Nishu Dabur Performance Appraisal

PART-1

1

EXECUTIVE

SUMMARY

2

EXECUTIVE SUMMARY

In today’s scenario, Human capital is acknowledged as one of the most potent sources in

contributing directly and significantly in the growth of any organization.

This project attempts to explore the most effective “HR policies and practices” for

smooth sailing of an organisation.

It was a research conducted to get the feedback of the employees from different

departments about the existing performance appraisal system followed in the

organization.

The main research objective was to understand the relevance of wide variety of methods

and techniques that can be explored towards performance of the organizational goals. In

today’s competitive world every organization is geared towards maximum return with

minimum investment. Human Resource Management plays a vital role towards planning

& controlling cost effective manpower support. This is widely affected by planning and

implementing “Effective Performance Appraisal System” which is the paramount part of

this project

1

Channelising human energies in a predetermined desirable direction are not possible

unless harmonious relations are maintained among team members involved in business

development. Concept of employee retention was also understood through the project

study. The ways adopted by companies to manage grievances and stress and thereby

motivating the employees and reducing employee turnover were studied through the

project.

4

DABUR AS AN FMCG

Today, the FMCG is the fourth largest sector in the Indian economy and there are many

FMCG companies like HLL, ITC, Britannia, Tata Tea, Nestle, Godrej Consumer, Dabur,

Marico etc.

Dabur India Limited is the fourth largest FMCG company in India. Dabur has five other

subsidiaries- Dabur Foods, Dabur Nepal, Dabur Egypt, Dabur Oncology and Dabur

Pharma.

Business

Dabur’s product range encompasses health care, personal care, ayurvedic specialities and

food segments.

Brands

Well-known brands include Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola, Ll

Dantmanjan, Nature Care, Pudin Hara and Real.

5

Location

Dabur has been marketing its products in more than 50 countries all over the world. The

company has offices and representatives in Europe, America and Africa. Manufacturing

facilities are spread across three overseas locations.

Turnover

Building on a legacy of quality and experience for over 100 years, today Dabur has a

turnover of Rs.1899.57 with powerful brands.

6

COMPANY PROFILE

7

3. COMPANY PROFILE

8

COMPANY HISTORY

1884

Birth of Dabur

1896 Setting up a manufacturing Plant

Early 1900s Ayurvedic Medicines

1919 Establishment of Research Laboratories

1920 Expands further

1936 Dabur India ( Dr. S.K Burman) Pvt. Ltd.

1972 Shift to Delhi

1979 Sahibabad fctory / Dabur Research Foundation

1986 Public Limited Company

1992 Joint Venture with Agrolimen of Spain

1993 Cancer treatment

1994 Public issues

1995 Joint ventures

1996 3 separate divisions

1997 Food Division/Project STARS

1998 Professionals to manage the Company

9

2000

2003

2005

2006

2006

Turnover of Rs 1000 crores

Dabur demerges Pharma Business

Dabur acquires Balsara

Dabur announces Bonus after 12 years

Dabur crosses $2 Bin market cap, adopts US GAAP

10

4.1 Milestones to Success

Dabur India Ltd. made its beginnings with a small pharmacy, but has continued to

learn and grow to a commanding status in the industry. The Company has gone a

long way in popularizing and making easily available a whole range of products

based on the traditional science of Ayurveda. And it has very high standards in

developing products and processes that meet stringent quality norms.

o 1884 - Established by Dr. S K Burman at Kolkata

o 1896 - First production unit established at Garhia

o 1919 - First R&D unit established

o Early 1900s- Production of Ayurvedic medicines

Dabur identifies nature-based Ayurvedic medicines as its area of specialization. It

is the first company to provide health care through scientifically tested and

automated production of formulation based on our traditional science.

o 1930 – Automation and Upgadation of Ayurvedic product manufacturing

initiated

o 1936 – Dabur ( Dr. S.K Burman) Pvt. Ltd. Incorporated

o 1940- Personal care through Ayurveda

11

Dabur introduces consumers to personal care through Ayurveda, with the launch

of Dabur Amla Hair Oil. The product was so popular that it became the largest

selling hair oil brand in India.

o 1949- Launched Dabur Chyawanprash in tin pack

Widening the popularity and usage of traditional Ayurvedic products continues.

The ancient restorative Chyawanprash is launched in packaged form, and

becomes the first branded chyawanprash in India.

o 1957- Computerizations of operations initiated

o 1970- Entered Oral Care & Digestives Segment

Addressing rural markets where homemade oral care is more popular than

multinational brands, Dabur introduces Lal Dant Manjan. With this a

conveniently packaged herbal toothpowder is made available at affordable costs

to masses.

o 1972- Shifts base to Delhi from Calcutta

o 1978- Launches Hajmola tablet

Dabur continues to make innovative products based on traditional formulations

that can provide holistic care in our daily life. An Ayurvedic medicine used as a

digestive aid is branded and launched as the popular Hajmola tablet.

12

o 1979- Commercial production starts at Sahibabad, the most modern

herbal medicines plant at that time

o 1984- Dabur completes 100 years

o 1988- Launches pharmaceutical medicines

o 1989- Care with fun

The Ayurvedic digestive formulation is converted into a children’s fun product

with the launch of Hajmola Candy. In an innovative move, a curative product is

converted to a confectionary item for wider usage.

o 1994- Comes out with first Public issue

o 1994- Enters oncology segment

o 1994- Leadership in Health care

Dabur establishes its leadership in health care as one of only two companies

worldwide to launch the anti-cancer drug Intaxel (Paclitaxel). Dabur Research

Foundation develops an eco-friendly process to extract the drug from its plant

source .

o 1996- Enters foods business with the launch of Real Fruit Juice

o 1996- Real blitzkrieg

13

Dabur captures the imagination of young Indian consumers with the launch of

Real Fruit Juices- a new concept in the Indian foods market. The first local brand

of 100% pure natural fruit juices made to International standards, Real becomes

the fastest growing and largest selling brand in the country.

