CHAPTER – I

INTRODUCTION

I) HUMAN RESOURCE MANAGEMENT-AN

OVERVIEW

Human resource management (HRM), or human resource development,

entails planning, implementing, and managing recruitment, as well as

selection, training, career, and organizational development initiatives within

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an organization. The goal of HRM is to maximize the productivity of an

organization by optimizing the effectiveness of its employees while

simultaneously improving the work life of employees and treating employees

as valuable resources. Consequently, HRM encompasses efforts to promote

personal development, employee satisfaction, and compliance with

employment-related laws.

To achieve equilibrium between employer and employee goals and

needs, HRM departments focus on these three general functions or activities:

planning, implementation, and evaluation. The planning function refers to the

development of human resource policies and regulations. Human resource

managers attempt to determine future HRM activities and plan for the

implementation of HRM procedures to help companies realize their goals.

Implementation of HRM plans involves four primary activities:

acquisition, development, compensation, and maintenance. Acquisition

entails the hiring of workers most likely to help a company attain its goals.

The development function encompasses the training of workers to perform

their tasks in accordance with company strategy. This activity also involves

company efforts to control and change employee behavior via reviews,

appraisals, incentives, and discipline. Compensation covers the payment of

employees for their services. Maintenance requires structuring labor relations

—the interaction between a company's management and its unionized

employees—and ensuring compliance with federal and state employment

laws. Finally, the evaluation function includes the assessment of a company's

HRM policies to determine whether they are effective.

The need for an organized form of HRM emerged during the industrial

revolution, as the manufacturing process evolved from a cottage system to

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factory production. As the United States shifted from an agricultural economy

to an industrial economy, companies were forced to develop and implement

effective ways of recruiting and keeping skilled workers. In addition,

industrialization helped spur immigration, as the country opened its borders

to fill industrial positions. Filling these jobs with immigrants, however, created

an even greater need for adequate management of employees.

Between the 1880s and the 1940s, immigration rose significantly and

remained robust until World War II. Advertisements circulated throughout the

world depicting the United States as the land of opportunity where good-

paying industrial jobs were plentiful. As a result, the country had a steady

stream of low-skill, low-cost immigrant workers who occupied manufacturing,

construction, and machinery operation positions. Even though these

employees performed largely routine tasks, managers faced serious obstacles

when trying to manage them since they spoke different languages.

Early human resource management techniques included social welfare

approaches aimed at helping immigrants adjust to their jobs and to life in the

United States. These programs assisted immigrants in learning English and

obtaining housing and medical care. In addition, these techniques promoted

supervisory training in order to increase productivity.

While some companies paid attention to the "human" side of

employment, however, others did not. Therefore, other factors such as

hazardous working conditions and pressure from labor unions also increased

the importance of effective management of human resources. Along with the

manufacturing efficiencies brought about by industrialization came several

shortcomings related to working conditions. These problems included:

hazardous tasks, long hours, and unhealthy work environments. The direct

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cause of employers seeking better HRM programs was not poor working

conditions, but rather the protests and pressures generated by workers and

organized labor unions. Indeed, labor unions, which had existed as early as

1790 in the United States, became much more powerful during the late 1800s

and early 1900s.

There were two other particularly important contributing

factors to the origination of modem HRM during that period. The first was the

industrial welfare movement, which represented a shift in the way that

managers viewed employees—from nonhuman resources to human beings.

That movement resulted in the creation of medical care and educational

facilities. The second factor was Frederick W. Taylor's (1856-1915) Scientific

Management, a landmark book that outlined management methods for

attaining greater productivity from low-level production workers.

The first corporate employment department designed to address

employee concerns was created by the B.F. Goodrich Company in 1900. In

1902 National Cash Register formed a similar department to handle worker

grievances, wage administration, record keeping, and many other functions

that would later be relegated to HRM departments at most large U.S.

companies. HRM as a professional discipline was especially bolstered by the

passage of the Wagner Act in 1935 (also known as the National Labor

Relations Act), which remained the basic U.S. labor law through the 1990s. It

augmented the power of labor unions and increased the role and importance

of personnel managers.

During the 1930s and 1940s the general focus of HRM changed from a

focus on worker efficiency and skills to employee satisfaction. That shift

became especially pronounced after World War II, when a shortage of skilled

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labor forced companies to pay more attention to workers' needs. Employers,

influenced by the famous Hawthorne productivity studies and similar

research, began to emphasize personal development and improved working

conditions as a means of motivating employees.

In the 1960s and 1970s the federal government furthered the HRM

movement with a battery of regulations created to enforce fair treatment of

workers, such as the Equal Pay Act of 1963, the Civil Rights Act of 1964, the

Employee Retirement Income Security Act of 1974 (ERISA), and the

Occupational Safety and Health Act of 1970. Because of these acts,

companies began placing greater emphasis on HRM in order to avoid lawsuits

for violating this legislation. These regulations created an entirely new legal

role for HRM professionals. Furthermore, during the 1970s, HRM gained status

as a recognized profession with the advent of human resource programs in

colleges.

By the end of the 1970s, virtually all medium-sized and large

companies and institutions had some type of HRM program in place to handle

recruitment, training, regulatory compliance, dismissal, and other related

issues. HRM's importance continued to grow during the 1980s for several

reasons. Changing workforce values, for example, required the skills of HRM

professionals to adapt organizational structures to a new generation of

workers with different attitudes about authority and conformity. Shifting

demographics forced changes in the way workers were hired, fired, and

managed. Other factors contributing to the importance of HRM during the

1980s and 1990s were increasing education levels, growth of service and

white-collar jobs, corporate restructuring (including reductions in middle

management), more women in the workforce, slower domestic market

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growth, greater international competition, and new federal and state

regulations.

In fact, businesses and organizations rely on three major resources:

physical resources, such as materials and equipment; financial resources,

including cash, credit, and debt; and human resources or workers. In its

broadest sense, HRM refers to the management of all decisions within an

organization that are related to people. In practice, however, HRM is a tool

used to try to make optimum use of human resources, to foster individual

development, and to comply with government mandates. Larger

organizations typically have an HRM department and its primary objective is

making company goals compatible with employee goals insofar as possible.

Hence, for a company to attain its goals, it must have employees who will

help it attain them.

Towards this end, R. Wayne Pace, writing in Human Resource

Development, identifies seven underlying assumptions that provide a

foundation and direction for HRM. First is the acknowledgment of individual

worth, suggesting that companies recognize and value individual

contributions. Second is that employees are resources who can learn new

skills and ideas and can be trained to occupy new positions in the

organization? Third is that quality of work life is a legitimate concern, and that

employees have a right to safe, clean, and pleasant surroundings. A fourth

assumption is the need for continuous learning; talents and skills must be

continually refined in the long-term interests of the organization.

A fifth assumption supporting the existence of an organized HRM within

a company or institution is that opportunities are constantly changing and

companies need methods to facilitate continual worker adaptation. Sixth is

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employee satisfaction, which implies that humans have a right to be satisfied

by their work and that employers have a responsibility and profit motivation

to try to match a worker's skills with his or her job. The seventh and final

assumption is that HRM encompasses a much broader scope than technical

training—employees need to know more than the requirements of a specific

task in order to make their maximum contribution.

II)THE ROLE OF HRM IN INDUSTRIAL ORGANISATIONS:

In Personnel Management, Paul S. Green law and John P. Kohl describe

three distinct, interrelated fields of interest addressed by the HRM discipline:

human relations, organization theory, and decision areas. Human relations

encompass matters such as individual motivation, leadership, and group

relationships. Organization theory refers to job design, managerial control,

and work flow through the organization. Decision areas encompass interests

related to the acquisition, development, compensation, and maintenance of

human resources. Although the method and degree to which those areas of

interest are handled vary among different HRM departments, a few general

rules characterize the responsibilities, positioning, and structure of most HRM

divisions.

HRM department responsibilities, other than related legal and clerical

duties, can be classified by individual, organizational, and career areas.

