help as they
earn enough to maintain their status.

For the lower group the company can increase their wages, give them pension
schemes, provide them the medical facilities etc. because they want financial help
from the company to insure their proper living.

The criteria decided upon which the performance has to be rated should not be
fixed it should be changed from time to time.

There should be the feeling of teamwork in the organization.

The performance, which is been measured, should be verifiable and measurable

afterwards also.

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This study was a learning experience where I came to know at experience the real world
exercise of HR Department. It has helped me to get the feel of organization.
So after my full study I have to reached to a conclusion that needs to spread the
awareness about the topic among the employees.
It was my experience in a working set-up in the field of performance appraisal. Things
are much different from what we read in books.
I wish for the bright future of the company with lot of thanks for everything that I gained
in Reliance.
According to the analysis conclusion may be summarized as follows:
80% of the employees working in Reliance are satisfied from their job.
Customers are not fully satisfied.
Lack of proper supervision is there in Reliance.
In Reliance initiative is provide to employees, through which employees feel
himself as a part of Reliance and not just an employee.
Work culture is satisfactory in Reliance.

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