o 1998- Burman family hands over the management of the company to

professionals

o 2000- The 1,000 crore mark

Dabur establishes its market leadership status by staging a turnover of Rs. 1,000

crores. Across a span of over 1000 years, Dabur has grown from a small

beginning based on traditional health care.

o 2001- Super specialty drugs

With the setting up of Dabur Oncology’s sterile cytotoxic facility, the Company

gains entry into the highly specialized area of cancer therapy. The state-of-the art

plant and laboratory in the UK have approval from the MCA of UK. They follow

FDA guidelines for production of drugs specifically for European and American

markets.

o 2002- Dabur record sales of Rs. 1163.19 crore on a net profit of Rs

64.4 crore

o 2003- Dabur demerges Pharmaceutical business

14

Maintaining Global Standards

As a reflection of its constant efforts at achieving superior quality standards,

Dabur became the first Ayurvadic products company to get ISO 9002

certification.

15

Science for Nature

Reinforcing its commitment to nature and its conversation, Dabur Nepal, a

subsidiary of Dabur India, has set up fully automated greenhouses in Nepal. This

scientific landmark helps to produce saplings of rare medicinal plants that are

under threat of extinction due to ecological degradation.

Merger with Balsara

Merger of 3 Balsara Companies- Besta cosmetics, Balsara hygiene Products and

Balsara Home Products to be effective from April 1,2006.

o 2005- Dabur acquires Balsara

o 2006- Dabur announces Bonus after 12 years

o 2006- Dabur crosses $2 Bin market cap, adopts US GAAP

Dabur Worldwide

Dabur’s mission of popularizing a natural lifestyle transcends national boundaries.

Today there is global awareness of alternative medicines, nature based and

holistic lifestyles and an interest in herbal products. Dabur has been in the

forefront of popularizing this alternative way of life, marketing its products in

more than 50 countries all over the world.

16

4.2 Its Products World Wide

o Offices and representatives in Europe, America and

Africa

o A special herbal health care and personal care range successfully selling in

markets of the Middle East, Far East and several European countries.’

o Inroads into European and American markets that have good potential due

to resurgence of the back-to-nature movement.

4.3 Corporate Governance

In India, the Securities and Exchange of India (SEBI) stipulates corporate

governance standards for listed companies through the Clause 49 of the listing

agreement of the stock exchanges.

Good corporate governance and transparency in actions of the management is key

to a strong bond of trust with the Company’s stakeholders. Dabur understands the

importance of good governance and has constantly avoided an arbitrary decision-

making process. In this pursuit, Dabur has already put in place systems and

procedures and is fully compliant with the revised Clause 49 well before it

17

becomes mandatory. Thus at Dabur, we believe good governance is key to strong

bond of trust between the company and all its stakeholders.

18

4.4 IT Initiatives

In Dabur India Limited knowledge and technology are key and efficiency.

Towards this overall goal of technology-driven performance, Dabur is utilizing

the world. It will also cut down costs and increase profitability. Information

Technology in a big way. resources which have helped the Company achieve

higher levels of excellence This will help in integrating a vast distribution system

spread all over India and across.

4.5 Future Challenges

Forward Integration of SAP with Distributors and Stockists.

Backward Integration of SAP with Suppliers.

Implementation of new POS system at Stockist point and integration with

SAP-ERP.

Implementation of SAP HR and payroll.

SAP Roll-out to DNPL and other new businesses

4.6 Central Procurement & Planning Department

Dabur has established a Central Procurement & Planning Department (CPPD) to

take care of all high value purchases across the company. The CPPD is housed at

the Kaushambi Corporate Office (KCO) and is headed by the head- CPPD. Low

value purchases are de-centralized at he manufacturing units. A Unit Purchase

Heads the Purchase Department at the manufacturing units.

19

Dabur India Limited has also set up a cross-functional Purchase Committee to

guide and oversee the purchasing function at the KCO. The purchase committee

comprises of the following:

Head – CPPD

Head – Marketing

Deputy General Manager – Operations

Chief Financial Officer

4.7 Quality Objectives

To focus on customer and successfully meet their needs and requirements.

To manufacture effective personal care, ayurvedic and food products at

competitive prices and improve the quality of life of common masses.

To implement system to ensure prevention of errors rather than detection

of errors.

To ensure global competitiveness by striving to achieve Current and Good

Manufacturing Practices (CGMP)

20

4.8 Organization structure

22

DaburDabur India LtdIndia Ltd..Corporate OfficeCorporate Office

ChairmanChairman((VivekVivek C C BurmanBurman))

Executive Director (Operations)Executive Director (Operations) Unit HeadsUnit HeadsChief Executive Officer

Sunil Duggal

Heads (Marketing)Heads (Marketing)

•• Regional Managers)Regional Managers)•• Branch ManagerBranch Manager•• Marketing ExecutivesMarketing Executives•• Customer Support Customer Support

OfficersOfficers•• AssistantsAssistants

Head Head (Finance & Commercial) (Finance & Commercial)

•• Manager (Accounts)Manager (Accounts)•• Asst. Manager (Asst. Manager (CommComm))•• Accounts OfficerAccounts Officer•• Sr. Executive (Stores)Sr. Executive (Stores)

HeadHead(Human Resources)(Human Resources)

•• HR Manager HR Manager •• HR ExecutiveHR Executive•• HR Sup. HR Sup.

