SUMMER TRAINING REPORT ON PFRFORMANCE APPRAISAL IN

SUBMITTED TO M.D.UNIVERSITY, ROHTAK IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF BBA (CAM)

(Session: 2011 2012)

Submitted To: Controller of examination M.D. University Rohtak

Submitted By:shivam BBA(CAM) 5thSemester

DAV INSTITUTE OF MANAGEMENT NH-3 , NIT, FARIDABAD

ACKNOWLEDGEMENT
First of all I thanks to almighty god. He creates everything. Then I am grateful to my parents for their love and affection, which has been the source of motivation for me forever. I owe my gratitude to the entire staff of the RELIANCE LTD who provided me the necessary and relevant information towards the completion of my survey report. I thank them for the critical suggestion and sound logical and design improvement during the project. Without their timely help it has been very difficult for me to submit this project well me on time. The project would not have been completed without the guidance and encouragement of Pankaj Rajawat who provided me all the facilities and also helped me in choosing my project. I am very thankful our college guide faculty guide of DAV Institute of Management for giving me the input and support, without her guidance the project would not have been completed

DECLARATION
I hereby to declared that my project on human resource management on the titled "PFRFORMANCE APPRAISAL" prepared by me under the guidance MR. Pankaj Rajawat and faculty guide of DAV Institute of Management is my original work findings in there part are based on the data collected by me during the course of object work while preparing this report. I have not copied from other project report submitted for a similar purpose. SHIVAM

INDEX

TOPICS

PAGE

1. 2. 3.

INTRODUCTION REVIEW OF LITERATURE THE COMPANY

MAIN TEXT HRD MODEL ORGANSATION CHART INDUSTRY PROFILE

4. DATA ANALYSIS AND PRESENTATION

4.1 PRESENTATION & RECOMMENDATION 4.2 INTERPRETATION

5. CONCLUSION AND RECOMMENDATION

Performance appraisal
The process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employ yees excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. performance appraisal, employee appraisal, performance review, or (career) development discussion[1] is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor.[2] A performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgement of an employee's performance in a job based on considerations other than productivity alone The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management.

As a distinct and formal management procedure used in the evaluation of work 6

performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession! There is, says Dulewicz (1989), "... a basic human tendency to make judgements about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily.. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time. 7

Modern Appraisal Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions. By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay.) Whether this is an appropriate use of performance appraisal - the assignment and justification of rewards and penalties - is a very uncertain and contentious matter. Controversy, Controversy Few issues in management stir up more controversy than performance appraisal. There are many reputable sources - researchers, management commentators, psychometricians - who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it (see Derven, 1990, for example).

At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially "... the most crucial aspect of organizational life" (Lawrie, 1990). Between these two extremes lie various schools of belief. While all endorse the use of performance appraisal, there are many different opinions on how and when to apply it. There are those, for instance, who believe that performance appraisal has many important employee development uses, but scorn any attempt to link the process to reward 8

outcomes - such as pay rises and promotions. This group believes that the linkage to reward outcomes reduces or eliminates the developmental value of appraisals. Rather than an opportunity for constructive review and encouragement, the reward-linked process is perceived as judgmental, punitive and harrowing. For example, how many people would gladly admit their work problems if, at the same time, they knew that their next pay rise or a much-wanted promotion was riding on an appraisal result? Very likely, in that situation, many people would deny or downplay their weaknesses. Nor is the desire to distort or deny the truth confined to the person being appraised. Many appraisers feel uncomfortable with the combined role of judge and executioner. Such reluctance is not difficult to understand. Appraisers often know their appraisees well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting

OBJECTIVES
Employee Performance Management has been designed to achieve the following objectives: To effect promotions based on competence and performance. To assess the training and development needs of employees. To decide upon a pay raise where (as in the unorganized sector) regular pay scales have not been fixed. To let the employees know where they stand in so far as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development. To improve communication. Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the rater and the ratee. Finally, performance appraisal can be used to determine whether HR programs such, as selection, training and transfers have been effective or not. Provide inputs for salary increments, additional responsibilities and promotions.

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Broadly, Performance Management serves four objectives: Table below outlines these and specific uses more c1early:Multiple Purposes of Performance Assessment

General Applications

Specific Purpose

Developmental Uses

Identification of individual needs Performance feedback Determining transfers and job assignments

Administrative Uses/Decisions

Salary Promotion Retention or Termination Lay-offs Identification of poor performers HR Planning Determining organization training needs Evaluation of organizational goal achievement Information for goal identification Evaluation of HR systems Reinforcement of organizational 11

Organizational Maintenance/Objectives

IMPORTANCE
In today's fast-paced business world, it may seem like a chore for organizations to spend precious resources planning, developing and engaging m employee performance management. The three key reasons for every organization to give performance reviews are:

1.

Performance Management help employees become better workers:

All good managers provide regular feedback to employees so that they can develop into skilled workers that will be useful to the organization. A written performance evaluation is a way of formalizing this feedback and lets employees know that how they perform counts. A formal review also allows employees to take a stop back from what they are doing, to focus on how well they are doing it. From this vantage point, they can make action plans to improve or alter behavior and set new personal goals. Encouraging people' to work to their full potential is the ultimate goal of a performance evaluation.