Individual management entails helping employees identify their strengths and

weaknesses, correct their shortcomings, and then make their best

contribution to the enterprise. These duties are carried out through a variety

of activities such as performance reviews, training, and testing.

Organizational development focuses on fostering a successful system that

maximizes human, and other, resources. This important duty also includes

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the creation and maintenance of a change program, which allows the

organization to respond to evolving outside and internal influences. The third

responsibility, career development, involves matching individuals with the

most suitable jobs and career paths.

The positioning of HRM departments is ideally near the theoretic

organizational center, with maximum access to all divisions and management

levels. In larger organizations the HRM function might be headed by a vice

president, while smaller entities will have a middle-level manager as head of

HRM. In any case, because the HRM department is charged with managing

the productivity and development of workers at all levels, the top HRM

manager ideally has access to, and the support of, key decision makers. In

addition, the HRM department should be situated in such a way that it has

horizontal access, or is able to communicate effectively with all divisions

within the company. Horizontal access allows HRM to integrate, educate, and

train the workforce, and to facilitate changes that affect one division and

indirectly influence other segments of the company or institution.

The structure of HRM departments differs according to the type and

size of the organization that they serve. But many large organizations

(including governments, institutions, manufacturing companies, and service

firms) organize HRM employee development functions around various clusters

of workers—they conduct recruiting, administrative, and other duties in a

central location. Different employee development groups for each

department are necessary to train and develop employees in specialized

areas, such as sales, engineering, marketing, or executive education. In

contrast, some HRM departments are completely independent and are

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organized purely by function. The same training department, for example,

serves all divisions of the organization.

iii)HRM FUNCTIONS:

To fulfill their basic role and achieve their goals, HRM professionals and

departments engage in a variety of activities in order to execute their human

resource plans. HRM implementation activities fall into four functional groups,

each of which includes related legal responsibilities: acquisition,

development, compensation, and maintenance.

a) ACQUISITION:

Acquisition duties consist of human resource planning for employees,

which includes activities related to analyzing employment needs, determining

the necessary skills for positions, identifying job and industry trends, and

forecasting future employment levels and skill requirements. These tasks

may be accomplished using such tools and techniques as questionnaires,

interviews, statistical analysis, building skill inventories, and designing career

path charts.

Four specific goals of effective human resource planning are:

1. Sustaining stable workforce levels during ups and downs in output,

which can reduce unnecessary employment costs and liabilities and

increase employee morale that would otherwise suffer in the event of

lay-offs.

2. Preventing a high turnover rate among younger recruits.

3. Reducing problems associated with replacing key decision makers in

the event of an unexpected absence.

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4. Making it possible for financial resource managers to efficiently plan

departmental budgets.

The acquisition function also encompasses activities related to recruiting

workers, such as designing evaluation tests and interview methods. Ideally,

the chief goal is to hire the most-qualified candidates without encroaching on

federal regulations or allowing decision makers to be influenced by unrelated

stereotypes. HRM departments at some companies may choose to administer

honesty or personality tests, or to test potential candidates for drug use.

Recruitment responsibilities also include ensuring that the people in the

organization are honest and adhere to strict government regulations

pertaining to discrimination and privacy. To that end, human resource

managers establish and document detailed recruiting and hiring procedures

that protect applicants and diminish the risk of lawsuits.

b)DEVELOPMENT:

The second major HRM function, human resource development, refers

to performance appraisal and training activities. The basic goal of appraisal is

to provide feedback to employees concerning their performance. This

feedback allows them to evaluate the appropriateness of their behavior in the

eyes of their coworkers and managers, correct weaknesses, and improve

their contribution. HRM professionals must devise uniform appraisal

standards, develop review techniques, train managers to administer the

appraisals, and then evaluate and follow up on the effectiveness of

performance reviews. They must also tie the appraisal process into

compensation and incentive strategies, and work to ensure that federal

regulations are observed.

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Training and development activities include the determination,

design, execution, and analysis of educational programs. Orientation

programs, for example, are usually necessary to acclimate new hires to the

company. The HRM training and education role may encompass a wide

variety of tasks, depending on the type and extent of different programs. In

any case, the HRM professional ideally is aware of the fundamentals of

learning and motivation, and must carefully design effective training and

development programs that benefit the overall organization as well as the

individual. Training initiatives may include apprenticeship, internship, job

rotation, mentoring, and new skills programs.

c) COMPENSATION:

Compensation, the third major HRM function, refers to HRM duties

related to paying employees and providing incentives for them. HRM

professionals are typically charged with developing wage and salary systems

that accomplish specific organizational objectives, such as employee

retention, quality, satisfaction, and motivation. Ultimately, their aim is to

establish wage and salary levels that maximize the company's investment in

relation to its goals. This is often successfully accomplished with performance

based incentives. In particular, HRM managers must learn how to create

compensation equity within the organization that doesn't hamper morale and

that provides sufficient financial motivation. Besides financial compensation

and fringe benefits, effective HRM managers also design programs that

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reward employees by meeting their emotional needs, such as recognition for

good work.

d)MAINTENANCE:

The fourth principal HRM function, maintenance of human resources,

encompasses HRM activities related to employee benefits, safety and health,

and worker-management relations. Employee benefits are non-incentive-

oriented compensation, such as health insurance and free parking, and are

often used to transfer nontaxed compensation to employees. The three major

categories of benefits managed by HRM managers are: employee services,

such as purchasing plans, recreational activities, and legal services;

vacations, holidays, and other allowed absences; and insurance, retirement,

and health benefits. To successfully administer a benefits program, HRM

professionals need to understand tax incentives, retirement investment plans,

and purchasing power derived from a large base of employees.

Human resource maintenance activities related to safety and health

usually entail compliance with federal laws that protect employees from

hazards in the workplace. Regulations emanate from the federal Occupational

Safety and Health Administration, for instance, and from state workers'

compensation and federal Environmental Protection Agency laws. HRM

managers must work to minimize the company's exposure to risk by

implementing preventive safety and training programs. They are also

typically charged with designing detailed procedures to document and handle

injuries.

Maintenance tasks related to worker-management relations primarily

entail: working with labor unions, handling grievances related to misconduct

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such as theft or sexual harassment, and devising systems to foster

cooperation. Activities in this arena include contract negotiation, developing

policies to accept and handle worker grievances, and administering programs

to enhance communication and cooperation.

IV)HRM TRENDS:

In the 1990s several forces were shaping the broad field of HRM. The

first key force, new technologies—particularly information technology—

brought about the decentralization of communications and the shake-up of

existing paradigms of human interaction and organizational theory. Satellite

communications, computers and networking systems, fax machines, and

other devices were facilitating rapid change. Moreover, since these

technologies helped blur the lines between work time and personal time by

enabling employees to work at home, HRM professionals began adopting

"management by objective" approaches to human resources instead of the

traditional "management by sight" method.

A second important change affecting HRM was new organizational

structures that began to emerge during the 1980s and continued through the

1990s. Because many companies began expanding their operations and

diversifying their products and services, the central decision-making system

failed to respond quickly enough to managers' needs and concerns.

Therefore, companies started scrapping traditional, hierarchical

organizational structures in favor of flatter, decentralized management

systems. Consequently, fewer managers were involved in the decision-

making process and companies were adopting more of a team approach to

management. HRM professionals, as the agents of change, were charged with

reorganizing workers and increasing their efficiency. These efforts also

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resulted in the proliferation of part-time, or contract, employees, which

required human resource strategies that contrasted with those applicable to

full time workers.

A third change factor was accelerating market globalization, which was

increasing competition and demanding greater performance out of workers,

often at diminished levels of compensation. To compete abroad, companies

were looking to their HRM professionals to augment initiatives related to

quality, productivity, and innovation.

V)Performance Appraisal System – A Theoretical Framework:

Performance appraisal is 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.

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.

By focusing the attention on performance, performance appraisal

goes to the heart of personnel management and reflects the

management's interest in the progress of the employees.