HeadHead(Quality Control)(Quality Control)

•• Assistant ManagerAssistant Manager•• Senior OfficersSenior Officers•• Officers / SupervisorsOfficers / Supervisors

HeadHead(Mfg. & Shop Maintenance)(Mfg. & Shop Maintenance)


DaburDabur India LtdIndia Ltd..Corporate OfficeCorporate Office

ChairmanChairman((VivekVivek C C BurmanBurman))

Executive Director (Operations)Executive Director (Operations) Unit HeadsUnit HeadsChief Executive Officer

Sunil Duggal

Heads (Marketing)Heads (Marketing)

•• Regional Managers)Regional Managers)•• Branch ManagerBranch Manager•• Marketing ExecutivesMarketing Executives•• Customer Support Customer Support

OfficersOfficers•• AssistantsAssistants

Head Head (Finance & Commercial) (Finance & Commercial)

•• Manager (Accounts)Manager (Accounts)•• Asst. Manager (Asst. Manager (CommComm))•• Accounts OfficerAccounts Officer•• Sr. Executive (Stores)Sr. Executive (Stores)

HeadHead(Human Resources)(Human Resources)

•• HR Manager HR Manager •• HR ExecutiveHR Executive•• HR Sup. HR Sup.

HeadHead(Quality Control)(Quality Control)


HeadHead(Mfg. & Shop Maintenance)(Mfg. & Shop Maintenance)


Dabur Products

Dabur Health Care Product Range

Health Supplements

Dabur Chyawanprash

Dabur Chyawanshakti

Glucose-D

Digestives

Hajmola Yumstick

Hajmola Mast Masala

Anardana

Hajmola

Hajmola Candy

Pudina hara

Dabur Hingoli

23

Natural Cures

Shilajit Gold

Nature Care

Ring Ring

Itch Care

Back-aid

Shankha Pushpi

Dabur Balm

Sarbyna Strong

Dabur Baby Care Product Range

Baby Care

Dabur Lal Tail

Dabur baby Olive oil

Dabur Janma Ghunti

Dabur Personal Care Product Range

Hair Care-Oil

24

Amla Hair Oil

Amla Lite Hair Oil

Vatika Hair Oil

Anmol Sarson Amla

Hair Care- Shampoo

Anmol Silky Black Shampoo

Vatika Henna conditioning Shampoo

Vatika Anti-Dandruff Shampoo

Skin Care

Gulabari

Vatika Fairness Face Pack

Dabur Oral Care Product Range

Oral Care

Dabur Red Gel

Babool Toothpaste

Dabur Red Toothpaste

Dabur Lal Dant Manjan

25

Dabur Binaca Toothbrush

Dabur Foods Product Range

Real

Real Fruit Juice

Real Active

Homemade

Lemoneez

Natural Lemon Juice

Honey

Pure Natural Honey

Capsico

A fiery red-pepper sauce

Dabur Ayurveda Product Range

Dashmularishtha

Ashokarishtha

Lauhasava

26

Mahanarayan Tail

Juritap

Madhuvani

Lavan Basked

4.10 Vision and Mission

Founding Thought: “ What is that life worth which cannot bring comfort

to others.

Vision: “ Dedicated to the health and well being of every household”.

Mission: “ To become a leading nature-based health and family care

Products Company”.

27

Core Values

Ownership : Accept personal responsibility, and accountability

to meet business needs.

Passion for Winning : Leaders in the area of responsibility, with a deep

commitment to deliver results. Determined to be the

best at doing what matters most.

People Development : People are the most important asset. Add value

through result driven training, and we encourage &

reward excellence.

Customer Focus : Superior understanding of consumer needs and

develop products to fulfill them better.

Team Work : Work together on the principle of mutual trust &

transparency in a boundary-less organisation.

Intellectually honest in advocating proposals,

including recognizing risks.

28

Major Strategic Business Units

In India, the Company’s business is carried out by three Strategic Business Units

(SBUs) namely:

Consumer Care Division, with a share of 82% in its total sales.

Consumer Healthcare Division, with a share of 8% in its total sales.

Dabur Foods Limited as a wholly owned subsidiary with a share of 10% in its total

sales.

29

PART-2

30

OBJECTIVES

31

OBJECTIVES OF THE STUDY

To assess the satisfaction level of employees regarding performance appraisal

policies and practices.

To determine what % of the employees think that performance appraisal actually

increases their performance level.

To determine what % of the executives likes the responsibility of performance

appraisal.

To conduct the study about the way involved in appraising the performance in

the PMS.

32

RESEARCH

METHODOLOGY

33

RESEARCH METHODOLOGY

Research is an organized inquiry designed and carried out to provide information to solve

the problem. The fact, search is an art of scientific investigation of a certain problem.

“Research is the process of systematically obtaining accurate answers to significant and

pertinent questions by the use of the scientific methods gathering and interpreting

information”.

a. Sample size:

Sample size is 50. Data was analyzed by surveying employees from different

departments.

b. Sample design:

This part is done through discussing and analyzing with my project guide and

referring to the subject regarding this topic. It was a random sampling.

c. Mode of analysis:

The methods used to analyze the data are as follows:

1) To study the importance of performance appraisal in the organization.

2) To find out whether the employees are satisfied with the present

performance appraisal system or not.

3) Interpret and analysis of the data and present it in a proper manner.

4) Uses of Microsoft excel for preparation of graph.

34

SOURCES OF DATA

Data Collection is the collection of necessary detail to gain further information. This

requires both primary and secondary data.

A. Secondary data:

My HR guide, Mr. Pawan Ponia in Dabur India Limited, helped me in secondary

data collection.

Field Work:

Fieldwork is done for the purpose of collection of data. The fieldwork involved here are:

Regular research to gather information on the relevant topic and have them

compiled according to the project specification.

For getting proper guidance for the project, often discussion with the guide.

35

HUMAN RESOURCE AT DABUR

Dabur places great deal of confidence on its excellent pool of human resources, which it

realizes is the key to its further growth strategy. The company continued its efforts to

further align its HR policies, processes and initiatives to meet the business needs.

In line with its focus on international operations, Dabur implemented a uniform HR

structure across all the groups company’s operations. This will enable seamless

transaction s between domestic and overseas position. Also the integration of the

personnel of the erstwhile Family Products Division (F.P.D) & Healthcare Products

Division (H.C.P.D) was implemented efficiently to suit the requirements well within

time. Major initiatives taken were:

Dabur implements performance metrics for all key positions based on two aspects

of the Balanced Score Card Approach- Financial and Internal Business Process.

