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PREFACE
The research project provides an opportunity to a student to demonstrate
application of his/her knowledge, skill and competencies required during the
technical session.
It also helps the student to devote his/her skill to analyze the problem to suggest
alternative solutions, to evaluate them and to provide feasible recommendations on
the provided data.
The project is on the topic A Study on Performance Appraisal System
Although I have tried my level best to prepare this report an error free report.
Every effort has been made to offer the most authenticate position with accuracy.
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TABLE OF CONTENTS
Topics Page no.
Introduction 10-18
Objective of the study 18-19
Research methodology 20-23
Collection of data 24-25
Performance appraisal system 26-56
Global trends in performance appraisal system 57-58
Methods of performance appraisal 59-61
Performance appraisal at different levels 62-65
Performance appraisal in Dabur India Ltd 66-67
Findings 68-75
Conclusion 76-77
Limitations 78-79
Bibliography 80-81
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INTRODUCTION TO TOPIC
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
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 human inclination to judge can create serious motivational, ethical and legal
problems in the workplace. Without a structured appraisal system, there is little
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chance of ensuring that the judgements made will be lawful, fair, defensible and
accurate.
Performance appraisal systems began as simple methods of income justification.
That is, appraisal was used to decide whether or not the salary or wage of an
individual employee was justified.
The process was firmly linked to material outcomes. If an 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
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performance. It was found that other issues, such as morale and self-esteem, could
also have a major influence.
As a result, the traditional emphasis on reward outcomes was progressively
rejected. In the 1950s in the United States, the potential usefulness of appraisal as
tool for motivation and development was gradually recognized. The general model
of performance appraisal, as it is known today, began from that time.
Modern Appraisal
Performance appraisal may be defined as a structured formal interaction between a
subordinate and supervisor, that usually takes the form of a periodic interview
(annual or 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,
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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
Few issues in management stir up more controversy than performance appraisal.
There are many reputable sources -researchers, management commentators, and
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
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to reward 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
appraises well, and are typically in a direct subordinate-supervisor relationship.
They work together on a daily basis and may, at times, mix socially. Suggesting
that a subordinate needs to brush up on certain work skills is one thing; giving an
appraisal result that has the direct effect of negating a promotion is another.
The result can be resentment and serious morale damage, leading to workplace
disruption, soured relationships and productivity declines.
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On the other hand, there is a strong rival argument which claims that performance
appraisal must unequivocally be linked to reward outcomes. The advocates of this
approach say that organizations must have a process by which rewards -which are
not an unlimited resource -may be openly and fairly distributed to those most
deserving on the basis of merit, effort and results.
There is a critical need for remunerative justice in organizations. Performance
appraisal -whatever its practical flaws -is the only process available to help
achieve fair, decent and consistent reward outcomes. It has also been claimed that
appraisees themselves are inclined to believe that appraisal results should be
linked directly to reward outcomes -and are suspicious and disappointed when told
this is not the case. Rather than feeling relieved; appraises may suspect that they
are not being told the whole truth, or that the appraisal process is a sham and
waste of time.
The Link to Rewards
Recent research (Bannister & Balkin, 1990) has reported that appraisees seem to
have greater acceptance of the appraisal process, and feel more satisfied with it,
when the process is directly linked to rewards. Such findings are a serious
challenge to those who feel that appraisal results and reward outcomes must be
strictly isolated from each other. There is also a group who argues that the
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evaluation of employees for reward purposes, and frank communication with them
about their performance, are part of the basic responsibilities of management. The
practice of not discussing reward issues while appraising performance is, say
critics, based on inconsistent and muddled ideas of motivation.
In many organizations, this inconsistency is aggravated by the practice of having
separate wage and salary reviews, in which merit rises and bonuses are decided
arbitrarily, and often secretly, by supervisors and managers.
There are basically three purposes to which performance appraisal can be put.
First, it can be used as a basis for reward allocation. Decision as to who gets salary
increase, promotion, and other rewards are determined by their performance
evaluation. Second, these appraisals can be used for identifying areas where
development efforts are needed. The performance appraisal is a major tool for
identifying deficiencies in individuals. Finally it can be used as a criterion against
which selection devices and development programs are validated. As a key input
into management's reward and punishment decision, performance appraisals can
motivate or de-motivate employees.
Three different approaches exist for doing appraisals. Employees can be appraised
against
1. Absolute standards
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2. Relative standards
3. Objectives
PERFORMANCE MANAGEMENT
Since organizations exits to achieve goals, the degree of success that individual employees have
reaching their individual goals is important in determining organization effectiveness.
Performance system is fundamentally, a feed back process, which requires sustained commitme
The cost of failure to provide such feedback may result in a loss of key professional employees, t
continued poor performance of employees who are not meeting performance standards and a loss
commitment by employees, in sum, the myth that the employee knows what. They are doing witho
adequate feedback from management can be an expensive fantasy.
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THE PERFORMANCE MANAGEMENT CYCLE
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OBJECTIVE OF THE STUDY
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OBJECTIVE OF THE STUDY
This project aims at studying the system of performance appraisal and its
effectiveness in an organization. Performance appraisal is the most significant and
indispensable tool for the management as it provide useful information for decision
making in area of promotion and compensation reviews.
Thus broad objectives of the study include:
To study the system of performance appraisal
To know the extent of effectiveness of the appraisal system
To know the importance of performance appraisal
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RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
DEFINITION OF RESEARCH
A systematic search for knowledge
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Movement from known to unknown.
Research in common refers to search for knowledge. One can also define
research as a Scientific and systematic research for pertinent information on
specific topics.