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DEFINITION:

According to A.B.FLIPO PAS means “A prominent personality in the

field of Human resources, "performance appraisal is the systematic,

periodic and an impartial rating of an employee’s 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.

VI)Objectives Of Performance appraisal:

To review the performance of the employees over a given

period of time.

To judge the gap between the actual and the desired

performance.

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between

superior – subordinates and management – employees.

To diagnose the strengths and weaknesses of the individuals so

as to identify the training and development needs of the future.

To provide feedback to the employees regarding their past

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performance.

Provide information to assist in the other personal decisions in

the organization.

Provide clarity of the expectations and responsibilities of the

functions to be performed by the employees.

To judge the effectiveness of the other human resource functions

of the organization such as recruitment, selection, training and

development.

To reduce the grievances of the employees.

VII)Measuring An Employee’s Performance:

The most difficult part of the performance appraisal process is to

accurately and objectively measure the employee performance.

Measuring the performance covers the evaluation of the main tasks

completed and the accomplishments of the employee in a given time

period in comparison with the goals set at the beginning of the period.

Measuring also encompasses the quality of the accomplishments, the

compliance with the desired standards, the costs involved and the time

taken in achieving the results.

Measuring employee performance is the basis of the Performance

appraisal processes and performance management. Accurate and

efficient performance measurement not only forms the basis of an

accurate performance review but also gives way to judging and

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measuring employee potential.

For the purpose of measuring employee performance, different input

forms can be used for taking the feedback from the various sources like the

superior, peers, customers, vendors and the employee himself. All the

perspectives thus received should be combined in the appropriate manner

and to get an overall, complete view of the employees’ performance.

Observation can also be exercised by the superior to obtain information.

Some suggestions and tips for measuring employee performance are:

Clearly define and develop the employee plans of action (performance)

with their role, duties and responsibilities.

Organizational outcomes or the achievement of organizational goals

should also be kept in mind.

Focus on accomplishments and results rather than on activities.

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 organization to be an effective organization 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

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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 employee’s performance, an organization might rate most of 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.

VIII)Process of Performance Appraisal

1. ESTABLISHING PERFORMANCE STANDARDS:

The first step in the process of performance appraisal is the setting up of the

standards which will be used to as the base to compare the actual

performance of the employees. This step requires setting the criteria to judge

the performance of the employees as successful or unsuccessful and the

degrees of their contribution to the organizational goals and objectives. The

standards set should be clear, easily understandable and in measurable

terms. In case the performance of the employee cannot be measured, great

care should be taken to describe the standards.

2. COMMUNICATING THE STANDARDS:

Once set, it is the responsibility of the management to communicate the

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standards to all the employees of the organization.

The employees should be informed and the standards

should be clearly explained to the. This will help them to understand

their roles and to know what exactly is expected from them. The

standards should also be communicated to the appraisers or the

evaluators and if required, the standards can also be modified at

this stage itself according to the relevant feedback from the

employees or the evaluators.

3. MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the Performance appraisal process is

measuring the actual performance of the employees that is the

work done by the employees during the specified period of time.

It is a continuous process which involves monitoring the

performance throughout the year. This stage requires the careful

selection of the appropriate techniques of measurement, taking

care that personal bias does not affect the outcome of the

process and providing assistance rather than interfering in an

employees work.

4. COMPARING THE ACTUAL WITH THE DESIRED

PERFORMANCE

The actual performance is compared with the desired or the

standard performance. The comparison tells the deviations in the

performance of the employees from the standards set. The result

can show the actual performance being more than the desired

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performance or, the actual performance being less than the

desired performance depicting a negative deviation in the

organizational performance. It includes recalling, evaluating and

analysis of data related to the employees’ performance.

5. DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with

the employees on one-to-one basis. The focus of this discussion is

on communication and listening. The results, the problems and the

possible solutions are discussed with the aim of problem solving

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and reaching consensus. The feedback should be given with a

positive attitude as this can have an effect on the employees’

future performance. The purpose of the meeting should be to solve

the problems faced and motivate the employees to perform better.

6. DECISION MAKING

The last step of the process is to take decisions which can be taken

either to improve the performance of the employees, take the

required corrective actions, or the related HR decisions like rewards,

promotions, demotions, transfers etc.

7.Pre-requisites for Effective & Successful Performance Appraisal

The essentials of an effective performance system are as follows:

a) Documentation – means continuous noting and documenting the

performance. It also helps the evaluators to give a proof and the basis of their

ratings.

b) Standards / Goals – the standards set should be clear, easy to

understand, achievable, motivating, time bound and measurable.

c) Practical and simple format - The appraisal format should be simple,

clear, fair and objective. Long and complicated formats are time consuming,

difficult to understand, and do not elicit much useful information.

e) Evaluation technique – An appropriate evaluation technique should be

selected; the appraisal system should be performance based and uniform.

The criteria for evaluation should be based on observable and measurable

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characteristics of the behavior of the employee.

f) Communication – Communication is an indispensable part of the

Performance appraisal process. The desired behavior or the expected results

should be communicated to the employees as well as the evaluators.

Communication also plays an important role in the review or feedback

meeting. Open communication system motivates the employees to actively

participate in the appraisal process.

g) Feedback – The purpose of the feedback should be developmental

rather than judgmental. To maintain its utility, timely feedback should be

provided to the employees and the manner of giving feedback should be

such that it should have a motivating effect on the employees’ future

performance.

j) Personal Bias – Interpersonal relationships can influence the evaluation

and the decisions in the performance appraisal process. Therefore, the

evaluators should be trained to carry out the processes of appraisals without

personal bias and effectively

IX) Challenges of Performance Appraisal

An organization comes across various problems and challenges Of

Performance Appraisal in order to make a performance appraisal system

effective and successful. The main Performance Appraisal challenges involved

in the performance appraisal process are:

• Determining the evaluation criteria

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Identification of the appraisal criteria is one of the biggest problems faced by

the top management. The performance data to be considered for evaluation

should be carefully selected. For the purpose of evaluation, the criteria

selected should be in quantifiable or measurable terms

A) Create a rating instrument

The purpose of the Performance appraisal process is to judge the

performance of the employees rather than the employee. The focus of the

system should be on the development of the employees of the organization.

B) LACK OF COMPETENCE

Top management should choose the raters or the evaluators carefully.

They should have the required expertise and the knowledge to decide the

criteria accurately. They should have the experience and the necessary

training to carry out the appraisal process objectively.

C) ERRORS IN RATING AND EVALUATION

Many errors based on the personal bias like stereotyping, halo effect (i.e.

one trait influencing the evaluator’s rating for all other traits) etc. may creep

in the appraisal process. Therefore the rater should exercise objectivity and

fairness in evaluating and rating the performance of the employees.

D) RESISTANCE

The appraisal process may face resistance from the employees and the

trade unions for the fear of negative ratings. Therefore, the employees should

be communicated and clearly explained the purpose as well the process of

appraisal. The standards should be clearly communicated and every

employee should be made aware that what exactly is expected from him/her.

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X)Purpose of Performance Appraisal

Performance Appraisal is being practiced in 90% of the organizations

worldwide. Self-appraisal and potential appraisal also form a part of the

performance appraisal processes.

Typically, Performance Appraisal is aimed at:

• To review the performance of the employees over a given period of

time.

• To judge the gap between the actual and the desired performance.

• To help the management in exercising organizational control.

• To diagnose the training and development needs of the future

Provide information to assist in the HR decisions like promotions,

transfers etc.

Provide clarity of the expectations and responsibilities of the

functions to be performed by the employees.

To judge the effectiveness of the other human resource functions

of the organization such as recruitment, selection, training and

development.

To reduce the grievances of the employees.

Helps to strengthen the relationship and communication between

superior – subordinates and management – employees.