This approach clearly outlines the expectation from each position and will be

upgraded to include two more aspects for any key managerial positions in future.

The Company institutionalized the “Assessment and Development

Center”(A.D.C) approach to all positions from staff to officer cadre and also at the

senior levelsto objectively identify, develop and promote the talent from within,

36

and to provide individual feedback for development of the participating

employees.

To encourage learning, the Company is planning to set-up a learning center,

which will be equipped with a library, I.T & Web based sources of knowledge. It

is also in the process of setting up a knowledge management portal and a

leadership and capability development cell

Dabur is committed to attract fresh talents. Towards this end, the company

required over 20 candidates from leading management and engineering institutes

in the country, who will be inducted.

37

INTRODUCTION TO PERFORMANCE APPRAISAL

This is a technique, not universally accepted, of assessing the performance of employees

against agreed targets. The personnel practitioners would be most likely to be involved in

designing the procedures, leaving the line managers normally to administer the process.

Performance Appraisal is the systematic evaluation of the individual with respect to his or

her performance on the job and his or her potential for development.

7.1 Aims of Performance Appraisal

The following aims might be considered when examining a performance appraisal

system:

Use reliable, fair and objective measures of performance, compare actual

with planned performance, and provide feedback to the appraisee.

Make provision for the allocation of both extrinsic rewards (performance

related pay) and intrinsic rewards (opportunity to enhance one’s skills)

following the assessment process.

Recognize that performance management is the heart of the general

management process.

38

7.2 Objectives of Performance Appraisal

Data relating to performance assessment of employees are recorded, stored and

used for several purposes. The main purposes of employee assessment are:

To effect promotions based on competence and performance.

To confirm the services of probationary employees upon their completing the

probationary period satisfactorily.

To assess the training and development needs of employees.

To decide upon a pay raise where regular pay scales have not been fixed.

7.3 Appraisal Techniques

Certain techniques are available to evaluate the performance of the employee.

Written report: The appraiser writes about the strengths, weaknesses, previous

performance and potential of the appraisee, with suggestions for

improvement. It is important that the appraiser is perceptive with

reasonable writing skill.

Critical incidents: The appraiser highlights incidents or key events that show

the appraisee’s behavior as exceptionally good or bad in relation to

39

particular outcomes at work. This exercise would depict desirable

behaviors as well as behavior that signal a need for improvement.

Graphic Rating Scale: This is a popular appraisal technique and it lends itself

to quantitative analysis and comparison of data. A set of performance

factors id identified, including such characteristics as quality of work,

technical knowledge, cooperative spirit, integrity, punctuality and

initiative. The appraiser would go through the set of factors rating them,

for e.g., on a scale 1 to 5 where the highest number would denote the best

rating.

Multi-person Comparison: This technique is relative rather than an absolute

measure, is used to assess one person’s performance against one or more

other individuals.

Multi-rater Comparative Evaluation: The total appraisal process consists of

interviews, psychometric testing, simulations of relevant work activities,

peer appraisals and appraisals by trained assessors.

Self-appraisal: Self-appraisal has introduced as a mean for empowering

employees, enhancing teamwork and raising awareness of quality. The

employees are given appraisal forms on which they evaluate themselves

against criteria such as attendance, productivity, quality, safety, teamwork

and commitment.

7.4 Who are Raters?

40

Raters can be immediate supervisors, specialists from the HR department,

subordinates, peers, committees, clients, self-appraisals, or combinations of

several. Immediate supervisor is the most fit candidate to appraise the

performance of his or her subordinates as no one is more familiar with the

subordinate’s performance than his or her superior. Subordinates can assess the

performance of their superiors. This helps in assessing an employee’s ability to

communicate, delegate work, allocate resources, disseminate information and

resolve intra-personal conflict. Peers are in a better position to evaluate certain

facts of job performance, which the subordinates or superiors cannot do.

Where superiors, subordinates and clients, make the appraisal it is called 360-

degree system of appraisal.

7.5 What should be Rated?

Quality: The degree to which the process or result of carrying out an activity

approaches in terms of fulfilling the activity’s intended purpose.

Quantity: The amount produced, expressed in monetary terms, number of

units or number of completed activity cycles.

Timeliness: The degree to which an activity is completed or a result produced

at the earliest time desirable

Cost Effectiveness: The degree to which the use of organization’s resources is

maximized in the sense of getting the highest gain by minimizing the losses.

41

Need for Supervision: The degree to which a job performer can carry out a job

function.

Interpersonal Impact: The degree to which a performer promotes feeling of

self-esteem, goodwill and cooperation among co-workers and subordinates.

7.6 Factors Determining Performance Evaluation

Halo Error: A halo error takes place when one aspect of an individual’s

performance influences the evaluation of the entire performance of the

individual. Rating employees separately on each of a number of performance

measures and encouraging raters to guard against the halo effect are the two

ways to reduce the halo effect.

Leniency: Every evaluator has his own value system, which acts as a standard

against which he makes his appraisals. Relative to the true or actual

performance an individual exhibits, some supervisors have a tendency to be

liberal in their ratings.

Central Tendency: This occurs when the evaluator assigns average or middle

ratings to the employees. The attitude of the rater is to play safe. This safe-

playing attitude stems from certain anxieties and doubts about the behavior of

employee. Such tendency distorts the evaluation.

42

Rater Effect: This includes favoritism, stereotyping and hostility. Excessively

high or low scores are given only to certain individuals or groups based on the

rater’s attitude towards the rate. Age, sex, race and friendship biases are

examples of this type of error.

Perceptual Set: This occurs when the rater’s assessment is influenced by

previously held beliefs. If supervisor, for example, has a belief that employees

hailing from one particular region are hard working, his subsequent rating of

an employee hailing from that region tends to be favorably high.