2.

Performance Management can help determine employees compensation:

As pay-for-performance compensation grows in importance, so too docs the need for an objective performance metric. The best evaluation forms serve this purpose and bring clarity to the manner" in which employees are compensated. From sales people, who are paid by their ability to "meet plan", to non-revenue generating workers whose goals are less tangible, performance appraisals serve to state objectives and "then measure the degree to which those objectives are achieved.

3.

Performance Management can protect organizations:

In today's litigious society, having formal documentation of an employee's performance is an important protection device. Detailed record of poor performance and unmet goals can be an effective counter to claims of bias in the case of a dismissed worker and arc often held up by the courts as legitimate, justification for termination

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RESEARCH METHODOLOGY
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Data Collection Method (a) Both primary and secondary data were collected to meet the objective. Primary Data: Primary data is the data which is collected for the first time. It is collected For primary data collection questionnaire was framed considering certain A copy of questionnaire is also attached in the Annexure. Questionnaire It is more economical This method can cover wider areas. (b) Secondary Data: The secondary data are those which are already in existence and which The secondary data can be collected from the following sources:Company Reports. Pamphlets. Magazines. Personnel Department. Hooks on communication have been collected for some other purpose. This method is original and therefore very reliable. Respondents feel more comfortable while answering the questions asked. Source of Data

from the source of origin factors like manpower planning, recruitment sources, selection method etc. method is being followed and was preferred over interview method because:-

RESEARCH DESIGN
A research design is the arrangement of condition for collection & analyzing 14

of data in a manner that aims to combine relevance to the research purpose with economy in procures." Research design is the framework or the blueprint or foundation for Research design is the conceptual structure within which research IS conducting the research project conducted its constitutes. The blueprint for the collection, measurement and analysis of data TYPES OF RESEARCH DESIGN Exploratory Design Descriptive Design Experimental Design

(A). Exploratory Design:Exploratory research studies are also termed as formulative research studies. The main purpose of such studies is that of formulating a problem for more precise investigation. (B) Descriptive Design:Descriptive research is concern with describing the characteristics of a population of phenomenon. (C) Experimental Design:Experimental research studies arc those where the researcher test the hypothesis of casual relationships between variables. I HAVE USED EXPERIMENTAL RESEARCH DESIGN IN THIS PROJECT

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16

INTRODUCTION
Performance appraisal has been one of the most debated management practices for several decades. It has generated a wide variety of viewpoints. A more comprehensive definition of Performance Appraisal is "Performance Appraisal is a formal structured system of measuring and evaluating employees job related behaviors and outcomes to discover how and why the employee is presently performing on a job and how the employee can perform more effectively in the future so that the employee, organization and society all benefit" Performance Appraisal consists of a systematic, face-to-face discussion of an employee's work performance, training and development needs, future job goals and job aspirations. It looks backwards, reviewing the employee's performance during the period under review and forwards, helping the employee prepare and set goals for the upcoming review period. Performance Management is central to most Human Resource practices. An

organization tries to increase productivity and performance there is an increased emphasis on appraisals. Over recent years there has also been a significant increase in the number of organizations linking Performance Appraisal of employees and managers with business plans and departmental goals. Managers evaluate things everyday. This may be done unconsciously. Managers also evaluate employees often also unconsciously. They know whether they are "good worker", reliable and conscientious. For a variety of reasons many organizations ask managers to make conscious formal evaluations of employees too. It may be as part of the organization's normal annual or biannual Performance Appraisal System, which gives everyone a chance to clarify aims and objectives, build on strengths and plan to strengthen weakness. In addition to these, there has been a trend through development in 'employment law' for Performance Appraisal to be viewed as important documentation for legal protection. This reason alone is sufficient to emphasize the importance of valid and equitable appraisal management. 17

Performance appraisal leads to the identification of the training and development needs of the employees. It also has close links with other important areas of human resource management, in particular with selection, motivation, and succession planning. Performance data provides relevant information required for validating selection methods and also helps in assessing whether selection methods are bringing high performers into the organization.

Here the organization must not get trapped into the various pitfalls that come along with administration of appraisal system. The question that arises here is - how to avoid these pitfalls? A necessary condition for the effective management of performance appraisal system in any organization is the need to clarify and communicate to all concerned the objectives that the system intends to achieve.

The culture of the organization clearly affects appraisal relationships. The only possible way for organizations, to minimize the possible conflict among appraisal objectives, is to emphasize on climate setting that will facilitate achieving the objectives that an appraisal system intends to achieve.

Thus what needs to be done is to encourage managerial styles that will lead to openness and frankness in relationships as a condition for establishing an effective performance appraisal system. The Indian companies need to realize that the relationship between organization culture and performance appraisal system is a two way process implying that they can successfully use their performance appraisal system to bring about cultural change.