It is a way to systematically solve the research problem. In it we study various
steps that are generally adopted by a researcher in studying his research problem
along with the logic behind them. It is important for the researcher not only to
understand the research methods and techniques but also the methodology.
RESEARCH OBJECTIVE
The purpose of research is to discover answers to question through the application
of scientific procedure. The main aim of research is to find out the truth which is
hidden and which has not been discovered as yet. Though each research study has
its own specific purpose, we may think of research objectives as falling into a
number of following broad groupings:
1. To gain familiarity with a phenomenon or to achieve new insight into it
(studies with this object in view are termed as exploratory or formulative
research studies).
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2. To portray accurately the characteristics of a particular individual,
situation or a group (studies with this object in view are known as
descriptive research studies)
3. To determine the frequency with which something occurs or with which
it is associated with something else (studies with this object in view are
known as diagnostic research studies)
4. To test a hypothesis of a causal relationship between variables (such
studies are known as hypothesis- testing research studies).
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RESEARCH PROCESS
Formulating research problem
Extensive literature
survey.
Survey.
Developing hypothesis.
Preparing research design
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Steps of
Research
Process
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COLLECTION OF DATA
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COLLECTION OF DATA
There are several ways of collecting the appropriate data, which differ
considerably in context of money costs, time and other resources at the disposal of
the researcher.
Primary data Primary
data is collected for the first time and can be collected either through experiment or
through survey.
Secondary data Secondary
data means data that are already available i.e., they refer to the data, which have
already been collected and analyzed by someone else. When the researcher utilizes
secondary data, then he has to look into various sources from where he can obtain
them. Secondary data may either be published data or unpublished data. Usually
published data are available in,
(a) Books, magazines, and newspaper
(b) Reports and publications of various associations connected with
business and industry, bank stock exchange
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(c) Public record, and statistics, historical documents and other
sources of published information like website of company.
(Data is collected primarily from Secondary sources)
CONCEPT OF PERFORMANCE APPRAISAL
PERFORMANCE APPRAISAL
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Since organization exist to achieve goals, the degree of success that individual
employees have in reaching their individuals goals is important in determining
organizational effectiveness. The assessment of how successful employees have
been at meeting their individual goals, therefore, becomes a critical part of HRM.
This leads us to the topic of performance appraisal.
People differ in their abilities and their aptitudes. There is always some
difference between the quality and quantity of the same work on the same job
being done by two different people. Performance appraisals of Employees arenecessary to understand each employees abilities, competencies and relative
merit and worth for the organization. Performance appraisal rates the employees
in terms of their performance.
Performance appraisals are widely used in the society. The history of
performance appraisal can be dated back to the 20th century and then to the
second world war when the merit rating was used for the first time. An
employer evaluating their employees is a very old concept. Performance
appraisals are an indispensable part of performance measurement.
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Meaning of performance appraisal
Performance appraisal is a method of evaluating the behavior of employees in the
work spot, normally including both the qualitative and quantitative aspects of job
performance. Performance here refers to the degree of accomplishment of the
tasks that make up an individuals job. It indicates how well an individual is
fulfilling the job demands. Often the term is confused with efforts, which means
energy expanded and used in a wrong direction. Performance is always measured
in terms of results. For example: A student may exert a great deal of efforts while
preparing for the examinations but manages to get a poor grade. In this case the
effort expanded is high but performance is low.
Performance appraisal is the systematic evaluation of the individual with respect
to his performance on the job and his potential for development.
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What is performance appraisal?
Identification: This means determining what areas of work the manager
should be examining when measuring performance that affects
organizational success.
Measurement: Entails making managerial judgments of how good or bad
employee performance was.
Management: Appraisal should be more than a post-mortem examination
of past events, criticizing or praising workers for their performance in the
preceding year. Instead, it must make a future oriented view of what
workers can do to realize their potential.
Characteristics of performance appraisal
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Performance appraisal is a process involving three steps:
a. setting work standards.
b. assessing employees actual performance relative to these
standards. c. offering feed back to the employee so that he
can eliminate deficiencies
Performance appraisal tries to find out how well an employee is on job
and tries to establish a plan for further improvement.
Performance appraisal is carried out periodically, according to a definite
plan. It is not a one shot deal.
Performance appraisal is a future oriented activity showing employees
where things gone wrong, how to set everything in order, and deliver
results using their potential in a proper way.
Performance appraisal is not job evaluation. It refers to how well
someone is doing an assigned job. While job evaluation is how much a
job is worth to the organization.
THE APPRAISAL PROCESS
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Establishing performance standard
Communicate performance expectations to employee
Measure actual performance
Compare actual performance with standards
Discuss the appraisal with the employees.
Initiate the corrective action
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Description of the steps involved in performance appraisal
1. Establishing Performance Standard
2. Communicate Performance expectations to employees
3. Measure actual performance
4. Compare actual performance with standards
5. Discussion with the employees and identification development programs to
bridge the gap.
6. Initiate action
The appraisal process begins with the establishment of performance standards.
These should have evolved out of job analysis and the job description discussed
under human resource planning. These performance standards should also be
clear and objective enough to be understood and measured. Too often, these
standards are articulated in some such phrase as "a full day's work" or "a good
job". Communication only takes place when the transference has taken place and
has been received and understood by the subordinate. Therefore feedback is
necessary from the subordinate to the manager. Satisfactory feedback censures
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that the information communicated by the manager has been received and
understood in the way it was intended.
The third step in the appraisal in the measurement of performance. To determine
what actual performance. To determine what actual performance is, it is necessary
to acquire information about it. We should be concerned with how we measure
and what we measure.