Spillover Effect: This refers to allowing past performance appraisal ratings to

unjustifiably influence current ratings. Past ratings, good or bad, result in

similar rating for the current period although the demonstrated behavior does

not deserve the rating good or bad.

Status Effect: It refers to overrating of employees in higher level job or jobs

held in high esteem, and underrating employees in lower level job or jobs held

in low esteem.

7.7 Appraisal Methods

The last to be addressed in the process of designing an appraisal program is to

determine methods of evaluation. Numerous methods have been devised to

measure the quantity and quality of employee’s job performance. Broadly, all the

approaches of appraisal can be classified into:

43

Past oriented Methods, and

Future oriented Methods

Past Oriented Methods

Rating Scale: This is the simplest and most popular technique for

appraising employee performance. The typical rating scale consist of

several numerical scales, each representing a job related performance

criterion such as dependability, initiative, output, attendance, attitude, co-

operation, and the like. Each scale ranges from excellent to poor. The rater

checks the appropriate performance level on each criterion, and then

computes the employee’s total numerical score. The number of points

scored may be linked to salary increase. The disadvantages of this method

are several. The rater’s biases are likely to influence evaluation.

Checklist: Under this method, a checklist of statements on the traits of the

employee and his or her job is prepared in two columns i.e., a ‘Yes’ and a

‘No’ column. All that the rater should do is tick the ‘Yes’ column if the

answer to the statement is positive and in column ‘No’ if the answer is

negative. After ticking off against each item, the rater forwards the list to

the HR department where the actual assessment of the employee takes

place. The advantages of a checklist are economy, ease of administration,

limited training of rater and standardization.

Essay Method: In the essay method, the rater must describe the employee

within a number of broad categories, such as:

44

i) The rater’s overall impression of the employee’s performance,

ii) The promotability of the employee,

iii) The jobs that’s the employee is now able or qualified to perform,

iv) The strengths and weaknesses of the employee,

v) The training and the development assistance required by the employee

The strength of the Essay method depends on the writing skills and

analytical ability of the rater. A problem with this method is that the ratees

may be rated on the quality of the appraisals that they give.

Ranking Method: In this, superior ranks his or her subordinates in the

order of their merit, starting from the best to the worst. The HR

department knows that A is better than B. The ‘how’ and ‘why’ are neither

questioned nor answered. This method is subject to the halo effects. Its

advantage includes ease of administration and explanation.

Forced Distribution Method: One of the errors in rating is leniency-

clustering a large number of employees around a high point on a rating

scale. This method seeks to overcome the problem by compelling the rater

to distribute the ratees on all points on the rating scale. The method

operates under an assumption that the employee performance level

conforms to a normal statistical distribution. The major weakness of the

45

forced distribution method lies in assumption that employee performance

levels always conform to a normal distribution.

46

Future Oriented Appraisal

Management by objective: I t was Peter Drucker who gave first the

concept of MBO to the world way back in 1954.. Application of MBO in

the field of performance appraisal is a recent thinking. One comment made

against the approach is that it is not applicable to all jobs an all

organization. Objectives are agreed and formulated at the beginning of the

period under review, and the appraisee is given the necessary assistance

and training to facilitate the achievement of those objectives.

Psychological Appraisal: Large organization employs full-time industrial

psychologists. When psychologists are used for evaluations, they assess an

individual’s future, potential and past performance. The appraisal

normally consists of in-depth interviews, psychological tests, discussions

with supervisors and a review of other evaluations. The psychologist then

writes an evaluation of the employee’s intellectual, emotional,

motivational and other related characteristics that suggest individual

potential and may predict future performance. From these evaluations,

placements and development decisions may be made to shape the person’s

career.

Assessment Centers: Mainly used for executive hiring. Assessment centers

are now being used for evaluating executive or supervisory potential. An

assessment center is a central location where managers may come together

to have their participation in job-related exercises evaluated by trained

47

observers. Assesses are requested to participate in in-basket exercises,

work groups, computer simulations, role playing and other similar

activities. After recording their observations of ratee's behaviors, the raters

meet to discuss these observations. Self-appraisal and peer evaluation are

also thrown in for final rating.

360-Degree Feedback: Where multiple raters are involved in evaluating

performance, the technique is called 360-degree appraisal. The 360-degree

technique is understood as systematic collection of performance data on an

individual or group, derived from a number of stakeholders- the

stakeholders being the immediate supervisors, team members, customers,

peers and self. The 360-degree appraisal provides a broader perspective

about an employee’s performance. However, there are drawbacks

associated with the 360-degree feedback. Receiving feedback on

performance from multiple sources can be unapproachable. It is essential

that the organization create a non-threatening environment by emphasizing

positive impact of the technique on an employee’s performance and

development. More and more number of firms are using 360-degree

appraisal technique to assess the performance of their employees.

48

Appraisal Process

The figure outlines the performance appraisal process. Each step in the

process is crucial and is arranged logically.

Objectives ofPerformance Appraisal

Establish JobExpectations

Design anAppraisal Program

Appraise Performance

PerformanceInterview

Use Appraisal Data forAppropriate Purpose

49

PERFORMANCE APPRAISAL AT DABUR

8.1 The System

Performance Appraisal of Grade VI and below in Dabur is carried out through

‘RATING METHOD’. Their immediate superior does performance appraisal and

HR department reviews it. Performance Evaluation is done by Contribution

Enhancement Plan (CEP) at the end of the year. CEP forms the core of

Performance Appraisal system of employees (Grade VI and below in Dabur)

The performance appraisal of executives in Dabur is carried out through rating

system of performance appraisal by their immediate supervisor and then reviewed

by latter’s boss. The performance appraisal system followed at Dabur is ‘Rating

Method’ and ‘Action by Objectives Method’.