XI)Performance Appraisals as Career Development

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Performance appraisal is a part of career development. The latest mantra being

followed by organizations across the world being – "get paid according to what you

contribute" – the focus of the organizations is turning to performance

management and specifically to individual performance. Performance appraisal

helps to rate the performance of the employees and evaluate their contribution

towards the organizational goals. Performance appraisal as Career Development

leads to the recognition of the work done by the employees, many a times by the

means of rewards and appreciation etc. It plays the role of the link between the

organization and the employees’ personal career goals.

Potential appraisal, a part of Performance appraisal, helps to identify the hidden

talents and potential of the individuals. Identifying these potential talents can

help in preparing the individuals for higher responsibilities and positions in the

future. The performance appraisal process in itself is developmental in nature.

Performance appraisal is also closely linked to other HR processes like helps to

identify the training and development needs, promotions, demotions, changes in

the compensation etc. A feedback communicated in a positive manner goes a

long way to motivate the employees and helps to identify individual career

developmental plans. Based on the evaluation, employees can develop their

career goals, achieve new levels of competencies and chart their career

progression. Performance appraisal encourages employees to reinforce their

strengths and overcome their weaknesses.

 

XII) Approaches to Performance Development

A) Performance appraisal - Traditional approach

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Traditionally, performance appraisal has been used as just a method for

determining and justifying the salaries of the employees. Than it began to be

used a tool for determining rewards (a rise in the pay) and punishments (a

cut in the pay) for the past performance of the employees.

This approach was a past oriented approach which

focused only on the past performance of the employees i.e. during a past

specified period of time. This approach did not consider the developmental

aspects of the employee performance i.e. his training and development needs

or career developmental possibilities. The primary concern of the traditional

approach is to judge the performance of the organization as a whole by the

past performances of its employees.

Therefore, this approach is also called as the overall approach. In 1950s the

performance appraisal was recognized as a complete system in itself and the

Modern Approach to performance appraisal was developed.

B)Performance appraisal - Modern approach

The modern approach to performance development has made the

performance appraisal process more formal and structured. Now, the

performance appraisal is taken as a tool to identify better performing

employees from others, employees’ training needs, career development

paths, rewards and bonuses and their promotions to the next levels.

Appraisals have become a continuous and periodic activity in the

organizations. The results of performance appraisals are used to take various

other HR decisions like promotions, demotions, transfers, training and

development, reward outcomes. The modern approach to performance

appraisals includes a feedback process that helps to strengthen the

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relationships between superiors and subordinates and improve

communication throughout the organization.

The modern approach to Performance appraisal is a future oriented approach

and is developmental in nature. This recognizes employ

XIII)Methods of Performance Appraisal

 

The performance appraisal methods may be classified into three categories,

as shown in Figure below.

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Figure: Performance Appraisal Methods

 

Traditional Methods of Performance Appraisal:

1. EASAY APPRAISAL METHOD

This traditional form of appraisal, also known as "Free Form method"

involves a description of the performance of an employee by his superior. The

description is an evaluation of the performance of any individual based on the

facts and often includes examples and evidences to support the information.

A major drawback of the method is the inseparability of the bias of the

evaluator.

2. STRAIGHT RANKING METHOD

29

This is one of the oldest and simplest techniques of performance appraisal. In

this method, the appraiser ranks the employees from the best to the poorest

on the basis of their overall performance. It is quite useful for a comparative

evaluation.

3. PAIRED COMPARISON

A better technique of comparison than the straight ranking method, this

method compares each employee with all others in the group, one at a time.

After all the comparisons on the basis of the overall comparisons, the

employees are given the final rankings.

4. CRITICAL INCIDENTS METHODS

In this method of Performance appraisal, the evaluator rates the employee on

the basis of critical events and how the employee behaved during those

incidents. It includes both negative and positive points. The drawback of this

method is that the supervisor has to note down the critical incidents and the

employee behaviour as and when they occur.

5. FIELD REVIEW

In this method, a senior member of the HR department or a training officer

discusses and interviews the supervisors to evaluate and rate their respective

subordinates. A major drawback of this method is that it is a very time

consuming method. But this method helps to reduce the superiors’ personal

bias.

6. CHECKLIST METHOD

The rater is given a checklist of the descriptions of the behaviour of the

employees on job. The checklist contains a list of statements on the basis of

which the rater describes the on the job performance of the employees.

30

7. GRAPHIC RATING SCALE

In this method, an employee’s quality and quantity of work is assessed in a

graphic scale indicating different degrees of a particular trait. The factors

taken into consideration include both the personal characteristics and

characteristics related to the on the job performance of the employees. For

example a trait like Job Knowledge may be judged on the range of average,

above average, outstanding or unsatisfactory.

8. FORCED DISTRIBUTION

To eliminate the element of bias from the rater’s ratings, the evaluator is

asked to distribute the employees in some fixed categories of ratings like on

a normal distribution curve. The rater chooses the appropriate fit for the

categories on his own discretion.

XIV)Modern Methods of Performance Appraisal

1. ASSESSMENT CENTRES :

An assessment centre typically involves the use of methods like

social/informal events, tests and exercises, assignments being given to a

group of employees to assess their competencies to take higher

responsibilities in the future. Generally, employees are given an assignment

similar to the job they would be expected to perform if promoted. The trained

evaluators observe and evaluate employees as they perform the assigned

jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centres are

interpersonal skills, intellectual capability, planning and organizing

capabilities, motivation, career orientation etc. assessment centres are also

31

an effective way to determine the training and development needs of the

targeted employees.

2. BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique

which combines the graphic rating scale and critical incidents method. It

consists of predetermined critical areas of job performance or sets of

behavioral statements describing important job performance qualities as

good or bad (for eg. the qualities like inter personal relationships, adaptability

and reliability, job knowledge etc). These statements are developed from

critical incidents.

In this method, an employee’s actual job behavior is judged against the

desired behavior by recording and comparing the behavior with BARS.

Developing and practicing BARS requires expert knowledge.

3. HUMAN RESOURCE ACCOUNTING METHOD

Human resources are valuable assets for every organization. Human

resource accounting method tries to find the relative worth of these assets in

the terms of money. In this method the Performance appraisal of the

employees is judged in terms of cost and contribution of the employees. The

32

cost of employees include all the expenses incurred on them like their

compensation, recruitment and selection costs, induction and training costs

etc whereas their contribution includes the total value added (in monetary

terms). The difference between the cost and the contribution will be the

performance of the employees. Ideally, the contribution of the employees

should be greater than the cost incurred on them.

4. 360-Degree-Performance-Appraisals

360 degree feedback, also known as 'multi-rater feedback', is the most

comprehensive appraisal where the feedback about the employees’

performance comes from all the sources that come in contact with the

employee on his job.

360 degree respondents for an employee can be his/her peers, managers

(i.e. superior), subordinates, team members, customers, suppliers/ vendors -

anyone who comes into contact with the employee and can provide valuable

insights and information or feedback regarding the "on-the-job" performance

of the employee.

A)360 degree appraisal has four integral components

1.Self

2.Superior’s

3.Subordinate’s

4.Peer

Self appraisal gives a chance to the employee to look at his/her strengths

33

and weaknesses, his achievements, and judge his own performance.

Superior’s appraisal forms the traditional part of the 360 degree performance

appraisal where the employees’ responsibilities and actual performance is

rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the

parameters like communication and motivating abilities, superior’s ability to

delegate the work, leadership qualities etc. Also known as internal customers,

the correct feedback given by peers can help to find employees’ abilities to

work in a team, co-operation and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and

therefore 360 degree Performance appraisal have high employee

involvement and also have the strongest impact on behavior and

performance. It provides a "360-degree review" of the employees’

performance and is considered to be one of the most credible performance

34

appraisal methods.

360 degree performance appraisal is also a powerful developmental tool

because when conducted at regular intervals (say yearly) it helps to keep a

track of the changes others’ perceptions about the employees. A 360 degree

appraisal is generally found more suitable for the managers as it helps to

assess their leadership and managing styles. This technique is being

effectively used across the globe for performance appraisals. Some of the

organizations following it are Wipro, Infosys, and Reliance Industries etc.