What we measure is probably more critical to the evaluation process than how we
measure, since the selection of the wrong criteria can result in serious
dysfunctional consequences. And what we measure determines, to a great extent,
what people in the organization will attempt to excel at.
One of the most challenging tasks facing managers is to present an. accurate
appraisal to the subordinate and then have the subordinate accept the appraisal in
a constructive manner. Appraising performance touches on one of the most
emotionally charged activities the assessment of another individual's contribution
and ability. The impression that subordinates receive about their assessment has a
strong impact on their self-esteem and, very important, on their subsequent
performance. The final step in the appraisal is the
initiation of corrective action when necessary. Corrective action can, be of two
types. One is immediate and deals predominantly with symptoms. The other is
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basic and delves into causes. Immediate corrective action often described as
"putting out fires," whereas basic corrective action gets to the source of deviation
and seeks to adjust the difference permanently.
Immediate action corrects something right now and gets things back on track.
THE IMPORTANCE OF APPRAISING PERFORMANCE
In general the appraisal systems serve following purposes:
Compensation decisions: It can serve as a basis for pay raises. Managers
need performance appraisal to identify employees who are performing at or
above expected levels.
Promotion decisions: It can serve a useful basis for job change or
promotion. The person doing their best receives the promotion. It helps in
minimizing the feelings of frustration of those who are not promoted.
Training and development programmes: It can serve as a guide for
formulating a suitable training and development program.
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Feed back: Performance appraisal enables the employee to know how well
he is doing on the job
Personal development: Performance appraisal can help to reveal the causes
of good and poor performance.
REQUIREMENTS FOR THE PERFORMANCE MANAGEMENT
SYSTEM.
Reliability The
foremost requirement of a sound system is reliability. In this contact it refers to
consistency of judgment. For any given employee, appraisals made by raters
working independently of one another should agree closely. But raters with
different perspective (e.g. supervisors, peers, subordinates) may see the same
individuals job performance very differently. To provide reliable data, each rater
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must have an adequate opportunity to observe what the employee has done and
the condition under which he or she has done it. By making appraisal system
relevant, sensitive and reliable we assume the resulting judgments are valid as
well.
Acceptability In
practice, acceptability is the most important requirement of all, for it is true that
human resources program must have the support of. those who will use them.
Unfortunately, many organizations do not put much effort into garnering the
front end support and participation of those who will use the appraisal system.
Ultimately it is management's responsibility to define as clearly as possible the
type and level of job behavior desired of employees.
It is important to enlist the active support and cooperation of subordinates by
making explicit what aspects of job performance they will be evaluated on.
Practicality
This implies that appraisal instruments are easy for managers and employees to
understand and to use.
For years, personnel specialists have searched for the 'Perfect; appraisal method as
if it were some kind of miraculous cure for many pitfalls that plague organizations.
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Such a method does not exist. In tomorrows world of work far more emphasis
needs to be placed on process issues. Factors such as timing and frequency are no
less important. In sum performance appraisal is a dialogue involving people and
data. Both technical and human issues are involved. Neither can be
overemphasized at the expense of the other.
PERFORMANCE CAN BE EVALUATED BY
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The most fundamental requirement for any rater is that he or she has an adequate
opportunity to observe the rates job performance over a reasonable period of time.
This suggests several possible raters. Performance can be evaluated by
The supervisor
Peers
Subordinates
Self-appraisal
Supervisor
Generally appraisal is done by this person. He is probably the most familiar with
the individual's performance and in most jobs has had the best opportunity to
observe actual job performance. Further more, the immediate supervisor is
probably best able to relate the individual's performing to department and
organizational objectives.
In some jobs such as outside sales, law enforcement and teaching, the immediate
supervisor may observe a subordinate's actual job performance rarely (and
indirectly thru written reports). Here judgment of peers play important role.
However, there is a danger of potential bias.
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Peers
Peer appraisal may be reliable if the work group is stable over a reasonably long
duration of time and performs task that need interaction. This is mostly used in
military rather in business organizations.
Subordinates Appraisal
by subordinates can be useful input to the immediate development. Subordinates
know first hand the extent to which the supervisor actually delegates, how well he
communicates, the type of leadership he has and the extent to which he or she
plans and orgasms.
Self appraisal On one
hand it improves the rate's motivation and moral, on the other it tends to be more
lenient, less variable and biased. The evidence on the accuracy of self assessment
is fairly complex.
In industry it is seen that feed back/ input is taken from various sources -Peers,
subordinates, superiors etc. Some companies have gone step ahead in taking
feedback from the customers and integrating it into the performance management
process.
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Self appraisal is an important part of the Performance appraisal process where
the employee himself gives the feedback or his views and points regarding his
performance. Usually this is done with the help of a self appraisal form where
the employee rates himself on various parameters, tells about his training
needs, if any, talks about his accomplishments, strengths, weaknesses,
problems faced etc.
TIPS FOR SELF APPRAISAL
Truthful
Always be truthful and honest while telling your accomplishments or failures.
Dont exaggerate your strengths and dont hide your weaknesses. Dont make
personal judgments for anybody.
Its always better to prepare yourself before the self appraisal.
Objectivity
Objectivity is important in self appraisal. Dont exaggerate or downplay
your achievements or failures. Be specific and concise in your statements and
if possible support them with examples or references or evidences with dates.
For example: "I responded to all queries within 48 hours" is better than just
saying "My customer service was good."
Positive attitude
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Preparation for Performance Review
Preparation for Performance Review is done as follows
Theperformance review meeting should not be strictly formal nor should
it be completely informal in nature. Ideally, the review meeting should
be structured, semi formal meeting which needs prior preparation by the
appraiser as well as the employee.