The design of Employee Performance Appraisal and Development Plan thus formed would assist in evaluating employee performance and identifying their potential and guide in developing a plan to improve his/her performance as also to prepare him/her for greater responsibilities in case of promotions and transfers. It should be filled carefully, thoughtfully and objectively. Before an appraisal is made, the superior should ensure that he/she and the employee are in agreement concerning responsibilities, for result expected and what constitutes satisfactory performance. The whole approach is a positive one; its purpose is improvement of individual's ability and performance.

The next fundamental question of importance is, to what extent, links should exist between performance appraisal pay decisions. The general trend with regard to the Indian organizations suggests atilt towards performance appraisal systems being linked to individual rewards and pay. The advocates of this trend argue that when performance appraisal system is linked to individual pay and rewards then all parties 18

(appraisers, appraisees and reviewers) take performance appraisal more seriously. Organizations are likely to develop performance -- oriented cultures, in which high performers are seen to receive extra rewards, and lower performers receive lower rewardsBut at the same time the issues that need to be looked into when pay and performance appraisal are closely linked are: The pay issue may overshadow all the other purposes of performance appraisal; there may be a tendency of employees to withhold negative information about performance, leading to less than frank appraisal discussions; Employees may adapt their behaviors to focus only on receiving good ratings, rather than genuinely improve their overall performance. So the question arises what to do? 1. Firstly the organization must realize that pay related performance appraisal is likely to be effective only where jobs are designed in such a way that allows individual performance to be measured. Thus in situation characterized by high interaction among jobs in achieving results, group-related pay systems may be more appropriate. Thus before establishing company policies on the matter, it may be good idea to read about alternative methods for rewarding good performance like gain sharing or tying rewards to team performance or the company performance rather' than only to individual performance, 2. Sometimes a combination of reward systems works much better and has fewer nasty side effects than a single way of rewarding performance. The design of Employee Performance Management and Development Plan thus formed would assist in evaluating employee performance and identifying their potential and guide in developing a plan to improve his/her performance as also to prepare him/her for greater responsibilities in case of promotions and transfers. It should he filled carefully, thoughtfully and objectively. Before an appraisal is made, the superior' should ensure that he/she and the employee are in agreement concerning responsibilities, for result expected and what constitutes satisfactory performance. The whole approach is a positive one its purpose is improvement of individual's ability and performance.

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The normal system consists of the following parts: PART A: SELF-APPRAISAL - To be filled in by the appraisee PART B: PERFORMANCE APPRAISAL -- To be filled in by the Reporting Authority/Superior PART C: PERFORMANCE COUNSELING -- To be filled in by reporting Authority and to be discussed with the appraisee along with person in charge. PART D: SUMMARY OV ASSESSMENT- To be filled in by Review Committee/Authority. PART E: POTENTIAL APPRAISAL - To be filled in by the H0D / Unit head in consultation with the reporting Authority.

Designing the Performance Management System :-Numerous have been devised to measure the quantity & quality of employees job performance. Each of the methods discussed could be effective for some purposes, for some organizations. None should be dismissed or accepted as appropriate except as they relate to the particular needs of the organization or of a particular type of employees. Broadly, all the approaches to appraisal can be classified into: Past-Oriented Methods: This is the simplest & most popular technique for appraising employee performance. The typical rating scale system consists of several numerical scales, each representing a jobrelated performance criterion such as dependability, initiative, output, attendance, attitude, co-operation, and the like. Each scale ranges from excellent to poor. The rater checks the appropriate performance level on each criterion, and then computes the employees total numerical score. Under this method, a checklist of the statement on the traits of the employee & his or her job is prepared in two columns.

1. Forced Choice Method :--In this, the rater is given a series of statements
about an employee. These statements are arranged in blocks of two or more,

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2. Forced Distribution Method

The approach focuses on certain critical behaviors of an employee that make all difference between effective & non-effective performance of a job. The superiors as & when they occur record such incidents. The advantage of this method is that the evaluation is based on actual job behavior

3. critical Incidents Method

The approach focuses on certain critical behaviors of an employee that make all difference between effective & non-effective performance of a job. The superiors as & when they occur record such incidents. The advantage of this method is that the evaluation is based on actual job behavior.

4. Behaviorally Anchored Rating Scales

Behaviorally anchored scales, sometimes called behavioral expectation scales, are rating scales whose scale points are determined by statements of effective & ineffective behaviors.

5. Field Review Method

This is an appraisal by someone outside the assessee's own department, usually someone from the corporate office or the HR department. The outsider reviews employee records & holds interviews with the ratee & his or her superior. The method is primarily used for making promotional decision at the managerial level field reviews are also useful when comparable information is needed fromemployees in different units or locations. 7. Performance Tests & Observations With a limited number of jobs, employee assessment may be based upon test knowledge or skills. The test may be of the paper-and-pencil variety or an actual demonstration of skills. The test may be reliable & validated to be useful.

8.