50

The broad structure of the system can be laid down as:

Evaluation of individual onAssessment parameters

Assessment of rating by appraiser through5-point Rating Scale

Discussion of rating with reviewer

Computation of overall final rating by theUse of Rating scale table

Assessment of training DevelopmentNeeds of individual

Constructive feedback given by AppraiserTo Appraisee

The performance appraisal of executives in Dabur is carried out through rating system of

performance appraisal by their immediate supervisor and then reviewed by latter’s boss.

The performance appraisal system followed at Dabur is ‘Rating Method’ and ‘Action by

Objectives Method’.

51

The broad structure of the system can be laid down as:

8.2 Mechanism

The evaluation under CEP consist of following steps:

i. Appraiser does the rating after considering individual assessment parameters

of every employee.

ii. Scores are given against each assessment parameter of an individual in the

rating column on the basis of 5-point rating.

iii. Rating is reviewed with the reviewer.

52

iv. Total score is computed by adding all the scores.

v. The rating category corresponding to the appropriate range of total scores is

selected as overall final performance rating of employees from rating scale

table.

vi. The individual development form is filled by the Appraisee, which is further

utilized for training and development needs of employees, besides giving a

direction to his/her career growth in the organization.

vii. After completing the appraisal, a constructive feedback should be given to

the Appraisee by the Appraiser in presence of reviewer.

Finally, Contribution Enhancement Plan discusses rating for deciding upon the

performance rewards in the form of:

Annual Rewards

Promotions

8.3 Contribution Enhancement Plan

Contribution Enhancement Plan or CEP is a process, which will enable Dabur to

improve organizational contribution through enhanced contribution of individual.

It aims to establish formal individual objectives and to review subsequent

contribution in order to reinforce successful behaviors, to correct shortfalls and to

plan training and development activities. The system will ensure that all

management staff employees are aware as to what is expected from them. This is

53

a developmental plan for the improvement in contribution of executives towards

organization’s or SBU’S achievement of objectives and its development. It is

categorized into 2 parts:

Contribution Enhancement Plan {(CEP)A}

Contribution Enhancement Plan {(CEP)B}

Contribution Enhancement Plan (A) evaluates the contribution of an individual and

decides revision in fixed pay and Contribution Enhancement Plan (B) is concerned

with variable pay.

8.4 Objectives of CEP

i) To establish formal contribution standards.

ii) To establish a system that is fact based and minimizes subjectivity in the

assessment of an individual’s contribution.

iii) It should provide constructive feedback for development of an employee.

iv) Enable the individual to evaluate his/her own areas of strengths and areas

of improvement for being a better manager.

8.5 Applicability of CEP

i) The system is applicable to Grade V and above employees of the

company.

ii) Setting of 3 to 5 BBO’s, which are measurable.

54

iii) Related to area/position in which employees operates.

iv) Evaluation of contribution and focus on employee development.

8.6 Business Building Objective (BBO’s) Process

Business Building Objectives (BBO’s) are mutually agreed objectives between an

employee and his/her superior. These are tangible business targets, which are

measurable.

The first stage is for the person initiating the review cycleto understand the

business plan so that there is clarity about the direction and priorities of the

organization. This will help ensure that individual BBO’s support the overall

business plan.

8.7 BBO’s Identification and Review Processes

BBO’s needed to be established the light of the annual business plan. The set

objectives must be relevant in context with each individual role.

The employees must prepare in advance his/her draft objectives for the next year

and contribution against objectives set for the past year. The same need to be

carried by the appraisee for discussion with the appraiser. The appraiser will also

come prepared with BBO’s (both past and future) for the employee. At the

meeting they will discuss the year ahead and seek agreement on various

55

objectives. During the same meeting they will also discuss the contribution

against the past year’s BBO’s. Once the objectives for the next year are set and

agreed upon the same need to be communicated to the employee in writing. The

employee shall be evaluated against BBO during mid-year at the end of

assessment year.

BBO’s identification, assessment and review of contribution, assessment of traits

and skills, training and development needs and plans will be joint responsibility if

the appraisee and the appraiser. The reviewer needs to be satisfied that the key

elements of the process have done correctly.

8.8 Conduct the Interim Contribution Review/s

In the mid of the assessment year the appraiser and the appraisee should meet to

review the progress against the set BBO’s. This should include a discussion of an

assessment of whether any BBO’s should be amended, deleted or introduced. The

Interim Contribution Review is a formal opportunity to reinforce effective

behaviors, identify and correct any problems, give general feedback/advice, and to

ensure the annual assessment will be fair. This should be recorded in writing and a

copy is given to the individual.

56

8.9 Category of Contribution

The Contribution rating is to be done on a 5-point scale for each set BBO. Their ratings are

as follows:

Rating Qualitative Description Score

Outstanding (OS)

Consistently exceed job expectations and

standards.

Employee contribution has been exemplary and

has displayed good grasp of the job and handles

additional responsibilities with confidence and

ease, while overcoming exceptional challenges

or applying unique solutions.

5

Strong (ST)

Very good contribution and often exceeds job

expectations. A good learner who can handle

the job with minimum supervision.

4

Good (GD)

Meet expectation on most of the set objectives.

Requires occasional supervision and has

adequate knowledge of the job.

3

Satisfactory (ST) Inconsistent in meeting the set objectives.

Needs regular guidance. Has knowledge about

the job however the same needs to be brushed

2

57

up

Below Expectations (BE)

Contribution is much below the set targets.

Constantly needs supervision and guidance.

Processes low level of job knowledge and skills

1

8.10 Contribution Grid

The contribution grid for arriving at final rating is as follows:

Final Rating Total Score Range

Outstanding 4.26-5.00

Strong 3.51-4.25

Good 2.51-3.50

Satisfactory 1.51-2.50

Below Expectation <1.50

8.11 Assessment of Managerial Effectiveness

CEP forms pertains to evaluation of managerial competencies. Performing each job requires

application of certain behavior traits/skills. Therefore, it is desirable to assess the appraise

on traits/skills. The appraiser will pick the relevant traits/skills applicable to the job/function.