Following are some points that need to be prepared before the review
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meeting ofPerformance appraisal:
Inform the concerned employees the date, time and place for the
review meeting well in advance.
Review and be prepared with each and every employees
o Job description
o Performance standards
o Planned performance goal
o Performance measures collected throughout the time period
o The critical incidents details
o Past appraisals of the employees.
Other things to be remembered
Be ready with all the important dates
Give the employee a copy of the appraisal form
The appraiser needs to completely understand the standards for the employees
at same level to maintain the consistency in the process.
Prepare what to say and how to say it calmly.
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The feedback should be prepared in quantifiable measures where ever
possible.
The appraiser should be familiar with the performance review form and the
details
The employee and the appraiser both should be prepared to discuss and figure
out the future goals and training needs
They should be mentally prepared for constructive feedback
Collect as many evidences to support your point as possible like the monthly,
quarterly progress reports.
PERFORMANCE REVIEW MEETING
Performance Review Meeting
Today, performance review meetings are regarded as
conversation with a purpose. They are considered extremely
important for the development and health of the organization. The
purpose of the performance review meetings is to reach mutually
agreed conclusions about the development of the individual and
his performance and if applicable, any areas for improvement,
including how such improvements are to be achieved.
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The purpose ofperformance and development reviews is to
enable the employees to engage in a dialogue and get the support
of the manager about the individuals performance and
development. They should be more like free- flowing, open
meetings in which views are exchanged so that agreed conclusions
can be reached.
The three key elements of performance review meetings are:
1. Feedback - Providing information on how a person has been doing.
2. Measurement assessing results against agreed targets and standards.
3. Exchange of views - Ensuring that the discussion involves a full, free
and frank exchange of views about what has been achieved, what
needs to be done to achieve more and what employees think about
their work the way they are managed and their aspirations.
Performance appraisalreview is the meeting when the employee can be
motivated to perform better in future or reinforce his desirable behavior.
Review discussion meetings ideally should include the following:
Review of progress on tasks and activities in relation to the
employees performance plan,
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The developmental initiatives taken by the employee himself and
those planned by the management for the employee.
Identification of variances in terms of delays, requisite quality and
shortfall in help planned for the employee, if any
Analyzing the causes of the delay, the problems faced and the
solutions adopted.
Preparation of action steps for solving identified problems and
contingency plans for anticipated problems.
Periodic review meetings become meaningful only when they help pause,
reflect, take stock and strategize in an otherwise active relationship.
How to Complete Performance Appraisal Form
Performance appraisal form provides the basis for theperformance
review, providing the feedback to the employees and the final
rating of the employee. It also facilitates various other HR
decisions and career development plans and decisions of the
employees. Therefore, performance appraisal from should be
filled with utmost care and objectivity.
The Performance appraisal form should be filled by the immediate
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supervisor or manager of the employee in order to ensure that the
appraiser if fully acquainted with the performance, responsibilities,
targets and standards of the employee. All the instructions and
guidelines on the appraisal form should be read and followed
carefully.
Be prepared with all the details of the performance, the standards, job
description and the past appraisals of the employee.
Clear and unambiguous description of the employee performance should be
given in terms of average, above average, good and excellent performance.
The focus should be on the employees behavior throughout the year and not
just his recent performance.
Quantify the ratings, wherever possible, to ensure easy comparability.
Substantiate and support your rating, and attach all the necessary documents
(if required).
Apart from the defined performance objectives and results, discuss the related
issues as well covering all the aspects of the performance.
When filling the appraisal form, be honest and objective.
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Analysis for Improving Performance
Any performance review process is incomplete without the
feedback to the employees. The feedback could be given in the
review discussion. Review discussions are semi formal, scheduled,
periodic interactions usually bimonthly or quarterly between a
manager and his employee. The basic purpose of the review
discussion is to analyze the performance of the employee in the
past to improve the performance of the employee in future.
A review discussion is an opportunity to coach, mentor, learn and
understand. The manager encourages his/her employees to
critically reflect over progress made on the Performance
appraisal plan and to develop creative, yet feasible alternatives for
problem areas.
The manager uses this opportunity to:
Review the performance of the each employee individually.
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Discuss the problems faced by the employees during the course of
action.
The solutions tried, and the degree of success achieved in solving the
problems faced.
Revisit with the employee, his/ her annual plan for the remaining time
period and develop revised action plans, if necessary.
Review discussions reassure the employees that each one of them has structured
opportunities for one to one interaction with the manager once every two or
three months during the year. These opportunities are important as they provide
an important chance for performance monitoring or development mentoring.
The aim of the performance review discussions is to share perceptions, solve the
problem faced during the course of the action, decide on the new goals jointly
and provide a feedbackto the employee for the past performance i.e. to look at
his strengths and weaknesses and also help to chart out a career plan for the
employee.
The focus of these performance review discussions should not bet o judge the
employees past performance; rather it should be to motivate the employee to
improve his future performance and reinforce his good behavior.
Active Performance Appraisal Conversation
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Active Performance Appraisal Conversation
Active conversation plays an important part in theperformance
review meeting. The appraiser should ensure that the meeting has a
two way conversation and that the employee should get a fair chance
to speak. The "manner" of giving the feedbackof the performance of
the employee is very important. The conversation should have an
optimistic and motivating tone.
Some important points that should be taken care of in the active
performance appraisal conversation are:
1. Make it a two-way conversation. An effectiveperformance
appraisalreview requires an interactive discussion with an open agenda.
Try to formulate questions that seek the employees ideas and input. This
will help the employee feel you value his or her opinions. Give the
employee a fair chance to put forward his ideas; let him speak.