Essay Method

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In the essay method, the rater must describe the employee within a number of categories such as: 1. 2. 3. perform 4. 5. The strengths & weaknesses of the employee The training & the development assistance required by the employee. 9. Cost Accounting Method A relationship is established between the cost included i n keeping the employee & the benefit of the organization derives from him or her. Performance of the employee is then evaluated based on the established relationship between the cost & the benefit 10. Comparative Evaluation Approaches These are a collection of different methods that compare one worker's performance with that of his/her co-workers. Supervisors usually conduct comparative appraisals. The usual comparative forms used in this kind of evaluation are the Ranking Method & The Paired Comparison Method Future oriented Performance Management systems :It is not enough if only the past performance is assessed. How an employee can perform in the days to come is equally important. This can be assessed by focusing on employee potential or setting future performance goals. The commonly used future oriented techniques are MBO, psychological appraisals, assessment centers and the 360-degrec appraisals. 1. Management by Objectives (MBO) The rater's overall impression of the employee's performance, The promo ability of the employee The jobs that the employee is now able or qualified to

The M BO concept, as was conceived by Peter Drucker, reflects a management philosophy, which values and utilizes employee contributions. Application of MHO in the field of performance appraisal is a recent thinking. The following arc the four steps in 22

which MBO works: i) The first step is to establish the goals each subordinate is to attain. ii) The second step involves setting the performance standard for the subordinates in a previously arranged time period. iii) In the third step, the actual level of goal attainment is compared with the goals agreed upon. iv) The final step involves establishing new goals and possibly new strategies for goals not previously attained. v) The process is then repeated. MBO is criticized on the following grounds: i) It is not applicable to all jobs in all organizations. ii) It is most useful with managerial personnel and employees who have a fairly wide range of flexibility and self control in their jobs. iii) Employees may be less likely to establish challenging goals. 2. Psychological Appraisals

When psychologists are used for' evaluations, they assess an individual's future potential and not the past performance. The appraisal normally consists of in-depth interviews, psychological tests, discussions with supervisors and a review of other evaluations. The psychologist then writes an evaluation of the employee's intellectual, emotional, motivational and other related characteristics that suggest individual potential and may predict future performance. The evaluation by the psychologist may be for a specific job opening for which the person is being considered, or it may be a global assessment of his / her future potential. This method has the following problems associated with its application: i) It is slow and costly. 23

ii) Employees may object.

3.

Assessment centers

An assessment centre is a central location where mangers may come together to have their participation in job related exercises evaluated by trained observers. The principal idea is to evaluate managers over a period of time by observing their behavior across a series of select exercises or work samples. The characteristics assessed in a typical assessment centre includes assertiveness, persuasive ability, communicating ability, planning and organizational ability, self confidence, resistance to stress, energy level, decision making, sensitivity to the feelings of others, administrative ability, Creativity and mental alertness. A well conducted assessment centre can and does achieve better forecasts of future performance and progress than other methods of appraisal. Also, reliability, content validity, and predictive validity are said to be high in the assessment centers. The problem with assessment centers is that they are not cost effective in nature and are thus, suitable mainly for the large organizations.

4.

360-Degree feedback

"The systematic collection and feedback of performance data on an individual or group, derived from a number of the stakeholders in their performance;" To Explain: The data collection is systematic, i.e. done in some systematic way via questionnaires or inter-views. This formalizes people judgments coming from the natural interactions they have with each other. There is both a collection and a feedback process data is gathered and then fed back to the individual participant in a clear way designed to promote understanding, acceptance and ultimately changed behavior. The performance of either individual or group can be measured. The process has recently been applied to groups or teams but can be an effective way of measuring interactions with in a team or team outputs and quality as perceived by the customer. The source of data is called the stakeholders in the participant's performance. Stakeholders are people who are both 24

affected by the individuals or group's performance and deal with them closely enough to be able to answer the specific questions about the way they interact with the stakeholders. A Final Observation: The word 'performances twice in the definition. However, we should be quite clear on the fact that it refers to the quality of a person's interactive processes or their behavior, rather than the results they produce. The 360 - degree appraisal, a relatively new model for reviewing employees' performance, incorporates appraisals from supervisors, co-workers, subordinates and even external customers. 360-degree performance appraisal strengthens the relationship between employee and employer. The advantage of 360-degree systems over traditional systems is that they accumulate more information about employees' performance and development areas; this information is used to give the most beneficial feedback possible. Increased feedback and multi-source feedback results in a change in management behavior and in an increase in performance. Theoretically, anonymous feedback is more open and honest then one - on -- one feedback. The assumption is that honest feedback changes management behavior faster than restricted feedback. It is also assumed that employees (and customers) that are listened to and involved will produce more and have higher satisfaction and retention. A basic assumption is that employees have knowledge of management behaviors that can be provided to management. A further assumption is that the "anonymity" provided in 360 process is credible and results in honest feedback. The 360-degree technique is an appraisal technique that provides a broader perspective about an employee's performance. In addition, the technique facilitates greater selfdevelopment of the employees. For one's development, multi-source feedback is highly useful. It enables an employee to compare his/her perceptions about self with perception of others. It is a systematic collection of performance data on an individual or group; derived from a number of stakeholders - superiors, team members, customers, peers and self. By design, the 360-degree appraisal is effective in identifying and measuring interpersonal 25

skills, customer satisfaction, and team building skills. .