5. Management By Objectives

The concept of ‘Management by Objectives’ (MBO) was first given by

Peter Ducker in 1954. It can be defined as a process whereby the

employees and the superiors come together to identify common goals,

the employees set their goals to be achieved, the standards to be

taken as the criteria for measurement of their performance and

contribution and deciding the course of action to be followed.

The essence of MBO is participative goal setting, choosing course of

actions and decision making. An important part of the MBO is the

measurement and the comparison of the employee’s actual performance with

the standards set. Ideally, when employees themselves have been involved

with the goal setting and the choosing the course of action to be followed by

them, they are more likely to fulfill their responsibilities.

A)THE MBO PROCESS:

35

B)UNIQUE FEATURES AND ADVANTAGES OF MBO

The principle behind Management by Objectives (MBO) is to create

empowered employees who have clarity of the roles and responsibilities

expected from them, understand their objectives to be achieved and thus

help in the achievement of organizational as well as personal goals.

36

Some of the important features and advantages of MBO are:

Clarity of goals – With MBO, came the concept of SMART goals i.e.

goals that are:

Specific

Measurable

Achievable

Realistic

Time bound.

The goals thus set are clear, motivating and there is a linkage

between organizational goals and performance targets of the

employees.

The focus is on future rather than on past. Goals and standards are

set for the performance for the future with periodic reviews and

feedback.

Motivation – Involving employees in the whole process of goal

setting and increasing employee empowerment increases employee

job satisfaction and commitment.

Better communication and Coordination – Frequent reviews and

interactions between superiors and subordinates helps to maintain

harmonious relationships within the enterprise and also solve many

problems faced during the period.

 

6. Balanced Scorecard

37

To evaluate the organizational and employee performance in Performance

appraisal management processes, the conventional approach measures the

performance only on a few parameters like the action processes, results

achieved or the financial measures etc. The Balanced scorecard – an

approach given by Kaplan and Norton provides a framework of various

measures to ensure the complete and balanced view of the performance of

the employees. Balanced scorecard focuses on the measures that drive

performance.

The balanced scorecard provides a list of measures that balance the

organizations internal and process measures with results, achievements and

financial measures.

To evaluate the organizational and employee performance in Performance

appraisal management processes, the conventional approach measures the

performance only on a few parameters like the action processes, results

achieved or the financial measures etc.

The Balanced scorecard – an approach given by Kaplan and Norton

provides a framework of various measures to ensure the complete and

balanced view of the performance of the employees. Balanced scorecard

focuses on the measures that drive performance.

The balanced scorecard provides a list of measures that balance the

organizations internal and process measures with results, achievements and

financial measures.

 

The two basic features of the balanced scorecard are:

A balanced set of measures based on. the four perspectives of

38

balanced scorecard

Linking the measures to Employee Performance

The four Perspectives recommended by Kaplan and Norton for the

managers to collect information are:

a) The financial measures – The financial measures include the

results like profits, increase in the market share, return on

investments and other economic measures as a result of the actions

taken.

b) The customers’ measures - These measures help to get on

customer satisfaction, the customer’s perspective about the

organization, customer loyalty, acquiring new customers. The data

can be collected from the frequency and number of customer

complaints, the time taken to deliver the products and services,

improvement in quality etc.

c) The internal business measures – These are the measures

related to the organization’s internal processes which help to

achieve the customer satisfaction. It includes the infrastructure, the

long term and short term goals and objectives, organizational

processes and procedures, systems and the human resources.

d) The innovation and learning perspective - The innovation

and learning measures cover the organization’s ability to learn,

innovate and improve. They can be judged by employee skills

39

matrix, key competencies, value added and the revenue per

employee.

7. Graphic rating scale: Perhaps the most commonly used method of

performance evaluation is the graphic rating scale. Of course, it is also one

of the oldest methods of evaluation in use. Under this method, a printed

form, as shown below, 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.

Table: Typical Graphic Rating Scale

Employee Name................... Job title.................

Department......................... Rate...............

Data..................................

 Quantity of work:

Volume of work

under normal

working conditions

Unsatisfactor

y

Fair Satisfactory Good Outstandin

g

Quality of work:

Neatness,

thoroughness and

accuracy of work

Knowledge of job

         

40

A clear

understanding of

the factors

connected with the

job

         

Attitude: Exhibits

enthusiasm and

cooperativeness on

the job

         

Dependability:

Conscientious,

thorough, reliable,

accurate, with

respect to

attendance, reliefs,

lunch breaks, etc.

         

Cooperation:

Willingness and

ability to work with

others to produce

desired goals.

         

 From the graphic rating scales, excerpts can be obtained about the

performance standards of employees. For instance, if the employee has

serious gaps in technical-professional knowledge (knows only rudimentary

41

phases of job); lacks the knowledge to bring about an increase in

productivity; is reluctant to make decisions on his own (on even when he

makes decisions they are unreliable and substandard); declines to accept

responsibility; fails to plan ahead effectively; wastes and misuses

resources; etc., then it can safely be inferred that the standards of the

performance of the employee are dismal and disappointing.

 The rating scale is the most common method of evaluation of an

employee’s performance today. One positive point in favor of the rating

scale is that it is easy to understand, easy to use and permits a statistical

tabulation of scores of employees. When ratings are objective in nature

they can be effectively used as evaluators. The graphic rating scale may

however suffer from a long standing disadvantage, i.e., it may be arbitrary

and the rating may be subjective. Another pitfall is that each characteristic

is equally important in evaluation of the employee’s performance and so

on.

8)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 towards the

issue.

According to a popular saying:

42

"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 Don’t judge the appraiser as a person.

o Should take the feedback objectively.

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.

43

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

Make the appraisal feedback meeting useful and productive for the

organization and the employee.

CHAPTER-II

OBJECTIVES

44

AND

METHODOLOGY

1)SCOPE OF THE STUDY:

The scope of H.R.M is very wide research in behavioral sciences, new

trends in managing knowledge workers and advances in the field of

training have expanded the scope of H.R function in recent years.

The Indian institute of personnel management has specified the scope

of H.R.M thus:

Personnel aspect: this is concerned with manpower

planning, recruitment, selection, placement, transfer, promotion,

training and development, layoff and retrenching, remuneration,

incentives, productivity, etc.

2)OBJECTIVES OF THE STUDY:

1. To know the various performance appraisal methods provided in

45

the company.

2. To study whether the employees are satisfy about their

performance appraisal methods.

3. To know opinions of employees about performance appraisal

measures.

4. To give suitable suggestions regarding performance appraisal

measures to the company.

3)METHODOLOGY:-

Methodology is a systematic procedure of collecting information

in order to analyses and verifies a phenomenon. To entire study is

based on both the primary data and the secondary data.

A)DATA COLLECTION:

Data is collected through two sources. They are

1. Primary Data:-

Primary data is collected from the

selected sample employees (50) by using structured

questionnaire which consists of 15 open ended questions.

46

2. Secondary Data:-

Secondary data is collected from

company broachers, records and manuals.

The data was analyzed with the help of

tables and bar charts. Findings for each diagram were written

and suggestions were offered at the end of the report.

4)SAMPLING METHOD:

The lanco has been selected as the sample organization for

this case study because it is private sector organization, which is

labour intensive. It is also expected that the selected organization

would have an efficient recruitment and selection.

Random sampling method used for this study.

5)SAMPLE SIZE:

The respondent under study was selected through the simple

random sampling technique. Among the total population in the

organization the respondents were selected randomly. In fact the

size of the sample was 50 employees out of the total strength.

6)SAMPLE LIST:

For the purpose of this a sample list was prepared in

47

consultation with faculty members and HR managers workings in

the Genting Lanco kondapalli power plant.

7)LIMITATIONS OF THE STUDY:

The following are the limitations, which are faced while

carrying on the survey in regard to performance appraisal facilities.