Minimum of 6 and maximum of 8 traits/skills must be chosen after careful thought and

thereafter rated on 5-point scale as mentioned below:

58

Skills/Traits Ratings

Strongly Demonstrated 5

Fairly Demonstrated 4

Present but not constantly demonstrated 3

Require significant development 2

Not up to the expectation 1

8.12 Contribution Review Discussion

The Contribution Review Discussion is intended to be an enriching process both

for Appraise and Appraiser. This is a critical and final stage of the entire CEP and

therefore has to be handled with utmost sensitivity, so that maximum value

addition is derived from this interaction between Appraise and Appraiser.

8.13 Contribution Enhancement Plan B (CEP B)

After evaluation under Contribution Enhancement Plan (B), variable for each

executive is compared through (CEP B). Variable pay is a lump sum amount to be

paid to appraise once a year on the basis of the performance.

59

The assessment of variable pay is done using the following table:

Criterion% of fixed amount if

criterion is 100 fulfilled

Company’s performance 33%

Unit/SBU’s performance 33%

Individual performance 34%

If the company’s performance meets the targeted performance then it will be

calculated as: (company’s actual performance/company’s targeted performance)*

100%.

60

TRAINING AND DEVELOPMENT

Dabur should hire professionals from outside to head key positions to become a player of

repute. In 1998, business was not big and being a family-owned company, there were

issues in hiring. Dabur was hiring literally at the rate of 20-30%. They started hiring from

campuses only in 1996-97. They went to the campuses and carried out serious brand

building exercise. Today their lateral hiring has come down to around 10-15%. Dabur

expanded their business and went to IIM for hiring. They also evolved new strategies and

a more structured hiring process. This was a huge success and they hired close 100

people in the last two years. The attrition rate at management level is 10% while at the

field staff level its 16%. Dabur has also introduced Esops for freshers to address the

retention issue right at the entry level. Currently, the annual training spend is around

Rs 1.5 crore.

Training and Development plays a vital role in CEP, which pertains to identification of

training needs through a joint process of discussion between Appraise and Appraiser. The

employee himself does this through guidance, feedback counseling and task force

assignment including self-development initiatives.

61

ANALYSIS

AND

INTERPRETATION

62

ANALYSIS AND INTERPRETATION

Q1. Do you think that Performance Appraisal is essential for the employees of the

company?

a) Fully b) Partially c) Not at all

Analysis and Interpretation:

It shows 80% of the employees agree that performance appraisal is essential for the

employees of the company and 20% of the employees partially agree.

Currently annual appraisal system in Dabur India Limited is carried out for the employees

at executive levels and above only. The target set may be reviewed quarterly so that

63

strengths and weaknesses, if any, can be assesses and remedial measures suggested

accordingly.

Q2: Performance appraisal has been described as the responsibility, which is not liked

by the superiors. Do you think so?

a) Yes

b) Partially

c) Not at all


46% executives say that they consider performance appraisal as the responsibility they

liked the least. 27% executives agree that it is a responsibility not liked by them and

remaining 27% denies about any such probability.Considerable amount of time is spent

for getting the appraisals done as per the existing system. The company should improve

64

the existing system by designing and implementing departmental performance review

system on a quarterly basis.

Q3: Do you agree that self-appraisal prior to performance appraisal facilitates you to

get high ratings?

a) Completely b)Partially c)Not at all


45.5% of the employees say partially self-appraisal facilitates to get high ratings, 27.3%

employees agree completely and other 27.2% say self-appraisal does not help in high

ratings in performance appraisal.

65

Many FMCG companies (eg. Britannia) have implemented the self-appraisal system.

This has proved helpful in identifying the needs for in-house group

discussions/counseling methods/training and development programs.

Q4: Does your supervisor give you effective feedback on a regular basis?

a) Yes

b) Depends on the employees

c) Not at all


It is clear in the graph that 100% of the employees say that the superior gives them

effective feedback on a regular basis.

66

Any company should give feedback to the employees periodically. They can also extend

proper diagnostic tips/ counseling methods at the required level.

Q5: Do you think that performance appraisal is the tool that improves employees’

performance level?

a)To a great extent b) To some extent c) Not at all


The graph shows 74% employees agree that up to a great extent, 18% say that to some

extent and 8% of the employees believe performance appraisal not at all improves

performance appraisal.

67

Currently the company’s existing appraisal system is on annual basis. This may be

reviewed on a quarterly basis, which will help in assessing the strengths and weaknesses

of executives and role modifications can be suggested accordingly.

Q6: Are you capable of achieving goals set for you?

a) Consistently

b) Occasionally

c) Never


The graph shows 100% of the employees are consistently capable of attaining their set

goals.

68

The target achieved by the employees may be vis-à-vis the target achieved last year. The

company should endorse proper diagnostic mapping for role modifications/ training and

development needs.

Q7: To what extent is the Dabur India Limited making progress towards its mission

and goals?

a) To a great extent

b) To some extent

c) No opinion


69

In this graph 82% of the employees say that Dabur India Limited is making progress

towards its mission and goals to a great extent and 18% employees say that only to some

extent company is making progress towards mission and goals.

For the further progress of company’s mission and goals organizational planning and

development department should be involved for quarterly analysis of the feedback

received.

Q8: Do you get merit raise when the performance evaluation indicates that you are

meeting the set standard on the job?

a)To a great extent b)To some extent c)Not at all


70

70% of the employees say up to a great extent they get merit raise, 20% employees say

that up to some extent they get merit raise and minority of 10% employees agree they do

not get any merit raise.

Apart from the merits awarded based on the performance indicators, HR should introduce

system for proper recognition rewards to such employees.

Q9: Do your co-workers and superiors help you to cope up with your poor

performance?


b) To some extent

c) Not at all


71

The graph shows 53% of the employees say up to great extent their co-workers and

superiors help them to cope up with their poor performance and 47% say to some extent.

Dabur India Limited can also concentrate on designing and implementing proper in-house

counseling program through group discussions/ personal interaction.