The Appraisal Interview

Whatever method of appraisal used by an organization, it is crucial to allow for 'employee feedback'. An interview between the manager and the employee is the main way of achieving this. The interview provides the opportunity, to discuss an employees performance and explore areas of possible improvements and growth. It also provides an opportunity to identify attitudes and feelings more thoroughly and thus improve communication. Fundamental to the success of the appraisal interview is the relationship between the two participants in the process. The interview may have any of the following purposes Record / summary of performance Feedback from employee Feedback from manager Career development Suitability for promotion/ transfer counseling Motivation Foster the working relationship

The format of the interview will be determined in large by The purpose of interview Type of appraisal method used Organization of the interview form (formal record)

The interview is perhaps the most important part of the entire appraisal program. Unfortunately, interviewers can become overburdened by attempting to discuss too much. 26

The interviewer should observe the following points: Initially, emphasize strengths on which employee can build rather than weakness Avoid suggestions about personal traits to change instead suggest more Concentrate on opportunities for growth that exist within the framework of the Limit plans for growth to a few important items that can be accomplished within

to overcome. acceptable ways of performing. employees' present position. a reasonable period of time

Types of Appraisal Interview

Managers should never assume that only one type of appraisal interview is appropriate for every review session. Rather, they should he able to use one or more of the interview types depending on the topic being discussed or the behavior being appraised. Feedback is necessary to effect improvement in performance, especially when it is inadequate. Specifically, performance interview has three goals: To change behavior of employees whose performance docs not meet organizational requirements or their own personal goals, To maintain the behavior of employees who perform III an acceptable To recognize superior performance behaviors so that the}' will be continued.

Three distinct types of interview are commonly used Tell and sell Tell and listen Problem solving and mixed.

1. Tell and sell It is also called as directive interview; the interviewer lets assesses know how well they arc doing and sells them on merits of setting specific goals for improvement, if needed. Has little provision for employee participation 27

 Generally consists of three stages performance. This method does not require much of anyone's time but is of little use if the improved behavior does not eventuate. There is no opportunity for employee participation and over time, it is likely that employees will only perform to conform to their manager's wishes. The role of the supervisor / manager is one of 'judge' and 'jury'. 2. Tell and listen Tell and listen interview provides the subordinates with chances to participate and establish a dialogue with their superiors. Its purpose is to communicate the rater's perceptions. It is the most commonly used interview technique. As with "Tell and Sell", the manager lets the employee know how he or she is doing. Communicate strong and weak points of an employee's job performance. The employee has a chance to respond to the assessment and present his/ her views. Employees feelings of the appraisal are thoroughly explored. BOTH views arc then considered together, a conclusion reached and a plan for" future performance is developed. This is much more flexible approach, however, the type of reaction provoked may strongly affect the success of the interview For example, if the manager's remarks arc perceived as unfair. (Or critical) by the employee, defense mechanism and face saving, Manager lets employee know how the latter is doing. The employee's acceptance of this evaluation is sought. The employee agrees to follow a pre-determined plan for improved job

rather than constructive responses might still be the outcome. The "Tell and Listen" method assumes that the opportunity to release frustrated 28

feelings will help reduce or remove them. 3. Problem solving and mixed In the problem solving or participative interview, an active and open dialogue is established between the superior and the subordinate. Not only are perceptions shared, but also solutions to problems arc presented, discussed, and sought. Mixed interview is a combination of tell and sell and problem solving interviews. Differs markedly from the methods above. Although recommended by some, since the objective of appraisal It is used more widely in 'counseling' and is an unstructured approach. is normally

to stimulate growth and development in the employee.

The skills an' consistent with the non-directive procedures of the "Tell and Listen" method in that listening, accepting and responding to feelings arc essential. However, it goes beyond an interest in the employee's feelings. It seeks to stimulate growth and development in the employee by discussing

problems, needs innovations, satisfactions and dissatisfactions encountered since the last appraisal A work - related situation IS presented and both the manager and the employee discuss a solution. The manager assumes the role of a 'Helper' or 'Facilitator' rather than a judge and emphasis is on the work situation, not the business of the individual. Can lead to a wide range of changes in work practices, patterns of supervision and individual attitudes. Managers need to have the following characteristics Be well prepared Show trust Be active listeners Discuss frankly any areas where performance IS not up to standard, backing

this with specific examples. 29

 examples.