2. Be a good listener. Remember to be an active listener and to pick up on
your employees verbal and nonverbal cues. Listen to his ideas and
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problems.
3. Address whats important to the employee. Since job satisfaction is the
most important factor affecting an employees attitude (and therefore his
or her level of performance and value to your company), an effective
review should delve into areas that include issues most important to that
employee.
4. Lead with the positive. Its important to reaffirm the employees
strengths at the beginning of the review. Since job security is the number
one concern of most people, the performance review is a good time to tell
an employee how much you value their contributions to your business.
5. Dont be confrontational. Its important not to criticize the employee in
general terms. The goal is to evaluate job performance and not the person.
A performance review that turns into a gripe session misses the
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opportunity to raise employee morale.
6. Positive reinforcement emphasizing what has been done well so that it
will be done even better in the future and making only constructive
criticisms (i.e. those that point the to way to improvement).
7. Exchange of views - Ensuring that the discussion involves a full, free and
frank exchange of views about what has been achieved, what needs be
done to achieve more and what the appraiser think about their work the
way they are managed and their aspirations.
8. Agreement - jointly coming to an understanding about what has to be
done by both parties to improve performance, knowledge and skills and
overcome any work problems raised during the discussion
Performance Appraisal Feedback
Performance appraisal process is incomplete without the feedback
given to the employee about his appraisal and his performance.
But the way of giving as well as receiving the feedback differs
from person to person and their way of handling and their outlook
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towards the issue.
According to a popular saying:
"A SUCCESSFUL MAN IS ONE WHO CAN LAY A FIRM
FOUNDATION WITH THE BRICKS OTHERS HAVE
THROWN AT HIM."
Therefore, On the part of the person receiving the feedback, the following
points are important to be taken care of:
o The employee should have a positive attitude towards the feedback
process
o He should listen to the suggestions of the appraiser calmly and try to
incorporate them in his plans.
o He should not hesitate to ask for the help of his superiors.
o Should have a co-operative attitude during the feedback meeting.
o Dont judge the appraiser as a person.
o Should take the feedback objectively
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o Should not judge the appraiser as a person on the basis of the
feedback.
On the part of the appraiser or the manager / person giving the feedback, the
following points are to be taken care of:
o The appraiser should make the receiver feel comfortable during the
feedback meeting.
o The appraiser should make it a two way conversation i.e. let the
employee speak.
o Listen to the employee and note his points, suggestions, problems etc.
o The appraiser should not adopt a confrontational approach towards
the meeting. The goal is not to criticize the employee.
o Provide a constructive feedback to the employee i.e. in a way which
will motivate him to perform better.
o Have a positive attitude towards the process
o Try to understand the reasons of his failure.
o Be fair and objective
o Prepare yourself for what to say and how to say.
o Make the appraisal feedback meeting useful and productive for the
organization and the employee.
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PERFORMANCE CONSULTING:
MOVING BEYOND TRAINING
Organizations are growing in size, becoming complex and the
importance of trained and developed workforce is also increasing.
One of the major objectives and benefits of the performance
appraisal is that it helps in identifying the training needs of the
employee and reducing the gap between the actual and the desired
performance of the employees. ButPerformance appraisal also
facilitates the other decisions like:
Compensation and rewards
Performance Feedback
Manpower planning
Performance improvement
Promotions and transfers
HR Documentation
To meet the increasing competition and the challenging organizational goal,
the human resource departments of the organisations throughout the world
are moving away from the traditional and the theoretical training methods.
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Review and feedback of the performance, facilitating performance
improvement
From the above functions and the role of the performance consultants, they
have become valued partners to the top level management of the
organizations in successfully achieving the organizational goals.
Writing Performance Appraisals
Writing performance appraisal involves creating a document
which has the summary of the every employees performance over
a period of time and a snapshot of their observed strengths and
weaknesses, and the raters feedback that can be used for other
purposes.
Writing Performance appraisal depend significantly on the writers
various abilities and a combination of other factors. A rater or a
manager needs :
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An objective rating method to assess an employees
performance, behavior, and skills and knowledge.
All the relevant data related to the employees performance, the
standards, his job description.
To observe and accurately recall the employees behavior
throughout the time period of the appraisal.
Appraisal as Employee Motivation Mechanism
Keeping in mind the growing attrition rates and the employee
dissatisfaction among the employees, the HR professionals are
approaching and using the performance appraisal as a fuel to
motivate employees. The latest trend being followed by
the HR professionals is to use the performance appraisal and
review process as a motivating mechanism. Various surveys
and studies have testified the relationship between
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performance, pay and motivation.
Other than the traditional goal of accessing the performance of
the employees, Performance appraisals and reviews can be
used as a tool to reinforce the desired behaviour and
competent performance of the employees.
One of the most motivating factors for the employees, in the appraisal
processes is to receive a fair an accurate assessment of their performance.
Inaccurate evaluation is one reason because of which most employees dread
going through performance appraisals. An employee always expects his
appraiser to recognize and appreciate his achievements, support him to
overcome the problems and failures.
The discrepancies and the inaccuracies in the performance review can
demotivate the employees, even if there has been an increase in the salary.
Such inaccuracies can kill the innovating and risk taking enthusiasm and spirit
in the employees. Similarly, inaccurate reviews with no hike in compensation
can increase the attrition rate in the organisation, forcing the employees to look
out for other options.
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An employee prefers an accurate performance review with no increase in the
salary over inaccurate performance review with an increase in salary.