Q10: In your opinion to what extent are the superiors responsible for the progress of

Dabur India Limited?


b) To some extent

c) Not at all


72

The graph shows 37% of the employees believe to a great extent superiors are responsible

for the progress, 28% are responsible to some extent and 35% say the superiors are not at

all responsible for the progress of the company.

For the progress of the company the performance appraisal of the top-level management

are also to be carried on a quarterly basis. Competency skills are to be assessed and

effective role modification areas are to be suggested.

FINDINGS

73

FINDINGS

Presently, Dabur India Limited is following annual appraisal system for

employees at the executive and the above level only. The target may be reviewed

on a quarterly basis.

Time is a crucial factor. Company delegate the responsibility to employees by

designing and implementing performance review system on a quarterly basis.

The self-appraisal system is widely adopted by other FMCG companies, which is

helpful in identifying need for in-house group discussions/ counseling methods.

Superiors is giving regular feedback to employees periodically. They are also

providing proper diagnostic tips/ counseling methods at required level.

Dabur India Limited has endorsing proper diagnostic mapping for role

modifications/ training and development needs.

Company also involve organizational planning and development department to

achieve its mission and goals

Company mainly concentrate on in-house counseling program through group

discussions/ personal interaction for the better performance of employees.

75

More than 75% of the employees are satisfied with performance appraisal system.

More than 74%of the employees agreed that performance appraisal improves their

performance level.

About 46% execeutives agrees that performance appraisal as the responsibility

they liked the most.

76

CONCLUSION

78

CONCLUSION

In the new millennium when the corporate world is designing newer techniques for

developing employees and retaining them, Dabur India Limited is no way behind and the

organizational structure is such that people works hand in hand to align the organizational

goals with the individuals’ goals.

Evaluation of employees’ performance is helpful as to strengthen the employees’

productivity, their promotion, transfer, training and development needs etc. The

organization has implemented the evaluation process not only to evaluate the

performance of employees but also for their increment and promotion. The company

follows a transparent performance appraisal system with no personal bias because it is

wholly based on individuals’ contribution towards the organization. But there are some

loopholes in the system that should be analyzed and corrective measures should be taken.

To sum it up, this project has provided me with opportunities to learn different areas of

the HR function and has given me stepping-stones to climb up to reach the summit of HR

at the end of my career.

79

RECOMMENDATION

81

RECOMMENDATION

In order to have a better liaison within the co-workers and their superiors the

company should have a well-planned communication system and employees’

views should be taken into consideration.

While working under pressure the employees performance is affected so it

becomes necessary that the management should try to analyze the strengths and

weaknesses of the employees.

Teamwork should be assigned to employees, which will be helpful in establishing

leadership qualities and also becoming aware of other’s problems.

The company can implement quarterly based performance appraisal system.

Employees should be given proper training and development programs to learn

new concepts and technologies as to expand their capabilities, knowledge, skills

etc.

82

LIMITATIONS

83

LIMITATIONS

I conducted the assigned task with full effort and dedication but still the extent

of my study with limited. Questionnaire was used as a measure of data collection

for the study. Everybody did not respond to the question properly. Some

respondent misinterpreted the questions, omitted essential items and gave the

answer casually and it was practically impossible to return such incomplete and

unsatisfactory questionnaire to the respondent for the correction.

This technique does not provide a check on the honesty and reliability of replies,

if the respondent give wrong replies, the investigator can not know what the

truth is. This technique was inappropriate when spontaneous answer were

wanted, where it was important that the views of one person were obtained,

uninfluenced by the discussion of others. The major response for the non-

response was that the respondents refused to fill the questionnaire. This is a

hard core reason no matter how much effort one puts in completing the return a

source of bias always persist

The study is conducted on very small scale. The sample size considered was 50.

84

ANNEXURE

85

QUESTIONNAIREON

PERFORMANCE APPRAISAL

86

QUESTIONNAIRE ON PERFORMANCE APPRAISAL

Name:

Age:

Gender:

Qualification:

Experience:

Department:

Q1: Do you think that Performance Appraisal is essential for the employees of

the company?

a) Fully

b) Partially

c) Not at all

Q2: Performance appraisal has been described as the responsibility, which is

not liked by the superiors. Do you think so?

a) Yes

b) Partially

c) Not at all

Q3: Do you agree that self-appraisal prior to performance appraisal facilitates

you to get high ratings

87

a) Completely

b) Partially

c) Not at all

Q4: Does your supervisor give you effective feedback on a regular basis?

a) Yes

b) Depend on the employees

c) Not at all

Q5: Do you think that performance appraisal is the tool that improves

employees’ performance level?


b) To some extent

c) Not at all

Q6: Are you capable of achieving the goals set for you?

a) Consistently

b) Occasionally

c) Never

Q7: To what extent is the Dabur India Limited making progress towards its

mission and goals?


b) To some extent

88

c) No opinion

Q8: Do you get merit raise when the performance evaluation indicates that you

are meeting the set standard on the job?


b) To some extent

c) Not at all

Q9: Do your co-workers and superiors help you to cope up from your poor

performance?


b) To some extent

c) Not at all

Q10: In your opinion to what extent the superiors responsible for the progress of

Dabur India Limited?


b) To some extent

c) Not at all

89

BIBLIOGRAPHY

90

BIBLIOGRAPHY

For the purpose of this study, some broad sources of literature were referred to:

Textbooks

i) Human Resource and Personnel Management- By K.Ashwathappa

ii) The essence of Human Resource Management- By Eugene Mc Kenna

iii) Organizational Theory- By Gareth Jones

iv) Organizational Behavior- By Stephen Robbins

Magazines and Newspapers

i) The Economic Times

ii) The Week

Internet Portals

www.dabur.com

www.google.com

91

http://www.google.com/

http://www.dabur.com/

Nishu Dabur Performance Appraisal

Documents

Transcript of Nishu Dabur Performance Appraisal