1. Limited period of 6 weeks is not sufficient to carry out the

project

2. Some workers give only basic information.

3. The scope of this limited to “LKPPL”.

4. “Confidentiality” matter restricts for an in depth study.

48

CHAPTER – III

GENTING LANCO

POWER(INDIA)PRIVATE

LIMITED PROFILE

49

Genting Lanco Power(india) Pvt Ltd Profile

Genting Lanco Power (India) Private Limited is a subsidiary of

Genting group of companies based at Kuala Lumpur, Malaysia. Genting

group has its presence in diversified fields like Power, Plantations, Paper &

Packaging, Entertainment, Resorts & Hotels, Property development, Cruise

liners, e Commerce, Oil and Gas.

Genting group is Malaysia’s leading multinational corporation

and one of Asia’s best-managed companies with over 36,000 employees

globally. The group is renowned for its strong management leadership,

financial prudence and sound investment discipline.

The combined market capitalization of the group is about

US $9 billion. The operating revenue for the group for the year 2007 is US

$1.53 billion.

Genting Lanco Power (India) Private Limited has entered in to a

15 years Operations and Maintenance Agreement with Lanco Kondapalli

Power Private Limited, who are the owners of the 368 MW gas fired

combined cycle power plant at kondapalli.

50

Genting Lanco Power (India) Private Limited has its registered office

at Lanco Kondapalli Power Plant, Kondapalli IDA, and Krishna Distric

Lanco Group Profile

LANCO Group, headquartered in Hyderabad, India is one of the leading

business houses in South India. It has an asset base of US $ 450 million and a turnover of

more than US $ 300 million. With operational experience in power plants based on Gas,

Biomass and Wind and an operating capacity of 509 MW, LANCO is heading for a

capacity of 2500 MW and an asset base of US $ 2.5 billion by the year 2010.

Lanco is a well-diversified group with activities like power generation,

engineering and construction, manufacturing, Information technology (IT), and property

development. Lanco group is striving to Empower, Enable and Enrich partner, business

associates and to be the chosen vehicle for growth for stakeholders and source of

inspiration to the society. The group is recognized as a leading player in the Indian

economic scenario with operation in USA and UK. LANCO also has presence in Civil

Construction, Property Development, Manufacturing of Pig Iron & Ductile Iron Spun

Pipes and Information Technology. LANCO’s overall growth is attributed to its technical,

Commercial and managerial skills, which is appreciated by its International partners –

Commonwealth Development Corporation (ACTIS/Globules) of the United Kingdom,

Genting Group of Malaysia and Doosan of Korea.

51

1) HISTORY AND EVOLUTION

The Lanco group of companies was established nurtured and developed by

a team of dedicated young technocrats. The burning desire to achieve versatility in

engineering spawned the magnificent decade –old growth of the present day multifaceted

conglomerate that touches the nerve center of the country.

L. Rajagopal, a technocrat-turned industrialist, is the Chairman of LANCO

Group. Established in 1989, the Group’s activities range from Power Generation,

Engineering and Construction, Manufacturing to Information Technology. Under his

dynamic leadership, the Group’s capital outlay has touched a whopping US $ 450 million

and is recognized as one of the leading players in the infrastructure sector in India.

2) MEMBER OF PARLIAMENT

After one-and-a-half decades of outstanding contribution to the industry,

Rajagopal chose to enter public life in 2003. He contested the recent elections to the

Lower House of Parliament for Vijayawada constituency and won a landslide victory. As

a Member of Parliament, his avowed mission is to make a difference in public life.

3) OBJECTIVES:

1. To provide basic amenities for the rural poor.

2. To save arts of historical relevance which are on the verge of extinction?

52

3. To develop integrated program for the differently able.

4. To encourage fresh talent in the area of sports.

5. To take up other humanitarian activities.

4) LANCO INDUSTRIES LIMITED: AN ISO 9001 CERTIFIED CO:

Lanco industries Ltd. is established in the year 1993 had setup a state-of-

the-art integrated Pig Iron and Cement Plants, which had in fact set the countries modern

day technological innovations. The complex has a captive power plant generating 2.5

MW of electricity from waste that meets the substantial part of the power requirement.

A) LANCO CONSTRUCTION LTD:

This was established in the year 1993 and has executed most demanding

and difficult projects in the field of civil and construction engineering. Lanco

constructions ltd. today stand tall and proud as one the leading civil engineering

companies by building competencies, developing modern construction management

methods and by adopting the highest standards of guilty.

At Lanco diverse dimension of growth is achieved through

converging rays of vision creating dimensions.

KALAHASTI CASTINGS limited an example of the forward integration

of the company established in 1997 located strategically beside the Pig Iron Plant

avoiding re-melting and transportation it employs delved process that ensures the highest

quality and durability.

B) LANCO PROJECT LTD:

Focuses on the immense opportunities in the area of Real Estates,

Construction and Property Development, International shopping malls, Food counters etc

are a few projects on the anvil.

53

LANCO’s venture into power is a natural extension of its core mission.

Lanco Kondapalli Power Pvt. Ltd. is a short gestation Poly fuel based combined cycle

power plant. The 368.144 mw (ISO) power plant has a build- operate -own agreement

with the state government. It is Lanco’s timely answer to the nations increasing power

needs. Lanco Kondapalli Power Ltd. is a joint venture involving Lanco group, Genting

Group of Malaysia, Hanjung (the Korean heavy industries and Construction Company)

and the Common Wealth Development Corporation Ltd. The project reflects Lanco’s

ability to partner with the global players and achieve inter organization synergies that

give its vision great scope and reach.

5) LANCO KONDAPALLI POWER PRIVATE LTD:

a)Vision:

1. To empower, enable and enrich partners, business and associates.

2. To be the chosen vehicle of growth for the Stakeholders and a source of inspira-

tion for the society.

b)Mission:

1. To be a leader in all areas key to the development of a nation and progress of the

world.

2. To be a leader in the field of Infrastructure, Manufacturing and Information Tech-

nology.

o To become learning organization and enable people to think like geniuses.

54

o Where every associate achieves outstanding results.

o Where capabilities are nurtured and stretched beyond boundaries for new

understandings, high performance, quality relations and attainment of

peace and happiness.

o Where an employee makes transaction from an old world to a new world,

from an old understanding to a desired understanding and from a subordin-

ate to an associate.

3. To constantly evolve and seek synergies between the interests of employers and

those of employees and to work intelligently towards empowerment of associates.

4. In view of global competition and knowledge explosion infusion in the market

place with complex, cognitive work, we seek to build efficiencies in such an un-

certain environment through empowerment of employees.

o Where decision-making is at frontline levels

o Where decision-making responsibility vests with self-directing teams close

to internal and external customers and associates take charge of their own

jobs.

o Where the organization is built, sleek, for speed, flexibility, quality and

service that are essential for global competition.

5. To make association with us an enriching experience to our partners, businesses

and associates.

6. To work with honest purpose, strategic planning and enduring perseverance to

achieve customer satisfaction, stakeholder benefits and measurable economic

growth for the organization.

55

c) Philosophy:

1. Assemble best people, delegate authority and don’t interfere “people make the dif-

ference

2. Business heads are entrepreneurs

3. Mistakes are facts of life. Its is response to the error that counts.

d)Success:

1. Create your luck by hard work

2. Trust + delegation = growth.

e)Work culture:

1. Commitment, creativity, efficiency, team spirit.

6) PROMOTERS AND EQUITY PARTNERS:

The power project is promoted by Lanco group of India and is co-promoted by

1. Genting Group of Malaysia

2. (CDC) common wealth development corporation UK

3. (Doosan) Doosan heavy industries and construction co.ltd in Korea.

a)LOCATION:

The plant is located at Kondapalli industrial development area in Krishna

(Dist.) of Andhra Pradesh. The plant is connected by road (national high way no. 9),

56

broad gauge railway line and is approximately 25 km from Vijayawada .The registered

office is at Lanco house, No - 565,

Phase - III, Jubilee Hills, Road no – 92, Hyderabad, Andhra Pradesh

500033, India.