Conversely good performance should be praised, again using specific

It is also important for the employee not to leave the interview with any issues unsolved. Whatever is the approach followed, the emphasis in the interview should be on counseling and development and not on criticism, witch- hunting and buck passing. Because of the significance of appraisal interview, every effort must be made to make it effective. Guidelines given will help make the interview successful. Guidelines for Effective Appraisal Interview: Select a good time

Minimize interruptions Welcome, set at ease Start with something positive Ask open-ended questions to encourage discussion Listen Manage eye contact and body language Be specific Rate behavior, not personally Layout development plan Encourages subordinate participation Set mutually agreeable goals for improvement End in a positive, encouraging note

Pitfalls of Performance Management Programs :- Obstacles to the success of formal Performance Management programs should be familiar to most managers, either from painful personal experience or from the growing body of critical literature. Here are the most troublesome and frequently cited drawbacks. Performance Management programs demand too much from supervisors.

Formal performance appraisal obviously requires at least periodic supervisor observation of subordinates' performance. However, the typical first - line 30

supervisor can hardly know, in a way, just what each of 20, 30, or more subordinates are doing. Standards and ratings tend to vary widely and often, unfairly. Some rates are

tough, while some are lenient. Some departments have highly competent people; others have less competent people. Consequently, employees subject to less competition or lenient ratings can receive higher appraisals than equally competent or superior associates. Personal values and bias can replace organizational standards. An appraiser may not lack standards, but the standards he uses are sometimes wrong ones. For example: - unfairly low ratings may be given to valued subordinates so they will not be promoted out of the rater's department. More often, however, outright bias dictates favored treatment for some employees. Because of lack of communication, employees may not know how they are rated. The standards by which employees think they are being judged are sometimes different from those their supervisors actually use. No performance appraisal system can be very effective for management decisions, organization development, or any other purpose until the people being appraised know what is expected of them and by what criteria they are being judged. Management techniques tend to be used as performance panaceas. If a worker lacks the ability or has not been given the necessary training for his job, it is neither reasonable to try to stimulate adequate performance through performance management, nor fair to base salary, dismissal, or other negative decisions on such an appraisal. In many cases, the validity of ratings is reduced by supervisory resistance to making the ratings. Rather than confront their less effective subordinates with negative ratings, negative feedback in appraisal interviews, and below average salary increases, supervisors often take the more comfortable way out and give average or above average ratings to inferior performers. Performance Management ratings can boomerang when communicated to employees. Negative feedback (i.e. criticism) not only fails to motivate the typical employee, but also can cause him to perform worse. Only those employees who have a high degree of self-esteem appear to be stimulated by criticism to improve their performance. 31

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INTRODUCTION
Reliance Group

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 58 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail, infotel and special economic zones. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products. Major Group Companies are Reliance Industries Limited, including its subsidiaries and Reliance Industrial Infrastructure Limited.

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Founder Chairman "Growth has no limit at Reliance. I keep revising my vision. Only when you can dream it, you can do it."

Dhirubhai H. Ambani Founder Chairman Reliance Group December 28, 1932 - July 6, 2002

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader in the materials and energy value chain businesses. He is credited to have brought about the equity cult in India in the late seventies and is regarded as an icon for enterprise in India. He epitomized the spirit 'dare to dream and learn to excel'. The Reliance Group is a living testimony to his indomitable will, single-minded dedication and an unrelenting commitment to his goals.

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Corporate Governance

Growth through Governance

Reliance is in the forefront of implementation of Corporate Governance best practices

Corporate Governance at Reliance is based on the following main principles:

Constitution of a Board of Directors of appropriate composition, size, varied expertise and commitment to discharge its responsibilities and duties. Ensuring timely flow of information to the Board and its Committees to enable them to discharge their functions effectively. Independent verification and safeguarding integrity of the Companys financial reporting. A sound system of risk management and internal control. Timely and balanced disclosure of all material information concerning the Company to all stakeholders. Transparency and accountability. Compliance with all the applicable rules and regulations. Fair and equitable treatment of all its stakeholders including employees, customers, shareholders and investors.

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Commitments
Growth through Commitments We care about
Quality Research & Development Health, Safety & Environment Human Resource Development Energy Conservation Corporate Citizenship Reliance believes that any business conduct can be ethical only when it rests on the nine core values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility, Citizenship and Caring. The essence of these commitments is that each employee conducts the company's business with integrity, in compliance with applicable laws, and in a manner that excludes considerations of personal advantage. We do not lose sight of these values under any circumstances, regardless of the goals we have to achieve. To us, the means are as important as the ends.

For Reliance Growth is care for good health

Reliance's occupational health centers carry out pre-employment and periodic medical checkups as well as other routine preventive services. Specialised tests like biological monitoring, health risk assessment studies and audits for exposure to various materials are also performed. Health education and awareness form an integral part of the health care programme at Reliance

Growth is care for safety

We believe that the safety of each employee is the responsibility of the individual as well as of the whole community of employees

Growth is care for the environment

Reliance believes that a clean environment in and around the workplace fosters health and prosperity for the individual, the group and the larger community to which they 36

belong. Environmental protection is an integral part of the planning, design, construction, operation and maintenance of all our projects.

Growth is betting on our people

Reliance builds with care a workplace that proactively fosters professional as well as personal growth. There is freedom to explore and learn; and there are opportunities that inspire initiative and intrinsic motivation. We believe that people must dream to achieve, that these dreams will drive the company's excellence in all its businesses. Reliance thinks, behaves, lives and thrives with a global mindset, encouraging every employee to reach his / her full potential by availing opportunities that arise across the group.