Employees, who receive both accuracy and a pay increase during their
performance review, are likely to be the most motivated. Therefore,
performance appraisal (review and its consequence in the form of
compensation adjustments) has the potential of motivating employees and
increasing their job satisfaction.
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Training for appraisers
Every organization conducts performance for assessing the
performance of the employees and the organization. But if not
conducted properly, they can give a false impression about
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Feedback techniques (providing constructive feedback)
How to deal with non-performers and people who refuse to co-
operate
Post review actions
The training can be given by conducting special workshops by professional
HR consultants or qualified and experienced HR professionals ofhuman
resource management. The venue for the purpose can be a suitable
seminar hall, training room, conference hall, boardroom, or at some place
away from the workplace like some hotel etc.
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Also take note of the skills, knowledge and competencies and
behaviors of the employees that help the organization to achieve its
goals.
If possible, collect the feedback about the performance of the
employees through multi-point feedback and self-assessments.
Financial measures like the return on investment, the market share,
the profit generated by the performance of the team should also be
considered.
For an organisation to be an effective organisation and to achieve its goals,
it is very important to monitor or measure its and its employee performance
on a regular basis. Effective monitoring and measuring also includes
providing timely feedback and reviews to employees for their work and
performance according to the pre-determined goals and standards and
solving the problems faced. Timely recognition of the accomplishments also
motivates the employees and help to improve the performance.
Measuring the performance of the employees based only on one or some
factors can provide with inaccurate results and leave a bad impression on
the employees as well as the organization. For example: By measuring only
the activities in employees performance, an organization might rate most of
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its employees as outstanding, even when the organization as a whole might
have failed to meet its goals and objectives. Therefore, a balanced set of
measures (commonly known as balanced scorecard) should be used for
measuring the performance of the employee.
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Global Trends In Performance Appraisal Program
Global Trends In Performance Appraisal Program
Current Global Trends In Performance Appraisal Program
The performance appraisal process has become the heart of
the human resource management system in the organisations.
Performance appraisal defines and measures the performance of
the employees and the organisation as a whole. It is a tool for
accessing the performance of the organisation.
The important issues and points concerning performance
appraisal in the present world are:
The focus of the performance appraisals is turning towards
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career development relying on the dialogues and discussions with
the superiors.
Performance measuring, rating and review systems have
become more detailed, structured and person specific than before.
Performance related pay is being incorporated in the strategies used by
the organisations.
Trend towards a 360-degree feedback system
The problems in the implementation of the performance appraisal
processes are being anticipated and efforts are being made to overcome
them.
In India, the performance appraisal processes are faced with a lot of
obstacles, the most prominent being the lack of quantifiable indicators of
the performance.
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Methods of Performance Appraisal
Methods of Performance Appraisal
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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. Organizations are increasingly using feedback from
various sources such as peer input, customer feedback, and input from
superiors. Different forms with different formats are being used to obtain
the information regarding the employee performance.
Group appraisal: An employee is appraised by the group of appraisers.
This group consists of the immediate supervisor of the employee, other
supervisors who have close contact with the employees work, manager and
the consultant.
Ranking Method: ranking of the employees in a work group is done
against that of the other employee. The relative position of each employee is
expressed in terms of his numerical rank.
Rank and Yank Strategy: Also known as the "Up or out policy", the rank
and yank strategy refers to the performance appraisal model in which best-
to-worst ranking methods are used to identify and separate the poor
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performers from the good performers. Then the action plans and the
improvement opportunities of the poor performers are discussed and they
are given to improve their performance in a given time period, after which
the appropriate HR decisions are taken. Some of the organizations following
this strategy are Ford, Microsoft and Sun Microsoft.
Management by objectives: MBO requires the management to set specific,
measurable goals with each employee and then periodically discuss the
latters progress towards these goals
Graphic rating scale: A printed form is used to evaluate the performance
of an employee. A variety of traits may be used in these types of rating
devices, the most common being the quantity and quality of work.
Checklistsand weighted checklists: It represents in its simplest form, a set
of objectives or descriptive statements about the employee and his behavior.
Some of the sample questions are :
Is the employee really interested in the task assigned? Yes/No
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Is he respected by his colleagues? Yes/NO
Does he respect his superiors? Yes/No
Performance Appraisal For Employees at Different Levels
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Performance Appraisal For Employees at Different Levels
Performance appraisal is important for employees at all levels
throughout the organization. The parameters, the characteristics
and the standards for evaluation may be different, but the
fundamentals ofperformance appraisal are the same. But as the
level of the employees increases, performance appraisal is more
effectively used as the tools of managing performance.
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Criteria for measuring performance at different levels:
The criteria for measuring performance changes as the levels of the
employees and their roles and responsibilities change.
A few examples for each level are described below:
For top level management
Degree of organizational growth and expansion
Extent of achievement of organizational goals
Contribution towards the society
Profitability and return on capital employed
For middle level managers
Performance of the departments or teams
Co-ordination with other departments
Optimal use of resources
Costs Vs. revenues for a given period of time
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The communication with superiors and subordinates
For front line supervisors
Quantity of actual output against the targets
Quality of output against the targets
Number of accidents in a given period
Rate of employee absenteeism
Two things to be noted and evaluated for the purpose of
appraisals are:
Performance in accomplishing goals, and
Performance as managers
Performance in accomplishing goals
Managers are responsible for the performance of their teams as a whole.
Performance in accomplishing goals would mean to look at the completion
or achievement of the goals set for a team of employees which is being
assigned to or working under a particular manager. The best measuring
criteria fora manager are hi goals, his plans of course of action to achieve
them and the extent of achievement of the goals.