Nearest railway station - Kondapalli railway station

Nearest airport - Gannavaram

Access road - National highway No –9

Source of water - Krishna river 9-km from the site

Climatic condition - Tropical hot, Humid.

7)LANCO POWER PLANT /OPERATION AND MAINTENANCE:

The project comprise of a combined cycle power plant consisting of two

(2) gas turbine generating units, two heat recovery steam generator and one steam turbine

generation unit along with all electrical system, Controls and instrumentation, Civil,

Structural and architectural works.

Lanco Kondapalli Power Private Limited (LKPPL) is an Independent

Power Project (IPP) located at Kondapalli Industrial Developmental Area near

Vijayawada in India, set up at a cost of around Rs.11,000 million (US $275 million), the

Plant is a 368.144 MW Combined Cycle Power Project operating on Natural Gas as

Primary fuel.

57

The plant operates on natural gas as the main fuel and Naphtha; HSD as

the alternative fuels Natural gas fuel is being received at site from Tatipaka near

Rajahmundry through a pipeline laid down by GAIL

Fuel -- Received

Naphtha fuel -- Through dedicated pipeline from HPCL

Kondapalli depot.

HSD -- Through Road tankers

The Operations & Maintenance of the plant is done by GLPIPL (Genting

Lanco Power (India) Private Limited) which is a joint venture of Lanco group

Hyderabad and Genting Group of Malaysia.

9)AWARDS AND CERTIFICATES:

1. Leadership and Excellence Award in Safety, Health & Environment 2002 by Co-

federation of Indian Industries.

2. Best Environmental Improvement award 2003 FAPCCI.

3. Certificate of Environmental management system with ISO 14001 (1996) from

LRQA April 2003.

4. Environmental Excellence Award 2004 by Green-tech Foundation, New Delhi.

5. Certificate of Quality Management System with ISO 9001 LRQM; April 2004.

6. 25% Cess Rebate on Water uses by APPCB.

7. OSHAS 18001 Certified – June 2005.

58

A) ENVIRONMENT POLICY:

We are committed to achieve satisfaction of interested parties and protect

environment by

1. Generation of power by implementation of prudent Eco friendly methods.

2. Conservation of natural resources like natural gas and water.

3. Complying to all the legal requirements.

4. Continual improvement in the environmental performance by minimizing the

emission and discharges & prevention of pollution.

5. Enhancing environmental awareness among employee’s contractors and surrounding

society.

B) QUALITY POLICY:

We are committed to continually improve the quality of our performance

through the application of our Quality policy.

1. Utilizing Commercial, Engineering and Human Resources, to Minimize Risks to

Personnel, Plant & Equipment and Maximize plant Availability for Generation of

Power.

2. Providing the best policies level of commercial performance for the benefit of all

Stake Holders.

3. Implementing prudent utility practices and providing Healthy and Excellent

Working Environment in all Disciplines of Engineering and Business as

documented in the Quality System.

59

C) OCCUPATIONAL HEALTH & SAFETY (OH&S) POLICY:

The Management is committed to maintain high standards of health and

safety in the workplace and shall consider OH&S in all its business activities.

1. Provide a safe working place to all of our direct and indirect employees by

minimizing Occupational Health & Safety Risks and practicing National

Standards.

2. Monitor and maintain health, safety and welfare of all employees and comply with

all applicable statutes.

3. Provide appropriate and ongoing Information, Instruction and Training of our

direct and indirect employees.

D) LKPPL’S COMMITMENT TO CLEAN & SAFE ENVIRONMENT:

(Green belt Management)

Lanco Commitment to re vegetation is

1. Encourage native fauna to develop.

2. Contribute to a reduction in green house gases

3. Reduce noise level

4. Minimize the effect of soil erosion.

5. Help to restore the site to a sustainable system.

Ongoing trees planting and maintaining theme are the important aspects of

environmental management program at LANCO.

60

E) NOISE MANAGEMENT:

Efforts to minimize noise mission from equipment and activities.

1. Acoustic linings around gas and steam turbines and boilers.

2. Silencers have been provided.

3. Noise minimization policy for equipment.

F) EFFLUENT DISCHARGED FROM POWER PLANT:

Well-developed chemical laboratory to cater the need for monitoring

effluent quality as per APPCD Norms.

1. Gaseous emission mgt. – as issues of green house gases has become prominent in

the public.

2. Water mgt. - Acknowledges importance of maintaining water quality.

3. Community participation.

4. Environmental awareness training.

61

COMPANY HIGH LIGHTS:

1. 368.144 MW combined cycle power plant under build – operate – own arrangement

with the state government.

2. The single largest investment in Andhra Pradesh, by any Andhra Pradesh based

group.

3. Power purchase agreement firmed with AP TRANSCO for 15 years.

4. Eco – friendly, adhering to highest standards of safety and conversion of natural

resources.

5. The first project cleared by Central Electricity Authority (CEA) under the

international competitive Bidding (ICB) route for power projects in India.

6. The first of the ICB power projects in India to achieve financial closure and complete

construction in shortest possible time.

7. One of the lowest evacuations costs to AP TRANSCO.

8. The first private sector power project to receive disbursement of finance from Power

Finance Corporation limited, India.

9. The shortest construction time in the private sector

10. Location advantages include:

a) Proximity to National and state Highway

b) Just 1.5 km from fuel storage facility of Hindustan Petroleum Corporation

limited.

62

CHAPTER-IV

PERFORMANCE APPRAISAL GENTING

LANCO POWER(INDIA)

Pvt Ltd

1). What method of appraisal would your management use to evaluate your performance?

63

Table No.1: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Confidential report 47 94%

2 360’ Performance appraisal 3 6%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that the management above 94% Confidential

report of performance method is used to emulate to assess their employees and only 6% of the

employees are agree 360’ performance appraisal is better to evaluate the performance of the

employee.

confidential report 360 Performance appraisel05

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Figure No.1: Views of the Respondents on the Method of Appraisal

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2). what is the main objective of performance appraisal?

Table No.2: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Incentives & promotions 50 100%

2 Termination 0 0%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 90% of the employees are agree the main

objective of the performance appraisal is to get the incentives and promotions and 10% of the

employees are agree the main objective of the management is Termination of the employee.

Incentives & promotions Termination0

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Figure No.2: Views of the Respondents on the Method of Appraisal

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3). Do you think proper training is required to improve your performance?

Table No.3: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Yes 48 97%

2 No 2 3%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 97% of the employees are agree the proper

training is required to improve the performance of the employee and 3% of the employees are

disagree.

Yes No0

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Figure No.3: Views of the Respondents on the Method of Appraisal

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4.) How much period of training they give to you?

Table No.4: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 3 Months 4 8%

2 6 Months 4 8%

3 Once Year 42 94%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 8% of the employees are agree 3 months of the training and 8% of the employees opinion is 6 months and above 90% of the employees are strongly agree the training period is one year the management is given to them

3 Months 6 months Once Year0

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Figure No.4: Views of the Respondents on the Method of Appraisal

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(5) Is the training given by the management is sufficient to you to improve performance level?

Table No.5: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Yes 48 97%

2 No 2 3%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 97% of the employees are agree training is

given by the management is sufficient to improve their skill and performance and 3% of the

employees are say “No” is not sufficient.

Yes No0

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Figure No.5: Views of the Respondents on the Method of Appraisal

(6).Do you think the appraisal system will improve your performance?

68

Table No.6: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Yes 48 97%

2 No 2 3%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 97% of the employees are agree whatever

the appraisal system apply in the organization is really useful to improve their performance 3%

of the employees are disagree.

Yes No0

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Figure No.6: Views of the Respondents on the Method of Appraisal

(7). How do you feel about the appraisal process in your organization?