Growth is thinking beyond business

As corporate citizens, we invest in social infrastructure, believing strongly that our business strength fuels our social contributions. To this end, Reliance encourages, funds and develops numerous education, health, human capital and infrastructure initiatives. These initiatives are undertaken through partnerships with non-governmental organizations, corporates and trusts.

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Product and Brands Products & Brands

The Company expanded into textiles in 1975. Since its initial public offering in 1977, the Company has expanded rapidly and integrated backwards into other industry sectors, most notably the production of petrochemicals and the refining of crude oil. The Company from time to time seeks to further diversify into other industries. The Company now has operations that span from the exploration and production of oil and gas to the manufacture of petroleum products, polyester products, polyester intermediates, plastics, polymer intermediates, chemicals and synthetic textiles and fabrics. The Company's major products and brands, from oil and gas to textiles are tightly integrated and benefit from synergies across the Company. Central to the Company's operations is its vertical backward integration strategy; raw materials such as PTA, MEG, ethylene, propylene and normal paraffin that were previously imported at a higher cost and subject to import duties are now sourced from within the Company. This has had a positive effect on the Company's operating margins and interest costs and decreased the Company's exposure to the cyclicality of markets and raw material prices. The Company believes that this strategy is also important in maintaining a domestic market leadership position in its major product lines and in providing a competitive advantage. The Company's operations can be classified into four segments namely:

Petroleum Refining and Marketing business Petrochemicals business Oil and Gas Exploration & Production business Others

The Company has the largest refining capacity at any single location. The Company is:

Largest producer of Polyester Fibre and Yarn 5th largest producer of Paraxylene (PX) 5th largest producer of Polypropylene (PP) 8th largest producer of Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG)

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Product Flow chart

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1. I am satisfied and totally concerned with the performance appraisal policies laid
by the top management.
STRONGLY DISAGREE 5% 35% 12% 7% DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE

41%

Interpretation: About 76% of the respondents showed their satisfaction about the way the policies have been laid by the perfomace It is a good sign for an organization like hpl where number of people working is very large. The case of worry for the company is that around 5% of the respondents have strongly disagreed and 7% neither agreed nor disagreed which indicates that these respondents are either very dissatisfied or not properly concerned about the policies

2. Communications with the top management are canalized properly with the rest
of the organization.
STRONGLY DISAGREE 15% 15% DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE

24% 44% 2%

Interpretation: The response says that about 60% of the people agree with the channels of communication as laid by the hpl Where as nearly 40% have disagreed which highlights employees are dissatisfied due to hpl being over staff. 41

3. I believe that hpl is professionally managed company.

STRONGLY DISAGREE DISAGREE 7% NEITHER AGREE NOR DISAGREE 45% AGREE STRONGLY AGREE

4% 40%

4%

Interpretation: 85% of the respondents have again respected the organisation and taking its side have responded positively to it. It clearly indicates that to a very good extent hpl employees show due respect to the organisations.

4. I am satisfied with the way the performance appraisal is conducted.

STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR DISAGREE 58% AGREE STRONGLY AGREE

25%

5%

10% 2%

Interpretation: Above 80% of the respondents have assured that HR policies have been directed towards employee satisfaction. A proper care of employees benefits has been taken by the department.

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5. Suggestion scheme maintained by the hpl are encouraging.

STRONGLY DISAGREE 20% 4% 10% 2% DISAGREE NEITHER AGREE NOR DISAGREE 64% AGREE STRONGLY AGREE

Interpretation: 84% of the responded have proved that hpl has been well taking care of Welfare for employees. The study about the perfomace appraisal relating to facilities provided has been visibly proved through the data represented.

6. Hpl providing a good perfomace apprsial

5% 15% 35% 3% NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE STRONGLY DISAGREE DISAGREE

42%

Interpretation: The data represents that employees have fair good response of perfoamce 77% positive response against the 20% dissatisfied ones is enough to prove the above fact.

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7. The perfoamce appraisal policy of both internally and externally has been
properly controlled.
STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR DISAGREE 39% 8% AGREE STRONGLY AGREE

18%

14%

21%

Interpretation: The response suggests the organisation to take care about its perfoamce appraisal policy. Where below 40% respondents felt that it does works well but overall there were 14% who strongly disagreed and other 39% felt same to a good extent and 8% were confused enough

8. Company has always takes corrective disciplinary action towards every

misconduct held by
STRONGLY DISAGREE 17% 12% DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE

30% 39% 2%

Interpretation: The response towards the disciplinary action towards misconduct has been in the 50:50 Ratio. The worry for the organisation is that large numbers of respondents i.e.44% do not believe in the discipline procedure of the organisation as maintained till now.

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The possible reason perceived does the large no of employees in hpl as well as large no of workers constitute the workforce.