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Performance of managers
Appraising the performance of managers is very important, but at the same
time, it is one of the most difficult tasks in the organization. It is difficult
because most of the managerial work cannot be quantified i.e. it is
qualitative in nature like leading his/her team, guiding
The responsibilities of managers include a series of activities which are
concerned with planning, organizing, directing, leading, motivating and
controlling. Managers can be rated on the above parameters or
characteristics
.
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PERFORMANCE APPRAISAL SYSTEM IN DABUR
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Dabur
Milestones to success
Dabur India Ltd. made its beginnings with a small pharmacy, but has continued to learn and grow
a commanding status in the industry. The Company has gone a long way in popularizing and maki
easily available a whole range of products based on the traditional science of Ayurveda. And it h
set very high standards in developing products and processes that meet stringent quality norms. As
grows even further, Dabur will continue to mark up on major milestones along the way, setting t
road for others to follow.
1884 - Established by Dr. S K Burman at Kolkata
1896 - First production unit established at Garhia
1919 - First R&D unit established
Early 1900s - Production of Ayurvedic medicin
Dabur identifies nature-based Ayurvedic medicines as its area of specialisation. It is the fir
Company to provide health care through scientifically tested and automated production
formulations based on our traditional science.
1930 - Automation and upgradation of Ayurvedic products manufacturing initiated1936 - Dabur (Dr. S K Burman) Pvt. Ltd. Incorporated
1940 - Personal care through Ayurveda Dabur introduces Indian consumers to personal ca
through Ayurveda, with the launch of Dabur Amla Hair Oil. So popular is the product that
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becomes the largest selling hair oil brand in India.
1949 - Launched Dabur Chyawanprash in tin pa
Widening the popularity and usage of traditional Ayurvedic products continues. The ancie
restorative Chyawanprash is launched in packaged form, and becomes the first brand
Chyawanprash in India.
1957 Computerisation of operations initiated
1970 - Entered Oral Care & Digestives segme
Addressing rural markets where homemade oral care is more popular than multinational brand
Dabur introduces Lal Dant Manjan. With this a conveniently packaged herbal toothpowder
made available at affordable costs to the masses.
1972 - Shifts base to Delhi from Calcutta
1978-Launches Hajmola tab
Dabur continues to make innovative products based on traditional formulations that can provi
holistic care in our daily life. An Ayurvedic medicine used as a digestive aid is branded an
launched as the popularHajmola tablet.
1979 - Dabur Research Foundation set up
1979 - Commercial production starts at Sahibabad, the most modern herbal medicines pla
at that time
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1984 - Dabur completes 100 years
1988 - Launches pharmaceutical medicines
1989 - Care with fu
The Ayurvedic digestive formulation is converted into a children's fun product with the launch
Hajmola Candy. In an innovative move, a curative product is converted to a confectionary item f
wider usage.
1994 - Comes out with first public issue
1994 - Enters oncology segment
1994 - Leadership in health ca
Dabur establishes its leadership in health care as one of only two companies worldwide to laun
the anti-cancer drug Intaxel (Paclitaxel). Dabur Research Foundation develops an eco-friend
process to extract the drug from its plant source
1996 - Enters foods business with the launch of Real Fruit Juice
1996-Real blitzkri
Dabur captures the imagination of young Indian consumers with the launch ofReal Fruit Juices
new concept in the Indian foods market. The first local brand of 100% pure natural fruit juices ma
to international standards, Real becomes the fastest growing and largest selling brand in t
country.
1998 - Burman family hands over management of the company to professionals
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2000 - The 1,000 crore ma
Dabur establishes its market leadership status by staging a turnover of Rs.1,000 crores. Across
span of over 100 years, Dabur has grown from a small beginning based on traditional health ca
To a commanding position amongst an august league of large corporate businesses.
2001 Super specialty dru
With the setting up of Dabur Oncology's sterile cytotoxic facility, the Company gains entry into th
highly specialised area of cancer therapy. The state-of-the-art plant and laboratory in the UK ha
approval from the MCA of UK. They follow FDA guidelines for production of drugs specifical
for European and American markets.
2002 - Dabur record sales of Rs 1163.19 crore on a net profit of Rs 64
crore
2003 - Dabur demerges Pharmaceuticals business
Maintaining global standards
As a reflection of its constant efforts at achieving superior quality standards, Dabur became the fir
Ayurvedic products company to get ISO 9002 cetificate
Science for nature
Reinforcing its commitment to nature and its conservation, Dabur Nepal, a subsidiary of Dab
India, has set up fully automated greenhouses in Nepal. This scientific landmark helps to produ
saplings of rare medicinal plants that are under threat of extinction due to ecological degradation.
2005 - Dabur aquires Balsara
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2006 - Dabur announces bonus after 12 years
2006 - Dabur crosses $2 bin market cap, adopts US GAAP.
2007 - Celebrating 10 years of Real
Dabur Foods unveiled the new packaging and design for Real at the completion of 10 years of th
brand. The new refined modern look depicts the natural goodness of the juice from freshly
plucked fruits.
2008 - Foray into organised retail
Dabur India announced its foray into the organised retail business through a wholly-owne
subsidiary, H&B Stores Ltd. Dabur will invest Rs 140 crores by 2010 to establish its presence in
the retail market in India with a chain of stores on the Health & Beauty format.
2008 - Dabur Foods Merged With Dabur India
Dabur India decides to merge its wholly-owned subsidiary Dabur Foods Limited with itself to
extract synergies and unlock operational efficiencies. The integration will also help Dabu
sharpen focus on the high growth business of foods and beverages, and enter newer produc
categories in this space.