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Table No.7: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Excellent 3 6%

2 Good 45 90%

3 Bad 2 4%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 6% of the employees are say the

performance appraisal system in the organization is Excellent and 90% of the employees opinion

the performance appraisal system in the organization is Good and only 45 of the employees

opinion is Bad.

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Figure No.7: Views of the Respondents on the Method of Appraisal

(8).How often they evaluate your performance level?

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Table No.8: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 3 Months 0 0%

2 6 months 0 0%

3 Once year 50 100%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 4% of the employees are say the evaluation

process of performance appraisal system in the organization is 3 months and 6% of the

employees opinion is 6 months and 90% of the employees opinion about the evaluation process

of the performance is once a year.

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Figure No.8: Views of the Respondents on the Method of Appraisal

(9). How often should an employee be assessed?

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Table No.9: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Monthly 2 4%

2 2 months 3 6%

3 3 Months 45 90%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information it is understood that 4% of the employees are say employee

should be assessed by the organization every month and 6% of the employees opinion is 2

months and 90% of the employees opinion about the employee assessed process is conducted

by the organization every 3 months in a year.

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Figure No.9: Views of the Respondents on the Method of Appraisal

(10). The spirit of co-operation among the work men, superior & executives?

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Table No.10: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Satisfactory 32 64%

2 Non-satisfactory 8 16%

3 Neutral 10 20%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 64% of the employees are satisfy about the

co-operation among the workmen, superior and executive and 16% of the employees opinion is

they are not satisfy and 20% of the employees opinion about the co-operation among the

workmen, superior and executive is “Neutral”.

Satisfactory Non-satisfactory Neutral0

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Figure No.10: Views of the Respondents on the Method of Appraisal

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(11). Do you think it is better to take subordinate, peers decisions while rating your performance?

Table No.11: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Yes 48 97%

2 No 2 3%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 97% of the employees are feel it is

better to take subordinate, peers decisions while rating our performance and 3% of the

employees are disagree.

Yes No0

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Figure No.11: Views of the Respondents on the Method of Appraisal

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(12). Do you think it should better to have a appraisal committee to evaluate the performance?

Table No.12: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Yes 48 97%

2 No 2 3%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 97% of the employees are feel it is better to appoint a special appraisal committee to assess and emulate the performance of the employee and 3% of the employees are not agree to appoint a special appraisal committee.

Yes No0

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Figure No.12: Views of the Respondents on the Method of Appraisal

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(13). what do you expect from P.A?

Table No.13: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Incentives 2 3%

2 Promotions 48 97%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 3% of the employees are except from the

organization is only incentives and majority of the employees it means 97% of the employees are

except from the organization through performance appraisal is promotions.

Incentives Promotions0

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Figure No.13: Views of the Respondents on the Method of Appraisal

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(14). Do you think P.A will build good relations between superior and subordinates?

Table No.14: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Yes 48 97%

2 No 2 3%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 97% of the employees are feel the perfect

and effective performance appraisal system will be increase the relations between the superior

and subordinates and 3% of the employees are not agree.

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Figure No.14: Views of the Respondents on the Method of Appraisal

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(15). which of the following approach is followed in your organization?

Table No.15: Views of the Respondents on the Method of Appraisal

S.No Opinion Respondents Percentage (%)

1 Tell-tell type 7 14%

2 Tell- listen type 7 14%

3 Problem solving 36 72%

Total 50 100%

Source: Compiled from the collected data of the study.

Interpretation:

From the above information It is understood that 14% of the employees are agree the Tell-

Tell type interaction approach fallow and 14% of the employees are Tell-Listen type and majority

of the employees are problem solving techniques are apply in the organization.

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Figure No.15: Views of the Respondents on the Method of Appraisal

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CHAPTER-V

FINDINGS, SUGGESTIONS AND

CONCLUSION

FINDINGS OF THE STUDY

79

1. It is observed from the study majority of the employees participated in the

performance appraisal rating system conducted by the organization.

2. The employees are showing more interest to make them self more efficient and

effective through the performance appraisal rating program.

3. Most of the respondent’s i.e.90% of employees said that the employee assessed

programmers' conducted once in a year. Rest of the employees’ opinion is better

to conduct for every 3 months.

4. The majority employees are satisfied with the existing performance appraisal

rating program and they are expressed that they will improve the performance.

5. The sources of the performance appraisal rating are both from internal and

external sources.

6. Most of the employees are satisfied with the effectiveness of performance

appraisal system.

7. Majority of the employees accepted that the effective performance appraisal rating

system program improve their performance.

8. Feedback sessions are there for performance appraisal system.

SUGGESTIONS

80

1. Since the employees are satisfied with existing performance appraisal rating system

programmers' the same may be continued.

2. The company may be suggested to undertake much more effective and efficient

appraisal systems along with traditional systems.

3. Improve the industrial relation.

4. Management should take necessary steps to make all the employees involve in the

identification of performance appraisal rating system in the organization.

5. Some of the employees expressed that they are assessed by the organization every

year but that they feel this program will be conducted by the every 3 months it is

better to the employees for their improvement.

6. Management should take necessary steps to provide effective appraisal techniques to

all the employees, for better results.

7. The management of Genting Lanco Company should continue the same interest

towards the appraisal system programmers’ in future also. Due to care has to be

taken for identification of the training needs of the employees.

8. Performance appraisal period should be reasonable with timings of employee

arranged as for the convenience of employee with regular intervals.

CONCLUSION

81

Performance appraisal tells us about the state of affairs of the organization with

regard to the employees. It mainly emphasizes the performance level of employess

programmers’ in a well structured way. After doing a comprehensive studying the

performance appraisal rating system process in Genting Lanco at Kondapalli,

It is observed that the performance appraisal rating system program is very much

useful in identifying the performance level. The feedback should be such that the

individuals are to be known about their faults, where they have lack of knowledge in

doing their jobs in an effective manner.

82

APPENDIX

A. Questionnaire

B. Bibliography

83

QUESTIONNAIRE ON PERFORMANCE APPRAISAL

Personal Profile of the Respondents

1. Age :

2. Gender:

3. Education:

4. Income:

Questionnaire

(1) What method of appraisal would your management use to evaluate your

performance?

(a)Confidential report (b) 360’ Performance appraisal

(2)What is the main objective of the performance appraisal system of your

organization?

(a)Incentives & promotions (b) Termination

(3) Do you think proper training is required to improve your performance?

(a) Yes (b) No

(4) How much period of training should be given to you for improving your

performance?

(A) 3 Months (b) 6 Months (c)Once Year

84

(5) Is the training given by the management is sufficient to you to improve your

performance level?

(a) Yes (b) No

(6)Do you think the appraisal feedback will improve your performance?

(a) Yes (b) No

(7)How do you feel about the appraisal process in your organization?

(a )Excellent (b) Good (c) Bad

(8)How often management evaluates your performance level?

(a) 3 Months (b) 6 months (c) Once in a year

(9)How often should an employee be assessed?

(a)Monthly (b) 2 months (c) 3 Months

(10) The spirit of co-operation among the work men, superior and executives?

(a)Satisfactory (b) Non-satisfactory (c) Neutral

(11)Do you think it is better to take subordinate, peers opinions while rating your performance?

(a) Yes (b) No

12) Do you think it should better to have an appraisal committee to evaluate your

performance?

(a) Yes (B) No

(13) What do you expect from PAS?

(a)Incentives (b) Promotions

(14) Do you think PAS will build good relations between superior and subordinates?

(a) Yes (b) No

85

(15)Which of the following approach is followed in your organization?

(a) Tell-tell type (b) Tell- listen type (c) Problem solving

BIBLIOGRAPHY

Title Author Publication Edition

Human resources &

Personal management

Aswathappa Tata Mc Grew hill 2nd edition

Organizational Behavior Stephen.P.Robbins Prentice- hall of India 9th edition

Personal Management C.B. Mamoris Himalaya publication 5th Edition

WEB SITES

www.hr.com

Www. lkpl@lancogroup.com

www.google.com

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