9. Overall, I am happier at my company than I was a year ago.

STRONGLY DISAGREE 24% 1% 20% 5% DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE

50%

Interpretation: For any company with around such great perfomace apprsail strength having nearly 3/4th of the respondents assuring faith in the management system of the company is a god sign for a further bright future of such organisation. The interpretation of the data represented from the research conducted can be analysed as: -

1. The company strongly believes in employees welfare and taking sheer

care of their rights and satisfaction in the workplace and the work as such given to them.

2. Companys appraisal policy, autonomy level given to the employees,

welfare policy, correspondingly gives job satisfaction to the employees

3. The respondents have shown due respect to companys image and have
felt the presence of its values, believed in its mission to be strongest and the most respected engineering company of the country and accepted it as a professionally managed company with a fair good response that makes every one believe in it. Overall, hpl can be interpreted having Sound perfoamce appraisal and a satisfied staff ensuring enough support to the organisation to be one of the most successful engineering company of the nation.

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Limitations
The following are the limitations faced by me during the course of the study the sample consisted only of employees in the day shift. Employees of the nightshift were not considered for the purpose of study. There is no concrete basis to prove the response given is a true measure of the opinion of all the employees as a whole. Convenient sampling was used as the mode of conducting the research. The questionnaire contained mostly multiple-choice questions; therefore many respondents may not have given a proper thought before answering the questions. The response of the respondents may not be accurate thinking that the\management might misuse the data. Almost all of the questionnaires had the open-ended question no. 11, leftunanswered.Sensitive company information cannot be displayed in the project report.Most respondents might be influenced by their peers in answering the questions.Due to the fact that most of the respondents were young, the questions might nothave been answered with due sincerity.

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Conclusions
The following are the suggestions and conclusions derived from this particularresearch study Objectivity One manager's idea of "self-starting ability" can be quite different thananother's idea. The question then arises as to how does one objectivelyevaluate "creativity ? If greater amount of objectivity can be infused into theAppraisal system, it can help to bring more transparency.Effective CommunicationOne function of performance appraisals is to help employees develop so theycan contribute more effectively. In order for the employees to develop andlearn they need to know what they need to change, where (specifically) theyhave fallen short, and what they need to do. If a manager assigns a 1(unsatisfactory) on a scale of 5, it does not convey much information to anemployee. It just says the manager is dissatisfied with something. In order tomake it meaningful and promote growth, far more information must be addedto the appraisal process and the related information should be transparentlyshared with the employee.Fairness Most employees resist being classified at the low end of the scale. Employeesargue, claiming that personal bias was involved in the ratings.Managerial EfficiencyThe implementation of a Performance Appraisal System rests on the shouldersof the manager and he must ensure that it is done properly. A good managercan make an average appraisal system work and vice-versa.

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RECOMMEDATIONS
The suggestions after the survey are: The Performance Appraisal should be done on half-yearly basis rather than on After the performance Appraisal, the supervisor should personally discuss the Everyone should feel free to express their opinion openly without any The employee in the organization should be made aware of the latest method of the Performance Appraisal like 3600 Appraisal. Proper training should be provided to the managers after discussing the All employees should be made of the Performance Appraisal system weakness of the manager.

yearly basis. strength and weakness of the managers. hesitation.

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HRBOOKS C.B Gupta, 1996, Principles and Practice of Management, National, New Delhi. Robbins, 2002, Human Resource Management, Himalaya Publication House, Gurgaon. Sharma, M.C.1992, Question Bank in Business Studies, Sultan Chand New Delhi. Mishra M.M, Human Resource Management, 2006-07, Anurag Jain Publication, New Delhi. Chandan T.S.2001, Organization Behavior, Vikas Publication, New Delhi. WEBSITES www.hrworld.com www.hr.com www.google.com & Sons,

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Instructions
The questionnaire has been designed to assure full anonymity. Please dont write your name anywhere in the questionnaire Respond to all statements. Please tick the box, which is most suitable to your belief and experience. There is no right and wrong answer the study will have its full benefit only if your responses are straight forward and your own. Your responses to each of these statements will be as to whether you. SD D NAND A SA -If you are STRONGLY DISAGREE with the statement -If you DISAGREE with the statement -If you NEITHER AGREE NOR DISAGREE -If you AGREE with the statement -If you STRONGLY AGREE with the statement

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QUESTIONS
1. I am satisfied with the perfomace apprsail policies laid by the top management.

2. Communications with the top management are channalised properly with the rest of the organization.

5. I believe that hpl is professionally managed company.

6. I am satisfied with the way the performance appraisal is conducted.

7. hpl providing a good perfomace appraisal policy

8. The prfoamce apprsial policy of both internally and externally has been properly controlled.

9. Suggestion scheme maintained by the hpl are encouraging. 54

10.Overall, I am happier at my company than I was a year ago.

As an employee I would like to do the following to make hpl a world-class organization.

NB: Please use additional sheets if needed and staple them to your questionnaire.

PLEASE NOTE: SD= Strongly Disagree; D= Disagree; A=Agree; SA=Strongly Agree; NAND=Neither Agree Nor Disagree

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