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Performance Appraisal system in Dabur
a. Outstanding -If the performance evaluated by the management turns out to
be outstanding. If the employee performs in such a way as to collect 3
consecutive outstanding performance into his/her credit) he / she gets
promoted.
b. Excellent -If the performance evaluated by the management turns out to be
excellent. If the employee performs in such a way as to collect 3 consecutive
excellent performance into his/her credit, he/she gets promoted.
c. Good -If the performance evaluated by the management turns out to be
good. The management sends the employee to the training programme to
improve his/.her skill to perform form.
d. Below average -If the performance evaluated by the management turns out
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to be below average. And, if the employee collects 3 below average to
his/her credit, then he/she dismissed
Duration of Appraisal System
The time constraints enables the employee to show or project his/her capabilities
in term of performance as per the duration allowed. In Dabur India Limited, the
performance appraisal system is carried out annually.
Feedback
The companies provide the annual feedback to its employees and thus, in term
bring out the highlights of the self assessment programme. This enables the better
communication between the management and employees thus, helps in promoting
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the business future.
FINDINGS
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FINDINGS
360 degree performance appraisal method is used in the study. It is found
more efficientbecause it helps to keep a track of the changes others
perceptions about the employees and the biggest advantage of 360 feedback
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to participants is increased self-awareness.
Performance appraisal is the strength of performance management, which in
turn effects the organizational performance. It helps to identify and
overcome the problems faced by the employees in their work.
Performance appraisal is like a double edged sword for an organisation.
Although it has many benefits for the organisation, various studies have also
revealed that performance appraisals have the equal probability of having a
bad impact on the organizational as well as the employee performance.
Performance appraisal processes can create a sense of insecurity in the working
environment and can become an obstacle in achieving the required changes in the
attitudes and the performance of the employees. The element of bias in the
appraisals can also worsen the situation.
.
Therefore, performance appraisals can affect the organizational performance both
positively and negatively, and should be dealt with care and expert knowledge and
experience.
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CONCLUSIONS
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Conclusions
It is concluded that performance appraisal serve a very important role. Firstly, it
can be used as a basis for reward allocations. Decisions as to salary increases,
promotions, and other rewards are determined by their performance evaluation.
Second, these appraisals can be used for identifying areas where development
efforts are needed. Management needs to spot those individuals who have specific
skill or knowledge deficiencies. The performance appraisal is a major tool for
identifying these deficiencies. Finally, the performance appraisal can be used as a
criterion against which selection devices and development programs are validated.
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Limitations
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Limitations
The performance appraisal improves the work performance and employee
satisfaction, it also demotivates employees leaving a bad impression on the good
employees. Most of the employees do not approve of continuous performance
monitoring and performance appraisals, and also consider it as a burdensome
activity. Performance appraisals and other tools which involve feedbackand target
management should be adapted to the employees individual needs and
characteristics. Otherwise, there is a risk of harming the good employees without
being able to help the less good."
Performance appraisal processes can create a sense of insecurity in the working
environment and can become an obstacle in achieving the required changes in the
attitudes and the performance of the employees. The element of bias in the
appraisals can also worsen the situation.
Therefore, performance appraisals can affect the organizational performance both
positively and negatively, and should be dealt with care and expert knowledge and
experience.
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Bibliography
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BIBLOGRAPHY
1) Flippo Edwin B., Personnel management, Edition sixth, Tata Mc Graw Hills,
1984
2) Gupta, C.B., Human Resource Management, Edition Fifth(Reprint),Sultan
Chand and Sons, New Delhi 2001
3) Rao, P. Subba, Essentials of Human Resource Management and Industrial
Relations; Edition Second, Himalaya Publishing House, New Delhi 2001
4) Rao,V.S. Human Resource Management Edition Second, Excel Books, New
Delhi 2000
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A STUDY ON PERFORMANCE APPRAISAL
A STUDY ON PERFORMANCE APPRAISAL WITH SPECIAL REFERENCE
DABUR.
QUESTIONNAIRE
SECTION ASOCIO DEMOGRAPHIC FACTORS:
1) Name ( optional ):
2)Sex :Male Female
3)Age :Upto 20 years 20 30 years 30 40 years above 40 years
4) Marital status : Married Unmarried
5) Educational qualification :SSLC HSC Diploma UG PG
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6)Department :Production HR R&D Accounts Others
7)Year of service :Upto 2 years 2 -6 years 6 -10 years above 10 years
8) Monthly Income: (in Rs.)Below 10,000 10,000 -15,000 15,000 20,000
above 20,000
SA- STRONGLY AGREE, A AGREE, NN NEITHER AGREE
NOR DISAGREE, DA DISAGREE, SDA STRONGLY DISAGREE
9) Performance appraisal system is needed in organization
10) Satisfied with the existing performance appraisal system.
11) The performance of the organization is assessed by self, superior or consultant.
12) The performance appraisal helps to win co-operation and team work.
13) The performance appraisal is helpful in reducing grievance among the
employees.
14) The performance appraisal is helpful for improving personnel skill.
15) Training programmers are effective for individual and organization
development.
16) The performance ratings were done periodically.
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17) The performance appraisal system helps to identify the strength and weakness
of the employee.
18) The performance rating is helpful for the management to provide employee
counseling.
19) Promotion is purely based on performance appraisal.
20) Management fixes salary through the performance rating.
21) Performance rating helps to fix increment.
22) Transfer, demotion, suspension and dismissal is based on performance
appraisal.
23) The desired target of the organization is achieved through the performance
appraisal.
24) Performance appraisal increases employee motivation.
25) Appraisal system keeps on the major achievement and failure or success
of work.
26) Have a separate committee to review the performance appraisal result.
27) Suggestions if any